A doctrine-grounded, practice-oriented guide for workers, HR, contractors, and counsel

1) Why this matters

“Project-based” is lawful in the Philippines—but it’s also overused. Labeling someone “project” does not by itself defeat security of tenure. If the engagement fails the legal tests, or if the worker’s pattern of work shows necessity to the business, the worker can acquire regular status—with all attendant rights (tenure, due-process protection, separation benefits when applicable, union/collective rights, etc.).

2) Core legal framework (plain language)

Constitution (Art. XIII): security of tenure.
Labor Code & implementing rules: kinds of employment, termination for just causes/authorized causes, benefits, and due process.
Department Orders (e.g., on construction, contracting/subcontracting): define project employment and compliance (project completion reports, contractor registration, capital/equipment tests).
Jurisprudential tests (applied by labor tribunals and courts): two-fold test for project status; “necessary or desirable” test for regularization; repeated/recurrent engagement doctrine; labor-only contracting tests; seasonal/regular-seasonal status.

Takeaway: The form (title “project”) must match the facts (scope/duration fixed; worker told at hiring; project truly distinct from usual operations). Otherwise, regularization follows.

3) What “project employment” legally means

A worker is project-based only if both are true:

Specific undertaking: The job is tied to a distinct project (or phase) with scope and duration reasonably determinable at hiring; and
Notice at engagement: The worker is clearly informed in writing, at the time of hiring, that the employment is for that project (or phase) and will end upon its completion.

Documentation that usually proves this:

Project employment contract naming the project, phase, site, estimated start/end;
Description of specific deliverables distinct from ongoing operations;
Project completion report to DOLE when the project ends (especially in construction).

If any of the above is missing or cosmetic, tribunals tend to find regular status.

4) Regularization pathways for project hires

4.1. “Necessary or desirable” test

If the work performed is usually necessary or desirable in the ordinary business of the employer (e.g., a broadcaster’s cameramen, a factory’s machine operators, a retailer’s cashiers), the worker can be deemed regular, even if cycled through “projects.”

4.2. Repeated and continuing engagement

Continuous rehiring to do substantially the same tasks, with short gaps designed to avoid tenure (“5-5-5”), is strong evidence of regular employment. Pattern matters more than labels.

4.3. Failure of the project-status tests

If the employer cannot show a specific project with determinable duration and proof that the employee was so informed at hiring, the default is regular.

4.4. Project vs. seasonal vs. fixed-term

Seasonal workers doing work that recurs every season may become regular seasonal: regular during seasons, with a right to be recalled each season.
Fixed-term hires (e.g., academic terms) are a different category and must meet strict voluntary-agreement tests; fixed-term cannot be used to evade regularization where the nature of work is usual and necessary.

5) Special industry notes

5.1. Construction and allied industries

Project employment is common and recognized, but contractors must file project completion reports and keep project-specific contracts.
Length of service alone does not convert to regular in bona fide construction projects; however, continuous assignment from one project to another without meaningful breaks and for the same roles may still show regularity—often as regular employees of the contractor (not necessarily of the project owner), with security of tenure during available work.

5.2. Contracting/Subcontracting (Service Providers)

If the “contractor” lacks substantial capital or investment and the principal directly controls the workers, this is labor-only contracting. The principal becomes the employer, and repeated “project” tags cannot prevent regularization with the principal.
Legitimate contractors must be registered, capitalized, and show tools/equipment or distinct business. Workers usually become regular employees of the contractor after satisfying tenure standards under the contractor’s continuous business.

5.3. Media, events, shipbuilding, IT projects

True production projects or time-bound builds can be valid projects. But core crews who are perennially cycled are commonly found regular.

6) Does the 6-month rule apply to project employees?

The “six months” often cited for probationary employees does not automatically convert a genuine project employee to regular.
Conversion happens not by months alone, but because the worker’s role is usually necessary or desirable, or the employer failed the project tests, or rehiring patterns prove regularity.
You can’t put a “probationary” wrapper on a project to dodge tenure; the categories have different rules.

7) Ending project employment lawfully

7.1. Completion of the project/phase

Employment ends upon completion if the engagement was a bona fide project and the employee was properly informed at hiring.
Best practice: give written notice of completion, pay all earned wages, 13th month, and proportionate benefits; issue Certificate of Employment.
Separation pay is not due for completion of a genuine project, unless provided by CBA/contract/company policy.

7.2. Early termination before completion

Requires just cause (misconduct, willful disobedience, etc.) with twin-notice and hearing; or authorized cause (redundancy, retrenchment, closure) with 30-day notices to the employee and DOLE, plus separation pay per law.

7.3. Reporting requirements

For industries with reporting duties (e.g., construction), submit project completion reports to DOLE; non-compliance weakens the “project” defense in disputes.

8) Benefits and statutory entitlements

Project employees are employees. Unless they fall under narrow exemptions, they are entitled to:

Minimum wage/wage orders;
13th-month pay (after at least one month of service in a calendar year);
Overtime, night shift differential, holiday/rest-day pay when applicable;
Service Incentive Leave (SIL) after one year of service, unless validly exempt (e.g., field personnel whose performance is unsupervised and paid by output);
SSS, PhilHealth, Pag-IBIG coverage and employer contributions;
OSH protections, PPE, and site safety compliance.

Project status never waives statutory benefits.

9) Remedies when “project” is used to dodge regularization

9.1. For workers

Compile evidence: contracts, IDs, deployment schedules, payslips, site memos, screenshots/emails showing continuous assignment and control by the employer/principal.
File a complaint (money claims and illegal dismissal/regularization) before the Labor Arbiter.
Seek findings of: regular status, illegal dismissal (if dropped mid-stream without cause), reinstatement or separation pay in lieu, and full backwages plus benefits.
If a “contractor” is a façade, ask that the principal be declared the true employer.

9.2. For employers/contractors

Use project contracts that name the project, phase, site, estimated duration, deliverables, and state end-of-project termination—and actually manage staffing that way.
Avoid “perpetual projects.” If a role is permanent, classify the worker as regular; or regularize with the contractor and pool between projects.
Keep completion reports, acceptance certificates, and DOLE filings; avoid sham gaps and “5-5-5” cycling.
For subcontracting: keep registration current, maintain capital/equipment, and ensure control rests with the contractor, not the principal.

10) Seasonal and “regular seasonal” employees

If work recurs with the seasons (e.g., milling, harvest, holiday peaks), employees can become regular seasonal: they are regular for the season and have a right to be rehired each season, subject to lawful causes.
Between seasons they are considered on leave/standby, not dismissed—attempts to label them “project” during every season to avoid tenure usually fail.

11) Proof and burden

The employer bears the burden to prove project status (specific project + notice at hiring + completion).
The employee proves work patterns (continuity, necessity, control, same tasks across projects). Diaries, timecards, group chats, gate passes, and HR emails are persuasive.

12) Termination pay matrix (quick view)

Situation	Due Process	Monetary Consequences
Project completion (genuine)	Notice of completion; DOLE report where required	No separation pay (unless policy/CBA); pay all earned wages/benefits
Just cause (misconduct, etc.)	Twin notices + hearing; written decision	No separation pay; final pay of earned wages/benefits
Authorized cause (redundancy/retrenchment/closure)	30-day notice to employee & DOLE; criteria proof	Separation pay per law + final pay
Illegal dismissal (sham “project” or premature end)	N/A (defective)	Reinstatement (or separation pay in lieu) + full backwages + benefits

13) Checklists

13.1. Worker self-audit: did I become regular?

My tasks are central to the company’s usual business.
I was not told in writing at hiring that my job ends at project completion.
I’ve been rehired repeatedly for the same role, with brief, artificial gaps.
I report to the company’s own supervisors; they control my hours/methods.
The “contractor” has no equipment/capital; work is done in the principal’s premises using the principal’s tools.

If 3+ boxes are ticked, consult and consider filing for regularization/illegal dismissal.

13.2. Employer compliance: keep “project” lawful

Project contract specifies project/phase, scope, site, duration.
Written notice at hiring that employment ends upon completion.
Actual deployment matches the project; no endless recycling.
Completion report and acceptance documents are filed/kept.
Roles that are permanent are regularized (with employer or contractor).

14) FAQs

Q: Does working beyond six months automatically make me regular even if I’m “project”? A: No—not automatically. Regularization hinges on the nature of work, proper notice, and rehiring patterns, not the 6-month mark alone.

Q: Are project workers entitled to 13th-month pay and SSS/PhilHealth/Pag-IBIG? A: Yes. Project status does not remove statutory benefits.

Q: Is separation pay due when a project ends? A: For a genuine project ending as planned, no (unless a CBA or policy grants it). For authorized causes or illegal dismissal, yes, per law/award.

Q: I worked for the principal through a “contractor,” always using the principal’s tools under its supervisors. Who is my employer? A: That suggests labor-only contracting—the principal can be deemed your employer and liable for regularization and monetary awards.

15) Bottom line

Project employment is valid when it’s truly project-tied, time-bounded, and properly disclosed. But when the work is integral to the business, when rehiring is continuous, or when “project” is a paper shield, the law recognizes regular status—and protects tenure, pay, and dignity accordingly.

This guide is for general information only and not legal advice. Specific facts, industry rules, CBAs, and contracts can change outcomes; consult competent Philippine labor counsel for case-specific strategy.