Exodus International Construction Corporation vs. Biscocho

Where there is neither dismissal nor abandonment, the proper remedy is reinstatement without backwages, as the burden of economic loss cannot be shifted to the employer.

Petitioner Exodus International Construction Corporation, a licensed labor contractor, hired respondents as painters for various projects, including the Imperial Sky Garden and Pacific Plaza Towers. Upon completion of one project, respondents were transferred to the next. After respondents ceased working on different dates, they filed complaints for illegal dismissal and non-payment of benefits, alleging oral termination. Petitioners countered that respondents stopped reporting after being reprimanded for infractions or applying for work elsewhere.

• Employment and Assignments: Respondents were hired as painters on different dates between 1999 and 2000 and assigned to various projects. Upon completion of one project, they were automatically transferred to the next.
• Cessation of Work: Gregorio Bellita stopped reporting after applying for work with another contractor on September 15, 2000. Fernando Pereda, Ferdinand Mariano, and Miguel Bobillo stopped reporting after being reprimanded for eating during working hours on November 25, 2000. Guillermo Biscocho was reprimanded for being AWOL on November 28, 2000, worked half-day, and never returned.
• Conflicting Claims: Respondents claimed they were orally notified of their dismissal. Petitioners presented the sworn statement of their foreman to rebut this, asserting respondents stopped reporting due to reprimands or seeking other employment. The Labor Arbiter found no evidence of dismissal or abandonment.

• No Dismissal or Abandonment: Petitioners argued that respondents were never dismissed and that their prolonged absences constituted abandonment, a valid ground for termination.
• Burden of Proof on Monetary Claims: Petitioners maintained that the burden of proving monetary claims rested on respondents, who failed to substantiate them.
• Impossibility of Reinstatement: Petitioners contended that reinstatement was impossible and unjust because the project had been completed and the positions no longer existed.
• Solidary Liability of Corporate Officer: Petitioners argued there was no specific evidence to hold individual petitioner Javalera solidarily liable with the corporation.
• Attorney's Fees: Petitioners asserted that the award of attorney's fees was improper because respondents were not represented by counsel in most stages of the proceedings.

• Regular Employment and Illegal Dismissal: Respondents argued that as painters performing activities necessary to the business, they were regular employees illegally dismissed without just cause and without notice.
• No Abandonment: Respondents countered that mere absence does not constitute abandonment; filing an illegal dismissal complaint manifests a clear intention to return to work and negates abandonment.

• Fact of Dismissal: Whether respondents successfully established by substantial evidence the fact of their dismissal.
• Abandonment: Whether respondents abandoned their employment.
• Reinstatement and Backwages: Whether the Court of Appeals erred in ordering reinstatement with full backwages despite the absence of illegal dismissal.
• Monetary Claims: Whether respondents are entitled to holiday pay, service incentive leave pay, and 13th month pay.
• Attorney's Fees: Whether the award of attorney's fees is proper despite the absence of counsel on record.
• Solidary Liability: Whether individual petitioner Javalera is solidarily liable with the corporation.

• Fact of Dismissal: No illegal dismissal was established. The burden to prove dismissal rests on the employee; respondents failed to provide substantial evidence, such as identifying who dismissed them or the circumstances thereof. Petitioners' evidence that respondents stopped reporting after reprimands was found more persuasive.
• Abandonment: No abandonment was established. Petitioners failed to prove a deliberate and unjustified refusal by respondents to resume work.
• Reinstatement and Backwages: Reinstatement without backwages is the proper remedy. Where failure to work is occasioned neither by abandonment nor termination, each party must bear its own economic loss; the Court of Appeals erred in awarding full backwages.
• Monetary Claims: The award of holiday pay, service incentive leave pay, and 13th month pay was affirmed. Employers control company records and payrolls; their failure to present vouchers or payrolls to rebut the claims creates a presumption of non-payment.
• Attorney's Fees: The award was affirmed. Respondents were forced to litigate to protect their interests due to petitioners' unjustified withholding of statutory benefits.
• Solidary Liability: The issue of Javalera's solidary liability for backwages was rendered moot by the deletion of the backwages award.
• Employment Status: Respondents are regular employees, not project employees, because they were continuously rehired and transferred across projects, performing tasks vital to the employer's painting business.

• Burden of Proof in Illegal Dismissal — Before the employer bears the burden of proving the legality of a dismissal, the employee must first establish by substantial evidence the fact of dismissal. If no dismissal is proven, the legality thereof cannot be entertained.
• Abandonment — Requires the concurrence of two elements: (1) the employee failed to report for work or was absent without valid or justifiable reason; and (2) there was a clear intention to sever the employer-employee relationship manifested by some overt act. Mere absence is insufficient, and the filing of an illegal dismissal complaint negates abandonment.
• Reinstatement Without Backwages — In cases where the employee's failure to work was occasioned neither by abandonment nor by termination, the burden of economic loss is not rightfully shifted to the employer; each party must bear its own loss. The proper remedy is reinstatement without backwages.
• Project Employees Acquiring Regular Status — A project employee may acquire the status of a regular employee when: (1) there is continuous rehiring of project employees even after cessation of a project; and (2) the tasks performed are vital, necessary, and indispensable to the usual business or trade of the employer.

• "Before the [petitioners] must bear the burden of proving that the dismissal was legal, [the respondents] must first establish by substantial evidence that indeed they were dismissed. [I]f there is no dismissal, then there can be no question as to the legality or illegality thereof."
• "In a case where the employee’s failure to work was occasioned neither by his abandonment nor by a termination, the burden of economic loss is not rightfully shifted to the employer; each party must bear his own loss."

• Machica v. Roosevelt Services Center, Inc. — Followed. Sustained the employer's denial over the employees' unsubstantiated assertion of illegal dismissal, holding that the burden to prove the fact of dismissal rests on the employees.
• Northwest Tourism Corporation v. Former Special 3rd Division of the Court of Appeals — Followed. Enumerated the two elements necessary to constitute abandonment of work.
• Maraguinot, Jr. v. National Labor Relations Commission — Applied. Provided the two factors determining when a project employee acquires regular employee status.
• Leonardo v. National Labor Relations Commission — Applied. Established the principle that where there is neither abandonment nor dismissal, each party bears its own economic loss, precluding an award of backwages.
• Rutaquio v. National Labor Relations Commission and Producers Bank of the Philippines v. Court of Appeals — Applied. Justified the award of attorney's fees when a party is compelled to litigate to protect its interests due to the unjustified act of the other party.

Renato C. Corona, Presbitero J. Velasco, Jr., Antonio Eduardo B. Nachura, Jose Portugal Perez.