PAL to send termination letters to employees affected by Palace-approved outsourcing

MANILA, Philippines – The Philippine Airlines (PAL) has commenced implementation of its spin-off/outsourcing program by sending individual separation letters to about 2,600 workers from the airline’s catering, airport services and call center reservations units.

In a press briefing conducted shortly after the airline’s annual stockholders’ meeting, PAL president and chief operating officer Jaime Bautista said the letters notified affected workers that their employment with the flag carrier is only up to the close of their respective duty hours on Sept. 30, 2011.

Those who expressed intention to join the airline’s third party service providers will start official duty the next day.

Bautista said PAL also sent notices to the regional offices of the Department of Labor and Employment (DOLE) in Manila and Cebu.

“The spin-off/outsourcing is a painful but necessary decision to ensure PAL’s viability and long term survival. We assure affected workers that they will all receive their separation pay and other benefits that are at par, if not better, than industry standards. Guaranteed employment also awaits them at our third-party service providers,” Bautista said.

PAL will spend about P2.5 billion for the severance package. Based on the Oct. 29, 2010 ruling of Labor Secretary Rosalinda Baldoz, workers affected by the spin-off/outsourcing will receive the following: separation pay in the amount of 125 percent of their monthly basic salary for every year of service; P50,000 gratuity pay; 100 percent commutable-to-cash vacation and sick leaves; and trip pass (travel) benefits.

On appeal before the Office of the President, DOLE’s ruling was affirmed but slightly modified by increasing the gratuity pay by another P50,000 per worker.

In addition, PAL is offering a one-year extension of medical and hospitalization benefits and guaranteed pay for one year of whatever salary is granted by the service providers to those who choose to be employed by PAL’s new contractors.

PAL told its workers that its service providers – Sky Kitchen (catering), Sky Logistics (airport services) and SPi Global (call center reservations) – would contact them in the coming days. They have until Sept. 9 to express their intention to be absorbed by the three firms.

The airline said it has begun conducting town hall-style meetings to help enlighten and answer workers’ questions about the spin-off/outsourcing program.

Side by side with preparations for the spin-off/outsourcing, the airline management has also put in place contingency plans to ensure continued service and passenger convenience. –-Mary Ann Reyes (The Philippine Star) with Rudy Santos