Stormy labor row halts 172 PAL flights

Thousands of passengers were stranded Tuesday as Philippine Airlines (PAL) canceled all flights to and from Manila after its employees refused to work in a last-ditch effort to save their jobs.

A total of 102 international flights and 70 domestic flights, which were supposed to carry around 14,000 passengers, were affected by the PAL Employees’ Association’s (Palea) protest.

The strike added to the travel chaos brought on by Typhoon “Pedring,” which made landfall earlier in the day and prompted the suspension of other domestic flights, ferry services and railway operations.

Members of Palea stopped working at 7 a.m. in protest of the company’s scheduled job cuts by the end of the week, forcing the Lucio Tan-led carrier to halt operations.

Employees reported for work but stopped refueling planes, moving cargo and manning check-in  counters—among other jobs—leaving thousands of passengers stuck at the Ninoy Aquino International Airport Terminal 2 in Manila.

PAL’s management said flights would resume by 6 Tuesday night, starting with PR 145 to Iloilo.

PAL condemned what it described was  illegal work stoppage, noting that those who participated in the protest would face administrative and criminal charges.

“About 300 PAL ground workers on duty at the airport suddenly refused to perform their official functions in the ramp, check-in counters and catering areas. Our lawyers are preparing the appropriate charges to be filed against these workers,” said PAL president Jaime J. Bautista.

Bautista said operations should be back to normal by Wednesday. The termination of the services of Palea members will take effect on Friday.

Apology

Affected passengers were endorsed on flights of other airlines, while others were transferred to hotels.

“Those who want to rebook or a refund of their tickets can proceed to PAL ticket offices,” PAL said in an advisory.

“PAL apologizes for the inconvenience as the airline goes through the difficult process of outsourcing its non-core services,” the airline added.

Palea president Gerry Rivera also apologized to passengers affected by the work stoppage.

The union official said the employees were left with no choice but to move to protect their jobs.

“Any inconvenience brought about by the protest is temporary. Ultimately the safe and efficient operation of PAL is guaranteed if employees are regular not contractual,” Rivera said at a press conference.

Palea’s work stoppage, which the union refuses to call a strike, is in protest of PAL’s plan to close down three departments, namely its call center reservations, in-flight catering and airport services, by the end of the week.

The 2,600 employees covered by the job cuts were offered positions at the third-party service providers that will replace the three closed departments. The companies are Sky Kitchen, Sky Logistics and SPi Global Holdings.

Palea claims that less than 15 percent of its members agreed to receive retirement benefits, while only 7 percent accepted jobs with the third-party companies.

PAL’s outsourcing plan, which was approved by the labor department and the Office of the President, is under appeal in the Court of Appeals. Palea has said the job cuts should not be carried out pending resolution of its appeal.

Replacement employees

At a separate briefing, PAL said it already had replacement employees to take the places of those who walked out. The new workers are made up of volunteers from the airline’s administrative staff and employees of the new service providers.

Bautista said the 2,600 workers to be affected by the outsourcing would be placed on leave with pay and would no longer be allowed inside the airport on October 1, when their termination takes effect.

But the 300 workers who took part in the work stoppage on Tuesday will have to face administrative and criminal charges. “We will hold them accountable,” the PAL president said.

Republic Act No. 9497, which created the Civil Aviation Authority of the Philippines, says that any person “who will cause disruptions in airport operations will be criminally liable.”

Conciliators

If found guilty, Palea members face as many as three years in prison and fines of up to P500,000 per person. Those who joined the work stoppage will also lose their retirement benefits, PAL said.

“We are ready to face any and all charges that they want to file against us,” Rivera said.

Labor Secretary Rosalinda Baldoz sent a team of conciliators to Ninoy Aquino International Airport to try to reconcile PAL management and the ground crew.

In a statement, Secretary Herminio Coloma of the Presidential Communications and Operations Office said President Aquino had directed Executive Secretary Paquito Ochoa to supervise efforts of the labor department, Civil Aviation Authority of the Philippines and Manila International Airport Authority in working closely with PAL management to resolve the matter.

Noting that the government was adhering to the rule of law in addressing Palea’s stand on outsourcing, Coloma called on the union “to do the same.”

In Cebu, the work stoppage forced hundreds of passengers to either rebook their flights to another date or to arrange flights with other airline companies. Four flights for Manila and five flights from Manila were canceled between 7 a.m. and 6 p.m. on Tuesday.

Passengers disembark

Mary Ann Dimabayao, public affairs manager of Mactan Cebu International Airport, said the flight cancellation came when passengers of the PR 848 had already checked in for departure at 8:05 a.m.

“The passengers were ordered to disembark at the arrival area and retrieve their luggage at the baggage carousel,” Dimabayao said.

She said the passengers were told that they could have their tickets rebooked at different PAL ticketing stations and that the management would waive rebooking and other fees.

Each canceled flight had more than 100 to 200 passengers depending on the plane’s capacity, said Eutiquio  Bulambot, a Palea board member in Cebu and a regular worker for 35 years.

Bulambot, who is assigned at the check-in counter of PAL at the airport, said Palea members just wanted to protect their rights. There are more than 200 Palea members in Cebu.

CBA suspension

The dispute between PAL and Palea dates back to 1998 when Palea agreed to an unprecedented deal with management to suspend negotiations for new collective bargaining agreements (CBA) for 10 years, giving PAL the financial flexibility to return to profitability.

The airline was suffering massive losses due to the Asian financial crisis at the time, made worse by a pilot strike, which forced the airline to close down for several days.

PAL was forced to enter corporate rehabilitation and to  trim down its fleet after being faced with dollar loans that had become harder to pay due to the peso’s sharp depreciation. When the CBA moratorium expired in 2008, PAL announced its plan to outsource the three departments.

Industry-wide trend

Bautista said the outsourcing of “noncore” units was an industry-wide trend being implemented by other airlines around the world. Industry profits have fallen steadily due to high fuel prices.

Last year, PAL posted a net income of $72.5 million, but the airline sank back into the red this year, posting a $10.6 million net loss in the April to June period of 2011.

Over the past five years, PAL has also struggled to compete with local budget carriers that have steadily chipped away at the flag carrier’s market share.

From being a virtual monopoly before 1998, PAL is now the second largest airline in the Philippines in terms of passengers flown. The company trails behind the Gokongwei family’s Cebu Pacific. With reports from AFP, Philip C. Tubeza and Christian Esguerra in Manila, and Jhunnex Napallacan, Inquirer Visayas

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TAGS: Cancelled Flights, Consumer Issues, labor issues, PAL