CASE DIGEST: Provincial Bus Operators v. Department of Labor

 

Provincial Bus Operators Association of the Philippines v. Department of Labor and Employment, G.R. No. 202275, [July 17, 2018]

ISSUE(S):

·         Tension between the Bill of Rights and administrative regulation

·         whether or not this case falls under any of the exceptions to the doctrine of hierarchy of courts;

·         Third, whether or not the DOLE Department Order No. 118-12 and the LTFRB Memorandum Circular No. 2012-001 deprive public utility bus operators of their right to due process of law;

·         Fourth, whether or not the DOLE Department Order No. 118-12 and the LTFRB Memorandum Circular No. 2012-001 impair public utility bus operators' right to non-impairment of obligation of contracts; and

·         Finally, whether or not the DOLE Department Order No. 118-12 and the LTFRB Memorandum Circular No. 2012-001 deny public utility bus operators of their right to equal protection of the laws.

FACTS:

To ensure road safety and address the risk-taking behavior of bus drivers, the LTFRB issued Memorandum Circular No. 2012-001 on January 4, 2012, 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.

Five  days later, the DOLE issued Department Order No. 118-12, elaborating on the part-fixed-part-­performance-based compensation system referred to in the LTFRB Memorandum Circular No. 2012-001. Department Order No. 118-12, among others, provides for the rule for computing the fixed and the performance-based component of a public utility bus driver's or conductor's wage.

On January 28, 2012, Atty. Emmanuel A. Mahipus, on behalf of the Provincial Bus Operators Association of the Philippines, Integrated Metro Manila Bus Operators Association, Inter City Bus Operators Association, the City of San Jose Del Monte Bus Operators Association, and Pro-Bus, wrote to then Secretary of Labor and Employment Rosalinda Dimapilis-Baldoz, requesting to defer the implementation of Department Order No. 118-12. The request, however, was not acted upon.

Meanwhile, on February 27, 2012 and in compliance with Rule III, Section 3 of Department Order No. 118-12, the National Wages and Productivity Commission issued NWPC Guidelines No. 1 to serve as Operational Guidelines on Department Order No. 118-12. NWPC Guidelines No. 1 suggested formulae for computing the fixed-based and the performance-based components of a bus driver's or conductor's wage.

On July 4, 2012, petitioners filed before the Court a Petition with Urgent Request for Immediate Issuance of a Temporary Restraining Order and/or a Writ of Preliminary Injunction, impleading the DOLE and the LTFRB as respondents. They pray that this Court enjoin the implementation of Department Order No. 118-12 and Memorandum Circular No. 2012-001 for being violative of their right to due process, equal protection, and non­ impairment of obligation of contracts. Particularly with respect to DO No. 118-12, its provisions on the payment of part-fixed-part performance based wage allegedly impair petitioners’ obligations under their existing collective bargaining agreements where they agreed with their bus drivers and conductor on a commission or boundary basis. They contend that Memorandum Circular No. 2012-001 further requires compliance with Department Order No. 118-12 under threat of revocation of their franchises, which allegedly deprive petitioners of the capital they invested in their businesses in violation of their right to due process of law.

Petitioners add that the initial implementation of Department Order No. 118-12 within Metro Manila allegedly creates an arbitrary distinction between bus operators operating in Metro Manila and those operating outside of Metro Manila, in violation of petitioners' right to equal protection of the laws.

Respondents counter that petitioners have no legal standing to file the present Petition considering that Department Order No. 118-12 and Memorandum Circular No. 2012-001 are directed against bus operators, not against associations of bus operators such as petitioners. They add that petitioners violated the doctrine of hierarchy courts in directly filing their Petition before this Court. For these reasons, respondents pray for the dismissal of the Petition.

On the constitutional issues raised by petitioners, respondents contend that Department Order No. 118-12 and Memorandum Circular No. 2012-001 are valid issuances promulgated by the DOLE and the LTFRB in the exercise of their quasi-legislative powers.

Further, they argue that Department Order No. 118-12 and Memorandum Circular No. 2012-001 do not violate public utility bus operators' rights to non-impairment of obligation of contracts, due process of law, and equal protection of the laws for the following reasons:

First, Department Order No. 118-12 and Memorandum Circular No. 2012-001 were issued "[to promote and protect] the welfare of the public utility bus drivers and conductors" and "(to ensure] road safety" by imposing a wage system where public utility bus drivers do not have to compete with one another and drive recklessly for additional income. Department Order No. 118-12 and Memorandum Circular No. 2012-001 are social legislations and police power measures to which petitioners' right against impairment of obligation of contracts must yield;

Second, certificates of public convenience are not property and are always subject to amendment, alteration, or repeal. Therefore, public utility bus operators cannot argue that they were deprived of their property without due process of law when the LTFRB required further compliance with Memorandum Circular No. 2012-001 for bus operators to retain their franchises; and

Finally, Department Order No. 118-12 does not violate Metro Manila public utility bus operators' right to equal protection of the laws since it applies to all public utility bus operators in the country.

RULING:

The Constitution vests in this Court and such lower courts as may be established by law the power to "declare executive and legislative acts void if violative of the Constitution."

Administrative actions reviewable by the Court, therefore, may either be quasi-legislative or quasi-judicial. As the name implies, quasi-legislative or rule-making power is the power of an administrative agency to make rules and regulations that have the force and effect of law so long as they are issued "within the confines of the granting statute." The enabling law must be complete, with sufficient standards to guide the administrative agency in exercising its rule-making power. As an exception to the rule on non­ delegation of legislative power, administrative rules and regulations must be "germane to the objects and purposes of the law, and be not in contradiction to, but in conformity with, the standards prescribed by law."

On the other hand, quasi-judicial or administrative adjudicatory power is "the power to hear and determine questions of fact to which the legislative policy is to apply and to decide in accordance with the standards laid down by the law itself in enforcing and administering the same law."

Determining whether the act under review is quasi-legislative or quasi-judicial is necessary in determining when judicial remedies may properly be availed of Rules issued in the exercise of an administrative agency's quasi-legislative power may be taken cognizance of by courts on the first instance as part of their judicial power.

However, in cases involving quasi-judicial acts, Congress may require certain quasi-judicial agencies to first take cognizance of the case before resort to judicial remedies may be allowed. This is to take advantage of the special technical expertise possessed by administrative agencies.