Project Based Employment Contract Template for the Philippines
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What is a Project Based Employment Contract?
The Project Based Employment Contract is essential for organizations engaging employees for specific projects or undertakings in the Philippines. This document is particularly crucial in industries where work is project-driven or seasonal, such as construction, IT development, or consulting. It complies with Philippine labor laws, particularly the Labor Code and Department Order No. 19-17, which provide specific guidelines for project-based employment. The contract should be used when there is a clear project with definable completion criteria, specific deliverables, and a reasonable timeframe. It includes comprehensive details about project scope, duration, compensation, benefits, and performance expectations while ensuring proper protection of both employer and employee rights under Philippine law.
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About the Project Based Employment Contract
A Project Based Employment Contract is a specialized employment agreement that allows Philippine employers to hire workers for specific projects with defined completion criteria. Unlike regular employment contracts, project-based arrangements are governed by strict legal requirements under the Labor Code of the Philippines and Department Order No. 19-17, making proper documentation essential for legal compliance.
When do you need this document?
You need this contract when engaging employees for projects with clear beginning and end points, specific deliverables, and measurable completion criteria. Common scenarios include hiring construction workers for building projects, software developers for system implementations, consultants for business process improvements, or seasonal workers for harvest periods. The project must be genuinely temporary with a defined scope that cannot be accomplished through regular employment arrangements. This document is also required when expanding your workforce temporarily for special initiatives, product launches, or time-bound research projects.
Key legal considerations
Project-based employment contracts must clearly define what constitutes project completion to avoid disputes and potential claims for regular employment status. The contract should specify deliverables, timelines, performance standards, and termination procedures. Compensation structures must comply with minimum wage laws, overtime provisions, and 13th month pay requirements. Employee benefits including social security, health insurance, and accident coverage must be provided according to Philippine law. The agreement should also address intellectual property rights, confidentiality obligations, and non-compete clauses where applicable. Failure to properly structure the contract may result in the employee being deemed a regular employee with corresponding security of tenure rights.
Legal requirements in Philippines
Under Republic Act No. 6982 and Department Order No. 19-17, project-based contracts must be in writing and clearly establish the project's nature, scope, and completion criteria. The employer must report the contract to the Department of Labor and Employment within 30 days of execution. Social Security System (SSS), PhilHealth, and Pag-IBIG coverage are mandatory for all project employees under Republic Act No. 11199. Occupational safety and health standards must be maintained according to Republic Act No. 11058, particularly for construction and industrial projects. Upon project completion, the employer must provide a certificate of completion and final pay settlement within the prescribed timeframe. Regular renewal of successive project contracts for the same employee may be scrutinized by labor authorities to ensure compliance with project-based employment restrictions.
GOVERNING LAW
Applicable law
This Project Based Employment Contract is drafted to comply with Philippines law. Key legislation includes:
Republic Act No. 6982 (Fixed-Term Employment Law): Governs fixed-term and project-based employment arrangements, defining rights and obligations of both employers and project employees
Department Order No. 19-17: Guidelines on project-based employment, including requirements for contracts and termination procedures
Republic Act No. 11058 (Occupational Safety and Health Law): Ensures workplace safety and health standards, particularly relevant for project-based work
Social Security Law (Republic Act No. 11199): Mandates social security coverage and benefits for all employees, including project-based workers
National Internal Revenue Code: Governs taxation of employment income and withholding tax obligations
PhilHealth Law (Republic Act No. 11223): Requires health insurance coverage for employees, including project-based workers
Pag-IBIG Fund Law (Republic Act No. 9679): Mandates home development mutual fund contributions for employees
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