The cost of laying off PAL employees

Manila Auxiliary Bishop Broderick Pabillo reportedly advises the Philippine Airlines Employees Association (PALEA). Was it on his counsel that they blocked the roads leading to the Manila International Airport last Monday? That planking inconvenienced not only passengers of PAL, but of other international and domestic airlines as well. Traffic snarled for hours in southern Metro Manila.

PALEA was protesting the airline’s outsourcing of three non-core operations: catering, ground handling, call-center reservations. Leaders of the 3,500-strong ground crew denounce it as union busting. Two-thirds or 2,400 ground staff would be moved to new service companies.

PAL management calls it cost cutting. While the airline posted profit of $72.5 million in 2010, this was but a fourth of its $312.2-million (P13.4-billion) loss in the two previous years. Diving in and out of red clouds, PAL lost $44.8 million in the past decade, $768.9 million since it was privatized in 1992. The business worldwide is reeling from high fuel prices, which makes up 40 percent of operating costs. Airlines are losing money and thus merging. Only one of the United States’ 17 carriers, Hawaiian Airlines, is making money, mostly due to its on-time reliability and baggage safety reputation. (Incidentally, it is offering buy one-take one round trip tickets from Manila to Hawaii and mainland America.)

The government has approved PAL’s outsourcing four times: twice by the labor department, twice by the Office of the President. The PALEA cries that most of the crew will be rehired at lower salaries by the service firms. To make up for it, PAL is paying them 1.25 times the monthly salary for every year of service, higher than the one-half month stipulated in the labor code and one month in the collective bargaining agreement. The labor office also imposed on PAL P50,000-cash for every displaced employee, which Malacañang doubled to P100,000.

Still the union worried about layoffs by the service providers within six months, to evade mandatory hiring as permanents. So PAL got them at least one year’s salaries and medical benefits, or virtual regularization under the labor law. Depending on their length of service in PAL, the separated staff will also get free plane tickets, for life if employed for 15 years or more. Pabillo decries all this as oppression. –Jarius Bondoc (The Philippine Star)

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