When workers become ‘non-essential’

Like most newspapermen, this columnist instinctively sympathizes with the workingman. We share a common fate as modern-day proles. We work for a living—and for someone else. Our capacity to perform certain jobs is all that we can bring to the marketplace.

No wonder then that, for example, the PAL Employees Association (Palea) has found many sympathetic ears in media. Out of its 4,100 or so members, about 2,600 are set to lose their jobs at Philippine Airlines—and the government has given its imprimatur for PAL to implement the layoffs.

The dismissed employees, PAL management has assured, would be absorbed by the companies that the airline intends to contract to handle its in-flight catering, airport services and call center reservations. They will also be given “generous” separation pay and other benefits purportedly above what the law stipulates.

PAL management has explained that the spin-off is a matter of “corporate survival.” In short, it has no options left. If PAL is not allowed to let its “non-essential” workers go and contract out its “non-core business operations,” the airline—like many others like it around the world—would collapse.

Interestingly, PAL seems to be constantly teetering at the brink of bankruptcy—or has often claimed to be so—ever since Lucio Tan took over in 1998. Airline executives, however, always have a ready explanation for PAL’s chronic financial malaise, ranging from stiff competition put up by budget carriers to volatile fuel prices and restrictions imposed by foreign governments.

At one point, PAL management made good on its threat to shut the airline down, only to resume operations months later after jettisoning many of the employees it found troublesome.

This time around the taipan-owned carrier has decided to streamline its operations and cut costs in its bid to recover financial health by, among other measures, spinning off its units that handle in-flight catering, airport services and call center reservations.

These services will be contracted to what PAL management and the Department of Labor and Employment (DOLE) regularly refer to as “third parties,” including Sky Logistics for ground handling and other airport operations and Sky Kitchen for in-flight catering.

PAL Executive Vice President Jose Gabriel Olives claimed that Sky Logistics and Sky Kitchen are not part of the Lucio Tan group of companies. “I can tell you that with a straight face,” Olives said at the Kapihan sa Sulo media forum last Saturday.

The union insists otherwise.

In a recent press statement, Palea President Gerry Rivera said that “Sky Logistics and Sky Kitchen are not third-party companies but simply fronts with Lucio Tan as the real owner.”

According to Palea, Sky Logistics and Sky Kitchen are in fact owned by Lucio Tan and the alleged proprietor, a certain Manny Osmeña, is just fronting for the PAL big boss.

“Manny Osmeña is a Chinese immigrant who acquired Filipino citizenship by naturalization and in the process changed his name to Manny Osmeña. He is not related to the Osmeñas of Cebu; instead he is a cousin of Lucio Tan,” Rivera said.

According to at least one published report, Sky Kitchen and Sky Logistics, both newly formed companies, are controlled by businessman Manny Osmeña, who also has a stake in Cebu Pacific Catering Services, which is not related to another airline owned by another ethnic Chinese businessman John Gokongwei.

In addition, the report said, Cebu Pacific Catering is partly owned by PAL sister firm Macroa-sia Corp.
Rivera, who is also vice chairman of the leftwing Partido ng Manggagawa, added that Palea has information showing that airline President Jaime Bautista is a partner of Manuel V. Pangi-linan in ePLDT Ventus, which will take over PAL’s call center reservation requirements.

Whether or not Palea’s revelations about the true owners of the third-party service providers are enough to derail the airline’s spin-off program is still unclear at this point. But if true, it would indicate a disturbing lack of candor on the part of PAL management.

What is clear is that DOLE has already affirmed PAL’s right to spin-off three non-core business units. The affirmation issued by Labor Secretary Rosa-linda Baldoz on October 29 actually dismissed the reconsideration motion filed by Palea against a ruling issued on June 15 by then acting DOLE chief Romeo Lagman who also upheld PAL’s prerogative.

Also at the Kapihan, Undersecretary Hans Leo J. Cacdac said that DOLE believes the spin-off “was done in good faith” and justified by management’s prerogative to reorganize its corporate structure in order to remain viable, to cut costs and to guarantee the airline’s survival.

DOLE agreed with the airline management, which said the spin-off is part of PAL’s “survival plan” in the wake of losses to-taling US$312 million in 2008 and 2009 due to the global recession, volatile fuel prices, “cutthroat competition” from low-cost carriers, the decision of the US Federal Aviation Administration to downgrade the aviation safety rating of the Philippines to Category 2 and other issues. –DAN MARIANO, Manila Times

dansoy26@yahoo.com