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Myla Ruth N.


MAM Realty Dev’t Corporation v. NLRC

Balbastro filed a complaint against petitioners, MAM realty and its Vice Pres Centeno, for wage differentials,
overtime pay and others. Balbastro alleged that he was employed by MAM as a pump operator and performed such
work at its Rancho Estate. He earned a monthly salary who worked seven days a week.
Petitioner alleged that Balbastro had previously been employed by Francisco Cancho Inc., the developer of
Rancho Estates. His services were contracted by petitioner for the operation of the Rancho Estates’ water pump.
Under the agreement, Balbastro was made to open and close daily the water supply system. He worked for
only a maximum of 3 hours a day and used his free times by offering plumbing services to the residents of the

ISSUE: W/N there exists an ER-EE relationship between petitioner and Balbastro

HELD: Yes.
Repeatedly, the issue of the existence of ER-EE relationship is determined by the following factors:
1. selection and engagement of the employees
2. payment of wages
3. power of dismissal
4. employer’s power to control the employee with respect to the result to be done and to the means and
methods by which the work is to be accomplished.
The power of control 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.
With regards to the liability of Centeno, Vice Pres of MAM, he is not jointly and severally liable with MAM. A
corporation, being a juridical entity, may act only through its directors, officers, employees. Obligations incurred by
them, are not theirs but the direct accountabilities of the corporation they represent. Solidary liability may at times
be incurred but only when exceptional circumstances warrant, such as:
1. When directors and trustees or 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
c. guilty of conflict of interest
2. When a director or officer has consented to the issuance of watered stocks or who, having knowledge
thereof, did not file his written objection thereto
3. When a director, trustee or officer has agreed to hold himself personally and solidarily liable with
4. When a director, trustee or officer is made personally liable for his corporate action.
In the case at bench, there is nothing substantial that can justify Centeno’s solidary liability with