PAL starts paying retrenched workers | Inquirer Business

PAL starts paying retrenched workers

National flag carrier Philippine Airlines (PAL) has released the P2.6 billion in retirement benefits to be paid to its former workers that were retrenched in a controversial spinoff/outsourcing program last month.

In a statement, PAL said this showed that the continued protests by ground crew labor union PAL Employees’ Association (Palea) would not change the management’s decision to retrench 2,600 employees, which was done to help streamline the airline’s operations.


PAL’s Human Resources Department (HRD) said the first batch to receive the package are employees who did not join the Sept. 27 “wildcat strike” and are now working for PAL’s service providers. To follow are those who declined the job offer but did not participate in the work stoppage—they will receive their checks starting Saturday.

“Per instructions of PAL management, we will give priority to employees who heeded PAL’s appeal for a smooth and orderly implementation of the spin-off/outsourcing program,” company spokesperson Cielo Villaluna said.


Grateful for loyalty

“Management is grateful for their dedication and loyalty and for honoring calls for cooperation during the transition period,” she said.

Of the more than 2,300 recipients of the retirement package, more than 600 transferred to the service providers while nearly 1,700 workers chose not to join PAL’s third party contractors.

Majority of the workers shall receive an average of close to P800,000 in separation pay, which includes 125 percent of their monthly salary for every year of service, P100,000 gratuity pay and 100 percent cash conversion of accrued vacation and sick leaves.

According PAL HRD records, more than 28 percent will receive P1 million and above; 37 percent will get between P750,000 and P1 million; and 22 percent below P500,000.

The highest package reached P2.4 million, while those who served PAL for only one year will receive about P120,000. The cash component of the benefits will be tax-free.


Villaluna said checks for 338 former employees who joined the wildcat strike on September 27 are on hold pending their final clearances.

The work stoppage led to the cancellation of domestic and international flights, ahead of the Oct. 1 implementation of the outsourcing program, which caused massive inconvenience to 14,000 passengers at the height of Typhoon ‘‘Pedring.”

PAL’s operations are still limping due to Palea members’ refusal to join the new service providers. Sky Logistics and Sky Kitchen, the two companies contracted to replace PAL’s airport services and in-flight catering divisions, have been unable to hire enough employees to replace those retrenched.

PAL will spend about P2.6 billion to cover the transition benefits, partly financed through a $50-million loan from the European bank Credit Suisse.

Amid the payout, Palea criticized President Aquino for dismissing union members as disgruntled workers. Contrary to the President’s statements earlier this week, Palea said the interest of PAL workers do not run counter to the welfare of the country’s 10 million migrant workers.

“The President should not pit one issue over another since Palea members and OFWs are workers riding the same boat.  Obviously the one who’s rocking the boat, the terminator Lucio Tan, has once again escaped the eyes of the President,” said Gerry Rivera, the union’s president and one of the 2,600 fired by PAL.

Rivera said aside from the riding public, the Tourism Congress has already taken notice of the harsh impact of this continuing labor dispute at PAL to the country’s tourism industry as well as on business.

Originally posted at 0:46 pm | Thursday, October 13, 2011

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our daily newsletter

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

Read Next
Don't miss out on the latest news and information.

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Employment, labor issues, PAL, PAL Employees’ Association, PALEA, Philippine Airlines, retirement benefits, retrenched workers
For feedback, complaints, or inquiries, contact us.
Your subscription could not be saved. Please try again.
Your subscription has been successful.

Curated business news

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

© Copyright 1997-2023 | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.