Palace to follow court on PAL

Tuesday, 02 November 2010 13:35 M. Gonzalez, E. Torres
Business Mirror

PRESIDENT Aquino said on Tuesday he is “studying” the Department of Labor and Employment (DOLE) ruling to uphold the Philippine Airlines (PAL) plan to outsource some of its services, but stressed that Malacañang will respect whatever decision the court may have on the case.
Asked whether Malacañang will reverse the DOLE ruling on PAL, the President said: “As you know, I just got back and am presently studying the decision. They [PAL employees], I understand, went to the Court of Appeals. If they did, we respect the division of powers enshrined in the Constitution.”
Deputy Presidential Spokesman Abigail Valte told reporters that Malacañang backs the decision of Labor Secretary Rosalinda Baldoz as it is “based on law,” even as she urged affected workers to seek legal remedies to appeal the decision.

“The finer points are that the exercise of management prerogative is valid and that they [employees] will be given the benefits that are entitled to them under that situation. We have no problem with that, as long as the decision is based in law and is rendered on the basis of facts as pleaded,” Valte said.

On the call of some 2,600 affected workers for Malacañang to reverse the DOLE ruling, Valte said, “They [PAL workers] can file a motion for reconsideration and then, eventually, they can appeal the decision of the DOLE.”

“For now, they are not without means to redress their grievances. As of the moment, we advise them to avail [themselves] of the remedies available to them under the law,” she said.

Valte noted that the DOLE ruling “is not the last recourse” for the PAL employees, as they can bring the case all the way to the Supreme Court.

She also said Malacañang will not interfere in the matter “at this point, because [Labor] Secretary Baldoz has affirmed the decision of her assistant secretary and they [workers] can still avail [themselves] of the remedies that are entitled to them.”

Meanwhile, an official of the DOLE said the decision of PAL to outsource employees was part of the bitter pill many airlines in all countries need to take to be able to cope with the challenges of the global financial crisis.

DOLE Spokesman Nicon Fameronag maintained that PAL is just one of the companies severely affected by the global financial crisis, “and it is the management prerogative to do whatever it can to survive.”

The DOLE said between 2006 and 2008 the aggregate income of PAL reached $180.7 million, but the amount was not enough to cover the $312.2-million losses that the company incurred in  2009 to 2010 as part of the impact of the global financial crisis.

“These losses were incurred notwithstanding the fact that PAL continues to enjoy a high market share in both domestic and international routes,” said the DOLE decision.

“Apparently, high market share alone does not guarantee the profitability of a firm.”
The Labor department also argued that PAL had to implement “drastic cost-saving measures” to reduce fixed operating expenses that include outsourcing of in-flight catering, airport services, such as ground handling, cargo terminal, cargo handling and ramp handling, and call-center operations.
Fameronag said the department is preparing its legal argument to defend its decision favoring the displacement of some 2,600 PAL ground employees who will be absorbed by outsourcing companies to be contracted by PAL.

Members of the PAL Employees Association are set to file an appeal of the DOLE’s decision with the CA.

Fameronag said outsourcing PAL ground operations was already indicated in the collective bargaining agreement (CBA) between PAL union and management, which recognizes the legitimate exercise of the management to “contract out or outsource services.”

Fameronag also said the CBA indicated that even if the displaced workers are absorbed by the outsourcing firms, their rights to “ humane conditions of work, security of tenure, self-organization and collective bargaining” will be guaranteed based on Articles 106 to 109 of the Labor Code and the DOLE Order 18-02.

The CBA, which was upheld by the Supreme Court, is still valid, he said.