PRELIMINARY

Article 295 (as renumbered) of the Labor Code, provides that Project Employees refer to those
whose employment has been fixed for a specific project or undertaking, the completion or
termination of which has been determined at the time of the engagement of the employee.

In the case of (GMA Network vs. Pabriga, G.R. No. 176419, 27 November 2013), another
classification of employment may be formed in accordance with the nature of employment:

(a) Employees performing activities which are usually necessary or desirable in the employer’s
usual business or trade can either be regular, project or seasonal employees; while

(b) Those performing activities not usually necessary or desirable in the employer’s usual
business or trade are, as a general rule, casual employees.

As discussed under Labor Law, Chan J.G., 2014, the reason for the distinction may not be readily
comprehensible to those who have not carefully studied the provisions; only employers who
constantly need the specified tasks to be performed can be justifiably charged to uphold the
constitutionally protected security of tenure of the corresponding workers. With respect to the
activities of project employees, they may or may not be usually necessary or desirable in the usual
business or trade of the employer, as discussed by the Court in some cases.

Under Article 295 of the Labor Code, regular employment may be attained in either three ways,
to wit;

(a) By nature of work – the employment is deemed regular when the employee has been
engaged to perform activities which are usually necessary or desirable in the usual business
or trade of the employer (Paguio vs. NLRC, G.R. No. 147816, 09 May 2003).

(b) By period of service – the employment is reckoned as regular when the employee has
rendered at least one (1) year of service, whether such service is continuous or broken, with
respect to the activity in which he is employed and his employment shall continue while
such activity exists (Philippine Fruit vs. NLRC, G.R. No. 122122, 20 July 1999).

(c) By probationary employment – The employment is considered regular when the

employee is allowed to work after a probationary period.
 DISCUSSIONS

As mentioned, under the Labor Code, project employees are those hired: (a) for a specific project
or undertaking; and (b) the completion or termination of such project has been determined at the
time of their engagement.

In (GMA Network vs. Pabriga, G.R. No. 176419, 27 November 2013), the Court said that in order
to safeguard the rights of workers against the arbitrary use of the word “project” to prevent
employees from attaining the status of regular employees, employers claiming that their workers
are project employees should not only prove that the duration and scope of the employment
was specified at the time they were engaged, but also that there was indeed a “project”.

In the case of (ALU-TUCP vs. NLRC, G.R. No. 109902, 02 August 1994), it was discussed;

“In the realm of business and industry, we note that "project" could refer to one or
the other of at least two (2) distinguishable types of activities. Firstly, a project
could refer to a particular job or undertaking that is within the regular or usual
business of the employer company, but which is distinct and separate, and
identifiable as such, from the other undertakings of the company. Such job or
undertaking begins and ends at determined or determinable times. The typical
example of this first type of project is a particular construction job or project of a
construction company. A construction company ordinarily carries out two or more
discrete identifiable construction projects: e.g., a twenty-five- storey hotel in
Makati; a residential condominium building in Baguio City; and a domestic air
terminal in Iloilo City. Employees who are hired for the carrying out of one of these
separate projects, the scope and duration of which has been determined and made
known to the employees at the time of employment, are properly treated as "project
employees," and their services may be lawfully terminated at completion of the
project.

The term "project" could also refer to, secondly, a particular job or undertaking that
is not within the regular business of the corporation. Such a job or undertaking must
also be identifiably separate and distinct from the ordinary or regular business
operations of the employer. The job or undertaking also begins and ends at
determined or determinable times.”

See also the cases of: (Magcalas vs. NLRC, G.R. No. 100333, 13 March 1997), (Cosmos Bottling
vs. NLRC, G.R. No. 106600, 29 March 1996), (Villa vs. NLRC, G.R. No. 117043, 14 January
1998), (ABS-CBN vs, Nazareno, G.R. No. 164156, 26 September 2006).
As discussed in Labor Law, Chan J.G., 2014, there are some indicators that an employee is a
project employee:

 The duration of the specific/identified undertaking for which the worker is engaged is
reasonably determinable.
 Such duration, as well as the specific work/service to be performed, are identified in an
employment agreement and is made clear to the employee at the time of hiring.
 The work or service performed by the employee is in connection with the particular project
or undertaking for which he is engaged.
 The employee, while not employed and awaiting engagement, is free to offer his services
to any other employer.
 The termination of his employment in the particular project/undertaking is reported to the
Regional Office of the DOLE having jurisdiction over the workplace, within thirty (30)
days following the date of his separation from work, using the prescribed form on
employees’ terminations or dismissals or suspensions.
 An undertaking in the employment contract by the employer to pay completion bonus to
the project employee as practiced by most construction companies.

As also discussed in Labor Law, Chan J.G., 2014, as a rule, employers may or may not form a
“work pool”. A “work pool” refers to a group of workers from which an employer like a
construction company draws the workers it deploys or assigns to its various projects or any phase
thereof. Members of a “work pool” may consist of:

 Non-project employees or employees for an indefinite period. If they are employed in a

particular project, the completion of the project or any phase thereof will not mean
severance of the employer-employee relationship.
 Project employees or workers in the work pool who are employed in a particular project or
in any phase thereof are considered as such if they are free to leave anytime and offer their
services to other employers.

Take note of the following principles:

(a) Project employees should be informed of their status as such at inception of the
employment relationship. (Abesco vs. Ramirez, G.R. No. 1411168, 10 April 2006).

(b) There must be a written contract of project employment stating the duration of the project
employment as well as the particular work or service to be performed.

(c) A written project employment contract is an indispensable requirement. (Abesco vs.

Ramirez, G.R. No. 1411168, 10 April 2006), (Department Order No. 19, S.1993).

(d) Failure to present contract of project employment means that employees are regular.
(Hanjin vs.Iibañez, G.R. No. 170181, 26 June 2008).
(e) Regular employee cannot be at the same time a project employee. (Magcalas vs. NLRC,
G.R. No. 100333, 13 March 1997).

(f) Intervals in employment contracts indicate project employment. (Palomares vs. NLRC,
G.R. No. 120064, 15 August 1997).

(g) Continuous, as opposed to intermittent rehiring shows that employee is regular. (PLDT vs.
Ylagan, G.R. No. 155645, 24 November 1999).

(h) “Project to project” basis of employment is valid. (Salinas vs. NLRC, G.R. No. 114671,
24 November 1999).

(i) Length of service is not a controlling determinant of employment tenure. (Fabela vs. San
Miguel, G.R. No. 150658, 09 February 2007)

(j) Project employment should not be confused with fixed-term employment to justify
continuous rehiring of so-called project employees. (Malicdem vs. Marulas, G.R. No.
204406, 26 February 2014).

(k) Project employees enjoy security of tenure only during the term of their employment.
(Tomas Lao vs. NLRC, G.R. No. 116781, 05 September 1997)

(l) Project employees have presumably become regular employees if they are allowed to work
beyond the completion of the project or any phase thereof to which they were assigned or
after the “day certain” which they and their employer have mutually agreed for its
completion. Having become regular employees, they can no longer be terminated on the
basis of the completion of the project or any phase thereof to which they were deployed.
(Dacuital vs. L.M. Camus, G.R. No. 176748, 01 September 2010).

(m) Burden of proof in termination of project employment rests on the employer. (Southern
Cotabato vs. NLRC, G.R. No. 121582, 16 October 1997).
 FINAL NOTE

The discussions above elucidate how a project employee becomes a regular employee, and how
such project employee remains to be a project employee.

To reiterate, it is important to note that a written contract of project employment stating the
duration of the project employment as well as the particular work or service to be performed is an
indispensable requirement. Project employees should be informed of their status as such at
inception of the employment relationship.

There is a need to execute a written employment contract if the intention is to stipulate on such
other kinds of employment such as project, seasonal, probationary, casual, or fixed-term, as the
case may be, because the absence thereof will make the relationship that of regular employment.
It is only by proving the terms and conditions of the contract that the general presumption that the
relationship is regular in nature would be effectively dispelled. Jurisprudence abounds where the
non-presentation of the written contract was held as evidence that the status of employment is not
what it purports to be, that is, probationary, project, seasonal, casual, or fixed-term, but, regular
employment.

The doctrine of adhesion applies to employment contracts. It must be emphasized, however, that
the rule on the interpretation or construction of contracts of adhesion does not apply when the
stipulations contained in a contract are not obscure or ambiguous. Besides, a contract of adhesion
is not prohibited per se.

Doctrines enunciated on the three cases (Herma Shipyard, Gadia, Innodata) you have mentioned
can be used to uphold the status of project-based employees. However, please be reminded that
the factual milieu of the said three cases are different from yours, if you are going to study and
read the three cases in its original.

Below are the links of the three cases in its original:

http://www.chanrobles.com/cralaw/2017aprildecisions.php?id=271

https://www.lawphil.net/judjuris/juri2015/jan2015/gr_209499_2015.html

https://www.lawphil.net/judjuris/juri2017/dec2017/gr_211892_2017.html