Project employment is an exception to the rule on regular employment.

The Labor Code, under Article 295 states that 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 me 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.

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 termination of which is determined at the time of engagement. (Carpio vs. Modair Manila Co. Ltd., Inc., G.R. No. 239622, June 21, 2021)

The act of termination is essentially a challenge to the security of tenure of the employee being terminated. There is no doubt that a regular employee has a security of tenure. However, as to project employee, is the right to security of tenure also available?

Yes, although in a limited sense.

The SC held in Carpio case, 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.

Unlike in regular employment though, the employment of project employee is co-terminus with the completion of the project.

Thus, the services of a project-based employees are co-terminus with the project and may be terminated upon the end or completion of the project of phase thereof for which they were hired. [Engineering Construction Corporation of Asia vs. Palle, G.R. 201247, July 13, 2020]

The services of the project employees are legally and automatically terminated upon the end or completion of the project as the employee’s services are coterminous with the project. [Universal Robina Sugar Milling Corporation vs. Acibo, G.R. No. 186439, January 15, 2014]

It bear noting though that there are other requirements for such termination. One of which is the report or notice to be submitted to the appropriate DOLE office.

See sample project employment contracts to make it easy for HR practitioners, business owners, and managers to craft:

1. Project Employment Contract – English Version Soft Copy
2. Project Employment Contract – Filipino / Tagalog Soft Copy