PILIPINAS SHELL PETROLEUM CORP V.

CA, 22 SCRA 389 (1993)

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.