G.R. No. 166109 - Exodus International Construction Corp. vs. Biscocho

Case Summary (G.R. No. 166109)

Factual Background

Exodus International Construction Corporation is a licensed labor contractor engaged in painting residential, condominium, and commercial buildings. On February 1, 1999 and July 28, 1999, Exodus obtained contracts for painting the Imperial Sky Garden and Pacific Plaza Towers, respectively. Exodus hired the respondents as painters on various dates and assigned them to the said projects. The dates of employment and daily wages were set out in the records. Guillermo worked at Imperial Sky Garden from February 8, 1999 to February 8, 2000 and was later transferred to Pacific Plaza Towers; Fernando and Ferdinand likewise worked first at Imperial Sky Garden and were transferred; Gregorio worked at a private house and then at Pacific Plaza Towers; Miguel was hired and assigned to Pacific Plaza Towers on March 10, 2000.

Procedural Origins of the Labor Claims

On November 27, 2000, Guillermo, Fernando, Ferdinand, and Miguel filed a complaint for illegal dismissal and nonpayment of holiday pay, service incentive leave pay, 13th month pay, and night-shift differential, docketed as NLRC NCR Case No. 30-11-04656-00. On December 1, 2000, Gregorio filed a separate complaint, docketed as NLRC NCR Case No. 30-12-04714-00, claiming dismissal on September 12, 2000. Petitioners denied dismissal and alleged that the respondents either absented themselves from work without leave or ceased reporting after reprimands for misconduct.

Labor Arbiter Proceedings and Decision

The Labor Arbiter rendered a Decision dated March 21, 2002. The Labor Arbiter found that respondents had not proved illegal dismissal but nonetheless ordered reinstatement without backwages because there was neither proven illegal dismissal nor abandonment. The Labor Arbiter disallowed claims for premium pay for holidays and rest days and night-shift differential for lack of proof of actual service on such days. The Labor Arbiter allowed claims for holiday pay, service incentive leave pay, and 13th month pay, and awarded a total aggregate sum of P70,183.23 inclusive of ten percent attorney’s fees, with specific amounts set out for each respondent.

National Labor Relations Commission Ruling

Petitioners appealed to the NLRC, limiting their contest to the monetary awards totaling P70,183.23. In its Resolution dated January 17, 2003, the NLRC dismissed the appeal and affirmed the Labor Arbiter’s Decision. The NLRC reasoned that petitioners had complete control over company records and could have easily rebutted the monetary claims by producing vouchers or payrolls showing payment, but they did not. The NLRC upheld the award of attorney’s fees on the ground that respondents were forced to litigate to vindicate their rights. A motion for reconsideration was denied in a Resolution dated July 31, 2003.

Court of Appeals Review

Petitioners filed a petition for certiorari with the Court of Appeals. The CA, by Decision dated August 10, 2004, dismissed the petition and affirmed the findings of the Labor Arbiter and the NLRC. The CA emphasized that when the employer controls relevant records and elects not to produce them, the burden of proof shifts against the employer and in favor of the complainants. The CA, in addition to affirming the Labor Arbiter’s awards, directed petitioners to solidarily pay full backwages inclusive of all benefits from the time wages were withheld until actual reinstatement, and included such full backwages in the computation of the ten percent attorney’s fees.

Issues Presented to the Supreme Court

Petitioners advanced several contentions on appeal: that the CA erred in ordering reinstatement where the positions no longer existed because the project had been completed; that the monetary awards lacked evidentiary and legal basis; that attorney’s fees were improper because respondents lacked counsel at most stages; and that individual petitioner Javalera should not have been held solidarily liable absent specific evidence.

Petitioners’ Contentions on the Merits

Petitioners maintained that respondents were never dismissed but voluntarily ceased reporting for work, and that prolonged absences constituted abandonment which justified termination. Petitioners argued that respondents bore the burden to prove their monetary claims and failed to do so. Petitioners further argued that reinstatement was impossible or unjust because the project had been completed and positions had ceased to exist.

Respondents’ Contentions on the Merits

Respondents asserted that they were regular employees because the painting services they performed were necessary and desirable to the usual business of petitioners. They contended that they were not project employees and that dismissal without prior notice and just cause was unlawful. Respondents denied abandonment, arguing that mere absences did not establish an intent to sever the employment relationship and that the filing of a complaint for illegal dismissal rebutted any presumption of abandonment.

Supreme Court’s Findings on Dismissal and Burden of Proof

The Supreme Court held that the petition was partly meritorious but emphasized the foundational rule on burden of proof: the employee must first establish by substantial evidence that there was a dismissal before the burden shifts to the employer to prove that any dismissal was legal. The Court found no dismissal in the present case. It accepted the Labor Arbiter’s factual findings that respondents were not shown to have been dismissed and that petitioners’ account, supported by the sworn statement of foreman Wenifredo Lalap, established that the respondents ceased reporting after reprimands for eating during working hours or after absences to apply for other work. The Court cited precedent that one alleging a fact must prove it, and that clear, positive, and convincing evidence is required to prove dismissal where the employer denies it.

Supreme Court’s Findings on Abandonment and Reinstatement

The Supreme Court agreed with the Labor Arbiter that there was no abandonment. It reiterated the settled rule that mere absence does not amount to abandonment and that abandonment requires a deliberate and unjustified refusal to resume employment accompanied by overt acts manifesting intention to sever the employment relationship. The Court observed that the employer bears the burden to prove such deliberate and unjustified refusal, and found petitioners did not adequately ascertain respondents’ interest in continuing their employment. Consequently, the Labor Arbiter’s order of reinstatement without backwages was upheld insofar as it found no dismissal nor abandonment warranting forfeiture of reinstatement.

Supreme Court’s Analysis of Employment Status and Entitlement to Benefits

The Court rejected petitioners’ contention that respondents’ positions ceased to exist upon project completion, explaining the distinction between project employees and non-project employees in the construction industry. The Court found respondents to be non-project or regular employees: they were continuously employed and transferred from one project to another without written contracts specifying employmen

Case Syllabus (G.R. No. 166109)

Parties and Procedural Posture

Exodus International Construction Corporation (Exodus) is a duly licensed labor contractor and Antonio P. Javalera is its President and General Manager.
Guillermo B. Biscocho, Fernando S. Pereda, Ferdinand M. Mariano, Gregorio S. Bellita, and Miguel B. Bobillo are painters who worked for Exodus on successive projects.
On November 27, 2000 Guillermo, Fernando, Ferdinand, and Miguel filed a complaint docketed as NLRC NCR CASE No. 30-11-04656-00 and on December 1, 2000 Gregorio filed a complaint docketed as NLRC NCR CASE No. 30-12-04714-00.
The Labor Arbiter rendered a Decision on March 21, 2002 ordering reinstatement without backwages and awarding specified monetary claims totaling P70,183.23, inclusive of ten percent (10%) attorney’s fees.
The National Labor Relations Commission (NLRC) dismissed petitioners’ appeal in a Resolution dated January 17, 2003 and denied reconsideration on July 31, 2003.
The Court of Appeals (CA) dismissed the petition for certiorari on August 10, 2004 and affirmed the Labor Arbiter and NLRC while additionally directing solidary payment of full backwages inclusive of benefits from the time wages were withheld until actual reinstatement.
Petitioners filed this Petition for Review on Certiorari assailing the CA Decision dated August 10, 2004.

Key Factual Allegations

Exodus obtained a contract from Dutch Boy Philippines, Inc. on February 1, 1999 for painting Imperial Sky Garden and another contract on July 28, 1999 for Pacific Plaza Towers.
Guillermo was employed February 8, 1999 at a daily salary of P222.00 and worked on Imperial Sky Garden from February 8, 1999 to February 8, 2000 before transfer.
Fernando was employed February 8, 1999 at a daily salary of P235.00 and worked on Imperial Sky Garden until June 17, 2000 before transfer.
Ferdinand was employed April 12, 1999 at a daily salary of P235.00 and worked on Imperial Sky Garden until February 17, 2000 before transfer.
Gregorio was employed May 20, 1999 at a daily salary of P225.00 and worked at a private house until December 4, 1999 before transfer to Pacific Plaza Towers.
Miguel was employed March 10, 2000 at a daily salary of P220.00 and was assigned to Pacific Plaza Towers.
Respondents alleged oral dismissal dates with Guillermo, Fernando, Ferdinand, and Miguel asserting oral notice on November 25, 2000 and Gregorio alleging dismissal on September 12, 2000.
Petitioners denied dismissal and alleged that Guillermo was AWOL on November 27, 2000, that Fernando, Ferdinand, and Miguel were caught eating during working hours on November 25, 2000 and thereafter ceased reporting, and that Gregorio absented himself on September 15, 2000 to apply with the general contractor and did not return.

Labor Arbiter Decision

The Labor Arbiter found on March 21, 2002 that respondents were not illegally dismissed because they chose not to report for work.
The Labor Arbiter ordered reinstatement of respondents to their former positions without any backwages.
The Labor Arbiter allowed claims for holiday pay, service incentive leave pay, and 13th month pay but disallowed premium pay for holidays and rest days and night-shift differential for lack of proof of actual service on such days.
The Labor Arbiter awarded specified sums to each respondent aggregating P70,183.23, inclusive of ten percent (10%) attorney’s fees, payable within ten days.

NLRC Rulings

The NLRC dismissed petitioners’ appeal on January 17, 2003 and affirmed the Labor Arbiter’s Decision.
The NLRC reasoned that petitioners, having control over company records, failed to present vouchers or payrolls to rebut respondents’ monetary claims and thereby gave the impression that the benefits were unpaid.
The NLRC found the award of attorney’s fees proper because respondents were compelled to litigate to vindicate their clai