3. DOLE Issuances

Boundary-Hulog System

Under the boundary-hulog scheme, a dual juridical relationship was created: that of Er-Ee and vendor- vendee. The boundary system is a scheme by an owner or operator engaged in transporting passengers as a common carrier to primarily govern the compensation of the driver, that is, the driver remits the agreed daily boundary to the owner or operator and retains earnings in excess of that boundary as compensation. Under this system, the owner or operator exercises control and supervision over the driver. (Villamaria v. CA and Bustamante, G.R. No. 165881, 19 Apr. 2006)

The boundary-hulog contract between the jeepney owner and the jeepney driver does not negate the Er-Ee relationship between them. (Azucena, 2016)

Q: To ensure road safety and address the risk- taking behavior of bus drivers, the LTFRB issued Memorandum Circular 2012-001 requiring all Public Utility Bus (PUB) operators to secure Labor Standards Compliance Certificates under pain of revocation of their existing certificates of public convenience or denial of an application for a new certificate. The DOLE likewise issued Department Order (D.O.) No. 118-12 elaborating on the part-fixed-part-performance-based compensation system referred to in the said memorandum circular. Petitioners assail the constitutionality of the department order and memorandum circular, arguing that these issuances violate petitioners' rights to non- impairment of obligation of contracts, due process of law, and equal protection of the laws. Respondents counter that the department order and memorandum circular are valid issuances promulgated by the DOLE and the LTFRB in the exercise of their quasi-legislative powers. Are the department order and memorandum circular constitutional?

A: YES. D.O. 118-12 and M.C. 2012-001 are in the nature of social legislations to enhance the economic status of bus drivers and conductors, and to promote the general welfare of the riding public. D.O. 118-12 was issued to grant bus drivers and conductors minimum wages and social welfare benefits. Further, petitioners repeatedly admitted that in paying their bus drivers and conductors, they employ the boundary system or commission basis, payment schemes which cause drivers to drive recklessly. Not only does D.O. 118-12 aim to uplift the economic status of bus drivers and conductors; it also promotes road and traffic safety. (Provincial Bus Operators Association of the Philippines v. DOLE and LTFRB, G.R. No. 202275, 17 July 2018)