G.R. No.

114787 June 2, 1995

MAM REALTY DEVELOPMENT CORPORATION and MANUEL CENTENO, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and CELSO B. BALBASTRO respondents.
Facts: Sometime in May 1982, Celso Balbastro was hired by MAM Realty Development Corporation (MAM) as pump
operator. He was merely made to open and close on daily basis the water supply system of the different phases of
the subdivision in accordance to the water scheme. However, he was considered as service contractor and not
employee by MAM. It was alleged that he was not subject to the supervision of MAM and in fact his work could also
be done by another person or the security guard. On May 23, 1990, prior to the complaint, MAM executed a Deed of
Transfer conveying to the Rancho Estates Phase III Homeowners Association, Inc. its rights and interests over the
water system in the subdivision.
Balbastro filed a complaint against MAM and its VP Manuel Centeno for the wage differentials, "ECOLA," overtime
pay, incentive leave pay, 13th month pay (for the years 1988 and 1989), holiday pay and rest day pay. The Labor
arbiter dismissed the complaint for lack of merit. But on appeal, NLRC set aside the decision of the Labor Arbiter and
referred it to Labor Tamayo for further hearing and submission of a report. Labor Tamayo rendered decision ordering
the MAM and Centeno to pay Balbastro. Instant petition was filed asserting that NLRC committed grave abuse of
discretion, amounting to lack or excess of jurisdiction, (1) in finding that an employer-employee relationship existed
between petitioners and private respondent and (2) in holding petitioners jointly and severally liable for the money
claims awarded to private respondent.
Issue: Whether there is a power of control over an employee whose work can be equally and easily done by another
person that would establish the employer-employee relationship?
Ruling: Yes there is still power of control. The court held that power of control refers to the existence of the power of
control not to the actual exercise thereof. It is not important for the employer to actually supervise the performance of
the duties of the employee. Therefore, there was an employer-employee relationship in the present case.
Regarding the solidarily liability of Centeno, the court held that solidary liabilities are only incurred under exceptional
circumstances. And the act of Centeno was not one of the enumeration and therefore, he should not be held
solidarily liable.
The decision was modified and the case was remanded to NLRC for the recomputation of private respondents
monetary award.