FACTS: Private respondent Camacho was the operator of a gasoline station in Baguio City, where she sells Shell petroleum products. Sometime in 1983, Camacho requested petitioner to conduct a hydro-pressure test on the underground storage tanks to determine whether the sales losses she was incurring were due to leakages therein The following morning, Camachos customers complained that their vehicles stalled because there was water in the gasoline that they bought. As a result, private respondents had to replace the gas sold to said customers. A criminal complaint was also filed against Camacho for selling adulterated gasoline ISSUE: WON petitioner should be held liable for the damage to private respondent due to the hydro-pressure test conducted by Feliciano HELD: No. To determine whether Shell should be liable for Felicianos acts, an employer-employee relationship must exist. The existence of employer-employee relationship is determined by the following elements, namely: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control employees' conduct although the latter is the most important element While the petitioner sent Feliciano to private respondent's gasoline station in conduct the hydro-pressure test, this single act did not automatically make Feliciano an employee of petitioner. More than mere hiring is required. It must further be established that petitioner is the one who is paying Felicia's salary on a regular basis; that it has the power to dismiss said employee, and more importantly, that petitioner has control and supervision over the work of Feliciano. The last requisite was sorely missing in the instant case. A careful perusal of the records shows that Feliciano is an independent contractor. According to the Labor Code, there is job contracting when the following concur: (1) It has an independent business; (2) It acts on its own account; (3) The employees are the contractor's responsibility; (4) The contractor uses its own means and methods; (5) The contractor is free from the principal's control, except with respect to the results; (6) The contractor has substantial capital; (7) Such capital is sufficient for the provision of its own tools, equipment, machinery, and work premises; (8) The agreement between the contractor and the employees assures that the latter shall be provided their rights & benefits as required by law.
Feliciano is independently maintaining a business under a duly registered business
name, "JFS Repair and Maintenance Service," and is duly registered with the Bureau of Domestic Trade. He does not enjoy a fixed salary but instead charges a lump sum consideration for every piece of work he accomplishes. If he is not able to finish his work, he does not get paid, as what happened in this case. Further, Feliciano utilizes his own tools and equipment and has a complement of workers. Neither is he required to work on a regular basis. Instead, he merely awaits calls from clients such as petitioner whenever repairs and maintenance services are requested. Moreover, Feliciano does not exclusively service petitioner because he can accept other business but not from other oil companies. All these are the hallmarks of an independent contractor. Being an independent contractor, Feliciano is responsible for his own acts and omissions. As he alone was in control over the manner of how he was to undertake the hydro-pressure test, he alone must bear the consequences of his negligence, if any, in the conduct of the same. Absent an employer-employee relationship, petitioner cannot be held liable for the acts and omissions of the independent contractor, Feliciano.