Supreme Court orders fixed salaries for bus drivers, conductors
Supreme Court orders fixed salaries for bus drivers, conductors
The court upholds the DOLE order and LTFRB memorandum circular that seek to 'enhance the economic status of bus drivers and conductors, and to promote the general welfare of the riding public'

MANILA, Philippines – The Supreme Court (SC) en banc unanimously upheld government orders for bus operators to provide fixed salaries to drivers and conducters, and to give them additional pay for good performance. 

In a 52-page decision penned by Associate Justice Marvic Leonen and made public on Thursday, September 27, the SC dismissed a petition by bus operator groups that questioned an order by the Department of Labor and Employment (DOLE) and a memorandum circular of the Land Transportation Franchising and Regulatory Board (LTFRB). 

The two agencies had directed bus operators to set up a compensation system for public utility bus drivers and conductors that would give incentives for safer behavior on the road.

The compensation system changes

DOLE’s Department Order 118-12, series of January 2012, is also known as the “Rules and Regulations Governing the Employment and Working Conditions of Drivers and Conductors in the PUB Transport Industry.” It mandates a fixed salary for public utility bus drivers and conductors not lower than the applicable minimum wage in a region.

Meanwhile, the performance-based aspect of the compensation will be based on the net income of the operator or bus company, alongside employee safety records covering road accidents, commission on traffic violations, and the observance of road courtesies.

LTFRB Memorandum Circular 2012-001, meanwhile, requires bus operators to have a Labor Standards Compliance Certificate. This certificate, which links labor standards compliance with franchise regulation, prevents the revocation of an existing certificate of public convenience or the denial of such a certificate application.

The LTFRB justified the requirement of this certificate by saying the drivers’ risky behavior on the road was attributable to the “lack of income security under a purely commission-based compensation scheme.”


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The petition

The following bus operators petitioned the SC in this case:

  • Bus Operators Association of the Philippines (PBOAP)
  • the Southern Luzon Bus Operators Association, Inc. (SO-LUBOA)
  • the Inter City Bus Operators Association (Interboa)
  • the City of San Jose del Monte Bus Operators Association (CSJDMBOA) 

The petitioners argued the DOLE order and LTFRB memorandum circular violated their constitutional rights as public utility bus operators to due process, equal protection, and non-impairment of obligation of contracts.

Specifically, they said, the DOLE order went against existing obligations to use a commission or boundary-based payment system as outlined in their collective bargaining agreement.

They also argued the LTFRB circular deprived them of capital they could invest into their business, which they say violated due process of law.

The petitioners also said the DOLE order, as it was initially put in place within Metro Manila, created an arbitrary distinction between bus operators in the capital, compared to provincial operations – an act that, they said, violated their right to equal protection.

DOLE and LTFRB cited the exercise of having quasi-legislative powers as validating the issuance of the DOLE order and the LTFRB memorandum circular, and added they did not violate the petitioners’s rights.

The decision

The SC agreed with DOLE and the LTFRB in the exercise of their quasi-legislative powers, which meant a notice and hearing were not required for their validity. It added the order and circular did not violate petitioners’ rights to due process.

The SC explained: “There can be no meaningful implementation of Department Order No. 118-12 if violating it has no consequence. As such, the LTFRB was not unreasonable when it required bus operators to comply with the part-fixed-part-performance-based payment scheme under pain of revocation of their certificates of public convenience.

“In sum, Department Order No. 118-12 and Memorandum Circular No. 2012-001 are in the nature of social legislation to enhance the economic status of bus drivers and conductors, and to promote the general welfare of the riding public. They are reasonable and are not violative of due process,” the SC added.

The SC also dismissed the bus operators’ stand that the issuances violated their right to non-impairment of obligation of contracts. Labor contracts, the court said, are “impressed with public interest, and therefore, must yield to the common good.”

“Labor contracts are subject to the special laws on wages, working conditions, hours of labor, and similar subjects. In other words, labor contracts are subject to the police power of the State,” the SC concluded. –

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