Despite rehiring, employee still has no permanent status


Persida Acosta

Dear PAO,
I have been engaged as an employee by a shipyard for ten years now. I have performed various tasks, which are all important to their business, on a per project contract basis. I am of the belief that I am a regular employee due to my repeated rehiring, and because all the tasks given to me by the company are necessary and desirable for their business. I have voluntarily acceded to the contracts, knowing that in the end, I can be declared a regular employee. Am I correct?
Sincerely yours,

Dear Thomas,
Fairly recent is the case of Herma Shipyard, et al. vs Danilo Oliveros, et al. (GR No. 208936, April 17, 2017) penned by Associate Justice Mariano C. Del Castillo, which would very well enlighten you in your situation:
“The services of project-based employees are co-terminus with the project and may be terminated upon the end or completion of the project or a phase thereof for which they were hired. The principal test in determining whether particular employees were engaged as project-based employees, as distinguished from regular employees, is whether they were assigned to carry out a specific project or undertaking, the duration and scope of which was specified at, and made known to them, at the time of their engagement. It is crucial that the employees were informed of their status as project employees at the time of hiring and that the period of their employment must be knowingly and voluntarily agreed upon by the parties, without any force, duress, or improper pressure being brought to bear upon the employees or any other circumstances vitiating their consent.

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It is settled, however, that project-based employees may or may not be performing tasks usually necessary or desirable in the usual business or trade of the employer. The fact that the job is usually necessary or desirable in the business operation of the employer does not automatically imply regular employment; neither does it impair the validity of the employment contract stipulating fixed duration of employment.”

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“‘[T]he repeated rehiring [of respondents as project-based employees]does not [also], by and of itself, qualify them as regular employees. Case law states that length of service [through rehiring]is not the controlling determinant of the employment tenure [of project-based employees but, as earlier mentioned], whether the employment has been fixed for a specific project or undertaking, with its completion having been determined at the time of [their]engagement.’ Stated otherwise the rule that employees initially hired on a temporary basis may become permanent employees by reason of their length of service is not applicable to project-based employees.” [Emphasis supplied, citations omitted.]

Verily, your repeated employment in your company, considering your own allegation that you have been engaged via project-based contracts does not necessarily amount to regular employment. You were very much aware of the conditions of your employment and you acceded to every project contract you have engaged into.

While you likewise prevail that you are engaged to “important” tasks or activities that are “necessary and desirable” for the company, the same would likewise not necessarily result to regular employment.

For as long as you have voluntarily and freely entered into those contracts and that your tasks are very well-delineated and defined, you cannot easily feign benefit as a regular employee due to the above-stated principles. You may have been inspired by other cases involving project employment which were adjudged by the Supreme Court as tantamount to regular employment, however, the facts you have presented is very similar to the peculiar presentation of facts in the above-quoted jurisprudence. Hence, your belief that you are engaged in regular employment, despite voluntariness and agreement to your project or contract-based engagement, may not be correct at all.

Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.

We hope that we were able to enlighten you on the matter.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to


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