Review of outsourcing issue

The walkout by members of the Philippine Airlines Employees Association (Palea) from their jobs last week at the height of typhoon “Pedring” may be considered an act of desperation.

The striking employees were on the verge of losing their employment with PAL. Effective October 1, their work will be outsourced to companies that pay less than what they used to earn and have none of the perks that the airline can give. Worse, since they will be treated as new employees, they have no past employment record to count on for severance benefits purposes when they later retire or resign.

Although PAL committed to give them separation pay above that required by law and were assured of employment (for at least one year) in the substitute service providers, these benefits cannot compensate for the insecurity that they and their families will likely face in the future.

The union members were practically at the ropes. Despite their strong opposition, PAL’s downsizing program was approved by the Secretary of Labor, and later by the Office of the President. Unfazed by these defeats, Palea sought relief from the Court of Appeals and asked it to order PAL not to implement the outsourcing until its appeal is resolved with finality. No dice. The court refused to issue a stay order. Thus, PAL was free to transfer the Palea members’ jobs to third-party service providers.

Respect

Without conceding its arguments against contracting out ticket reservations, catering and ground services operations to other companies, Palea is demanding that PAL give “judicial respect” to the court while it is in the process of reviewing the issues raised against the outsourcing program. Strictly speaking, the doctrine of judicial respect does not apply to this case. True, the outsourcing issue has moved from the administrative level, i.e., the executive offices, to the judicial branch, but the court has opted not to countermand, even if temporarily, the decisions earlier made by two government offices until after it has heard PAL’s side. Thus, no court process or procedural rule is being violated by PAL’s implementation of the twice-approved program.

By refusing to issue a restraining order, the court, in effect, was saying that the union has not presented sufficient arguments to justify judicial interference in PAL’s judgment that it is in the company’s best interests that the work being performed by some of its employees are better off outsourced than handled internally. PAL probably felt it has sufficiently complied with the legal requirements on downsizing and cannot wait for the court’s resolution on the labor dispute any longer.

Delaying tactics

The need to immediately implement the contested outsourcing is borne out of PAL’s own experience. Considering the iceberg-like pace at which our courts decide cases, it may, optimistically speaking, take two to three years before the appellate court can rule on the outsourcing issue. Either way the decision goes, expect the losing party to file a motion for reconsideration; if that fails, a second motion for reconsideration or other motions of similar nature but labeled differently to circumvent any possible order not to file another motion for reconsideration. When further moves in the appellate court are no longer available, the action will shift to the Supreme Court where the entire convoluted process will be repeated all over again.

PAL is no stranger (in fact, it is an active participant) to the delay game in our judicial system. Last month, after 13 long years, the airline was ordered with finality by the tribunal to reinstate with full back wages the 1,400 flight attendants it dismissed from the service in 1998. Although the tribunal made the same ruling on July 22, 2008, two motions for reconsideration filed by PAL prevented the enforcement of the 2008 reinstatement order. (Whatever happened to the tribunal’s off-repeated pronouncement that it allows only one motion for reconsideration to expedite the rendition of justice?)

Competition

The shoe will be in the other foot, so to speak, if PAL accedes to Palea’s demand that it hold in abeyance the implementation of the outsourcing program until after the Court of Appeals has ruled on the matter. No doubt, the union will run to the tribunal in case the appellate court rules against it. If PAL was allowed to submit two motions for reconsideration in the flight attendants case, there is no stopping the union from asking for the same treatment in the event the tribunal decides against it the first time on the outsourcing issue.

A 13-year wait—like that of the flight attendants case—on the final resolution of the outsourcing dispute is something PAL may not be able to afford if it wants to keep its bottom line healthy. Painful the dislocation may be for the affected employees, there is no denying the need for airline companies today to outsource their noncore activities to be able to maintain their financial viability. Unlike PAL, which inherited a system where these activities formed part of its historical development, its domestic competitors started early in the game to outsource them. The financial statements of these airline companies seem to prove they made the right move.

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