16mam Vs NLRC

MAM REALTY DEVELOPMENT CORPORATION and MANUEL
CENTENO, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and CELSO B.
BALBASTRO respondents.
FACTS:
The case originated from a complaint filed with the Labor Arbiter by private
respondent Celso B. Balbastro against herein petitioners, MAM Realty Development
Corporation ("MAM") and its Vice President Manuel P. Centeno, for wage
differentials, "ECOLA," overtime pay, incentive leave pay, 13th month pay (for the
years 1988 and 1989), holiday pay and rest day pay. Balbastro alleged that he was
employed by MAM as a pump operator in 1982 and had since performed such work
at its Rancho Estate, Marikina, Metro Manila. He earned a basic monthly salary of
P1,590.00 for seven days of work a week that started from 6:00 a.m. to up until
6:00 p.m. daily. MAM countered that Balbastro had previously been employed by
Francisco Cacho and Co., Inc., the developer of Rancho Estates. Sometime in May
1982, his services were contracted by MAM for the operation of the Rancho Estates'
water pump. He was engaged, however, not as an employee, but as a service
contractor, at an agreed fee of P1,590.00 a month. Similar arrangements were
likewise entered into by MAM with one Rodolfo Mercado and with a security guard of
Rancho Estates III Homeowners' Association. Under the agreement, Balbastro was
merely made to open and close on a daily basis the water supply system of the
different phases of the subdivision in accordance with its water rationing scheme.
He worked for only a maximum period of three hours a day, and he made use of his
free time by offering plumbing services to the residents of the subdivision. He was
not at all subject to the control or supervision of MAM for, in fact, his work could so
also be done either by Mercado or by the security guard. On 23 May 1990, prior to
the filing of the complaint, MAM executed a Deed of Transfer, 1effective 01 July
1990, in favor of the Rancho Estates Phase III Homeowners Association, Inc.,
conveying to the latter all its rights and interests over the water system in the
subdivision. In a decision, dated 23 December 1991, the Labor Arbiter dismissed the
complaint for lack of merit. On appeal to it, respondent National Labor Relations
Commission ("NLRC") rendered judgment (a) setting aside the questioned decision
of the Labor Arbiter and ordered petitioner to pay jointly and severally complainant
the sum of P86,641.05 as above-computed
ISSUE:
A. Whether or not there has been an employer-employee relationship existed
between petitioners and respondents.
B. If there is, can petitioners be held jointly and severally liable for the
money claims awarded to private responden?
HELD:
A. Yes. Once again, the matter of ascertaining the existence of an employeremployee relationship is raised. Repeatedly, we have said that this factual issue is
determined by: (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. We see no grave abuse of
discretion on the part of NLRC in finding a full satisfaction, in the case at bench, of
the criteria to establish that employer-employee relationship. The power of control,
the most important feature of that relationship and, here, a point of controversy,
refers merely to the existence of the power and not to the actual exercise thereof. It
is not essential 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. 4 It is hard
to accede to the contention of petitioners that private respondent should be
considered totally free from such control merely because the work could equally and
easily be done either by Mercado or by the subdivision's security guard. Not without
any significance is that private respondent's employment with MAM has been
registered by petitioners with the Social Security System
B. No. The NLRC erred in holding Centeno jointly and severally liable with MAM. A
corporation, being a juridical entity, may act only through its directors, officers and
employees. Obligations incurred by them, acting as such corporate agents, are not
theirs but the direct accountabilities of the corporation they represent. Except in
cases: 1. When directors and trustees or, in appropriate cases, the officers of a
corporation (a) vote for or assent to patently unlawful acts of the corporation;(b)
act in bad faith or with gross negligence in directing the corporate affairs;(c) are
guilty of conflict of interest to the prejudice of the corporation, its stockholders or
members, and other persons.
2. When a director or officer has consented to the issuance of watered stocks or
who, having knowledge thereof, did not forthwith file with the corporate secretary
his written objection thereto.
3. When a director, trustee or officer has contractually agreed or stipulated to hold
himself personally and solidarily liable with the Corporation.
4 When a director, trustee or officer is made, by specific provision of law, personally
liable for his corporate action.
WHEREFORE, the order of 21 March 1994 is MODIFIED. The case is REMANDED to
the NLRC for a re-computation of private respondent's monetary awards, which,
conformably with this opinion, shall be paid solely by petitioner MAM Realty
Development Corporation. No special pronouncement on costs.

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MAM REALTY DEVELOPMENT CORPORATION and MANUEL

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