Project Employees Still Enjoy Security of Tenure: Lessons from Saberola v. Suarez

The distinction between regular and project employees often confuses both workers and employers. Many assume that being hired for a specific project means an employer can end the arrangement at any time, without notice or justification. The Supreme Court’s decision in Saberola v. Suarez (G.R. No. 151227, July 14, 2008) clarifies that this assumption is wrong. Even project employees enjoy security of tenure, and terminating them requires both a lawful cause and observance of procedural due process.

The Facts of the Case

Gregorio Saberola owned G.S. Saberola Electrical Services, a firm that installed electrical devices in subdivision homes and buildings. He hired Ronald Suarez and Raymundo Lirasan, Jr. as electricians from February 1995 until their separation in 1997. They worked Monday to Saturday, sometimes on Sundays, for a daily wage of P110.00.

The employees filed a complaint for illegal dismissal and money claims. They alleged that Lirasan was dismissed without cause or due process—he was simply told his services were no longer needed. Both claimed they were paid below the minimum wage of P135.00 per day under Wage Order No. 5 of Region XI, and that they never received 13th month pay, overtime pay, or service incentive leave pay.

Saberola defended by saying the workers were project employees, employed only when electrical jobs were available, and that their employment was coterminous with each project.

The Issue Before the Court

The Supreme Court was asked to resolve two questions: (1) whether Suarez was illegally dismissed, and (2) whether the employees were entitled to their monetary claims.

The Ruling: Project Employees Have Security of Tenure

The Court first confirmed that Suarez and Lirasan were indeed project employees. Under Article 280 of the Labor Code, a project employee is one whose employment has been fixed for a specific project or undertaking, the completion or termination of which was determined at the time of engagement.

However, the Court emphasized that project employees still enjoy security of tenure. Section 3, Article XIII of the Constitution guarantees this right to all workers. Consequently, a project employee may only be terminated for just or authorized causes under Articles 282 and 283 of the Labor Code, and the termination must comply with the due process requirements under Article 277(b).

The Court cited Archbuild Masters and Construction, Inc. v. NLRC to explain that while a project worker’s employment is coterminous with the completion of a specific phase of a project, the dismissal must still satisfy substantive and procedural due process. The employer must furnish a written notice of impending dismissal and give the employee an opportunity to contest it.

Burden of Proof on the Employer

In termination cases, the burden of proof rests on the employer to show that the dismissal was for a just or authorized cause. The employer must state and prove the actual basis for the dismissal once its validity is challenged.

Saberola failed this test. He presented no evidence to show that the project had ended or that he complied with notice and hearing requirements. The Court therefore held that Suarez was illegally dismissed.

Monetary Claims: The Burden of Proving Payment

The Court also upheld the employees’ monetary claims. As a general rule, the party who pleads payment has the burden of proving it. In the employer-employee context, this burden falls on the employer because payrolls, personnel files, remittances, and other relevant records are in the employer’s custody and control.

Saberola failed to present such records. Consequently, the Court affirmed the awards for wage differentials, 13th month pay, service incentive leave pay, separation pay (for Suarez), and attorney’s fees.

Practical Takeaways

• Project employees are not at-will workers. Their employment may end with a project, but the termination must still be for a valid cause and must follow due process.
• Written notice is essential. An employer must give a project employee written notice of the impending termination and an opportunity to be heard before the dismissal takes effect.
• Keep project records. Employers should document the scope and duration of each project and maintain clear records showing when a project ended and why a worker’s services were no longer needed.
• Payroll records are critical. Employers bear the burden of proving payment of wages and statutory benefits. Failure to produce payroll records can result in liability for monetary claims.
• When in doubt, consult counsel. The distinction between regular and project employment is highly factual. Employers should seek legal advice before classifying workers or effecting terminations.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.