What is the relationship between jeepney and taxi drivers and their operators under the boundary system?

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AT A GLANCE

In determining the existence of employer-employee relationship, the four-fold test or the two-tiered test may be applied.
The relationship between jeepney owners/operators on one hand and jeepney drivers on the other hand under the boundary system is that of employer-employee and not of lessor-lessee.
The existence of a vendor-vendee relationship between the operator and the driver under a boundary-hulog system which is essentially a contract to sell does not negate the existence of an employer-employee relationship.

In determining the existence of employer-employee relationship, the four-fold test or the two-tiered test may be applied.

Jurisprudence says:

In determining the existence of an employer-employee relationship, has invariably adhered to the four-fold test, to wit: [1] the selection and engagement of the employee; [2] the payment of wages; [3] the power of dismissal; and [4] the power to control the employee’s conduct, or the so-called “control test”, considered to be the most important element. (Philippine Global Communications, Inc. vs. Ricardo De Vera, G.R. No. 157214, June 7, 2005)

The control test, or “means-and-method control test,” determines whether the employer controls or has reserved the right to control the employee not only as to the result of the work to be done bust also as to the means and methods by which the same is to be accomplished. The greater the supervision and control the hirer exercises, the more likely the worker is deemed an employee.

Jurisprudence says:

Case law has consistently held that the elements of an employer-employee relationship are: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee on the means and methods by which the work is accomplished. The last element, the so-called “control test”, is the most important element. (Jose Y. Sonza Vs. Abs-Cbn Broadcasting Corporation, G.R. No. 138051, June 10, 2004)

What is a boundary system?

Jurisprudence says:

The boundary system is a scheme by an owner/operator engaged in transporting passengers as a common carrier to primarily govern the compensation of the driver, that is, the latter’s daily earnings are remitted to the owner/operator less the excess of the boundary which represents the driver’s compensation. Under this system, the owner/operator exercises control and supervision over the driver. It is unlike in lease of chattels where the lessor loses complete control over the chattel leased but the lessee is still ultimately responsible for the consequences of its use. The management of the business is still in the hands of the owner/operator, who, being the holder of the certificate of public convenience, must see to it that the driver follows the route prescribed by the franchising and regulatory authority, and the rules promulgated with regard to the business operations. The fact that the driver does not receive fixed wages but only the excess of the “boundary” given to the owner/operator is not sufficient to change the relationship between them. Indubitably, the driver performs activities which are usually necessary or desirable in the usual business or trade of the owner/operator. (Oscar Villamaria, Jr. vs. Court of Appeals, G.R. No. 165881, April 19, 2006)