PAL seeks dialogue; workers’ union sets protest action | Inquirer Business

PAL seeks dialogue; workers’ union sets protest action

/ 06:00 PM August 18, 2011

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 spin-off program that was recently upheld by Malacañang.

Workers, however, have announced a protest action against the restructuring plan.

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 after the airline got such imprimatur from Malacañang on its plan to spin off its catering, ground handling and call-center reservations units.


Palea, on the other hand, said it has been preparing with its lawyers a motion for reconsideration to be filed at the Court of Appeals in reaction to Malacañang’s decision, which would lay off 2,600 employees and make them contractual workers in third-party service providers.


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 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 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.

Gerry Rivera, Palea president and Partido ng Manggagawa (PM) vice chairman, said in a separate statement: “With the OP (Office of the President) decision permitting PAL to retrench thousands of workers despite billions in profit, PNoy has unveiled his fire-all-you-can policy. This overturns the provisions of the Labor Code and jurisprudence of the courts that serious financial losses are a necessary ground for retrenchment.”

Rivera said he would seek support from fellow airline unions in the Asia-Pacific region as he attended a seminar on the aviation industry sponsored by the International Transport Workers Federation.


Palea, PM and the Church-Labor Conference will hold a motorcade on the afternoon of August 22 to protest the OP decision and highlight its campaign against contractualization. The motorcade will start at the PEZA office on Roxas Boulevard corner Buendia and then proceed to Ayala Avenue in Makati.

“PNoy’s employment policy is a second-rate trying-hard copycat of American industrial relations where giant money-making corporations can fire at will. But he should beware since the result of flexible employment relations in the US was not economic progress but financial crisis. The unequal distribution of wealth is at the root of the global financial crash of 2008 and even the present threat of a double-dip recession in the US,” Rivera stated.

The airline lost $312 million for its 2008 and 2009 fiscal years ending March. It posted a net profit of $72.5 million in 2010 but has swung back to a negative bottom line with $10.6-million in net loss for the first quarter of its current fiscal year.

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

On the other hand, Palea said the Palace ignored the workers’ argument that outsourcing was not necessary for the flag carrier to survive. “Since PAL is awash in profits even without outsourcing, then there is no reason for it to retrench employees,” Rivera said.

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Rivera argued that even with just the declared yearly income, PAL could easily cover the costs of Palea’s CBA proposal for 2008-2013. “Again there is no cause for PAL to refuse to bargain in good faith with Palea,” he said.

TAGS: Business, Employment, Government, justice and rights, labor dispute, labor laws, PAL Employees' Association, PALEA, Philippine Airlines

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