Distinguishing Regular Employment from Project Employment as Viewed by the Supreme Court

Both regular and project employments find basis in Article 295 (previously Article 280) of the Labor Code, which provides:

ARTICLE 295. [280] Regular and Casual Employment. -The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the 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 or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph:  Provided, That any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a  regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.

The Supreme Court (SC), in the case of Carpio vs. Modair Manila Co. Ltd., Inc.

[G.R. No. 239622, June 21, 2021] distinguished regular from project employment. According to the SC, as characterized, regular employment exists when the employee is:

(a) engaged to perform activities that are usually necessary or desirable in the usual business or trade of

the employer; or

(b) a  casual employee whose activities are not usually necessary or desirable in the employer’s usual business or trade, and has rendered at least one year of service, whether continuous or broken, with respect to the activity in which he is employed; while project employment exists when the employee is hired under a contract which specifies that the employment will last only for a  specific project or undertaking, the completion or tem1ination of which is determined at the time of engagement.

As regards security of tenure, regular employment may be terminated for just or authorized causes; whereas, for project employment, lawful dismissal is brought about by the completion of the project or contract for which the employee was engaged, unless terminated during the life of the project, in which case, only just or authorized causes may be invoked.

Regarding payment of backwages in cases of illegal dismissal, for regular employment, backwages are computed from the time of dismissal until reinstatement, if such is ordered, or until finality of the decision ordering separation pay, if reinstatement is infeasible; while for project employment, backwages are computed from the date of the termination of employment until the actual completion of the work.

Upon the employer lies the burden of proof to establish project employment by showing that:

(1) the employee was assigned to carry out a specific project or undertaking; and

(2) the duration and scope of which were specified at the time the employee was engaged for such project.

Moreover, the employer must also prove that there was indeed a  project undertaken. Failing these, the worker will be presumed a regular employee.

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