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.
Frequently Asked Questions
Is a project based employment contract legally binding in the Philippines?
Yes, a project-based employment contract is legally binding in the Philippines when it complies with the Labor Code and Department Order No. 19-17. The contract must clearly specify the project scope, duration, and completion criteria to be enforceable. Both employer and employee are bound by the terms once signed, and violations can result in legal consequences including potential labor disputes.
How is a project based contract different from a regular employment contract in the Philippines?
A project-based contract in the Philippines is specifically for a defined project with a clear completion date, while regular employment has no predetermined end date. Project-based employees are not entitled to security of tenure and their employment automatically terminates upon project completion. Regular employees enjoy greater job security and benefits under the Labor Code of the Philippines.
Can my project based employment become regular employment in the Philippines?
Yes, project-based employment can become regular employment if the contract doesn't meet Department Order No. 19-17 requirements. If the project lacks a specific completion date, involves activities necessary to the employer's business, or if you're repeatedly rehired for successive projects without gaps, the employment may be deemed regular. This grants you security of tenure and additional benefits under Philippine labor law.
How long does it take to create a project based employment contract in the Philippines?
Creating a project-based employment contract typically takes 1-3 business days if using a template, or 1-2 weeks if drafted from scratch by a lawyer. The timeline depends on the project's complexity and negotiation of terms. However, ensuring compliance with Department Order No. 19-17 and the Labor Code requirements may require additional review time.
Are project based employees entitled to 13th month pay in the Philippines?
Yes, project-based employees in the Philippines are entitled to 13th month pay under Presidential Decree No. 851, regardless of their employment classification. They must receive pro-rated 13th month pay based on their length of service during the year. This applies even if the project duration is less than 12 months.
Can I terminate a project based employee before the project ends in the Philippines?
You can terminate a project-based employee before project completion only for just causes under the Labor Code, such as serious misconduct or willful disobedience. Early termination without just cause may require payment of separation pay and could expose you to illegal dismissal claims. The contract should specify termination procedures and notice requirements.
Will my project based employment contract be invalid if it's missing completion criteria?
Yes, a project-based contract without clear completion criteria will likely be deemed invalid under Department Order No. 19-17. The contract must specify measurable project milestones, deliverables, or a definite completion date. Without these elements, the Department of Labor may classify the employment as regular, granting the employee security of tenure and additional benefits.
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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