Union appeals vs PAL outsourcing scheme

THE PHILIPPINE Airlines Employees’ Association (PALEA) yesterday appealed the Department of Labor and Employment’s (DoLE) decision allowing Lucio C. Tan-led Philippine Airlines (PAL) to proceed with an outsourcing scheme that will lay off ground staff.

“There are strong grounds to seek the reversal of the decision and June 28 is the 10th and last day to file a motion for reconsideration.

The decision of DoLE is not executory since we still have the right to file this motion,” PALEA President Gerardo F. Rivera told BusinessWorld in a telephone interview yesterday.

He added: “We did not file a motion last June 21 because we are afraid that there could be another “midnight decision.” We hope the current administration will let the new administration decide on this matter.”

Union members held a rally at the DoLE office in Manila yesterday with other labor groups. PALEA has asked President-elect Benigno Simeon C. Aquino III to intervene on the issue.

The DoLE’s June 15 decision penned by Acting Labor Secretary Romeo Lagman favored PAL management’s plan to outsource three non-core operations. Outsourcing call center, catering, and ground services will displace more than 2,600 workers and is estimated to yield savings of P1 billion to P1.5 billion.

The distressed airline plans to pay around P2 billion in benefits to retrenched employees, who will get separation pay equivalent to one month’s salary for every year of service.

“Contrary to the decision, there is no spin-off of company departments in this case. No subsidiary corporation was formed by PAL and not one of its divisions was transformed into an independent company. What is involved here is outsourcing of functions wherein regular rank-and-file employees and union members will be terminated and the functions that they are performing will be farmed out to service providers,” Mr. Rivera said in a statement.

Labor Secretary Marianito D. Roque assumed jurisdiction over PAL in April to prevent a strike following the airline’s announcement of the outsourcing plan.

PAL had net loss of $40.2 million for nine months of its current fiscal year, narrower than the $330.2 million reported the previous year.

Mr. Rivera said: “There are no sufficient bases for retrenchment.

Retrenchment is a measure of last resort which should only be undertaken in case of serious and imminent losses. A close review of the financial statements and disclosures of PAL reveals that its business condition is improving and not deteriorating, thereby negating the necessity for retrenchment.”

PAL officials could not be reached for comment. — Aura Marie P. Dagcutan, Businessworld