Malacañang says it won't intervene in PAL row anymore

By Aurea Calica (The Philippine Star) Updated March 27, 2011 12:00 AM

SILANG, Cavite, Philippines  – Malacañang said yesterday it would no longer intervene in the Philippine Airlines (PAL) management-labor row after it had upheld the decision of the Department of Labor and Employment (DOLE) on Oct. 29, 2010 allowing the national carrier to outsource its services.

“In the case of PAL, we tried to strike the right balance between the interest of Philippine Airlines, our national carrier, who’s playing a very important role now in repatriating Filipinos in the Middle East and Japan, and of course, the rights of labor,” Presidential Communications Development and Strategic Planning Office Secretary Ricky Carandang said in an interview here after attending the Philippine National Police Academy graduation rites with President Aquino.

“I know some people are not happy with the decision, but we did try to seek a balance between our national interest, the interest of management and the interest of labor, and they still have recourse, they can go and appeal it to the courts but as of now, the decision stands as it is,” Carandang said.

He explained the Office of the Executive Secretary tried to augment whatever separation pay was going to be given to the people who would be laid off.

“And certainly, we’re not completely happy with the solution but again, it’s a balance. Sometimes, when you try to strike a balance, neither side is completely happy but we did try to fulfill some of the demands of all the sides.”

“I think the next step would be to take it to the courts, if they did not want the decision,” Carandang said.

In Manila, Executive Secretary Paquito Ochoa Jr. said the Office of the President (OP) affirmed the decision of the DOLE that could result in the lay off of more than 2,000 workers but modified a component of the transition benefits package that would be given to the affected employees.

Ochoa said the OP empathized with the concerns of the PAL Employees Association (PALEA) and addressed the apprehensions of its members being employed by an entity other than the airline company and the remuneration they would receive.

The OP endorsed the separation pay equivalent to 125 percent of the employee’s monthly salary per year of service, an improvement from the one-fourth the amount of the employee’s one month salary provided for in the original decision.

It also affirmed certain compensation to PAL employees, such as 100 percent cash payment of vacation and sick leave balance regardless of years of service, one year extension of medical and hospitalization package, and continued trip pass benefits depending on the years of service rendered.

The OP, however, increased the additional gratuity pay to affected workers to P100,000 from P50,000.

Ochoa said the OP decision on the petition of PALEA for presidential intervention upheld the labor department’s ruling that service providers should absorb the affected workers.

PAL shall be bound and held liable by way of guaranteeing the payment of their salaries for a period of one year from the time of their retrenchment.

In the decision, the OP said it agreed with the DOLE position that PAL could contract out services, the severance of employment of rank-and-file employees to be affected by the outsourcing of services was valid, and that PAL could not be held liable for unfair labor practice for pursuing a legitimate exercise of management prerogative.   

PALEA’s decision to seek presidential intervention to settle the dispute with PAL stemmed from management’s plan to outsource its in-flight catering, air services and call center reservation operations, a move that will lead to the retrenchment of 2,600 employees.

The country’s flag-carrier said outsourcing these services would help reduce its accumulated net losses and deficit brought about by surging fuel prices, the ban of its entry into 27 European Union member-states and the suspension of its remittance facilities by the International Transport Association.

Ochoa explained that the OP had made efforts to get the two parties come up with a “mutually agreeable settlement” in a dialogue held in Malacañang last Feb. 11, but “both PAL and PALEA maintained their respective positions on the issues involved.”

“In light of this development, we are issuing a ruling which takes into consideration the welfare of the workers involved in accordance with labor laws and regulations,” he said.