PAL, PALEA mull partial settlement of labor issues

MANILA, Philippines – The ground crew union and management of local carrier Philippine Airilnes (PAL) have agreed to consider a partial settlement of their disputes before the Office of the President hands down its decision over the year-long labor row.

A partial settlement may involve either the gradual implementation of the airline’s outsourcing plans or the increase in the separation benefits of affected employees, deputy presidential spokesperson Abigail Valte told a radio interview on Saturday.

“Magandang development po (ang meeting) kahapon dahil at least nalaman natin mula sa kanila na open pa sila to a partial settlement bago mag-release ng desisyon doon sa kaso nila ang Office of the President. I think it’s a very good sign if both parties manifest that they are still willing to come across for certain things bago naman po maglabas po ng desisyon,” she said.

PAL and PALEA (PAL Employees Association) were in a 1.5-hour long meeting on Friday afternoon to thresh out differences after Malacañang assumed jurisdiction of the high profile labor case in December 2010.

In a statement, PAL spokesperson Cielo Villaluna said Jose Amor Amorado, Senior Deputy Executive Secretary, asked both sides if they are willing to resolve the issues through the following mechanisms:

1. For PAL management to increase the separation benefits of affected employees to an amount equivalent to 1.5 months for every year of service from the previous 1.25.
2. For PALEA to accept a partial implementation of the spin-off of the 3 non-core businesses of the airline.

Over P2.5 billion

Increasing the separation benefits will hike the costs for PAL.

Initially, PAL has earmarked P2 billion for the separation package for the 2,600 affected ground crew employees. This was raised to P2.5 billion when the labor department decided to modify the separation package in Nov. 2010.

The P2.5 billion, which PAL has planned to partially fund through loans from state banks, was meant to cover only 1.25 months for every service.

That package had included 100% of accumulated vacation and sick leaves, P50,000 as gratuity, one-year extension of their medical benefits, and free airline tickets depending on the length of service.

Spin-off

On the contentious issue of spinning off 3 non-core businesses of the airline, PALEA representatives requested for a copy of PAL’s financial statement so they can pore over the financial health of the company as claimed by management.

Valte said Malacañang directed PAL to comply and required PALEA to submit its comments in 10 days.

The spin-off was management’s strategy to manage costs as it navigates an industry now more competitive due to the growing number of and more aggressive players that regularly offer low fares.

Valte said PAL management is also mulling it they will agree to guaranteeing the payment of compensation for affected employees even if the employee is not absorbed by the service provider during the probation period.

“These are the finer details of their case,” noted Valte.

Background

Malacañang’s order calling Friday’s conference was in response to “PALEA’s pending petition for intervention.”

The meeting between the parties was the first since President Aquino took jurisdiction over the labor dispute in December.

Aquino’s move effectively put on hold the retrenchment of the 2,600 ground crew workers of PAL who are working in non-core units, and a planned strike that aimed to cripple the operations of the Lucio Tan-controlled airline. –abs-cbnNEWS.com