PAL seeks dialogue with workers over restructuring program approved by Palace

MANILA, Philippines—Flag carrier Philippine Airlines is seeking a dialogue with the leaders of its labor union on a “smooth” and “orderly” implementation of a restructuring program that was recently upheld by Malacañang.

After getting such imprimatur from Malacañang on its prerogative to spin off its catering, ground handling and call-center reservations units, the tycoon Lucio Tan-led airline said on Thursday it would invite leaders of the PAL Employees Association (PALEA) to discuss the implementation of the program.

In a statement, PAL spokesperson Cielo Villaluna said the PAL management was also planning to hold town hall meetings in the affected departments to discuss the mechanics of the spin-off. Primers will also be distributed to guide workers on how to avail themselves of their retirement benefits and gratuity pay, which will be processed on a “first come, first served” basis.

The statement said Malacañang’s decision further validated the management’s plan to fold up non-core units and transfer these functions to third-party service providers. No firm date has yet been announced as to when the spin-off will be implemented.

PAL is allocating around P2.5 billion in severance benefits for the workers of three non-core units to be spun off. Based on the October 29, 2010, order of the Labor Secretary Rosalinda Baldoz, affected workers will receive separation pay equivalent to 1.25 months’ salary for every year of service, P50,000 cash as gratuity pay and other non-cash benefits. Malacañang earlier granted an additional P50,000.00 as gratuity pay.

The spin-off plan is a measure intended to stabilize PAL’s finances due to the lingering effects of the global recession.

The airline lost $312 million for its 2008 and 2009 fiscal years. While it posted modest profits of $72.5 million in 2010, it has swung back to a negative bottom line after posting $10.6-million losses for the first quarter of its current fiscal year.

Several workers of the affected units have expressed interest in availing of the package while the three independent service providers await the smooth transition of operations, according to PAL.