Project employment

A project employee is one whose employment has been fixed for a specific project or
undertaking such that the completion or termination of which has been determined at the
time of the engagement of the employee.[15]
Due care should be observed in project employment. As stated earlier, a project employee
is considered a regular employee when the following conditions concur: (a) there is a
continuous rehiring of the project employee event after the cessation of a project; and (b)
the tasks performed by the alleged project employees is vital, necessary, and indispensable
to the usual business or trade of the employer.[16]
ACLATEL Philippines, Inc. v. Relos
G.R. No. 164315, 03 July 2009
Complainant Rene R. Relos field a complaint for illegal dismissal with monetary claims
against defendant Alcatel Philippines. Previously, complainant was repeatedly rehired in
various capacities (estimator/draftsman, civil works inspector, civil engineer, etc.) for several
projects of defendant from January 1988 to December 1993 (with different periods, from 1
to 11 months). On 31 December 1995, complainant’s last contract terminated. In March
1997, he instituted the labor case claiming that he was illegally dismissed as he was a
regular employee.
“Alcatel argues that respondent was a project employee because he worked on distinct
projects with the terms of engagement and the specific project made known to him at the
time of the engagement. Alcatel clarifies that [complainant’s] employment was coterminous
with the project for which he was hired and, therefore, [complainant] was not illegally
dismissed but was validly dismissed upon the expiration of the term of his project
employment. Alcatel explains that its business relies mainly on the projects it enters into
and thus, it is constrained to hire project employees to meet the demands of specific
projects.
“On the other hand, [complainant] insists that he is a regular employee because he was
assigned by Alcatel on its various projects since 4 January 1988 performing functions
desirable or necessary to Alcatel’s business. [Complainant] adds that his employment
contracts were renewed successively by Alcatel for seven years. [Complainant] contends
that, even assuming that he was a project employee, he became a regular employee
because he was re-hired every termination of his employment contract and he performed
functions necessary to Alcatel’s business. [Complainant] also claims that he was illegally
dismissed because he was dismissed during the existence of the project.”
HELD: Defendant was not liable; complainant was a project employee.“The principal test
for determining whether a particular employee is a project employee or a regular employee
is whether the project employee was assigned to carry out a specific project or undertaking,
the duration and scope of which were specified at the time the employee is engaged for the
project. ‘Project’ may refer to a particular job or undertaking that is within the regular or
usual business of the employer, but which is distinct and separate and identifiable as such
from the undertakings of the company. Such job or undertaking begins and ends at
determined or determinable times.
The complainant was a project employee. “The specific projects for which respondent was
hired and the periods of employment were specified in his employment contracts. The
services he rendered, the duration and scope of each employment are clear indications that
respondent was hired as a project employee.
While complainant was continuously rehired by Alcatel and he “performed tasks that were
clearly vital, necessary and indispensable to the usual business or trade of Alcatel,
respondent was not continuously rehired by Alcatel after the cessation of every
project. Records show that respondent was hired by Alcatel from 1988 to 1995 for three
projects, namely the PLDT X-5 project, the PLDT X-4 IOT project and the PLDT 1342
project. On 30 April 1988, upon the expiration of respondent’s contract for the PLDT X-4
IOT project, Alcatel did not rehire respondent until 1 February 1991, or after a lapse of 33
months, for the PLDT 1342 project. Alcatel’s continuous rehiring of respondent in various
capacities from February 1991 to December 1995 was done entirely within the framework
of one and the same project ― the PLDT 1342 project. This did not make [complainant]
a regular employee of Alcatel as respondent was not continuously rehired after the
cessation of a project. [Complainant] remained a project employee of Alcatel working on
the PLDT 1342 project.
“The employment of a project employee ends on the date specified in the
employment contract. Therefore, respondent was not illegally dismissed but his
employment terminated upon the expiration of his employment contract…” (Emphasis
supplied.)
Best Legal Practices:
Stipulate clearly the paramaters for project or fixed-period employment – In order to avoid
doubts on the status of an employee, the employment contract should clearly stipulate the
terms and conditions for the project employment. In particular, the project should be clearly
specified.
Refrain from continuous rehiring of the same project employee – While project employment
is valid, a continuous rehiring of the same project employee who performs work that is vital,
necessary and indispensable to the usual business or trade of the employer, may result in
the latter becoming a regular employee by operation of law.
D.M. Consunji, Inc. v. Jamin
G.R. No. 192514, 18 April 2012
Complainant Estelito L. Jamin initiated an illegal dismissal case against defendant D.M.
Consunji, Inc. Prior thereto, defendant repeatedly rehired complainant as a carpenter for
several projects. Complainant claimed that he served the company for almost 31 years
making him a regular employee. In its defense, defendant claimed that complainant was
hired on a project-to-project basis.
HELD: The company was liable. Complainant was a regular employee. For a period of 31
years, “DMCI had repeatedly, continuously and successively engaged Jamin’s services
since he was hired on December 17, 1968 or for a total of 38 times — 35 as shown by the
schedule of projects submitted by DMCI to the labor arbiter and three more projects or
engagements added by Jamin, which he claimed DMCI intentionally did not include in its
schedule so as to make it appear that there were wide gaps in his engagements.”
Thus, “while the contracts indeed show that Jamin had been engaged as a project
employee, there was an almost unbroken string of Jamin’s rehiring from December 17,
1968 up to the termination of his employment on March 20, 1999.” Moreover, “all the 38
projects where DMCI engaged Jamin’s services, the tasks he performed as a carpenter
were indisputably necessary and desirable in DMCI’s construction business.”
When a project ends so does the employment of a project employee. As held in the Alcatel
case, the termination of the project by which a project employee was engaged does not
result in illegal dismissal.[17]
With project employment, the issue usually raised in a labor dispute is often whether a
particular project or undertaking is valid. That is to say, may an employer create a project or
undertaking which is necessary to the business or trade? As the law does not make any
limitation on such a project or undertaking, the employer may do so provided it is in
compliance with law on project employment and it is not done to circumvent the employee’s
security of tenure.