But carrier’s prospects still ‘challenging’
By Paolo Montecillo
Philippine Daily Inquirer
First Posted 21:13:00 11/29/2010
MANILA, Philippines—Lucio Tan-led Philippine Airlines (PAL) Holdings grew its profits substantially in the first six months of its fiscal year on the back of the improvement in demand, despite the many challenges faced by the local aviation sector over the past few months.
In a disclosure, the listed firm said its consolidated net income for the March to September period reached P2.34 billion. This represents a 349-percent increase from the figure reported in same period last year.
Consolidated revenues for the period amounted to P37.5 billion, up by 25 percent from last year’s P30.1 billion.
“The increase in revenues was attributable mainly to higher passenger and cargo revenues earned during the period,” the company said.
Its main subsidiary, flag carrier PAL, experienced a 16.4- and 80.5-percent growth in its passenger and cargo traffic, respectively, over the same period the year before, “reflecting an upturn in global economy.”
An improvement of 13.4 percent in yields generated from passenger seat offerings complemented the increase in passenger traffic.
Total expenses and other charges for the period April-September rose by 14 percent over the previous year’s same-period total of P30.3 billion.
This was primarily due to higher expenses related to flying operations, aircraft and traffic servicing, reservation and sales and other expenses, offset by the decrease in maintenance, financing charges and general and administrative costs.
Flying operations expenses, which increased by 21 percent, is attributable mainly to higher fuel costs and aircraft lease rentals. About 40 percent of its operating expenses represent jet fuel consumption.
More international flights were operated during the period, resulting in higher aircraft and traffic servicing costs by 2 percent, or P89.7 million, over the previous year’s level of P 4.5 billion.
Cost-cutting measures implemented by PAL resulted in the reduction of general and administrative expenses by 22 percent, or P376.5 million.
Tuesday, November 30, 2010
Philippine Airlines warns of bird flu, fuel prices
Agence France-Presse
First Posted 16:48:00 11/21/2010
MANILA-- Philippine Airlines (PAL) has warned that a possible resurgence of bird flu and a rise in fuel prices could hurt its fledgling recovery from economic woes.
The warning comes as the national flag carrier is dealing with the fallout of a bloody hostage-taking in Manila in August that left eight Hong Kong tourists dead.
"The global airline industry remains vulnerable to volatile market conditions. Take fuel... if the upward trend continues, it could wipe out all our recent gains," PAL president Jaime Bautista said.
"PAL is also closely watching the recent re-emergence of the AH1N1 (bird flu) virus in Hong Kong," the airline said in a statement issued late Saturday.
The Philippines has been on alert for any instances of bird flu in the country after a new case was recorded in Hong Kong last week, the first since 2003.
"The avian flu can dampen demand at a time when the Philippines has yet to fully recover from the stigma of the recent hostage crisis involving Hong Kong nationals and the negative travel advisory against the Philippines," it added.
Many Hong Kong and Chinese travellers cancelled trips to the Philippines after a disgraced Filipino policeman took a bus-load of Hong Kong tourists hostage in August.
After a mistake-riddled rescue attempt by Manila police, the hostage-taker was shot dead but eight tourists were killed and seven others were injured, sparking outrage and travel warnings in Hong Kong and China.
Despite the hostage incident, PAL said it posted "modest gains" in its 28.2-million-dollar net profit posted from July to September, something it attributed to cost reduction measures, without giving details.
The airline said revenues hit 399.5 million dollars in the July-September, 2010 period, up 33 percent from the same period in 2009.
First Posted 16:48:00 11/21/2010
MANILA-- Philippine Airlines (PAL) has warned that a possible resurgence of bird flu and a rise in fuel prices could hurt its fledgling recovery from economic woes.
The warning comes as the national flag carrier is dealing with the fallout of a bloody hostage-taking in Manila in August that left eight Hong Kong tourists dead.
"The global airline industry remains vulnerable to volatile market conditions. Take fuel... if the upward trend continues, it could wipe out all our recent gains," PAL president Jaime Bautista said.
"PAL is also closely watching the recent re-emergence of the AH1N1 (bird flu) virus in Hong Kong," the airline said in a statement issued late Saturday.
The Philippines has been on alert for any instances of bird flu in the country after a new case was recorded in Hong Kong last week, the first since 2003.
"The avian flu can dampen demand at a time when the Philippines has yet to fully recover from the stigma of the recent hostage crisis involving Hong Kong nationals and the negative travel advisory against the Philippines," it added.
Many Hong Kong and Chinese travellers cancelled trips to the Philippines after a disgraced Filipino policeman took a bus-load of Hong Kong tourists hostage in August.
After a mistake-riddled rescue attempt by Manila police, the hostage-taker was shot dead but eight tourists were killed and seven others were injured, sparking outrage and travel warnings in Hong Kong and China.
Despite the hostage incident, PAL said it posted "modest gains" in its 28.2-million-dollar net profit posted from July to September, something it attributed to cost reduction measures, without giving details.
The airline said revenues hit 399.5 million dollars in the July-September, 2010 period, up 33 percent from the same period in 2009.
PAL airs caution amid recovery
By Paolo Montecillo
Philippine Daily Inquirer
First Posted 22:30:00 11/21/2010
Philippine Daily Inquirer
First Posted 22:30:00 11/21/2010
MANILA, Philippines—Flag carrier Philippine Airlines (PAL) posted a profit for the second quarter of its fiscal year as revenues climbed by a third on the back of the revival in demand for domestic and international air travel.
In a statement over the weekend, PAL reported a $28.2-million net income for the July-September period. This came as revenues in the same period shot up by 33 percent to $399.5 million from $288.7 million in 2009.
PAL’s “modest” gains came amid uncertainties spawned by a looming fuel price hike and a new case of bird flu in Hong Kong, the airline said in a statement.
In its filing with the Securities and Exchange Commission, PAL reported revenues of $399.5 million for the second quarter of fiscal year 2010-11, up by 33 percent from the same period total of $299.7 million in 2009.
PAL also reported increases in both passenger (26 percent) and cargo (57 percent) revenues from its international operations, with an improvement as well in yields generated from passenger seat offerings.
This offset the growth in total expenses during the quarter, which reached $371.2 million, or 7 percent, higher from $346.0 million in the same period last year.
The company said cost-saving measures, which led to a 36-percent dip in maintenance expenses, helped temper the increase in fuel prices from an average of $79 last year to $97 this year. Fuel makes up roughly 40 percent of the company’s expenses.
Despite the encouraging signs, PAL president and chief operating officer Jaime Bautista said the company remained “cautiously optimistic” of the airline’s prospects.
He said recent reports of a possible breakout of the AH1N1 virus in Hong Kong and the recent hostage crisis involving foreign tourists might dampen demand for travel to the Philippines.
“The global airline industry remains vulnerable to volatile market conditions. Take fuel, for example. If the upward trend continues, it could wipe out all our recent gains,” Bautista said.
The recent negative travel advisories on the Philippines might also lead to a dip in demand, Bautsita said.
PAL flights to Korea normal
INQUIRER.net First Posted 13:53:00 11/24/2010
MANILA, Philippines—Philippine Airlines (PAL) on Wednesday said its flights to South Korea remain normal despite the reported military tension in the Korean Peninsula.
In a news release, PAL will continue mounting regular flights to Seoul and Busan until otherwise advised either by Philippine or South Korean authorities.
PAL is closely monitoring developments, as the flag carrier braces for the possibility of mounting evacuation flights should the Philippine Department of Foreign Affairs and/or Malacanang make an official request in case the situation in South Korea deteriorates.
Updates on the conflict are also being fed to PAL management by its staff in Seoul who, in turn, get information from the Philippine embassy in South Korea.
Many times in its 70-year history, the national flag carrier—with its wide international route network—has been called upon to operate emergency missions to evacuate Filipinos in conflict-stricken territories.
PAL currently flies Manila-Seoul twice a day, to Busan four times a week, and daily from Cebu to Seoul.
For regular updates, inquiries, or booking requirements, visit the PAL website at http://www.philippineairlines.com.
Friday, November 26, 2010
End to PAL row seen by Christmas
November 25, 2010
Malaya
Labor Secretary Rosalinda Baldoz said Tuesday the dispute between Philippine Airlines and the Flight Attendants and Stewards Association of the Philippines (FASAP) will be resolved before Christmas.
Baldoz, in an ambush interview after the third annual convention of the Calabarzon Regional Tripartite Industrial Peace Council (TIPC), said the labor department is negotiating the compensation package with both the union and management this week.
"We talked to the union for their bottom lines and then we’re ready to meet with the management and its bottom line," she said.
She said she will join the meetings of labor and management later on and make a conciliated decision.
Afterwards, she said FASAP will negotiate a new collective bargaining agreement with PAL management.
She said the issue of outsourcing by PAL is pending with the Office of the President,.
She said government’s intervention has averted possible strikes in the flag carrier.
Malaya
Labor Secretary Rosalinda Baldoz said Tuesday the dispute between Philippine Airlines and the Flight Attendants and Stewards Association of the Philippines (FASAP) will be resolved before Christmas.
Baldoz, in an ambush interview after the third annual convention of the Calabarzon Regional Tripartite Industrial Peace Council (TIPC), said the labor department is negotiating the compensation package with both the union and management this week.
"We talked to the union for their bottom lines and then we’re ready to meet with the management and its bottom line," she said.
She said she will join the meetings of labor and management later on and make a conciliated decision.
Afterwards, she said FASAP will negotiate a new collective bargaining agreement with PAL management.
She said the issue of outsourcing by PAL is pending with the Office of the President,.
She said government’s intervention has averted possible strikes in the flag carrier.
PAL flights to stay despite tensions between Koreas
Thursday, 25 November 2010 00:00
The Manila Times
By Euan Paulo C. Añonuevo, Reporter
PHILIPPINE Airlines (PAL) said its flights to South Korea would stay despite the military tension in the Korean peninsula.
In a statement, the flag carrier said it will continue mounting regular flights to Seoul and Busan until otherwise advised either by Philippine or South Korean authorities.
”PAL is closely monitoring developments, as the flag carrier braces for the possibility of mounting evacuation flights should the Philippine Department of Foreign Affairs and/or Malacanang make an official request in case the situation in South Korea deteriorates,” the Lucio Tan-owned airline said.
The company said its staff in Seoul is providing management updates on the conflict based on information from the Philippine Embassy in South Korea.
PAL flies from Manila to Seoul twice a day, and to Busan four times a week. The carrier also operates a daily flight from Cebu to Seoul.
The airline said that this is not the first time that its operations has been exposed to conflict-stricken territories.
”Many times in its 70-year history, the national flag carrier—with its wide international route network— has been called upon to operate emergency missions to evacuate Filipinos,” it added.
The Manila Times
By Euan Paulo C. Añonuevo, Reporter
PHILIPPINE Airlines (PAL) said its flights to South Korea would stay despite the military tension in the Korean peninsula.
In a statement, the flag carrier said it will continue mounting regular flights to Seoul and Busan until otherwise advised either by Philippine or South Korean authorities.
”PAL is closely monitoring developments, as the flag carrier braces for the possibility of mounting evacuation flights should the Philippine Department of Foreign Affairs and/or Malacanang make an official request in case the situation in South Korea deteriorates,” the Lucio Tan-owned airline said.
The company said its staff in Seoul is providing management updates on the conflict based on information from the Philippine Embassy in South Korea.
PAL flies from Manila to Seoul twice a day, and to Busan four times a week. The carrier also operates a daily flight from Cebu to Seoul.
The airline said that this is not the first time that its operations has been exposed to conflict-stricken territories.
”Many times in its 70-year history, the national flag carrier—with its wide international route network— has been called upon to operate emergency missions to evacuate Filipinos,” it added.
Wednesday, November 24, 2010
PAL Holdings turns around, posts P2.44-B profit in April-September
The Philippine Star
November 24, 2010
By Zinnia B. Dela Peña
MANILA, Philippines - PAL Holdings Inc., the publicly-listed parent firm of flag carrier Philippine Airlines, posted a net income of P2.44 billion in the six months ending September this year, a reversal of the P177.63-million loss incurred in the same period last year.
The significant turnaround was attributed mainly to higher passenger and cargo revenues, which grew 16.4 percent and 80.5 percent, respectively.
Revenues amounted to P37.52 billion in the first half of its fiscal year ending March 2011, up 24.6 percent from the P30.12 billion recorded a year ago.
A 13.4-percent improvement in yields generated from passenger seat offerings complemented the boost in passenger traffic.
Total expenses and other charges from April to September 2010 rose 14 percent to P34.6 billion, largely due to higher costs related to flying operations, aircraft and traffic servicing, reservation and sales, and other expenses which offset the decrease in maintenance, financing charges and general and administrative costs.
Flying operations expenses grew 21 percent due to higher fuel costs and aircraft lease rentals. Fuel price per barrel went up from $ 79.06 in 2009 to $ 97.73 this year. The phase-in of two Boeing 777 aircraft in November 2009 and January 2010 likewise resulted in the increase of aircraft lease rentals by 45.7 percent.
More international flights were operated, thus resulting in higher aircraft and traffic servicing cost by two percent or P89.7 million over the previous year’s.
Debt servicing of various long term obligations resulted in lower financing charges of P602.5 million or a reduction of 39 percent.
Cost-cutting measures implemented by PAL resulted in the reduction of general and administrative expenses by 22 percent or P376.5 million.
PAL posted a net profit of $28.2 million in the second quarter of its fiscal year (July-September 2010) on the back of a 33 percent jump in revenues.
As of end-September this year, PAL Holdings had total assets of P71.95 billion, down six percent from the March 31, 2010 balance of P76,76 billion.
Total liabilities likewise decreased 11 percent due to the principal payments made on various loans and the effect of the debt buyback of certain unsecured claims from Trustmark Holdings Corp.
To remain viable, PAL will focus on continuing its cost-control initiatives as the passenger and cargo markets as well as fuel and maintenance costs remain very volatile.
November 24, 2010
By Zinnia B. Dela Peña
MANILA, Philippines - PAL Holdings Inc., the publicly-listed parent firm of flag carrier Philippine Airlines, posted a net income of P2.44 billion in the six months ending September this year, a reversal of the P177.63-million loss incurred in the same period last year.
The significant turnaround was attributed mainly to higher passenger and cargo revenues, which grew 16.4 percent and 80.5 percent, respectively.
Revenues amounted to P37.52 billion in the first half of its fiscal year ending March 2011, up 24.6 percent from the P30.12 billion recorded a year ago.
A 13.4-percent improvement in yields generated from passenger seat offerings complemented the boost in passenger traffic.
Total expenses and other charges from April to September 2010 rose 14 percent to P34.6 billion, largely due to higher costs related to flying operations, aircraft and traffic servicing, reservation and sales, and other expenses which offset the decrease in maintenance, financing charges and general and administrative costs.
Flying operations expenses grew 21 percent due to higher fuel costs and aircraft lease rentals. Fuel price per barrel went up from $ 79.06 in 2009 to $ 97.73 this year. The phase-in of two Boeing 777 aircraft in November 2009 and January 2010 likewise resulted in the increase of aircraft lease rentals by 45.7 percent.
More international flights were operated, thus resulting in higher aircraft and traffic servicing cost by two percent or P89.7 million over the previous year’s.
Debt servicing of various long term obligations resulted in lower financing charges of P602.5 million or a reduction of 39 percent.
Cost-cutting measures implemented by PAL resulted in the reduction of general and administrative expenses by 22 percent or P376.5 million.
PAL posted a net profit of $28.2 million in the second quarter of its fiscal year (July-September 2010) on the back of a 33 percent jump in revenues.
As of end-September this year, PAL Holdings had total assets of P71.95 billion, down six percent from the March 31, 2010 balance of P76,76 billion.
Total liabilities likewise decreased 11 percent due to the principal payments made on various loans and the effect of the debt buyback of certain unsecured claims from Trustmark Holdings Corp.
To remain viable, PAL will focus on continuing its cost-control initiatives as the passenger and cargo markets as well as fuel and maintenance costs remain very volatile.
Palace to follow court on PAL
Tuesday, 02 November 2010 13:35 M. Gonzalez, E. Torres
Business World
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.
Business World
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.
Tuesday, November 23, 2010
Labor dep’t OKs layoff of 2,600 PAL workers
By Jocelyn Uy
Philippine Daily Inquirer
First Posted 02:31:00 11/01/2010
MANILA, Philippines—The Department of Labor and Employment has given flag carrier Philippine Airlines (PAL) the green light to proceed with the layoff of 2,600 employees as a consequence of its plan to outsource services to cut costs.
In a decision promulgated on Friday, Labor Secretary Rosalinda Baldoz said contracting out services and closing down PAL’s in-flight catering, airport services and call center reservation operations were lawful.
Baldoz said these were valid exercises of managerial prerogative.
“We find [these] to be a just, reasonable, humane and lawful exercise of its management prerogative to reorganize the corporate structure for purposes of viability of its operations, subject to the entitlement of affected employees to transition guarantees and benefits,” the decision said.
PAL plans to sell its units providing in-flight catering, airport services and call center reservations to third parties and engage their services to reduce costs.
Losses
The flag carrier said it lost $312 million in the last two years due to the global recession, volatile fuel prices, the US Federal Aviation Administration’s downgrade of the Philippines’ aviation safety rating to Category 2, cutthroat competition with low-cost carriers and other factors.
“As correctly pointed out by Secretary Baldoz’s decision, ‘if there is no spin-off, PAL will close down and 7,500 workers will be displaced without separation pay,’ not to mention its adverse effects on PAL’s shareholders, the riding public and public interest,” PAL spokesperson Cielo Villaluna said in a statement.
PAL welcomed Baldoz’s decision affirming its prerogative to spin off three noncore business units.
“Most airlines in the world, and almost all carriers in Asia, are now using third parties to supply and render noncore services. In PAL’s case, it is implementing the spin-off to cut costs and ensure the airline’s continued survival,” Villaluna said.
So far only PAL’s maintenance and engineering department was spun off and bought by Lufthansa Technik Philippines in 2000.
A copy of the dispositive portion of Baldoz’s decision was obtained by the Inquirer Sunday.
Package modified
The documents showed that Baldoz ruled in favor of businessman Lucio Tan’s PAL, affirming an earlier order by then acting Labor Secretary Romeo Lagman and dismissing the charges of unfair labor practice filed by the PAL Employees’ Association (PALEA) due to “lack of merit.”
PALEA had filed a motion for reconsideration on June 28 challenging Lagman’s decision that was promulgated on June 15.
But Baldoz modified several components of the transition benefits package to be extended to the affected workers, which represent half of PAL’s total workforce.
Among the modifications she ordered were an increase in separation pay to 125 percent per year of service from 100 percent and an additional gratuity of P50,000 to be extended to each of the affected workers.
Workers to be absorbed
Baldoz also ordered that vacation and sick leave balances be 100-percent convertible to cash regardless of the period of service and that affected workers shall be awarded their trip pass benefits. The hospitalization and medical package shall also be extended for a year.
The terminated employees shall be absorbed by their respective service providers, and PAL shall guarantee payment of their salaries for a period of at least one year from the time of their separation from employment as the original decision provided.
These employees shall be absorbed by SkyKitchen Phil. Inc. (catering), SkyLogistics Phil. Inc. (airport services) and ePLDT Ventus, a PLDT subsidiary (call center), according to the decision.
“And PAL shall be bound and held liable by way of guarantee in favor of all affected employees, for payment of one year, or whatever salary is guaranteed respectively by service providers upon their admission to employment with said service providers,” Baldoz stated.
PAL assured that those to be affected by the spin-off would receive separation pay and other benefits apart from the opportunity to work with the new service providers if they so desire.
“Workers in other industries are not as lucky,” Villaluna said.
Death of job security
PALEA president Gerry Rivera Sunday slammed the decision, saying that the labor department’s go-signal for the retrenchment of 3,000 workers signified the “death of job security” at PAL.
“The order is not a win-win solution that balances the interest of workers for job security and management for financial viability,” Rivera said in a statement.
“Instead, it is simply management’s slightly improved offer disguised as (the department’s) decision,” he added.
Zombie positions
Rivera said Baldoz’s decision, released at a time when Filipinos mark All Saints’ and All Souls’ Day, was symbolic for the loss of 3,000 regular jobs would “conjure 3,000 zombie positions which will have cheaper wages, less benefits, no security of tenure and no protection by a union.”
Rivera said the union would bring their case to the Court of Appeals. They would also hold a protest action on Monday at the labor department’s main office in Intramuros, Manila, to denounce Baldoz’s decision.
“The protesters plan to bring a mock coffin with the message ‘RIP PAL Workers’ and an effigy of Baldoz as the mythical ‘Kamatayan,’” he added.
Philippine Daily Inquirer
First Posted 02:31:00 11/01/2010
MANILA, Philippines—The Department of Labor and Employment has given flag carrier Philippine Airlines (PAL) the green light to proceed with the layoff of 2,600 employees as a consequence of its plan to outsource services to cut costs.
In a decision promulgated on Friday, Labor Secretary Rosalinda Baldoz said contracting out services and closing down PAL’s in-flight catering, airport services and call center reservation operations were lawful.
Baldoz said these were valid exercises of managerial prerogative.
“We find [these] to be a just, reasonable, humane and lawful exercise of its management prerogative to reorganize the corporate structure for purposes of viability of its operations, subject to the entitlement of affected employees to transition guarantees and benefits,” the decision said.
PAL plans to sell its units providing in-flight catering, airport services and call center reservations to third parties and engage their services to reduce costs.
Losses
The flag carrier said it lost $312 million in the last two years due to the global recession, volatile fuel prices, the US Federal Aviation Administration’s downgrade of the Philippines’ aviation safety rating to Category 2, cutthroat competition with low-cost carriers and other factors.
“As correctly pointed out by Secretary Baldoz’s decision, ‘if there is no spin-off, PAL will close down and 7,500 workers will be displaced without separation pay,’ not to mention its adverse effects on PAL’s shareholders, the riding public and public interest,” PAL spokesperson Cielo Villaluna said in a statement.
PAL welcomed Baldoz’s decision affirming its prerogative to spin off three noncore business units.
“Most airlines in the world, and almost all carriers in Asia, are now using third parties to supply and render noncore services. In PAL’s case, it is implementing the spin-off to cut costs and ensure the airline’s continued survival,” Villaluna said.
So far only PAL’s maintenance and engineering department was spun off and bought by Lufthansa Technik Philippines in 2000.
A copy of the dispositive portion of Baldoz’s decision was obtained by the Inquirer Sunday.
Package modified
The documents showed that Baldoz ruled in favor of businessman Lucio Tan’s PAL, affirming an earlier order by then acting Labor Secretary Romeo Lagman and dismissing the charges of unfair labor practice filed by the PAL Employees’ Association (PALEA) due to “lack of merit.”
PALEA had filed a motion for reconsideration on June 28 challenging Lagman’s decision that was promulgated on June 15.
But Baldoz modified several components of the transition benefits package to be extended to the affected workers, which represent half of PAL’s total workforce.
Among the modifications she ordered were an increase in separation pay to 125 percent per year of service from 100 percent and an additional gratuity of P50,000 to be extended to each of the affected workers.
Workers to be absorbed
Baldoz also ordered that vacation and sick leave balances be 100-percent convertible to cash regardless of the period of service and that affected workers shall be awarded their trip pass benefits. The hospitalization and medical package shall also be extended for a year.
The terminated employees shall be absorbed by their respective service providers, and PAL shall guarantee payment of their salaries for a period of at least one year from the time of their separation from employment as the original decision provided.
These employees shall be absorbed by SkyKitchen Phil. Inc. (catering), SkyLogistics Phil. Inc. (airport services) and ePLDT Ventus, a PLDT subsidiary (call center), according to the decision.
“And PAL shall be bound and held liable by way of guarantee in favor of all affected employees, for payment of one year, or whatever salary is guaranteed respectively by service providers upon their admission to employment with said service providers,” Baldoz stated.
PAL assured that those to be affected by the spin-off would receive separation pay and other benefits apart from the opportunity to work with the new service providers if they so desire.
“Workers in other industries are not as lucky,” Villaluna said.
Death of job security
PALEA president Gerry Rivera Sunday slammed the decision, saying that the labor department’s go-signal for the retrenchment of 3,000 workers signified the “death of job security” at PAL.
“The order is not a win-win solution that balances the interest of workers for job security and management for financial viability,” Rivera said in a statement.
“Instead, it is simply management’s slightly improved offer disguised as (the department’s) decision,” he added.
Zombie positions
Rivera said Baldoz’s decision, released at a time when Filipinos mark All Saints’ and All Souls’ Day, was symbolic for the loss of 3,000 regular jobs would “conjure 3,000 zombie positions which will have cheaper wages, less benefits, no security of tenure and no protection by a union.”
Rivera said the union would bring their case to the Court of Appeals. They would also hold a protest action on Monday at the labor department’s main office in Intramuros, Manila, to denounce Baldoz’s decision.
“The protesters plan to bring a mock coffin with the message ‘RIP PAL Workers’ and an effigy of Baldoz as the mythical ‘Kamatayan,’” he added.
Aquino asked to intervene in PAL labor dispute
By Lira Dalangin-Fernandez
INQUIRER.net First Posted 13:26:00 11/01/2010
MANILA, Philippines—The labor dispute in the country’s prime flag carrier, Philippine Airlines (PAL), is now for President Benigno Aquino III to solve, a lawmaker said on Monday.
This developed as several members of the House of Representatives pushed anew for an inquiry into the impending layoff at PAL, and for the passage of legislation to prohibit labor-only contracting and to strengthen the security of tenure of the country’s workers.
“PAL services are basic utility services and they affect national interest, the PAL labor dispute cannot be treated like an ordinary labor problem,” said Gabriela party-list Representative Luz Ilagan, in calling on the President to get his hands on the case.
She said that in such a situation, the company’s profits should come “secondary to national interest.”
Ilagan and another party-list congresswoman, Arlene “Kaka” Bag-ao, echoed the sentiments of some labor groups in condemning the decision of Labor Secretary Rosalinda Baldoz to allow PAL to lay-off 2,600 of its regular employees belonging to the PAL Employees Association (Palea).
Ilagan said Malacanang should now step into the labor row to avert a crisis in employment.
“The DoLE should not have allowed this. It sends a chilling effect on workers, who cannot enjoy security of tenure. Congress should review existing labor laws and amend or pass new ones with greater protection for the workforce, or else, we will lose them to jobs abroad,” she said in a text message.
Ilagan is one of the authors of a resolution to investigate the alleged discrimination of women in the workplace, particularly in PAL, which sets 40 as the age of retirement.
Of the 1,600 flight attendants of PAL, about two-thirds are women, the lawmaker said.
Northern Samar Representative Emil Ong, chairman of the House labor committee, said he will immediately convene his committee to look into the lay-offs in PAL when sessions resume on November 8.
In a phone interview, Ong said the committee will investigate how the DoLE came up with the decision allowing the lay-offs, noting the big number of employees that will lose their regular employment.
Bag-ao said Baldoz’s decision is a “death knell, a funeral toll for regular employment.”
“It opens the floodgates to intensified contractualization across industries, a situation that has been vigorously opposed by labor organizations in the country.”
She said the labor committee in the House should immediately look into the matter to see the contractualization of employment in public utilities and holders of government franchise, and come up with legislation that will regulate, if not prohibit, contractualization of regular positions.
Coming amid a separate labor dispute involving pilots and flight attendants, Bag-ao said the impending termination of the union members shows that PAL is “assaulting workers’ rights virtually at all levels.”
“This is a dark day not only for PAL employees, but for all Filipino workers,” she added.
At least seven bills and resolutions are pending in the committee on labor in the House seeking inquiry into the PAL labor row, including Bag-ao’s House Resolution 181 on the collective bargaining agreement between PAL management and employees.
Anakpawis party-list Representative Rafael Mariano said DoLE’s decision sets a “dangerous precedent.”
“The Aquino government practically gave a go-signal to employers to implement massive contractualization of labor, indiscriminately violate of workers’ rights, and disregard the Philippine Labor Code,” he said in a statement.
Instead of protecting the workers’ interests, the department took the side of the management of PAL and disregarded the employees’ security in the workplace, he said.
INQUIRER.net First Posted 13:26:00 11/01/2010
MANILA, Philippines—The labor dispute in the country’s prime flag carrier, Philippine Airlines (PAL), is now for President Benigno Aquino III to solve, a lawmaker said on Monday.
This developed as several members of the House of Representatives pushed anew for an inquiry into the impending layoff at PAL, and for the passage of legislation to prohibit labor-only contracting and to strengthen the security of tenure of the country’s workers.
“PAL services are basic utility services and they affect national interest, the PAL labor dispute cannot be treated like an ordinary labor problem,” said Gabriela party-list Representative Luz Ilagan, in calling on the President to get his hands on the case.
She said that in such a situation, the company’s profits should come “secondary to national interest.”
Ilagan and another party-list congresswoman, Arlene “Kaka” Bag-ao, echoed the sentiments of some labor groups in condemning the decision of Labor Secretary Rosalinda Baldoz to allow PAL to lay-off 2,600 of its regular employees belonging to the PAL Employees Association (Palea).
Ilagan said Malacanang should now step into the labor row to avert a crisis in employment.
“The DoLE should not have allowed this. It sends a chilling effect on workers, who cannot enjoy security of tenure. Congress should review existing labor laws and amend or pass new ones with greater protection for the workforce, or else, we will lose them to jobs abroad,” she said in a text message.
Ilagan is one of the authors of a resolution to investigate the alleged discrimination of women in the workplace, particularly in PAL, which sets 40 as the age of retirement.
Of the 1,600 flight attendants of PAL, about two-thirds are women, the lawmaker said.
Northern Samar Representative Emil Ong, chairman of the House labor committee, said he will immediately convene his committee to look into the lay-offs in PAL when sessions resume on November 8.
In a phone interview, Ong said the committee will investigate how the DoLE came up with the decision allowing the lay-offs, noting the big number of employees that will lose their regular employment.
Bag-ao said Baldoz’s decision is a “death knell, a funeral toll for regular employment.”
“It opens the floodgates to intensified contractualization across industries, a situation that has been vigorously opposed by labor organizations in the country.”
She said the labor committee in the House should immediately look into the matter to see the contractualization of employment in public utilities and holders of government franchise, and come up with legislation that will regulate, if not prohibit, contractualization of regular positions.
Coming amid a separate labor dispute involving pilots and flight attendants, Bag-ao said the impending termination of the union members shows that PAL is “assaulting workers’ rights virtually at all levels.”
“This is a dark day not only for PAL employees, but for all Filipino workers,” she added.
At least seven bills and resolutions are pending in the committee on labor in the House seeking inquiry into the PAL labor row, including Bag-ao’s House Resolution 181 on the collective bargaining agreement between PAL management and employees.
Anakpawis party-list Representative Rafael Mariano said DoLE’s decision sets a “dangerous precedent.”
“The Aquino government practically gave a go-signal to employers to implement massive contractualization of labor, indiscriminately violate of workers’ rights, and disregard the Philippine Labor Code,” he said in a statement.
Instead of protecting the workers’ interests, the department took the side of the management of PAL and disregarded the employees’ security in the workplace, he said.
PAL labor trouble a House priority
By Lira Dalangin-Fernandez
INQUIRER.net First Posted 15:03:00 11/02/2010
MANILA, Philippines—(UPDATE) The case of the 2,600 retrenched employees of the Philippine Airlines (PAL) will be a priority of the labor and employment committee in the House of Representatives when sessions resume next week.
Northern Samar Representative Emil Ong, chairman of the committee, said he will set a hearing next week or the week after to look into the alleged anti-labor practice in the country’s flag carrier.
The seven bills and resolutions pending before the committee dealing with the PAL case will be consolidated and discussed during the hearing, Ong said in a phone interview.
But he acknowledged that Congress cannot do anything to reverse the decision of Labor Secretary Rosalinda Baldoz, who allowed the 2,600 employees and members of the PAL Employees Association to be laid off following the company’s move to spin off some of its operations.
The order of the labor department takes effect on November 8, or 10 days after the parties have received the ruling.
“The remedy is through the court, not really here in Congress. Maybe they can file for an extension,” Ong said.
Ong said it is time to give attention to the country’s labor laws and see if they are responsive enough to the plight of both workers and management.
“The hearing is not really to penalize or anything, but to propose legislation for future problems, so they will not recur again,” he said.
Among those to be invited are officials of the Department of Labor and Employment, Department of Transportation and Communications, and PAL management and employees.
Lawmakers continue to assail the decision, calling it anti-labor.
“It will set a bad precedent for other companies to lay off employees under the guise of outsourcing,” Eastern Samar Representative Ben Evardone said.
Evardone said the President should review and reverse the decision of Baldoz.
“Millions will lose their jobs if the Baldoz formula is not reversed,” he added in a text message.
Akbayan party-list Representative Walden Bello said the labor department’s decision “opens the floodgates to the erosion of job security.”
“Already, regularized workers are having problems with abusive managements that refuse to provide them minimum wage and uphold other labor rights. By giving contractualization her seal of approval, this means workers will, more often than not, never get regularized, and are effectively powerless against end-of-contract, massive lay-offs, and other such violations of labor laws,” Bello said.
One of the pending resolutions, House Resolution 111 of Anakpawis party-list Representative Rafael Mariano, scored PAL for “faking its financial health” to justify the retrenchment of the workers.
According to the resolution, the company even purchased two new Boeing 777-300ER jets, one in November 2009 and another in January 2010.
PAL also had a series of promotional events, where up to 70,000 free seats were given away throughout the year, which proves that the company is not in the brink of bankruptcy, the resolution added.
INQUIRER.net First Posted 15:03:00 11/02/2010
MANILA, Philippines—(UPDATE) The case of the 2,600 retrenched employees of the Philippine Airlines (PAL) will be a priority of the labor and employment committee in the House of Representatives when sessions resume next week.
Northern Samar Representative Emil Ong, chairman of the committee, said he will set a hearing next week or the week after to look into the alleged anti-labor practice in the country’s flag carrier.
The seven bills and resolutions pending before the committee dealing with the PAL case will be consolidated and discussed during the hearing, Ong said in a phone interview.
But he acknowledged that Congress cannot do anything to reverse the decision of Labor Secretary Rosalinda Baldoz, who allowed the 2,600 employees and members of the PAL Employees Association to be laid off following the company’s move to spin off some of its operations.
The order of the labor department takes effect on November 8, or 10 days after the parties have received the ruling.
“The remedy is through the court, not really here in Congress. Maybe they can file for an extension,” Ong said.
Ong said it is time to give attention to the country’s labor laws and see if they are responsive enough to the plight of both workers and management.
“The hearing is not really to penalize or anything, but to propose legislation for future problems, so they will not recur again,” he said.
Among those to be invited are officials of the Department of Labor and Employment, Department of Transportation and Communications, and PAL management and employees.
Lawmakers continue to assail the decision, calling it anti-labor.
“It will set a bad precedent for other companies to lay off employees under the guise of outsourcing,” Eastern Samar Representative Ben Evardone said.
Evardone said the President should review and reverse the decision of Baldoz.
“Millions will lose their jobs if the Baldoz formula is not reversed,” he added in a text message.
Akbayan party-list Representative Walden Bello said the labor department’s decision “opens the floodgates to the erosion of job security.”
“Already, regularized workers are having problems with abusive managements that refuse to provide them minimum wage and uphold other labor rights. By giving contractualization her seal of approval, this means workers will, more often than not, never get regularized, and are effectively powerless against end-of-contract, massive lay-offs, and other such violations of labor laws,” Bello said.
One of the pending resolutions, House Resolution 111 of Anakpawis party-list Representative Rafael Mariano, scored PAL for “faking its financial health” to justify the retrenchment of the workers.
According to the resolution, the company even purchased two new Boeing 777-300ER jets, one in November 2009 and another in January 2010.
PAL also had a series of promotional events, where up to 70,000 free seats were given away throughout the year, which proves that the company is not in the brink of bankruptcy, the resolution added.
PAL: All employees to be laid off to be given jobs
By DJ Yap
Philippine Daily Inquirer
First Posted 18:30:00 11/03/2010
MANILA, Philippines—Philippine Airlines said Wednesday that all 2,600 workers who face termination under its plan to outsource catering, call-center reservations and airport services would be absorbed by third-party service providers as regular employees.
But PAL president and CEO Jaime Bautista said the absorbed employees must still pass the mandated six-month probationary period to become regular employees, as stipulated in agreements with the service providers.
In a briefing at the Century Park Hotel in Manila, the PAL executive said the decision of the labor department recognizing the company's prerogative to restructure operations also hurt PAL as it involved paying the terminated employees P400 million more than the original agreement.
"This is more than what's provided by law, and more than what's provided by the CBA (collective bargaining agreement)," Bautista said.
He said DOLE's decision was "just, reasonable and humane," and that PAL did not wish to be remembered for 2,600 jobs lost, but rather, for 4,000 jobs saved.
Bautista said PAL was the only carrier in Asia which operated its own catering, call center reservations and airport services, and that the practice in the airline industry was to contract these out to service providers.
He said PAL has already signed agreements with third-party providers: PLDT e-Ventures for call center reservations, Sky Kitchen for catering, and Sky Logistics for airport services.
Bautista said the agreements were signed in the early part of the year after PAL had given notice of the outsourcing plan.
PAL said it hoped to finally implement its corporate restructuring to stabilize finances and expand and improve services, enabling the flag carrier to compete with other airlines.
Bautista said he hoped the outsourcing of the services would be implemented within the year.
Philippine Daily Inquirer
First Posted 18:30:00 11/03/2010
MANILA, Philippines—Philippine Airlines said Wednesday that all 2,600 workers who face termination under its plan to outsource catering, call-center reservations and airport services would be absorbed by third-party service providers as regular employees.
But PAL president and CEO Jaime Bautista said the absorbed employees must still pass the mandated six-month probationary period to become regular employees, as stipulated in agreements with the service providers.
In a briefing at the Century Park Hotel in Manila, the PAL executive said the decision of the labor department recognizing the company's prerogative to restructure operations also hurt PAL as it involved paying the terminated employees P400 million more than the original agreement.
"This is more than what's provided by law, and more than what's provided by the CBA (collective bargaining agreement)," Bautista said.
He said DOLE's decision was "just, reasonable and humane," and that PAL did not wish to be remembered for 2,600 jobs lost, but rather, for 4,000 jobs saved.
Bautista said PAL was the only carrier in Asia which operated its own catering, call center reservations and airport services, and that the practice in the airline industry was to contract these out to service providers.
He said PAL has already signed agreements with third-party providers: PLDT e-Ventures for call center reservations, Sky Kitchen for catering, and Sky Logistics for airport services.
Bautista said the agreements were signed in the early part of the year after PAL had given notice of the outsourcing plan.
PAL said it hoped to finally implement its corporate restructuring to stabilize finances and expand and improve services, enabling the flag carrier to compete with other airlines.
Bautista said he hoped the outsourcing of the services would be implemented within the year.
Aquino urged to get involved in PAL labor dispute
November 03, 2010 14:28:00
Lira Dalangin-Fernandez lira.fernandez@inquirer.net
INQUIRER.net
MANILA, Philippines – Several lawmakers on Wednesday renewed their appeal to President Benigno Aquino III to get involved in the labor dispute at the Philippine Airlines that is threatening to displace some 2,600 employees.
This developed as the labor committee at the House of Representatives announced the holding of its first hearing on the PAL case on November 10 at 1:30 p.m.
Northern Samar Representative Emil Ong, chairman of the committee, said the seven pending bills and resolutions involving the labor dispute in the country’s flag carrier would be a priority, but acknowledged that Congress could not stop the implementation of an order by the Department of Labor and Employment allowing PAL to lay off the 2,600 regular workers as a result of the spin-off of some of its services.
“I am certain PNoy [Aquino] understands the gravity of this PAL row. This appeal only serves as an urge to his Excellency to intervene and exhaust all means provided by the law to act and protect the PAL workers’ labor rights and job security. After all, these affected workers are also his boss,” San Juan City Representative Joseph Victor Ejercito said.
Ejercito, one of the vice chairpersons of the committee, expressed disappointment over the decision of Labor Secretary Rosalinda Baldoz, saying this may cause a stain on the President’s commitment to lead the people on the right path.
“If the laying off of workers be made final and executory, this may hugely affect the way people will perceive PNoy’s administration as the decision is purely anti-labor, anti-worker and most of all, anti-Filipino,” he said.
Ejercito and Gabriela partylist Representative Emmi de Jesus said the President should not be afraid to confront business tycoon Lucio Tan, PAL’s owner, with his decisions on the workers’ fate.
“It is imperative that we put a stop to Lucio Tan’s economic sabotage by firing out industrious yet underpaid PAL workers and consistently evading tax obligations since the time of Ramos. It’s high time for PNoy to confront and remove the horns of abusive and exploitative big businessmen such as Lucio Tan,” he said.
De Jesus, a member of the committee on labor, called on the employees of the airlines to work together and protect their ranks.
Lira Dalangin-Fernandez lira.fernandez@inquirer.net
INQUIRER.net
MANILA, Philippines – Several lawmakers on Wednesday renewed their appeal to President Benigno Aquino III to get involved in the labor dispute at the Philippine Airlines that is threatening to displace some 2,600 employees.
This developed as the labor committee at the House of Representatives announced the holding of its first hearing on the PAL case on November 10 at 1:30 p.m.
Northern Samar Representative Emil Ong, chairman of the committee, said the seven pending bills and resolutions involving the labor dispute in the country’s flag carrier would be a priority, but acknowledged that Congress could not stop the implementation of an order by the Department of Labor and Employment allowing PAL to lay off the 2,600 regular workers as a result of the spin-off of some of its services.
“I am certain PNoy [Aquino] understands the gravity of this PAL row. This appeal only serves as an urge to his Excellency to intervene and exhaust all means provided by the law to act and protect the PAL workers’ labor rights and job security. After all, these affected workers are also his boss,” San Juan City Representative Joseph Victor Ejercito said.
Ejercito, one of the vice chairpersons of the committee, expressed disappointment over the decision of Labor Secretary Rosalinda Baldoz, saying this may cause a stain on the President’s commitment to lead the people on the right path.
“If the laying off of workers be made final and executory, this may hugely affect the way people will perceive PNoy’s administration as the decision is purely anti-labor, anti-worker and most of all, anti-Filipino,” he said.
Ejercito and Gabriela partylist Representative Emmi de Jesus said the President should not be afraid to confront business tycoon Lucio Tan, PAL’s owner, with his decisions on the workers’ fate.
“It is imperative that we put a stop to Lucio Tan’s economic sabotage by firing out industrious yet underpaid PAL workers and consistently evading tax obligations since the time of Ramos. It’s high time for PNoy to confront and remove the horns of abusive and exploitative big businessmen such as Lucio Tan,” he said.
De Jesus, a member of the committee on labor, called on the employees of the airlines to work together and protect their ranks.
PAL seeks P2.5B for restructuring, layoff
Wednesday, 03 November 2010 13:17 Lenie Lectura & Recto Mercene / Reporters
Business Mirror
PHILIPPINE Airlines (PAL) is in talks with several banks and foreign creditors to help the flag carrier raise P2.5 billion needed to restructure its operations.
Word of the negotiations with financiers came as political pressure mounted for the government to halt PAL’s plan to lay off 12,600 employees in its so-called noncore units as it struggles to survive the impact of the global slump on airlines.
The restructuring involves the spinoff of PAL’s in-flight catering, airport services and call-center reservations. This move will help the airline save P500 million to P600 million a year, but will displace 2,600 employees, the majority of whom are already in the early 40s to mid-50s.
However, the plan is to have them rehired by the service provider that will assume the operations of PAL’s noncore assets. Depending on their performance during the six months’ probationary period, PAL said their employment status can be made regular on the seventh month.
“Given its recent losses and current financial position, PAL would be hard put to raise P2.5 billion, but this is a bitter pill we have to swallow,” said PAL president Jaime Bautista.
“Bautista said the flag carrier plans to finance the severance package of close to 2,600 rank-and-file workers by securing loans from government financial institutions, like the Development Bank of the Philippines or Land Bank of the Philippines and even foreign creditors. If this is not possible, we will seek financing from other PAL creditors,” he said.
PAL chief finance officer Jose Gabriel Olives said discussions with the banks are ongoing. The talks are being done more or less simultaneously. “We prefer it this way rather than talking to one, then moving to another. But we have to finalize this as soon as possible, within the year preferably,” he said.
On Friday the Department of Labor and Employment (DOLE) recognized the PAL management’s prerogative to restructure its operations, sparking protests from the workers’ unions, and an appeal for Malacañang Palace to intervene. However, President Aquino said there are remedies for the workers, such as seeking a reconsideration with the DOLE; or, going to court, as they announced, in which case, the Palace said, the Executive branch will abide by whatever the court says.
Bautista said the spinoff was grounded on valid and lawful cause, “it being an obvious effort to prevent continued heavy and substantial losses.”
The 2,600 regular and rank-and-file workers affected are members of the PAL Employees Union (Palea). Since Palea has 4,100 members, there will still be some 1,500 of them left after the spinoff.
On the other hand, Labor Secretary Rosalinda Baldoz took jurisdiction over the planned strike of the Flight Attendant and Stewards Association of the Philippines, rendering an earlier planned walkout moot and academic.
The planned spinoff of PAL’s noncore assets was originally estimated to cost about P2 billion under the original DOLE decision. However, last weekís ruling of Labor Secretary Rosalinda Baldoz upped the figure by more than P400 million due to enhanced separation benefits and other modifications in the financial and noncash awards.
Barring the grant by a higher court of a temporary restraining order to be sought by Palea, Bautista said PAL management plans to implement the appropriate provisions of the DOLE’s order after the prescriptive period for further legal remedies has lapsed.
“The effectivity depends if the order will become effective 10 days from receipt. Of course, we will have to work with employees, and the date will depend when we can finally make arrangements with them. If they will not cooperate with us, then we will work with service providers for them to hire other employees,” said Bautista.
Bautista stressed that third-party service providers like PLDT e-Ventus for the call center is owned by PLDT; Sky Kitchen for catering and Sky Logistics for airport services are both owned by Cebu-based businessman Manny Osmeña. These service providers are not owned by PAL chairman Lucio Tan or any of his family members.
But there is a possibility that PAL will spin off more of its noncore assets so that the airline can concentrate on its core business, which is to fly passengers. “If given the chance, we will also study and implement it in our other departments if that is possible. We want to concentrate on our core business, which is flying. This is now the practice of the industry, which is to outsource an airline’s noncore business,” explained the PAL official.
Bautista stressed that the decision to spin off was difficult but necessary. “At the end of the day, PAL wants to be remembered not for the 2,600 jobs it lost, but the more than 4,000 it saved,” he said. There will still be 4,000 employees to be retained by PAL, said its president.
Contrary to claims by Palea, Bautista said the airline is not engaging in contractualization. “The spinoff means PAL will sell its in-flight catering, airport services and call-center reservations, which will lead to the early retirement of affected rank-and-file workers. They will all receive their respective separation pay and benefits that are much more than what the Labor Code provides,” he explained.
He said Palea’s apprehensions on the spinoff can best be allayed by referring to the actual events of the successful turnover in 2000 of PAL’s Maintenance and Engineering Department to Lufthansa Technik Philippines (LTP), a world-class maintenance, repair and overhaul service provider.
The more than 1,300 mechanics and other skilled workers who transferred to LTP and are now enjoying fulfilling careers can confirm those spinoff anxieties are unfounded, he said.
Ten years later, PAL was compelled to further spin off three noncore units and focus on the core business of air transport in order to survive a compendium of debilitating issues, which include, among others, a $312-million loss in the last two years due to the global recession; volatile fuel prices; the US Federal Aviation Administration’s downgrade of the Philippines’ aviation-safety rating to Category 2; cutthroat competition from budget airlines; the previous government’s liberal grant of air-traffic rights to foreign carriers and other factors.
Passengers assured: No disruption
Bautista also assured PAL passengers and customers that the implementation of the spinoff will not affect the flag carrier’s daily flights and other ground services.
PAL employees will continue to provide excellent service, and those who violate the law would lose their benefits, Bautista said.
He added that PAL will mount more flights during the Christmas holidays, especially to San Francisco, Los Angeles, Las Vegas and Vancouver, including Japan and Korea.
Lawmakers cry ‘foul’
LEGISLATORS urged President Aquino to exhaust all means to protect the rights of PAL workers. At the same time, congressmen described as “inhumane” the DOLE decision allowing the layoff of 2,600 PAL workers.
“I am certain P-Noy [Mr. Aquino] understands the gravity of this PAL row. This appeal only serves as an urge to his Excellency to intervene and exhaust all means provided by the law to act and protect the PAL workers’ labor rights and job security. After all, these affected workers are also his boss,” said Pwersa ng Masang Pilipino Rep. Jose Victor Ejercito of San Juan.
Ejercito said Mr. Aquino should not dilly dally on the DOLE’s decision, which he said was made in haste and with no serious deliberation.
Party-list Rep. Emmi de Jesus of Gabriela agreed with Ejercito, saying that while for some people it is not easy to cross the second-richest Filipino tycoon, she wonders what Mr. Aquino thinks is at stake for him if he, being the President of the Philippines, compels PAL owner Lucio Tan to respect the constitutionally mandated obligation to protect the rights of the workers and promote their welfare. --With F. Marasigan
Business Mirror
PHILIPPINE Airlines (PAL) is in talks with several banks and foreign creditors to help the flag carrier raise P2.5 billion needed to restructure its operations.
Word of the negotiations with financiers came as political pressure mounted for the government to halt PAL’s plan to lay off 12,600 employees in its so-called noncore units as it struggles to survive the impact of the global slump on airlines.
The restructuring involves the spinoff of PAL’s in-flight catering, airport services and call-center reservations. This move will help the airline save P500 million to P600 million a year, but will displace 2,600 employees, the majority of whom are already in the early 40s to mid-50s.
However, the plan is to have them rehired by the service provider that will assume the operations of PAL’s noncore assets. Depending on their performance during the six months’ probationary period, PAL said their employment status can be made regular on the seventh month.
“Given its recent losses and current financial position, PAL would be hard put to raise P2.5 billion, but this is a bitter pill we have to swallow,” said PAL president Jaime Bautista.
“Bautista said the flag carrier plans to finance the severance package of close to 2,600 rank-and-file workers by securing loans from government financial institutions, like the Development Bank of the Philippines or Land Bank of the Philippines and even foreign creditors. If this is not possible, we will seek financing from other PAL creditors,” he said.
PAL chief finance officer Jose Gabriel Olives said discussions with the banks are ongoing. The talks are being done more or less simultaneously. “We prefer it this way rather than talking to one, then moving to another. But we have to finalize this as soon as possible, within the year preferably,” he said.
On Friday the Department of Labor and Employment (DOLE) recognized the PAL management’s prerogative to restructure its operations, sparking protests from the workers’ unions, and an appeal for Malacañang Palace to intervene. However, President Aquino said there are remedies for the workers, such as seeking a reconsideration with the DOLE; or, going to court, as they announced, in which case, the Palace said, the Executive branch will abide by whatever the court says.
Bautista said the spinoff was grounded on valid and lawful cause, “it being an obvious effort to prevent continued heavy and substantial losses.”
The 2,600 regular and rank-and-file workers affected are members of the PAL Employees Union (Palea). Since Palea has 4,100 members, there will still be some 1,500 of them left after the spinoff.
On the other hand, Labor Secretary Rosalinda Baldoz took jurisdiction over the planned strike of the Flight Attendant and Stewards Association of the Philippines, rendering an earlier planned walkout moot and academic.
The planned spinoff of PAL’s noncore assets was originally estimated to cost about P2 billion under the original DOLE decision. However, last weekís ruling of Labor Secretary Rosalinda Baldoz upped the figure by more than P400 million due to enhanced separation benefits and other modifications in the financial and noncash awards.
Barring the grant by a higher court of a temporary restraining order to be sought by Palea, Bautista said PAL management plans to implement the appropriate provisions of the DOLE’s order after the prescriptive period for further legal remedies has lapsed.
“The effectivity depends if the order will become effective 10 days from receipt. Of course, we will have to work with employees, and the date will depend when we can finally make arrangements with them. If they will not cooperate with us, then we will work with service providers for them to hire other employees,” said Bautista.
Bautista stressed that third-party service providers like PLDT e-Ventus for the call center is owned by PLDT; Sky Kitchen for catering and Sky Logistics for airport services are both owned by Cebu-based businessman Manny Osmeña. These service providers are not owned by PAL chairman Lucio Tan or any of his family members.
But there is a possibility that PAL will spin off more of its noncore assets so that the airline can concentrate on its core business, which is to fly passengers. “If given the chance, we will also study and implement it in our other departments if that is possible. We want to concentrate on our core business, which is flying. This is now the practice of the industry, which is to outsource an airline’s noncore business,” explained the PAL official.
Bautista stressed that the decision to spin off was difficult but necessary. “At the end of the day, PAL wants to be remembered not for the 2,600 jobs it lost, but the more than 4,000 it saved,” he said. There will still be 4,000 employees to be retained by PAL, said its president.
Contrary to claims by Palea, Bautista said the airline is not engaging in contractualization. “The spinoff means PAL will sell its in-flight catering, airport services and call-center reservations, which will lead to the early retirement of affected rank-and-file workers. They will all receive their respective separation pay and benefits that are much more than what the Labor Code provides,” he explained.
He said Palea’s apprehensions on the spinoff can best be allayed by referring to the actual events of the successful turnover in 2000 of PAL’s Maintenance and Engineering Department to Lufthansa Technik Philippines (LTP), a world-class maintenance, repair and overhaul service provider.
The more than 1,300 mechanics and other skilled workers who transferred to LTP and are now enjoying fulfilling careers can confirm those spinoff anxieties are unfounded, he said.
Ten years later, PAL was compelled to further spin off three noncore units and focus on the core business of air transport in order to survive a compendium of debilitating issues, which include, among others, a $312-million loss in the last two years due to the global recession; volatile fuel prices; the US Federal Aviation Administration’s downgrade of the Philippines’ aviation-safety rating to Category 2; cutthroat competition from budget airlines; the previous government’s liberal grant of air-traffic rights to foreign carriers and other factors.
Passengers assured: No disruption
Bautista also assured PAL passengers and customers that the implementation of the spinoff will not affect the flag carrier’s daily flights and other ground services.
PAL employees will continue to provide excellent service, and those who violate the law would lose their benefits, Bautista said.
He added that PAL will mount more flights during the Christmas holidays, especially to San Francisco, Los Angeles, Las Vegas and Vancouver, including Japan and Korea.
Lawmakers cry ‘foul’
LEGISLATORS urged President Aquino to exhaust all means to protect the rights of PAL workers. At the same time, congressmen described as “inhumane” the DOLE decision allowing the layoff of 2,600 PAL workers.
“I am certain P-Noy [Mr. Aquino] understands the gravity of this PAL row. This appeal only serves as an urge to his Excellency to intervene and exhaust all means provided by the law to act and protect the PAL workers’ labor rights and job security. After all, these affected workers are also his boss,” said Pwersa ng Masang Pilipino Rep. Jose Victor Ejercito of San Juan.
Ejercito said Mr. Aquino should not dilly dally on the DOLE’s decision, which he said was made in haste and with no serious deliberation.
Party-list Rep. Emmi de Jesus of Gabriela agreed with Ejercito, saying that while for some people it is not easy to cross the second-richest Filipino tycoon, she wonders what Mr. Aquino thinks is at stake for him if he, being the President of the Philippines, compels PAL owner Lucio Tan to respect the constitutionally mandated obligation to protect the rights of the workers and promote their welfare. --With F. Marasigan
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.
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.
Extra security precautions set
Thursday, 04 November 2010 13:19
Business Mirror
Business Mirror
THE head of Manila International Airport Authority (Miaa) on Thursday announced extra security precautions in its four passenger terminals in the wake of travel advisories issued by five developed countries warning of terrorist attacks in areas frequented by foreigners.
Airport, shopping malls, resorts, bus and train terminals, and shipping ports are usually areas where large numbers of people congregate and could be targeted, according to Miaa general manager Jose Honrado.
He said the Ninoy Aquino International Airport (Naia) Terminals 1, 2 and 3, including the Manila Domestic Terminals, are now under increased surveillance with sniff dogs, snipers and plain-clothes agents.
“But detecting terrorist activities is better done through intelligence work and not the high-profile strategy of showing off your armaments,” Honrado, a retired general, said.
Meanwhile, the Philippine Airlines (PAL) on Thursday said it is always on “heightened alert status,” implementing strict, round-the-clock security measures to ensure aircraft and passenger safety.
PAL made the assurance amid the travel advisories issued by five countries urging their nationals to take extra precautions when traveling to the Philippines.
“With or without travel advisories by foreign governments, Philippine Airlines always maintains a robust security system to address all kinds of threats,” PAL president Jaime Bautista stressed.
He said PAL’s sophisticated security setup, equipment and trained personnel complement the Philippine government’s own security systems in the country’s airport terminals.
Bautista said PAL, which will celebrate its 70th anniversary next year, has a good safety track record.
PAL announced that it has fielded some of its 120 sniffer K-9s at Naia 2 to augment the security of the Miaa.
“We maintain 120 bomb-sniffing K-9s aside from those owned by the Aviation Security Group,” Bautista said.
He said it is no joking matter to feed the mostly foreign breed dogs, which thrive mostly on meat to maintain their strength and alertness. This does not include the cost of training and paying for the trainers.
PAL also employs the following security measures to ensure the safety of its passengers and cargo: use of cargo x-ray machines in the cargo-handling area in Manila and selected domestic stations; regular training of PAL security personnel in local and foreign training centers; implementation of the “Secure Flight Program”, which requires PAL’s US-bound passengers to submit specific data for identification and validation purposes by the US Transportation Security Administration (TSA) and Department of Homeland Security; close coordination with local and foreign security regulators; and implementation and strict adherence to aviation-security programs/protocols by Philippine and foreign regulators Bautista said the PAL management assures the riding public that it is “business as usual” despite the issuance by foreign governments of negative travel advisories. He said the airline’s safety measures are comparable to the safety standards being observed by other legacy carriers around the world.
Travel advisories issued the other day by the United States, Britain, Australia, Canada and New Zealand warned that an attack may occur at any time in the Philippines, and that areas frequented by foreigners were potential targets, including shopping malls and airports.
Reliable information indicated that terrorist attacks might occur at any time in Manila, the travel advisories noted.
Honrado said Philippine authorities are doing their best not to inconvenience passengers passing through the Naia’s four terminals by adding security personnel to augment its regular security force.
He appealed to airport users to be on alert on suspicious unattended luggage and people who might be acting suspiciously, and report them to the security personnel at the airport terminal.
The US issued on Wednesday a warning against traveling to the Philippines due to “high risk” of
terrorist activity not only in Mindanao but also in Manila.
Eduardo Malaya, spokesman of the Department of Foreign Affairs, said the government understands the “need of foreign embassies to issue travel advisories for their respective nationals.”
However, he added, “our expectation is that whenever foreign embassies have intelligence information about any terrorist threat which may be useful to our security agencies, they will convey it to our side in a timely manner. We have been informed that such has been done recently,” he added.
“These reports and advisories need to be seen in perspective, as most are re-issuance of previous travel advisories. It is best to exercise care and caution, but there is no need to overreact,” Malaya said. (R. Mercene. L. Lectura)
PAL union files notice of strike
By Paolo Montecillo
Philippine Daily Inquirer
First Posted 16:55:00 11/06/2010
MANILA, Philippines – (UPDATE) Philippine Airlines employees have filed a formal notice to go on strike to protest the company’s insistence to cut 2,600 jobs despite its improving financial condition.
In a statement late Friday, the PAL Employees’ Association (Palea) said the notice before the Department of Labor and Employment (DoLE) was a bid to stop what the union called a mass “contractualization” of work.
The union also accused the airline management of negotiating directly with individual employees instead of coursing its concerns to the union leadership.
PAL spokesperson Cielo Villaluna said the airline’s legal department would be responding to Palea's allegations in the proper legal forums. She dismissed the union’s move as a “strategy to delay implementation of the flag carrier’s spin-off program that had already been recognized by DoLE.”
Villaluna also denied the claim that Pal management was “'directly negotiating' with union members,” saying that “management regularly conducts consultative talks only with Palea officials and not with the members.”
Palea warned that the strike would lead to a total disruption of the airline’s operations in the crucial fourth quarter of the year – usually one of the strongest seasons for PAL.
“We decided to file the notice of strike because of widespread and persistent attempts by management to convince union members [to accept the outsourcing plan] which, by law, is individual bargaining and constitutes interference to the right to self-organization,” Palea president Gerry Rivera said in a statement.
In the notice of strike, Palea cited unfair labor practice as its ground for calling the work stoppage. Specifically, the group complained of management’s individual bargaining with union members, the coercion of employees, the mass termination of union officers amounting to union busting.
This is the second strike notice filed by Palea this year. Last February, the union, representing more than half of the airline’s rank-and-file workers, threatened to go on strike after PAL management announced its plan to outsource non-core services. These include in-flight catering operations, airport services and call center reservations, affecting 2,600 employees.
PAL has argued that the plan would help the company cut costs and be more competitive.
Dole assumed jurisdiction over the dispute, which prevented PAL from pushing through with the outsourcing plan. The decision also kept Palea from mounting a strike.
The DoLE has declared the outsourcing plan as a legal exercise of “management prerogative.”
The notice of strike was filed around 5 p.m. Friday at the Intramuros office of the National Conciliation and Mediation Board.
Rivera disputed the Dole decision by saying that any retrenchment of employees should only be done as a “last resort.”
He argued that although PAL did lose over $300 million from 2008 to 2010, the airline already swung to profitability in the current fiscal year.
PAL has said the outsourcing plan would cost P2.5 billion in severance benefits. The company plans to borrow this money from government banks.
PAL also has an ongoing dispute with its 1,400 flight attendants, which are protesting an airline policy of retiring crew members by the age of 40. The case is currently being reviewed by the DoLE.
Philippine Daily Inquirer
First Posted 16:55:00 11/06/2010
MANILA, Philippines – (UPDATE) Philippine Airlines employees have filed a formal notice to go on strike to protest the company’s insistence to cut 2,600 jobs despite its improving financial condition.
In a statement late Friday, the PAL Employees’ Association (Palea) said the notice before the Department of Labor and Employment (DoLE) was a bid to stop what the union called a mass “contractualization” of work.
The union also accused the airline management of negotiating directly with individual employees instead of coursing its concerns to the union leadership.
PAL spokesperson Cielo Villaluna said the airline’s legal department would be responding to Palea's allegations in the proper legal forums. She dismissed the union’s move as a “strategy to delay implementation of the flag carrier’s spin-off program that had already been recognized by DoLE.”
Villaluna also denied the claim that Pal management was “'directly negotiating' with union members,” saying that “management regularly conducts consultative talks only with Palea officials and not with the members.”
Palea warned that the strike would lead to a total disruption of the airline’s operations in the crucial fourth quarter of the year – usually one of the strongest seasons for PAL.
“We decided to file the notice of strike because of widespread and persistent attempts by management to convince union members [to accept the outsourcing plan] which, by law, is individual bargaining and constitutes interference to the right to self-organization,” Palea president Gerry Rivera said in a statement.
In the notice of strike, Palea cited unfair labor practice as its ground for calling the work stoppage. Specifically, the group complained of management’s individual bargaining with union members, the coercion of employees, the mass termination of union officers amounting to union busting.
This is the second strike notice filed by Palea this year. Last February, the union, representing more than half of the airline’s rank-and-file workers, threatened to go on strike after PAL management announced its plan to outsource non-core services. These include in-flight catering operations, airport services and call center reservations, affecting 2,600 employees.
PAL has argued that the plan would help the company cut costs and be more competitive.
Dole assumed jurisdiction over the dispute, which prevented PAL from pushing through with the outsourcing plan. The decision also kept Palea from mounting a strike.
The DoLE has declared the outsourcing plan as a legal exercise of “management prerogative.”
The notice of strike was filed around 5 p.m. Friday at the Intramuros office of the National Conciliation and Mediation Board.
Rivera disputed the Dole decision by saying that any retrenchment of employees should only be done as a “last resort.”
He argued that although PAL did lose over $300 million from 2008 to 2010, the airline already swung to profitability in the current fiscal year.
PAL has said the outsourcing plan would cost P2.5 billion in severance benefits. The company plans to borrow this money from government banks.
PAL also has an ongoing dispute with its 1,400 flight attendants, which are protesting an airline policy of retiring crew members by the age of 40. The case is currently being reviewed by the DoLE.
Palea president’s absence prompts resetting of mediation meeting
Monday, 08 November 2010 13:36 Recto Mercene / Reporter
Business Mirror
THE meeting between Philippine Airlines (PAL) executives and officials of the PAL Employees Association (Palea) was reset to November 11 by the National Reconciliation and Mediation Board (NRMB) after the Palea president, Gerry Rivera, failed to attend and was represented only by two board members of the association.
The meeting was called on Monday to iron out the conflict between PAL and Palea, after the flag carrier announced last week that it is following the decision of the Department of Labor and Employment (Dole) allowing the airline to terminate some 2,600 employees after it spun off three of its noncore businesses.
Despite the announcement, however, Palea filed a second notice of strike on Friday.
PAL management questioned the factual and legal basis for the notice of strike filed by Palea last week before the Dole.
During the conciliation meeting, the team from PAL Human Resources Department and PAL’s external legal counsel said Palea should state clearly its specific allegations against the airline that warrants the filing of a strike notice.
“PAL management will check and verify whether there’s any truth to Palea’s claims that some PAL managers were allegedly involved in individual bargaining, even coercing some rank-and-file workers to accept the separation package approved by Dole,” PAL spokesman Cielo Villaluna said.
Until completion of the verification process, PAL lawyers insisted that these remain to be allegations that do not constitute justification for a strike notice.
Business Mirror
THE meeting between Philippine Airlines (PAL) executives and officials of the PAL Employees Association (Palea) was reset to November 11 by the National Reconciliation and Mediation Board (NRMB) after the Palea president, Gerry Rivera, failed to attend and was represented only by two board members of the association.
The meeting was called on Monday to iron out the conflict between PAL and Palea, after the flag carrier announced last week that it is following the decision of the Department of Labor and Employment (Dole) allowing the airline to terminate some 2,600 employees after it spun off three of its noncore businesses.
Despite the announcement, however, Palea filed a second notice of strike on Friday.
PAL management questioned the factual and legal basis for the notice of strike filed by Palea last week before the Dole.
During the conciliation meeting, the team from PAL Human Resources Department and PAL’s external legal counsel said Palea should state clearly its specific allegations against the airline that warrants the filing of a strike notice.
“PAL management will check and verify whether there’s any truth to Palea’s claims that some PAL managers were allegedly involved in individual bargaining, even coercing some rank-and-file workers to accept the separation package approved by Dole,” PAL spokesman Cielo Villaluna said.
Until completion of the verification process, PAL lawyers insisted that these remain to be allegations that do not constitute justification for a strike notice.
Retrenchment of 2,600 PAL employees could be put on hold
By Lira Dalangin-Fernandez
INQUIRER.net
First Posted 19:51:00 11/10/2010
MANILA, Philippines— The decision of the Department of Labor and Employment to retrench some 2,600 employees of the Philippine Airlines (PAL) can still be put on hold while the notice of strike filed by the employees is under conciliation, Labor Secretary Rosalinda Baldoz said Wednesday.
Interviewed after a hearing on the PAL labor dispute in the House of Representatives, Baldoz said that the decision she made on October 28 will lapse into finality 10 days after the employees’ union have received the decision.
But she said this could still change depending on the agreement that both the PAL management and the employees can come up with in the conciliation period.
“Right now, because of the notice of strike that have raised some issue on the implementation, even if the decision lapsed into finality since there is conciliation going on then anything can still be the subject of agreement by the parties on how this will be handled,” Baldoz said in an interview.
The PAL Employees Association (Palea) filed the notice of strike last week in a bid to stop the implementation of the order to put out of work some 2,600 employees.
At the hearing of the labor committee, several lawmakers demanded that PAL open its books for scrutiny to prove it is financially distressed, the reason used by the management to retrench the workers and outsource some of its operations.
Representatives Joseph Victor Ejercito (San Juan City), Philip Pichay (Surigao del Sur), Herminia Roman (Bataan) and Emmeline Aglipay (Diwa Partylist) asked PAL to submit its financial statements to show “convincing evidence” that the retrenchment has substantial basis.
PAL president and chief executive officer Jaime Bautista told the panel that the company has sustained big losses in 2008 and 2009, and that the spin-off of some of its services is part of a “survival plan” amid the huge losses.
INQUIRER.net
First Posted 19:51:00 11/10/2010
MANILA, Philippines— The decision of the Department of Labor and Employment to retrench some 2,600 employees of the Philippine Airlines (PAL) can still be put on hold while the notice of strike filed by the employees is under conciliation, Labor Secretary Rosalinda Baldoz said Wednesday.
Interviewed after a hearing on the PAL labor dispute in the House of Representatives, Baldoz said that the decision she made on October 28 will lapse into finality 10 days after the employees’ union have received the decision.
But she said this could still change depending on the agreement that both the PAL management and the employees can come up with in the conciliation period.
“Right now, because of the notice of strike that have raised some issue on the implementation, even if the decision lapsed into finality since there is conciliation going on then anything can still be the subject of agreement by the parties on how this will be handled,” Baldoz said in an interview.
The PAL Employees Association (Palea) filed the notice of strike last week in a bid to stop the implementation of the order to put out of work some 2,600 employees.
At the hearing of the labor committee, several lawmakers demanded that PAL open its books for scrutiny to prove it is financially distressed, the reason used by the management to retrench the workers and outsource some of its operations.
Representatives Joseph Victor Ejercito (San Juan City), Philip Pichay (Surigao del Sur), Herminia Roman (Bataan) and Emmeline Aglipay (Diwa Partylist) asked PAL to submit its financial statements to show “convincing evidence” that the retrenchment has substantial basis.
PAL president and chief executive officer Jaime Bautista told the panel that the company has sustained big losses in 2008 and 2009, and that the spin-off of some of its services is part of a “survival plan” amid the huge losses.
PAL to bare financial records to justify spin-off
By BEN ROSARIO
November 10, 2010, 8:41pm
Manila Bulletin
November 10, 2010, 8:41pm
Manila Bulletin
MANILA, Philippines — Accused by its workers of concealing its true financial condition, the Philippine Airlines management vowed on Wednesday to submit all its financial records to the House of Representatives to help it determine the truth behind its decision to lay off at least 2,600 workers.
PAL President and Chief Executive Officer Jaime Bautista told the House Committee on Labor and Employment that the company’s corporate restructuring and spin-off programs are necessary to ensure the flag carrier’s continued survival in a cut-throat airline industry buffeted by massive losses in the last two years.
The committee chaired by Northern Samar Rep. Emil Ong opened on Wednesday an inquiry into the decision of Labor Secretary Rosalinda Baldoz affirming PAL management’s decision to restructure its organization which could result to the termination of some 2,600 regular employees.
The Philippine Airlines Employes Association assailed the decision, even as it belied claims by PAL that it had been losing money.
PALEA President Gerry Rivera insisted that PAL has concealed its true financial position to justify plans to terminate workers and resort to the more economical employment outsourcing.
At one point during the hearing, San Juan Rep. JV Ejercito, author of one of the seven measures proposing the congressional inquiry, accused PAL chairman Lucio Tan of being “anti-labor”.
Congressmen present were taken aback by Ejercito’s name calling antics, saying that it was unfair for the PAL official to be subjected to serious accusations despite his absence from the hearing.
“I think it is unfair for anyone of us to resort to name calling and throw accusations at Mr. Tan who is not here to defend himself,” lamented Quezon City Rep. Vincent Crisologo, who was challenged in the recent congressional race by the billionaire’s daughter, Vivian Tan.
Bautista said PAL has presented the financial records of the firm to Baldoz and will not hesitate to submit the same documents to the House labor panel.
Baldoz told the committee that she sees nothing wrong with her decision to uphold the PAL management’s prerogative to restructure its organization, saying that she remains convinced that it is “based on solid grounds.”
The PAL management said it has provided a generous separation package for the affected workers, adding that it had also been affirmed by the Department of Labor and Employment.
Bautista said the DoLE decision allows PAL to spin-off or sell three of its non-core units such as in-flight catering, airport services and call center reservations and contract the same to third party service providers.
The agency also ruled that the termination of affected employees as a result of the spin-off is in accordance with law, and that PAL is not liable for any unfair labor practice as a result of said termination.
Bautista said Baldoz based her October 29, 2010 Order on pertinent provisions of the Labor Code, Civil Code, past rulings of the National Labor Relations Commission (NLRC), Supreme Court decisions and the current collective bargaining agreement (CBA) between PAL and the PAL Employees Association (PALEA).
He said complaints by PALEA officers and other militant groups that the DoLE ruling trampled on workers’ rights have no factual or legal justification.
According to Bautista PAL’s string of massive losses in the last two years amounting to US$312-million or almost P15-billion necessitated the spin-off to ensure PAL’s continued survival. He said the sale of the three non-core units was only done as a last resort after 14 major cost-cutting measures proved inadequate to guarantee PAL’s continued operations.
PALEA officials agreed that the separation package offered them was indeed generous but they stressed that this can only tide them over for a few years.
The organization aired fears that allowing PAL to pursue the retrenchment program would hurt the
labor sector and set a bad precedent on the constitutionally-guaranteed security of tenure of workers.
PAL seeks dismissal of 2nd NOS
Thursday, 11 November 2010 13:32 Recto Mercene / Reporter
Business Mirror
THE Philippine Airlines (PAL) on Thursday sought dismissal of the second Notice of Strike (NOS) filed by the PAL Employees Association (Palea) on November 5, saying the issues raised by union officials have already been decided when the Labor department upheld PAL’s planned spinoff as a valid exercise of management prerogative.
At Thursday’s second conciliation meeting at the National Conciliation and Mediation Board, PAL disputed the union’s claim that management was directly negotiating with union members.
“It’s simply illogical for PAL to ‘bargain’ or even attempt to negotiate directly with individual rank-and-file workers after it has already secured a favorable decision from the DOLE [Department of Labor and Employment] upholding its right to spin off and retire its workers in the process,” said PAL spokesman Cielo Villaluna.
In the same manner, she said claims of unfair labor practice and union busting arising from the planned spinoff had already been ruled upon by Labor Secretary Rosalinda Baldoz.
“There is no attempt by the PAL management to ‘restrain, coerce or interfere’ with the workers’ exercise right to self-organization—which are basic elements of unfair labor practice. Since DOLE already ruled that the spinoff is valid and stands on solid legal grounds, the union’s claim of unfair labor practice cannot hold water,” said Villaluna.
“Palea’s public threat to proceed with a strike—even in the event of a possible assumption of jurisdiction of Palea’s complaint— is a clear indication of the union’s intention to ignore the rule of law. It likewise shows disrespect for the secretary of Labor and her office which has primary jurisdiction over labor disputes,” added Villaluna.
At Wednesday’s public hearing at the House Committee on Labor, union president Gerry Rivera openly declared the union’s plan to proceed with the strike vote and stage a strike notwithstanding a possible assumption of jurisdiction order by the DOLE.
Villaluna said the strike threats only serve to scare away passengers, especially during the coming holiday peak season. This could push the airline into further financial difficulty, which is the very reason for its planned spinoff.
Business Mirror
THE Philippine Airlines (PAL) on Thursday sought dismissal of the second Notice of Strike (NOS) filed by the PAL Employees Association (Palea) on November 5, saying the issues raised by union officials have already been decided when the Labor department upheld PAL’s planned spinoff as a valid exercise of management prerogative.
At Thursday’s second conciliation meeting at the National Conciliation and Mediation Board, PAL disputed the union’s claim that management was directly negotiating with union members.
“It’s simply illogical for PAL to ‘bargain’ or even attempt to negotiate directly with individual rank-and-file workers after it has already secured a favorable decision from the DOLE [Department of Labor and Employment] upholding its right to spin off and retire its workers in the process,” said PAL spokesman Cielo Villaluna.
In the same manner, she said claims of unfair labor practice and union busting arising from the planned spinoff had already been ruled upon by Labor Secretary Rosalinda Baldoz.
“There is no attempt by the PAL management to ‘restrain, coerce or interfere’ with the workers’ exercise right to self-organization—which are basic elements of unfair labor practice. Since DOLE already ruled that the spinoff is valid and stands on solid legal grounds, the union’s claim of unfair labor practice cannot hold water,” said Villaluna.
“Palea’s public threat to proceed with a strike—even in the event of a possible assumption of jurisdiction of Palea’s complaint— is a clear indication of the union’s intention to ignore the rule of law. It likewise shows disrespect for the secretary of Labor and her office which has primary jurisdiction over labor disputes,” added Villaluna.
At Wednesday’s public hearing at the House Committee on Labor, union president Gerry Rivera openly declared the union’s plan to proceed with the strike vote and stage a strike notwithstanding a possible assumption of jurisdiction order by the DOLE.
Villaluna said the strike threats only serve to scare away passengers, especially during the coming holiday peak season. This could push the airline into further financial difficulty, which is the very reason for its planned spinoff.
PAL union slams DoLE midnight decision on labor dispute
INQUIRER.net
First Posted 14:22:00 06/20/2010
MANILA, Philippines—The Philippine Airlines Employees’ Association (Palea) on Sunday slammed as a “midnight decision” the order signed by acting Labor Secretary Romeo Lagman that found the planned PAL spin-off as a valid exercise of management prerogative.
“Lagman’s decision was released with suspicious haste and preempted the ongoing mediation proceedings at the Department of Labor and Employment (DoLE). We wonder what reasons prompted him to make a decision just 15 days before a new administration assumes power and a new Labor Secretary is appointed,” said Gerry Rivera, Palea president and Partido ng Manggagawa (PM) vice chairman, in a news release.
Palea announced that it will file a motion for reconsideration and exhaust all the means provided by law to protect the job security and labor rights of some 3,000 employees to be laid off as a result of the planned spin-off of airport services, in-flight catering, and call center operations.
The PAL union said it is also planning mass actions to protest the decision as Rivera explained that the DoLE’s decision is not yet final and executory.
The militant PM expressed its support for the fight of the PAL union.
“The DoLE’s decision, together with the measly P22 wage hike, exposes the real legacy of the Gloria Arroyo regime which is anti-labor to its last remaining days. The working class will remember the GMA government for legalizing mass contractualization and its cheap labor policy,” said PM chairman Renato Magtubo.
Rivera argued that “Lagman’s June 15 order is faulty on both substantial and procedural grounds. It failed to consider the PAL-Palea collective bargaining agreement’s provision prohibiting the outsourcing of jobs that are being performed by regular employees. Further the case has not been submitted for resolution and the order came only four working days after Palea filed a motion for the production of certain documents such as PAL’s latest financial statement and its outsourcing contracts with service providers.”
Both Rivera and Magtubo criticized the decision for opening the floodgates for mass contractualization.
“In truth PAL will not be outsourcing non-core functions but merely engaging in illegal termination. It will lay off thousands of regular employees who will be absorbed by so-called service providers which are owned by Lucio Tan’s Kamag-anak Inc. PAL’s regular employees will overnight become contractual workers and lose wages, benefits and job security even as they perform the job as before,” Rivera said.
First Posted 14:22:00 06/20/2010
MANILA, Philippines—The Philippine Airlines Employees’ Association (Palea) on Sunday slammed as a “midnight decision” the order signed by acting Labor Secretary Romeo Lagman that found the planned PAL spin-off as a valid exercise of management prerogative.
“Lagman’s decision was released with suspicious haste and preempted the ongoing mediation proceedings at the Department of Labor and Employment (DoLE). We wonder what reasons prompted him to make a decision just 15 days before a new administration assumes power and a new Labor Secretary is appointed,” said Gerry Rivera, Palea president and Partido ng Manggagawa (PM) vice chairman, in a news release.
Palea announced that it will file a motion for reconsideration and exhaust all the means provided by law to protect the job security and labor rights of some 3,000 employees to be laid off as a result of the planned spin-off of airport services, in-flight catering, and call center operations.
The PAL union said it is also planning mass actions to protest the decision as Rivera explained that the DoLE’s decision is not yet final and executory.
The militant PM expressed its support for the fight of the PAL union.
“The DoLE’s decision, together with the measly P22 wage hike, exposes the real legacy of the Gloria Arroyo regime which is anti-labor to its last remaining days. The working class will remember the GMA government for legalizing mass contractualization and its cheap labor policy,” said PM chairman Renato Magtubo.
Rivera argued that “Lagman’s June 15 order is faulty on both substantial and procedural grounds. It failed to consider the PAL-Palea collective bargaining agreement’s provision prohibiting the outsourcing of jobs that are being performed by regular employees. Further the case has not been submitted for resolution and the order came only four working days after Palea filed a motion for the production of certain documents such as PAL’s latest financial statement and its outsourcing contracts with service providers.”
Both Rivera and Magtubo criticized the decision for opening the floodgates for mass contractualization.
“In truth PAL will not be outsourcing non-core functions but merely engaging in illegal termination. It will lay off thousands of regular employees who will be absorbed by so-called service providers which are owned by Lucio Tan’s Kamag-anak Inc. PAL’s regular employees will overnight become contractual workers and lose wages, benefits and job security even as they perform the job as before,” Rivera said.
PAL postpones outsourcing while DoLE resolves labor dispute
By Paolo Montecillo
Philippine Daily Inquirer
First Posted 17:48:00 05/24/2010
MANILA, Philippines -- The Lucio Tan-led Philippine Airlines (PAL) has postponed a plan to outsource about 3,000 jobs by the end of the month amid the government’s moves to resolve issues between the company and labor groups.
In an internal memorandum, PAL assistant vice-president for industrial relations Remegio Siapno said that they have decided to wait for the Department of Labor and Employment’s (DoLE) resolution of the dispute between the airline management and the PAL Employees’ Association (PALEA).
“We shall wait for the decision of the Secretary of Labor and Employment,” PAL said.
Last month, the labor department assumed jurisdiction over the labor row, which has stemmed from a plan by management to outsource non-core services such as in-flight catering and aircraft maintenance to outside entities.
The outsourcing, which would affect around 3,000 of the airline’s 7,500 employees, was supposed to take effect on June 1.
“Please take note that the Dole Secretary’s assumption of jurisdiction on the planned spin-off/outsourcing suspends the effects of the termination pending resolution of the labor dispute by the Dole,” the inter-office document, obtained by the Inquirer, said.
“In other words, the planned spin-off/outsource shall not take effect as scheduled on May 31,” the memo said.
In the meantime, employees who have received the termination letters shall continue to report for work and PAL shall continue to admit the workers, according to PAL.
Philippine Daily Inquirer
First Posted 17:48:00 05/24/2010
MANILA, Philippines -- The Lucio Tan-led Philippine Airlines (PAL) has postponed a plan to outsource about 3,000 jobs by the end of the month amid the government’s moves to resolve issues between the company and labor groups.
In an internal memorandum, PAL assistant vice-president for industrial relations Remegio Siapno said that they have decided to wait for the Department of Labor and Employment’s (DoLE) resolution of the dispute between the airline management and the PAL Employees’ Association (PALEA).
“We shall wait for the decision of the Secretary of Labor and Employment,” PAL said.
Last month, the labor department assumed jurisdiction over the labor row, which has stemmed from a plan by management to outsource non-core services such as in-flight catering and aircraft maintenance to outside entities.
The outsourcing, which would affect around 3,000 of the airline’s 7,500 employees, was supposed to take effect on June 1.
“Please take note that the Dole Secretary’s assumption of jurisdiction on the planned spin-off/outsourcing suspends the effects of the termination pending resolution of the labor dispute by the Dole,” the inter-office document, obtained by the Inquirer, said.
“In other words, the planned spin-off/outsource shall not take effect as scheduled on May 31,” the memo said.
In the meantime, employees who have received the termination letters shall continue to report for work and PAL shall continue to admit the workers, according to PAL.
PAL assures uninterrupted service amid labor dispute
By Lira Dalangin-Fernandez
INQUIRER.net
First Posted 17:49:00 04/29/2010
MANILA, Philippines—The Philippine Airlines (PAL) has assured uninterrupted service in the transport of passengers, cargo, ballots and other election paraphernalia in the days leading to the national elections on May 10 amid an ongoing labor dispute.
The Department of Labor and Employment (DOLE) has assumed jurisdiction over the dispute between the airline management and the Philippine Airlines Employees Association (PALEA) to prevent both parties from taking drastic action that could lead to work disruption or stoppage.
In the order on April 23, Labor Secretary Marianito Roque urged the PAL and PALEA "to refrain from committing any act that might exacerbate the situation."
"Thus, PAL's scheduled spin-off and restructuring programs are on hold while the PALEA cannot engage in any mass action, work slowdown/stoppage or go on strike without violating the DOLE order," PAL said in a statement.
The airline’s management said the labor department is now on top of the situation.
PAL officials and PALEA will meet on Friday with the undersecretary for Labor Relations to discuss their differences over a planned restructuring program that could affect some 3,000 employees.
PAL said shipment of Comelec materials and paraphernalia to various domestic points is being given priority on all its flights. It said it has recently completed delivery of PCOS (precinct count optical scan) machines in Mindanao.
INQUIRER.net
First Posted 17:49:00 04/29/2010
MANILA, Philippines—The Philippine Airlines (PAL) has assured uninterrupted service in the transport of passengers, cargo, ballots and other election paraphernalia in the days leading to the national elections on May 10 amid an ongoing labor dispute.
The Department of Labor and Employment (DOLE) has assumed jurisdiction over the dispute between the airline management and the Philippine Airlines Employees Association (PALEA) to prevent both parties from taking drastic action that could lead to work disruption or stoppage.
In the order on April 23, Labor Secretary Marianito Roque urged the PAL and PALEA "to refrain from committing any act that might exacerbate the situation."
"Thus, PAL's scheduled spin-off and restructuring programs are on hold while the PALEA cannot engage in any mass action, work slowdown/stoppage or go on strike without violating the DOLE order," PAL said in a statement.
The airline’s management said the labor department is now on top of the situation.
PAL officials and PALEA will meet on Friday with the undersecretary for Labor Relations to discuss their differences over a planned restructuring program that could affect some 3,000 employees.
PAL said shipment of Comelec materials and paraphernalia to various domestic points is being given priority on all its flights. It said it has recently completed delivery of PCOS (precinct count optical scan) machines in Mindanao.
Gov’t stops PAL layoff, outsourcing for now
By Paolo Montecillo
Philippine Daily Inquirer
First Posted 19:35:00 04/27/2010
MANILA, Philippines -- The government has stepped in to resolve the labor dispute at Philippine Airlines (PAL), ordering the airline to postpone a plan to lay off 3,000 of the company’s 7,500 employees to cut costs.
The Department of Labor and Employment (DoLE) also ordered labor union PAL Employees Association (PALEA) to hold off a potential strike that could paralyze the flag carrier and harm the local aviation sector.
In an order issued Tuesday, DoLE said it decided to assume jurisdiction over the dispute by moderating discussions between the union and the airline’s management.
“What this means is that PAL is enjoined from pushing through with their spin-off,” PALEA president Gerardo Rivero said.
This was done to stop a “strike or lockout in an industry indispensible to the national interest such as the airline industry to which PAL belongs,” the labor department said.
The order was issued amid possibility of PALEA holding a paralyzing strike in protest of the Lucio Tan-led airlines’ plan to outsource its non-core operations to non-core service providers.
PAL announced the planned outsourcing earlier this month as part of efforts to return the airline to profitability after suffering massive losses in the last three years.
Hiring outside entities to handle non-core operations, including in-flight catering and reservations, is also seen as vital to allow PAL to attract investors for the airline.
The spinning off of services is scheduled to take effect on June 1.
DoLE said the order was also issued to deflect any negative impact on the economy brought about by the disturbance in the airline industry and other allied industries such as travel and tourism, trade and foreign currency exchange.
“It must be emphasized that this is not the first time that PAL has been embroiled in a labor dispute that eventually progressed into a strike among its employees, which resulted in the loss of employment status of not a few union officers as well as its members,” the DoLE order said.
“Both parties are ordered to refrain from committing any act that might exacerbate the situation,” DoLE said. The department said it would meet with both the union and the company’s management on April 30 to settle the issue.
PAL president and chief operating officer Jaime Bautista in an interview said the company would have no choice but to comply with the order.
“We haven’t received a copy of the order yet, but if Dole is assuming jurisdiction, then we’ll have to comply,” Bautista said, but added that this would have dire consequences for the airline.
“If we are not able to implement this spin-off, it will be more difficult for us to invite possible investors into PAL,” he said. “There are several interested investors, but they want to see changes in the structure of PAL to become like other airlines in Asia and concentrate only on its core services.”
Philippine Daily Inquirer
First Posted 19:35:00 04/27/2010
MANILA, Philippines -- The government has stepped in to resolve the labor dispute at Philippine Airlines (PAL), ordering the airline to postpone a plan to lay off 3,000 of the company’s 7,500 employees to cut costs.
The Department of Labor and Employment (DoLE) also ordered labor union PAL Employees Association (PALEA) to hold off a potential strike that could paralyze the flag carrier and harm the local aviation sector.
In an order issued Tuesday, DoLE said it decided to assume jurisdiction over the dispute by moderating discussions between the union and the airline’s management.
“What this means is that PAL is enjoined from pushing through with their spin-off,” PALEA president Gerardo Rivero said.
This was done to stop a “strike or lockout in an industry indispensible to the national interest such as the airline industry to which PAL belongs,” the labor department said.
The order was issued amid possibility of PALEA holding a paralyzing strike in protest of the Lucio Tan-led airlines’ plan to outsource its non-core operations to non-core service providers.
PAL announced the planned outsourcing earlier this month as part of efforts to return the airline to profitability after suffering massive losses in the last three years.
Hiring outside entities to handle non-core operations, including in-flight catering and reservations, is also seen as vital to allow PAL to attract investors for the airline.
The spinning off of services is scheduled to take effect on June 1.
DoLE said the order was also issued to deflect any negative impact on the economy brought about by the disturbance in the airline industry and other allied industries such as travel and tourism, trade and foreign currency exchange.
“It must be emphasized that this is not the first time that PAL has been embroiled in a labor dispute that eventually progressed into a strike among its employees, which resulted in the loss of employment status of not a few union officers as well as its members,” the DoLE order said.
“Both parties are ordered to refrain from committing any act that might exacerbate the situation,” DoLE said. The department said it would meet with both the union and the company’s management on April 30 to settle the issue.
PAL president and chief operating officer Jaime Bautista in an interview said the company would have no choice but to comply with the order.
“We haven’t received a copy of the order yet, but if Dole is assuming jurisdiction, then we’ll have to comply,” Bautista said, but added that this would have dire consequences for the airline.
“If we are not able to implement this spin-off, it will be more difficult for us to invite possible investors into PAL,” he said. “There are several interested investors, but they want to see changes in the structure of PAL to become like other airlines in Asia and concentrate only on its core services.”
PAL union considers strike; compromise still possible
By Paolo Montecillo
Philippine Daily Inquirer
First Posted 20:01:00 04/23/2010
MANILA, Philippines—Employees of flag carrier Philippine Airlines have raised the possibility of holding a strike to stop the company’s management from pushing through with a plan to cut close to 3,000 jobs to help lower costs.
PAL Employees Association (PALEA) president Gerardo Rivera said in an interview the union recently met with management over the airline’s plan to outsource non-core services to lower expenses and help the company keep up with the competition.
“PAL management still wants to push through with the spin-off and outsourcing, but we made it clear to them that we are opposing this completely,” Rivera said.
While the union understood many of the airline’s concerns about cutting costs and turning the company into a leaner organization, Rivera said cutting jobs should only be a last resort.
“We saw a lot of their points, but we believe there are still other areas where the airline can cut costs,” he said, claiming that outsourcing was not yet necessary.
The Lucio Tan-led carrier earlier announced that it would ask third-party service providers to handle non-core services like call-centers, catering and airport services.
The outsourcing, which is set to take effect on June 1, will affect up to 3,000 of the airline’s 7,500 employees. Front-liners like pilots and flight attendants will be retained, the company said. PAL president and chief operating officer Jaime Bautista earlier said the move would help
the company save as much as P1.5 billion a year.
The leaner organization that PAL will become as a result of the retrenchments will also help the company attract much-needed “white knight” investors willing to pour cash into the organization, which is seen as vital to the airline’s survival.
PALEA said it would continue to negotiate with PAL in hopes that a compromise could save the workers’ jobs.
“We are willing to talk to them… all we can do is hope for the best,” Rivera said. But he added that pushing through with a labor strike remained as “one of the options” for the group.
PALEA filed a notice of strike with the Labor department last January. The group also urged the government to bail PAL out of its current financial situation.
PAL officials could not be reached for comment.
Philippine Daily Inquirer
First Posted 20:01:00 04/23/2010
MANILA, Philippines—Employees of flag carrier Philippine Airlines have raised the possibility of holding a strike to stop the company’s management from pushing through with a plan to cut close to 3,000 jobs to help lower costs.
PAL Employees Association (PALEA) president Gerardo Rivera said in an interview the union recently met with management over the airline’s plan to outsource non-core services to lower expenses and help the company keep up with the competition.
“PAL management still wants to push through with the spin-off and outsourcing, but we made it clear to them that we are opposing this completely,” Rivera said.
While the union understood many of the airline’s concerns about cutting costs and turning the company into a leaner organization, Rivera said cutting jobs should only be a last resort.
“We saw a lot of their points, but we believe there are still other areas where the airline can cut costs,” he said, claiming that outsourcing was not yet necessary.
The Lucio Tan-led carrier earlier announced that it would ask third-party service providers to handle non-core services like call-centers, catering and airport services.
The outsourcing, which is set to take effect on June 1, will affect up to 3,000 of the airline’s 7,500 employees. Front-liners like pilots and flight attendants will be retained, the company said. PAL president and chief operating officer Jaime Bautista earlier said the move would help
the company save as much as P1.5 billion a year.
The leaner organization that PAL will become as a result of the retrenchments will also help the company attract much-needed “white knight” investors willing to pour cash into the organization, which is seen as vital to the airline’s survival.
PALEA said it would continue to negotiate with PAL in hopes that a compromise could save the workers’ jobs.
“We are willing to talk to them… all we can do is hope for the best,” Rivera said. But he added that pushing through with a labor strike remained as “one of the options” for the group.
PALEA filed a notice of strike with the Labor department last January. The group also urged the government to bail PAL out of its current financial situation.
PAL officials could not be reached for comment.
PAL to spin off catering, other services, Outsourcing to save P1.5B a year
By Paolo Montecillo
Philippine Daily Inquirer
First Posted 22:52:00 04/19/2010
Philippine Daily Inquirer
First Posted 22:52:00 04/19/2010
Flag carrier Philippine Airlines (PAL) stands to save as much as P1.5 billion a year in a controversial plan to outsource its non-core operations to third-party service providers.
The airline said its plan to ask outside parties to provide catering, cargo handling and call center services for the airline was necessary to keep the company afloat. The move, however, is expected to affect close to 3,000 employees.
“This is for the survival of the company,” PAL president and chief executive officer Jaime J. Bautista said in a briefing. The spin-off takes effect on June 1.
This year, Bautista said the company stood to lose more money as the airline struggled against mounting problems facing the domestic and international travel industries.
“All airlines in the region are doing this. The air travel sector has been hit with so many problems over the last two years. We were hit by the financial crisis, we were hit by high oil prices and now, even this problem in Europe will affect the industry,” he said.
The airline said it was also affected by the outbreaks of diseases such as the Severe Acute Respiratory Syndrome (SARS), Avian Influenza and the recent A(H1N1) virus.
“Given this grim scenario, PAL has no choice but to restructure. It must also sell or cease operations of non-core businesses since no airline in Asia, or the world for that matter, continue to operate non-core businesses,” the airline said in a notice sent to the PAL Employees Association (Palea) last Friday.
Employees involved in the company’s core business, including pilots and flight attendants, would not be affected, Bautista said.
The streamlining of operations was also done as part of plans to attract investors who can infuse fresh capital into the airline. So far, even PAL owner Lucio Tan has refused to pour cash into the company.
“He’s already invested so much money in PAL,” Bautista said, referring to the PAL chair who controls about 84 percent of the company. “If we continue to operate the way we do right now, we’ll continue to lose money and that’s what investors are seeing.”
PAL posted a net loss of $40.2 million in the April-December period of 2009, which is the first three quarters of the company’s fiscal year. This was lower than the $330 million the firm lost in the same period a year earlier.
Philippine Airlines union files strike notice
Agence France-Presse
First Posted 18:08:00 02/01/2010
MANILA - A union representing Philippine Airlines (PAL) ground staff said Monday it had notified the government of its intention to call a strike in a dispute over the outsourcing of the airline's services.
Edgar Oredina, the head of the PAL Employees' Association (PALEA), said the "notice of strike" had been filed to force the government to become involved in resolving the dispute, which began in August.
"Before, we resorted to preventive mediation but since nothing happened, we converted this to a notice of strike. Once we file that, we put the negotiations on a higher level," Oredina told Agence France-Presse.
He said that actually embarking on a strike was "the worst-case scenario" and that the union was using the threat of a strike to prompt the labor secretary or even President Gloria Macapagal-Arroyo to become involved.
"PAL has an outsourcing plan that would mean a lot of people would be gone from PAL. We are not asking for higher wages. This is just for job security," he said.
Oredina said it was proper that the government became involved because "the government contributed to this. The government had many policies that affected the revenues of PAL."
PALEA represents about 3,900 PAL employees in such areas as ground handling, maintenance and cargo operations, accounting for more than half of the national flag-carrier's 7,000 employees, Oredina said.
The airline said it was saddened by PALEA's move, which comes as "PAL is in an urgent financial predicament, with limited time and options."
It urged the union "to look at the big picture" of how the airline is trying to cope with a severe downturn in the global aviation industry.
PAL assured the public that all its operations would continue as normal.
Labour Department officials in charge of mediating strike threats said their agency's chief would meet union and PAL representatives on February 4.
In August, PAL said it would cut staff and realign operations after reporting a $301.4-million loss in the past fiscal year as it was hit by rising fuel costs.
First Posted 18:08:00 02/01/2010
MANILA - A union representing Philippine Airlines (PAL) ground staff said Monday it had notified the government of its intention to call a strike in a dispute over the outsourcing of the airline's services.
Edgar Oredina, the head of the PAL Employees' Association (PALEA), said the "notice of strike" had been filed to force the government to become involved in resolving the dispute, which began in August.
"Before, we resorted to preventive mediation but since nothing happened, we converted this to a notice of strike. Once we file that, we put the negotiations on a higher level," Oredina told Agence France-Presse.
He said that actually embarking on a strike was "the worst-case scenario" and that the union was using the threat of a strike to prompt the labor secretary or even President Gloria Macapagal-Arroyo to become involved.
"PAL has an outsourcing plan that would mean a lot of people would be gone from PAL. We are not asking for higher wages. This is just for job security," he said.
Oredina said it was proper that the government became involved because "the government contributed to this. The government had many policies that affected the revenues of PAL."
PALEA represents about 3,900 PAL employees in such areas as ground handling, maintenance and cargo operations, accounting for more than half of the national flag-carrier's 7,000 employees, Oredina said.
The airline said it was saddened by PALEA's move, which comes as "PAL is in an urgent financial predicament, with limited time and options."
It urged the union "to look at the big picture" of how the airline is trying to cope with a severe downturn in the global aviation industry.
PAL assured the public that all its operations would continue as normal.
Labour Department officials in charge of mediating strike threats said their agency's chief would meet union and PAL representatives on February 4.
In August, PAL said it would cut staff and realign operations after reporting a $301.4-million loss in the past fiscal year as it was hit by rising fuel costs.
Labor department won’t intervene in PAL case
Saturday, 14 August 2010 00:00
By Jomar Canlas Reporter and Darwin G. Amojelar, Senior Reporter
THE MANILA TIMES
THE Department of Labor and Employment on Friday admitted that its hands are tied in connection with a dispute between the management of flag-carrier Philippine Airlines (PAL) and the Philippine Airlines Employees Assocation (Palea).
Labor Secretary Rosalinda Baldoz said that they cannot step into the PAL case since there is no pending labor dispute or case filed before the department.
She added though that they can assist both parties by holding dialogues in the hope of settling disagreements between the PAL management and the workers.
“We cannot intervene right now with PAL because there is no pending case before us. What can we do right now is to assist [the two sides] in their dialogues,” Baldoz said.
The Labor department is brokering preventive mediation talks between the clashing parties before the National Conciliation and Mediation Board .
But the Labor chief pointed out that in the case of the 25 pilots of PAL who resigned, the matter would have to be settled before regular courts.
Baldoz said what Palea is actually seeking before the Labor department is reconsideration of a decision by former Acting Labor Secretary Romeo Lagman that affirmed PAL management’s prerogative to contract out jobs of its ground crew.
Ready for the worst
Meanwhile, the management of PAL said that they have readied contingency measures if flight attendants and stewards hold a strike that could paralyze the airline’s operations.
In a statement, Jaime Bautista, PAL president and chief operating officer, also on Friday said that they will deploy their administrative staff and other personnel to assist in case of an emergency.
“As part of our conditions of carriage, we commit to our passengers that we will bring them to their destination whether through extra flights or through PAL’s domestic and international interline partners,” he added.
PAL has a total of 134 interline partners—12 airlines in Southeast Asia; 11 in the United States and Canada; 25 in Europe; 12 in the Middle East; three in Japan; and 10 in China.
“In case of flight disruptions, our passengers can rest assured that we can transfer them to these airline partners,” Bautista said.
The Flight Attendants and Stewards Association of the Philippines’ (Fasap) earlier threatened to hold a strike after it rejected the PAL’s management proposal of a “one-time” P80-million package under a collective bargaining agreement.
“There is a legal process involved which all parties must respect and adhere to, before any lockout or strike can materialize,” Bautista said.
He added that the PAL management continues to talk with the union representatives.
“We believe the negotiating table is still the best venue for resolving differences,” Bautista said.
Bautista added that almost all airlines in the world are concentrating on their core business of flying and operating aircraft.
Most, if not all, he said, have given up non-core businesses and simply engaged the services of third parties that can provide cheaper and more cost-efficient products and services.
According to Bautista, PAL is not engaging in “contractualization” as claimed by its ground crew union.
“PAL is not hiring contractuals. It is selling its catering, ground handling and call-center units to interested third parties who are experts in operating these businesses,” he said.
Bautista added that the more than 2,600 Palea members to be affected by the spin-off will be paid one month’s salary for every year of service rendered.
They also are guaranteed employment by companies who will take over PAL’s catering, ground handling and call-center units.
By Jomar Canlas Reporter and Darwin G. Amojelar, Senior Reporter
THE MANILA TIMES
THE Department of Labor and Employment on Friday admitted that its hands are tied in connection with a dispute between the management of flag-carrier Philippine Airlines (PAL) and the Philippine Airlines Employees Assocation (Palea).
Labor Secretary Rosalinda Baldoz said that they cannot step into the PAL case since there is no pending labor dispute or case filed before the department.
She added though that they can assist both parties by holding dialogues in the hope of settling disagreements between the PAL management and the workers.
“We cannot intervene right now with PAL because there is no pending case before us. What can we do right now is to assist [the two sides] in their dialogues,” Baldoz said.
The Labor department is brokering preventive mediation talks between the clashing parties before the National Conciliation and Mediation Board .
But the Labor chief pointed out that in the case of the 25 pilots of PAL who resigned, the matter would have to be settled before regular courts.
Baldoz said what Palea is actually seeking before the Labor department is reconsideration of a decision by former Acting Labor Secretary Romeo Lagman that affirmed PAL management’s prerogative to contract out jobs of its ground crew.
Ready for the worst
Meanwhile, the management of PAL said that they have readied contingency measures if flight attendants and stewards hold a strike that could paralyze the airline’s operations.
In a statement, Jaime Bautista, PAL president and chief operating officer, also on Friday said that they will deploy their administrative staff and other personnel to assist in case of an emergency.
“As part of our conditions of carriage, we commit to our passengers that we will bring them to their destination whether through extra flights or through PAL’s domestic and international interline partners,” he added.
PAL has a total of 134 interline partners—12 airlines in Southeast Asia; 11 in the United States and Canada; 25 in Europe; 12 in the Middle East; three in Japan; and 10 in China.
“In case of flight disruptions, our passengers can rest assured that we can transfer them to these airline partners,” Bautista said.
The Flight Attendants and Stewards Association of the Philippines’ (Fasap) earlier threatened to hold a strike after it rejected the PAL’s management proposal of a “one-time” P80-million package under a collective bargaining agreement.
“There is a legal process involved which all parties must respect and adhere to, before any lockout or strike can materialize,” Bautista said.
He added that the PAL management continues to talk with the union representatives.
“We believe the negotiating table is still the best venue for resolving differences,” Bautista said.
Bautista added that almost all airlines in the world are concentrating on their core business of flying and operating aircraft.
Most, if not all, he said, have given up non-core businesses and simply engaged the services of third parties that can provide cheaper and more cost-efficient products and services.
According to Bautista, PAL is not engaging in “contractualization” as claimed by its ground crew union.
“PAL is not hiring contractuals. It is selling its catering, ground handling and call-center units to interested third parties who are experts in operating these businesses,” he said.
Bautista added that the more than 2,600 Palea members to be affected by the spin-off will be paid one month’s salary for every year of service rendered.
They also are guaranteed employment by companies who will take over PAL’s catering, ground handling and call-center units.
PAL raises fuel surcharge
Thursday, 12 August 2010 00:00
BY DARWIN G. AMOJELAR SENIOR REPORTER
FARES of Philippine Airlines (PAL) have risen after the government approved an increase in the flag carrier’s fuel surcharge for both domestic and international flights. The Civil Aeronautics Board (CAB) approved PAL’s request to increase its fuel surcharge to $42 from $35 in its Manila to Bangkok flights starting August 15.
“PAL is constrained to increase its fuel surcharge to enable it to partially recover the steady increase of the cost of fuel,” the airline said in a document filed with the regulator.
PAL said fuel prices rose 177.9 percent to $86.64 per barrel in July from its base reference of $31.18 per barrel in 2003.
The CAB also granted the request of PAL to extend a higher fuel surcharge up to October 12 to its Singapore flights at $29; Indonesia, $44; Hong Kong, $25; Macau, $19; Xiamen, $24; Beijing and Shanghai, $44.
PAL’s fuel surcharge for US and Canada stands at $109 per passenger; Australia, $109; Korea, $40; China, $44; Guam, $34;Singapore, $29 and Hong Kong, $25.
For its domestic destinations, the airline imposed a fuel surcharge of between P500 and P700.
A fuel surcharge is a temporary relief granted to airlines to help them recover losses they incur from higher jet fuel prices.
Fuel accounts for a third of an airline’s operating cost per passenger, and is the second-highest expense next to labor.
PAL’s costlier ticket is an additional burden to its passengers at a time when the carrier is suffering delays and cancellation of flights because of a lack of pilots.
Last week, PAL was forced to cancel several regional and domestic flights after 26 pilots flying its Airbus A319s and A320s resigned.
None of the 26 pilots who suddenly left their jobs have returned to their posts even as the airline gave them seven days to come back without sanctions.
This coincided with a planned strike by the Flight Attendants’ and Stewards’ Association of the Philippines
(Fasap) to protest what it called the carrier’s discriminatory age and gender requirements, as well as PAL’s failure to raise salaries for more than three years.
The carrier’s management had offered an P80 million one-time package to FASAP under their 2005-2010 collective bargaining agreement, but the union rejected the offer.
BY DARWIN G. AMOJELAR SENIOR REPORTER
FARES of Philippine Airlines (PAL) have risen after the government approved an increase in the flag carrier’s fuel surcharge for both domestic and international flights. The Civil Aeronautics Board (CAB) approved PAL’s request to increase its fuel surcharge to $42 from $35 in its Manila to Bangkok flights starting August 15.
“PAL is constrained to increase its fuel surcharge to enable it to partially recover the steady increase of the cost of fuel,” the airline said in a document filed with the regulator.
PAL said fuel prices rose 177.9 percent to $86.64 per barrel in July from its base reference of $31.18 per barrel in 2003.
The CAB also granted the request of PAL to extend a higher fuel surcharge up to October 12 to its Singapore flights at $29; Indonesia, $44; Hong Kong, $25; Macau, $19; Xiamen, $24; Beijing and Shanghai, $44.
PAL’s fuel surcharge for US and Canada stands at $109 per passenger; Australia, $109; Korea, $40; China, $44; Guam, $34;Singapore, $29 and Hong Kong, $25.
For its domestic destinations, the airline imposed a fuel surcharge of between P500 and P700.
A fuel surcharge is a temporary relief granted to airlines to help them recover losses they incur from higher jet fuel prices.
Fuel accounts for a third of an airline’s operating cost per passenger, and is the second-highest expense next to labor.
PAL’s costlier ticket is an additional burden to its passengers at a time when the carrier is suffering delays and cancellation of flights because of a lack of pilots.
Last week, PAL was forced to cancel several regional and domestic flights after 26 pilots flying its Airbus A319s and A320s resigned.
None of the 26 pilots who suddenly left their jobs have returned to their posts even as the airline gave them seven days to come back without sanctions.
This coincided with a planned strike by the Flight Attendants’ and Stewards’ Association of the Philippines
(Fasap) to protest what it called the carrier’s discriminatory age and gender requirements, as well as PAL’s failure to raise salaries for more than three years.
The carrier’s management had offered an P80 million one-time package to FASAP under their 2005-2010 collective bargaining agreement, but the union rejected the offer.
PAL looming strike to cause ‘emergency’
Wednesday, 11 August 2010 00:00
THE MANILA TIMES
The domestic tourism industry would lose some as well as win some from Philippine Airlines’ (PAL) current woes, Tourism Secretary Alberto Lim said.
Lim told reporters on the sidelines of the Wallace Business Forum Roundtable on Tuesday that a looming strike of PAL flight attendants and stewards would create an “emergency” situation.
PAL itself would suffer heavily if it failed to address policies of the flag-carrier on pay, retirement and pregnancy.
During a press conference also on Tuesday, Bob Anduiza, the president of Flight Attendants and Stewards Association of the Philippines (Fasap), said that they decided to push through with their planned strike after PAL management refused to yield to their demands.
According to Anduiza, the management, during a meeting on Monday, rejected lowering the retirement age for flight attendants, revoking the no-pregnancy rule and raising the salaries of members of the association.
The flag-carrier has been reported to be reeling from an exodus of pilots to foreign airlines that offer much higher salaries than PAL.
Fasap wants the flag-carrier to pay them a total of P160 million as back pay for the more than three years that PAL failed to raise their salaries.
PAL had offered a “one-time” P80-million package to its 1,600 flight attendants and stewards.
Its flight attendants are required to retire once they reach the age of 40 based on the 2000 to 2005 collective bargaining agreement.
Lim said that while the government has come up with a contingency plan—tapping other domestic air carriers to serve travelers who may be adversely affected by a strike—implementation may take some time.
“It may take a month to make these arrangements,” he added. “We don’t know which flights may be affected.”
The Tourism secretary said that PAL would mainly insulate its international flights from the trouble at the flag-carrier.
According to Lim, it helps that there are other airlines ready to help out, unlike during the PAL pilots’ strike in 1998.
PAL at present has 40-percent share of local flights.
Lim said that PAL’s problems may open the doors for more new players.
He batted for liberalizing the local airline industry.
Besides PAL, other airlines servicing the domestic market are Cebu Pacific, Air Philippines Express, SEAIR and Zest Air.
Anduiza said that they will announce the date of the strike a day before holding it.
He appealed to the Department of Labor and Employment to be fair to both Fasap and PAL.
Anduiza said that Labor Secretary Rosalina Baldoz not only has the power to assume jurisdiction over the standoff but also the power to order the PAL management to answer questions raised by Fasap.
Ben Arnold O. De Vera And Jefferson Antiporda
THE MANILA TIMES
The domestic tourism industry would lose some as well as win some from Philippine Airlines’ (PAL) current woes, Tourism Secretary Alberto Lim said.
Lim told reporters on the sidelines of the Wallace Business Forum Roundtable on Tuesday that a looming strike of PAL flight attendants and stewards would create an “emergency” situation.
PAL itself would suffer heavily if it failed to address policies of the flag-carrier on pay, retirement and pregnancy.
During a press conference also on Tuesday, Bob Anduiza, the president of Flight Attendants and Stewards Association of the Philippines (Fasap), said that they decided to push through with their planned strike after PAL management refused to yield to their demands.
According to Anduiza, the management, during a meeting on Monday, rejected lowering the retirement age for flight attendants, revoking the no-pregnancy rule and raising the salaries of members of the association.
The flag-carrier has been reported to be reeling from an exodus of pilots to foreign airlines that offer much higher salaries than PAL.
Fasap wants the flag-carrier to pay them a total of P160 million as back pay for the more than three years that PAL failed to raise their salaries.
PAL had offered a “one-time” P80-million package to its 1,600 flight attendants and stewards.
Its flight attendants are required to retire once they reach the age of 40 based on the 2000 to 2005 collective bargaining agreement.
Lim said that while the government has come up with a contingency plan—tapping other domestic air carriers to serve travelers who may be adversely affected by a strike—implementation may take some time.
“It may take a month to make these arrangements,” he added. “We don’t know which flights may be affected.”
The Tourism secretary said that PAL would mainly insulate its international flights from the trouble at the flag-carrier.
According to Lim, it helps that there are other airlines ready to help out, unlike during the PAL pilots’ strike in 1998.
PAL at present has 40-percent share of local flights.
Lim said that PAL’s problems may open the doors for more new players.
He batted for liberalizing the local airline industry.
Besides PAL, other airlines servicing the domestic market are Cebu Pacific, Air Philippines Express, SEAIR and Zest Air.
Anduiza said that they will announce the date of the strike a day before holding it.
He appealed to the Department of Labor and Employment to be fair to both Fasap and PAL.
Anduiza said that Labor Secretary Rosalina Baldoz not only has the power to assume jurisdiction over the standoff but also the power to order the PAL management to answer questions raised by Fasap.
Ben Arnold O. De Vera And Jefferson Antiporda
PAL proceeds with case vs. pilots
Wednesday, 11 August 2010 00:00
BY DARWIN G. AMOJELAR SENIOR REPORTER
THE MANILA TIMES
PHILIPPINE Airlines (PAL) on Tuesday asked its flight attendants and stewards to reconsider a plan to hold a strike amid management efforts to bridge their differences. In a statement, PAL said the company is sincere in addressing the Flight Attendants and Stewards Association of the Philippines (FASAP) concerns.
“Let’s find a peaceful solution to our internal problems for the sake of the flying public,” Jaime Bautista, PAL president said.
He said negotiations are still ongoing before the National Conciliation and Mediation Board (NCMB) where FASAP members could ventilate their grievances.
Andy Ortega, FASAP vice president had threatened that the group would go on strike after the PAL management proposal failed to address the real problems the employees had raised.
The next meeting between PAL management and FASAP officers is scheduled for August 17 before the NCMB.
“We recognize the flight attendants’ right to express their concerns, and they can use the negotiating table to do that,” Bautista said.
He said PAL is suffering financial difficulties, thus its inability to offer more than the P80 million one-time package to FASAP under their 2005-2010 collective bargaining agreement (CBA).
“PAL was hit hard by the global economic recession and slowdown in travel just like the other airlines around the world. We could not afford at the moment what they are asking. But to show our good faith and sincerity in addressing their concerns, we offered the P80 million one-time package to be divided among FASAP members,” Bautista said.
He said management was willing to discuss the retirement age issue during the mediation held Monday at NCMB, adding that the company preferred to incorporate this matter in the next CBA for 2010 to 2015.
“We told them that since the first flight crew to be affected by the 40-year-old retirement rule under the existing CBA is still years from now, we have enough time to discuss it with no one being adversely affected by the said rule,” the executive said.
Bautista said the first crew—assuming she was hired in year 2000 at the age of 22—will only turn 40 in 2018. Those hired in 1996 will only turn 45 by 2019.
Under the existing CBA, male and female flight attendants who were hired before November 1996 would be retired once they reach 60 and 55 years old, respectively, and those hired from 1996 and beyond would be retired at age 45 for both males and females. Those hired after November 2000 will be retired by the age of 40 for both males and females.
The country’s flag carrier said none of the 26 pilots who suddenly left their jobs have returned to their posts even as the airline gave them seven days to come back without sanctions.
“It’s apparent that these pilots already have commitments abroad and opted not to return,” Bautista said, adding that an administrative process is ongoing, in line with the company’s internal rules and regulations.
“Pilots will be served notices to explain why they continue to fail to report for flight duty. So far, the pilots have been served “notices,” to which they were given the opportunity to respond, he explained,” Bautista said.
“Right now, the administrative process is taking its course. But even while this is ongoing, our legal department is studying what cases will be filed in the coming days,” he added.
BY DARWIN G. AMOJELAR SENIOR REPORTER
THE MANILA TIMES
PHILIPPINE Airlines (PAL) on Tuesday asked its flight attendants and stewards to reconsider a plan to hold a strike amid management efforts to bridge their differences. In a statement, PAL said the company is sincere in addressing the Flight Attendants and Stewards Association of the Philippines (FASAP) concerns.
“Let’s find a peaceful solution to our internal problems for the sake of the flying public,” Jaime Bautista, PAL president said.
He said negotiations are still ongoing before the National Conciliation and Mediation Board (NCMB) where FASAP members could ventilate their grievances.
Andy Ortega, FASAP vice president had threatened that the group would go on strike after the PAL management proposal failed to address the real problems the employees had raised.
The next meeting between PAL management and FASAP officers is scheduled for August 17 before the NCMB.
“We recognize the flight attendants’ right to express their concerns, and they can use the negotiating table to do that,” Bautista said.
He said PAL is suffering financial difficulties, thus its inability to offer more than the P80 million one-time package to FASAP under their 2005-2010 collective bargaining agreement (CBA).
“PAL was hit hard by the global economic recession and slowdown in travel just like the other airlines around the world. We could not afford at the moment what they are asking. But to show our good faith and sincerity in addressing their concerns, we offered the P80 million one-time package to be divided among FASAP members,” Bautista said.
He said management was willing to discuss the retirement age issue during the mediation held Monday at NCMB, adding that the company preferred to incorporate this matter in the next CBA for 2010 to 2015.
“We told them that since the first flight crew to be affected by the 40-year-old retirement rule under the existing CBA is still years from now, we have enough time to discuss it with no one being adversely affected by the said rule,” the executive said.
Bautista said the first crew—assuming she was hired in year 2000 at the age of 22—will only turn 40 in 2018. Those hired in 1996 will only turn 45 by 2019.
Under the existing CBA, male and female flight attendants who were hired before November 1996 would be retired once they reach 60 and 55 years old, respectively, and those hired from 1996 and beyond would be retired at age 45 for both males and females. Those hired after November 2000 will be retired by the age of 40 for both males and females.
The country’s flag carrier said none of the 26 pilots who suddenly left their jobs have returned to their posts even as the airline gave them seven days to come back without sanctions.
“It’s apparent that these pilots already have commitments abroad and opted not to return,” Bautista said, adding that an administrative process is ongoing, in line with the company’s internal rules and regulations.
“Pilots will be served notices to explain why they continue to fail to report for flight duty. So far, the pilots have been served “notices,” to which they were given the opportunity to respond, he explained,” Bautista said.
“Right now, the administrative process is taking its course. But even while this is ongoing, our legal department is studying what cases will be filed in the coming days,” he added.
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