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Project-Based Contract
"I need a project-based employment contract for a software developer to work on a 6-month project, with a fixed monthly payment, 10 days of paid leave, and a 2-week termination notice."
What is a Project-Based Contract?
A Project-Based Contract is a fixed-term employment agreement that ties a worker's service to a specific project or undertaking in the Philippines. These contracts typically end when the project is completed or when a set milestone is reached, following guidelines under DOLE Department Order No. 18-A.
Common in construction, IT, and consulting sectors, these contracts spell out key details like project scope, completion timeline, and payment terms. Philippine labor law requires employers to clearly define the project's beginning and end, ensure fair compensation, and provide workers with benefits like SSS and PhilHealth coverage during the contract period.
When should you use a Project-Based Contract?
Use a Project-Based Contract when hiring workers for specific, time-bound initiatives like construction projects, software development, or event management campaigns in the Philippines. This agreement makes sense for tasks with clear start and end dates, defined deliverables, and measurable outcomes.
The contract proves especially valuable for businesses managing seasonal demands, one-time projects, or specialized work that doesn't require permanent staff. It helps comply with DOLE regulations while protecting both employer and worker rights through clear terms about project scope, duration, and compensation. Perfect for situations where work naturally concludes once project goals are met.
What are the different types of Project-Based Contract?
- Fixed-Duration Project Contract: Specifies exact start and end dates, commonly used for construction or event management
- Milestone-Based Contract: Links payment and completion to specific project phases or deliverables
- Seasonal Project Agreement: Designed for recurring but temporary projects like harvest seasons or holiday campaigns
- Technical Services Contract: Used for specialized IT, engineering, or consulting projects requiring specific expertise
- Multi-Phase Project Contract: Covers complex projects with distinct stages, allowing continuation or termination at phase completion
Who should typically use a Project-Based Contract?
- Project Managers: Define project scope, timeline, and deliverables while overseeing contract implementation
- HR Departments: Draft and process Project-Based Contracts, ensuring DOLE compliance and proper documentation
- Contract Workers: Provide specialized skills or labor for specific project duration, subject to contract terms
- Legal Teams: Review and validate contract terms, ensuring protection for both parties under Philippine labor laws
- Department Heads: Identify project needs, approve budgets, and authorize contract execution
How do you write a Project-Based Contract?
- Project Details: Define clear scope, timeline, deliverables, and completion criteria
- Worker Information: Gather complete employee details, role specifications, and required qualifications
- Compensation Structure: Calculate salary, benefits, and performance-based incentives following DOLE guidelines
- Contract Duration: Specify exact start and end dates or milestone-based completion terms
- Legal Requirements: Include mandatory provisions for SSS, PhilHealth, and other statutory benefits
- Contract Review: Use our platform to generate a compliant document, then verify all details match project needs
What should be included in a Project-Based Contract?
- Project Definition: Clear description of work scope, specific deliverables, and completion criteria
- Duration Terms: Explicit start and end dates or milestone-based completion parameters
- Compensation Details: Salary, payment schedule, and statutory benefits as per DOLE requirements
- Work Conditions: Hours, location, reporting structure, and performance standards
- Legal Compliance: SSS, PhilHealth, and other mandatory benefit provisions
- Termination Clauses: Valid grounds for early contract end and proper notice periods
- Signatures Section: Full names and titles of authorized signatories from both parties
What's the difference between a Project-Based Contract and an Employment Contract?
A Project-Based Contract differs significantly from a standard Employment Contract in several key aspects under Philippine labor law. While both regulate employer-employee relationships, their fundamental structures and applications serve different purposes.
- Duration and Termination: Project-Based Contracts end automatically when the specific project completes, while Employment Contracts continue indefinitely until formal termination
- Scope Definition: Project contracts require detailed deliverables and completion criteria, whereas employment contracts focus on ongoing role responsibilities
- Benefits Structure: Project workers receive benefits for the contract duration only, while regular employees enjoy continuous benefits under Philippine labor laws
- Job Security: Regular employment offers stronger security protections and severance rights compared to project-based arrangements
- Legal Classification: Project-based work falls under fixed-term employment rules, requiring specific DOLE compliance different from regular employment requirements
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