Law Summary
Classification of Employees
- Employees classified as project employees and non-project employees.
- Project employees are hired for a specific project or phase and employment ends with the project.
- Non-project employees have no reference to a particular project.
Indicators of Project Employment
- Employment duration is determinable and defined in the contract.
- Work is connected to a specific project.
- Employee is free to seek work elsewhere when not engaged.
- Employer reports termination within 30 days to DOLE.
- Employer may pay a completion bonus.
Project Completion and Rehiring
- Project employees may be separated by phase completion, which is considered completion for that employee.
- Gradual reduction in workforce as project phases near completion.
- Rehiring for another project allowed, with proper contractual documentation.
Types of Non-project Employees
- Probationary employees: entitled to regularization upon successful probation.
- Regular employees: have completed probation or appointed to regular positions.
- Casual employees: work unrelated to main business; may become regular after one year.
Contracting and Subcontracting
- Recognized practice, allowed under law with labor standards compliance.
- Workers employed by contractors or subcontractors subject to Labor Code rules.
Security of Tenure
- Regular project employees enjoy security of tenure per Article 280 of Labor Code.
- Just causes for termination (Art. 282) do not require separation pay.
- Authorized causes (Art. 283) entitle employee to separation pay.
Separation Pay and Project Completion
- Project employees terminated due to project completion generally not entitled to separation pay.
- Employees with at least one year continuous employment considered regular unless termination date is clearly defined.
- Unsatisfactory service before project end may entitle reinstatement or compensation.
Completion Bonus
- Pro-rata completion bonus owed if promised.
- Minimum industry standard bonus generally half-month salary per 12 months service.
- Bonus applies to projects bid or tendered 30 days after guideline issuance.
Statutory Benefits
- All employees entitled to benefits under law, whether project or non-project.
Payment by Results
- Rates paid by results must not be below region’s minimum wage.
- DOLE Regional Office can determine appropriate rates.
Preventive Suspension
- Employees may be suspended up to 15 days if a serious threat exists.
- Employer must hold fact-finding investigation within suspension period.
- Suspension may be extended with pay; termination may follow based on investigation.
Self-Organization and Collective Bargaining
- Employees encouraged to form trade unions to promote collective bargaining.
- Trade unions consist of workers from same or allied trades.
- Activities must not prejudice existing bargaining units and comply with existing laws.
Employer and Worker Responsibilities
- Construction companies, contractors, and subcontractors must comply with labor laws including wages, benefits, health and safety.
- Employers required to submit reports on accidents and employee terminations to DOLE.
- Workers must follow labor laws and company rules.
Safety and Health Standards
- DOLE Regional Offices enforce occupational safety and health standards.
- Specific rules apply to construction safety.
- Bureau of Working Conditions may issue construction industry-specific codes of practice.
Wage Increases
- Wage increases to be borne by principals or clients of contractors.
- Wage rates depend on skills and are aligned with NMYC trade standards and wage orders.
- Subsequent mandated wage increases handled per applicable laws.
Effect on Existing Issuances and Agreements
- Guidelines serve as enforcement tools for labor laws.
- Benefits existing at issuance time cannot be reduced.
- Supersedes Policy Instructions No. 20 of 1977.
- Effective immediately as of April 1, 1993.