The end of commission-based salaries for bus drivers and conductors might finally be in sight. The Supreme Court (SC) has affirmed the legality of implementing a part-fixed, part-performance-based wage system for public utility bus (PUB) drivers and conductors to ensure road safety.

The change in compensation was conceived by the Land Transportation Franchising and Regulatory Board (LTFRB), Department of Labor and Employment (DOLE), and National Wages and Productivity Commission (NWPC) as far back as 2012 to put an end to the boundary salary scheme which encourages competition among bus drivers and conductors, and reckless driving as a result.

Six years in the making

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The change in compensation was kicked off by the LTFRB Memorandum Circular No. 2012-001 1 on January in 2012, requiring all PUB operators to secure Labor Standards Compliance Certificates or risk having their franchises revoked.

This was followed by DOLE Department Order No. 118-12, that detailed the part-fixed, part-performance-based compensation system for bus drivers and conductors referred to in the LTFRB memorandum circular.

On February, NWCP issued Operational Guidelines on the Department Order, providing suggested formulae for computing the new wage system.

New wage system

Under the new system, public utility bus drivers and conductors will be given a fixed salary not lower than the applicable minimum wage in a region. The fixed wage may be based on a time unit of work (hourly, daily or monthly), per trip or per kilometer basis. It should include overtime pay, night shift differential, service incentive leave and premium pay, among others.

It also requires a performance-based compensation portion based on the net income of the operator while also taking into account employee safety records with regards to road accidents, commission on traffic violations, and the observance of road courtesies.

Will fixed salaries for bus drivers make for better, safer driving?

The petition

This new system could not immediately be implemented because the Bus Operators Association of the Philippines (PBOAP), the Southern Luzon Bus Operators Association, Inc. (SO-LUBOA), the Inter City Bus Operators Association (Interboa), and the City of San Jose del Monte Bus Operators Association (CSJDMBOA) has petitioned the SC to look into the legality of its implementation.

The petitioners argued that these new orders violated their constitutional rights as public utility bus operators to due process, equal protection, and non-impairment of obligation of contracts. The group argued that the commission or boundary-based payment system was a condition of their collective bargaining agreement, and that the system, initially put in place in Metro Manila, violated their right to equal protection.

The decision

In a 52-page decision penned by Associate Justice Marvic Leonen, the high court dismissed the petition. In its decision, the SC found that the orders were “reasonable and are not violative of due process” and are intended ”to enhance the economic status of bus drivers and conductors, and to promote the general welfare of the riding public.”

It cited that the DOLE created a Technical Working Group that conducted meetings and consultations with interested sectors before promulgating the challenged department order.

It went on to explain that, “The boundary system puts drivers in a ‘scarcity mindset’ that creates a tunnel vision where bus drivers are nothing but focused on meeting the boundary required and will do so by any means possible and regardless of risks...This scarcity mindset is eliminated by providing drivers with a fixed income plus variable income based on performance.”

“The fixed income equalizes the playing field, so to speak, so that competition and racing among bus drivers are prevented. The variable pay provided in Department Order No. 118-12 is based on safety parameters, incentivizing prudent driving,” it added.

Thus it argued that the DOLE and LTFRB issuances were in the exercise of their quasi-legislative powers.