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Friday, October 14, 2011

PAL to disburse P2.6-B separation packages to 2,300 affected workers

Business Mirror
October 14-15, 2011
By Lenie Lectura


FORMER workers of Philippine Airlines (PAL) who were affected by the outsourcing program will start receiving today their respective separation package, the flag carrier said.

PAL, in a statement, said it will start releasing today the P2.6 billion earmarked as payment representing the separation package of workers from three non-core units whose functions were outsourced to third-party service providers on October 1.

According to PAL’s human resources department, the first batch to receive the package are employees who did not join the September 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?October 15.

“Per instructions of PAL management, we will give priority to employees who heeded PAL’s appeal for a smooth and orderly implementation of the spinoff/outsourcing program,” said PAL spokeswoman Cielo Villaluna.?“Management is grateful for their dedication and loyalty and for honoring calls for cooperation during the transition period,” she added.

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.

The majority of the workers will 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 converted-to-cash accrued vacation and sick leave credits.

PAL said 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 only served PAL for a minimum of one year will receive about P120,000. The cash component of the benefits is tax-free.A guaranteed salary and hospitalization benefits for one year are also assured to those who transferred to the service providers.

The non-economic component of the package includes free tickets for the employee and qualified dependents depending on the number of years of service.

Villaluna said checks for 338 former employees who joined the PAL Employees Association’s 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?October 1, implementation of the outsourcing program, which caused massive inconvenience to 14,000 passengers at the height of typhoon ‘Pedring.’

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

Villaluna said components of the package are much higher than industry levels and more than the prescribed benefits under the Labor Code and PAL’s own collective bargaining agreement with its ground workers’ union.

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