It is increasingly being realized that liquid-crystalline features can play an important role in the properties and dynamics of cell monolayers. Here, we present a cell-based model of cell layers, based on the phase-field formulation, that connects cell-cell interactions specified at the single cell level to large-scale nematic and hydrodynamic properties of the tissue. In particular, we present a minimal formulation that reproduces the well-known bend and splay hydrodynamic instabilities of the continuum nemato-hydrodynamic formulation of active matter, together with an analytical description of the instability threshold in terms of activity and elasticity of the cells. Furthermore, we provide a quantitative characterisation and comparison of flows and topological defects for extensile and contractile stress generation mechanisms, and demonstrate activity-induced heterogeneity and spontaneous formation of gaps within a confluent monolayer. Together, these results contribute to bridging the gap between cell-scale dynamics and tissue-scale collective cellular organisation.