Frances Claire R. Caceres Case No.

24
Labor I - Block A

MAM REALTY DEV. CORP. vs. NLRC

G.R. No. 114787 June 2, 1995

FACTS:

Petitioner Celso Balbastro filed a complaint against MAM Realty Development

Corporation and its Vice President Manuel Centeno for wage differentials, ECOLA, overtime
pay, incentive leave pay and 13th month pay for the years 1988 to 1989. Balbasto alleged that he
was employed by MAM as a pump operator in 1982 and had since performed such work at its
Rancho Estate in Marikina, Metro Manila. This was countered by MAM stating that Balbastro
had been previously employed by Francisco Cacho and Co., Inc., and his services were
contracted by MAM for the operation of the Rancho Estates water pump, therefore, was
engaged only as a service contractor and not as an employee of MAM. In fact, similar
arrangements were likewise entered into by MAM two other individuals.

In its decision, the Labor Arbiter dismissed the complaint for lack of merit. On appeal,
the NLRC set aside the decision of the Labor Arbiter and ordered MAM to pay the sum of
money to Balbastro. In its petition, MAM contended that the NLRC gravely abused his
discretion in finding that there was an employer-employee relationship between the petitioner
and the respondent and in holding the paying the sum of money.

ISSUE:

1) Did the NLRC err in finding that there was an employer-employee relationship between
MAM and Balbastro?

2) Was there an error by NLRC in holding Centeno to jointly and severally pay the sum of
money?

RULING:

1) No. The elements of employer-employee relationship are as follows: a) the selection and
engagement of the employee; b) the payment of wages; c) the power of dismissal; and d)
the employer's power to control the employee with respect to the result of the work to be
done and to the means and methods by which the work is to be accomplished. In the case
at bar, the power of control, the most important feature of an employer-employee
relationship refers merely to the existence of power and not to the actual exercise thereof.
It is not necessary for the employer to actually supervise the performance of duties of the
employee; it is enough that the former has a right to wield the power.

2) Yes. A corporation, being a juridical entity, may act only through its directors, officers
and employees. Obligations incurred by them are not theirs by the direct accountabilities
of the corporation they represent. In this case, there is nothing substantial on record that
can justify petitioners Centenos solidary liability with the corporation.