NOTICE REQUIREMENT AFTER EXPIRY OF A PROJECT-BASED CONTRACT

(Philippine labor-law perspective)

“Project completion is not a surprise event; but treating it as an automatic exit still demands compliance with the Labor Code’s procedural safeguards.”

1. Concept of Project Employment in the Philippines

Parameter	Key Points
Statutory basis	Art. 295(c) of the Labor Code (as renumbered by R.A. 10395) defines project employees as those “engaged to perform a specific project or undertaking, the completion or termination of which has been determined at the time of engagement.”
Essential elements	1. The specific project or phase and its duration are clearly described in writing at the time of hiring. 2. The employee is informed and agrees that employment ends upon completion. 3. Work is directly connected to the project, not the company’s usual ongoing business (unless the employer is a legitimate independent contractor in the construction industry).
Policy issuances	• DOLE Department Order (D.O.) 19, Series 1993 (construction-industry rules) • D.O. 174-17 (rules on contracting/sub-contracting) • D.O. 147-15 (implementing rules on termination).

2. Termination on Project Completion: Substantive and Procedural Due Process

Aspect	Requirement	Why / Source
Substantive (authorized cause)	Completion of the project or its phase is a valid ground under Art. 298 (formerly 283) in relation to Art. 295(c).	Completion is ipso facto sufficient cause; separation pay is generally not due unless provided by CBA, company policy, or employment contract.
Procedural Part 1 — Employee notice	No advance notice period is required to the project employee if the completion date was fixed and made known at hiring. ♦ Gaco v. NLRC, G.R. No. 104690 (23 Feb 1994) ♦ Abesco Construction v. Ramirez, G.R. No. 168902 (17 Apr 2007)	The employee is presumed to have been on notice from the start.
Procedural Part 2 — DOLE notice	The employer must file a Termination Report (RKS Form 5) with the nearest DOLE Regional Office within 30 calendar days after each group of project employees is severed.	Required by Sec. 2.3, D.O. 147-15; Sec. 14, D.O. 174-17; Art. 301 [286] for bona fide suspension/termination.
Good-faith HR practice (optional but prudent)	Give a courtesy written notice to the worker ~1–2 weeks before actual release and conduct exit clearances; helps prove clean break and facilitates final pay.	Recommended by DOLE Labor Advisory 06-20 (final pay guidelines) and jurisprudence on procedural fairness (see Fuji v. Espiritu, G.R. No. 204061, 2018).

3. Consequences of Non-Compliance

Failure to serve DOLE Termination Report De-facto regularization may result if repeated rehiring and absence of reports show an intent to employ indefinitely (GMA Network v. Pabriga, G.R. No. 167218, 11 Mar 2015).
Failure to inform employee at hiring Converts the worker into a regular employee per Art. 295; termination at project end becomes illegal dismissal, entitling the employee to reinstatement or separation pay plus full backwages.
Failure to observe contractor rules (if project employment is within legitimate contracting) May trigger solidary liability of the principal under Art. 109.

4. Reporting Mechanics to DOLE

Step	What to file	Timing	Where / How
1	RKS Form 5 (Notice of Termination of Employment)	Within 30 days after actual separation date	Physical filing or e-submission to DOLE regional office
2	Attachments	Project name & location, list of employees, nature of work, date hired, date released	Certified true copy by company HR
3	Keep records	3-year retention minimum (for NLRC inspections/audits)	DO 147-15, Sec. 12

5. Distinct Rules in the Construction Industry (PCAB-licensed contractors)

Guided by D.O. 19-93 and Department Circular 01-20.
Contractors must register project employees and completion dates in the Construction Safety and Health Program (CSHP) filed with the DOLE-BWC.
Separate P.E.R.C. (Project Employee Registration Card) issuance is optional but best practice.

6. Final Pay, Certificates, and Other Employer Obligations

Item	Do project employees get it?	Basis
Final wages & 13th-month salary	Yes — compute up to last actual day	Pres. Decree 851; Labor Advisory 06-20
Service Incentive Leave (SIL) pay	Only if tenure ≥ 1 year AND not in construction or field personnel category	Art. 95; BWC Handbook
Separation pay	Generally No, unless… ① Contract/CBA provides; ② Termination for authorized cause other than project completion (e.g., redundancy)	Art. 298
Retirement pay (R.A. 7641)	Not applicable if tenure < 5 yrs, but aggregated service may count if rehired with ≤ 6-month gap each time	R.A. 7641 IRR
Certificate of Employment (COE)	Mandatory upon request within 3 days	Labor Advisory 06-20
BIR Form 2316 & tax clearance	Issue on or before 31 Jan of following year	NIRC Sec. 2.83.1

7. Jurisprudential Highlights

Maraguinot, Jr. v. NLRC, G.R. No. 120969 (22 Jan 1998) – Completion alone is valid cause but employer must prove employee was project-hired and informed at start.
D.M. Consunji v. Gobres, G.R. No. 160545 (20 Apr 2006) – Repeated project engagements with same duties may create regular status.
Hanjin Heavy Industries v. Ibañez, G.R. No. 170181 (26 Apr 2010) – Non-submission of DOLE reports defeats employer’s claim of project employment.
Angeles v. Goldlink Security, G.R. No. 184389 (11 Mar 2015) – Even security agencies (outside construction) may validly engage project guards, but must submit RKS 5 reports.
8990 Housing Dev. v. Suarez, G.R. No. 211106 (07 Dec 2021) – “End-of-phase” clause must specify identifiable work outputs; vague phrases (“until completion of tasks”) disregard due process.

8. Checklist for Employers

Draft crystal-clear project contracts (scope, phase, start/end dates, no promise of renewal).
Orient workers in writing that employment ends at completion; secure countersigned copy.
Monitor progress; set internal alerts 2 weeks before completion for exit processing.
File RKS Form 5 within 30 days after releasing employees (retain stamped copy).
Release final pay & COE within 30 days (or within the shorter Labor Advisory timeline of 30 days from separation).
Archive contracts and reports for at least 3 years.
Avoid “successive-project” traps; rotate or regularize long-term core workers.

9. Practical Tips for Employees

Keep your signed project contract and deployment orders.
Ask HR for the project completion date and expected last day.
If repeatedly rehired for similar tasks, you may already be a regular employee — consult DOLE or a lawyer.
Request your COE and final pay promptly; follow up using DOLE Single-Entry Approach (SEnA) if delayed.
Verify that the employer issued your BIR Form 2316 for tax records.

10. Frequently Asked Questions

Question	Short Answer
Is 30-day advance notice to the employee mandatory?	No — project completion is an exception; prior notice is not required as long as completion date was fixed at hiring.
Does failure to file RKS Form 5 automatically make dismissal illegal?	It creates a strong presumption of regular employment; employer then bears heavy burden to prove project status.
Are project employees entitled to separation pay?	Not for project completion itself. They may get it if terminated for other authorized causes (redundancy, retrenchment, closure).
Can a project employee join or form a union?	Yes. Project employees have the same right to self-organization during their tenure.
What if the project gets suspended?	Employer may place employees on bona fide suspension (Art. 301) for up to 6 months; longer suspension without pay risks illegal dismissal unless employees are recalled or paid separation/retirement benefits.

11. Conclusion

In Philippine labor law, project completion is a legitimate ground to end employment without the ordinary 30-day notice to the worker. However, employers must still satisfy due-process markers: (1) categorical disclosure of the project’s parameters at hiring, and (2) post-termination reporting to the DOLE through RKS Form 5. Lapses in these substantive or procedural steps expose the company to findings of illegal dismissal and the burdens of reinstatement, backwages, and damages. Conversely, diligent compliance provides a clear, lawful, and efficient off-boarding route that respects both managerial flexibility and workers’ rights.

(Prepared July 3, 2025. This article conveys general information and is not legal advice. For specific cases, consult counsel or the DOLE.)