PAL Labor Union Goes On Strike

Business World

Thursday, October 31, 1996

By LARINA G. PEREZ, Senior Reporter, ESTHER C. TANQUINTIC, Reporter

and LEOTES MARIE T. LUGO, Researcher

Philippine Airlines (PAL), the country's flag carrier, will temporarily stop servicing several domestic routes as the labor strike started yesterday. Even with this, Pres. Ramos refused to draw in the squabble.

"I am not a labor arbiter," President Ramos told Palace reporters yesterday when asked if he would again mediate in the PAL labor dispute.

Earlier, the Alliance of Philippine Airlines, Inc. Labor Unions (APLU) wrote a letter asking the President to intervene in their row with PAL management. But Mr. Ramos said he is tossing the problem to the Department of Labor and Employment (DoLE).

"The initial approach of the government through the DoLE is to let the employer and employees settle their differences by virtue of their CBAs (collective bargaining agreements) and their sharing of benefits arising out of the whole enterprise," Mr. Ramos said.

Mr. Ramos also expressed approval of PAL's Employee Sharing Program (ESOP). PAL announced it is offering stocks worth P477 million at P5 per share to its employees. The 95 million unsubscribed shares account for about 4.75% of PAL's total capital stock.

"I think this is part of the solution that the DoLE is trying to get the two sides to adopt. And since this has been announced by PAL already, I think they are on their way to a solution," Mr. Ramos said.

APEC

However, with the start of the strike yesterday which could stretch until the Asia-Pacific Cooperation (APEC) summit starting this November 21, a harder stance may have to be taken by government to resolve the dispute.

APLU is the umbrella organization of PAL's three labor unions — PAL Employees' Association of the Philippines (PALEA), Flight Attendants and Stewards Association of the Philippines (FASAP) and Airline Pilots Association of the Philippines (ALPAP).

Manolo Aquino, PAL Executive Vice-President, told Business World prior to the strike that if PAL's unions go on strike "we will be forced to concentrate on domestic routes where there is no competition. We're talking about Cebu, Davao, etc."

Grand International Airways (GrandAir), Cebu Pacific Air, and Air Philippines offer alternatives to PAL's domestic services. GrandAir, which is controlled by the Panlilios, currently flies to Cebu, Davao, Tacloban and Cagayan de Oro. The Gokongwei-controlled Cebu Pacific serves the following points: Manila, Cebu, Cagayan de Oro, Davao and Iloilo. Air Philippines, owned by businessman William Gatchalian, flies to Subic, Iloilo, Kalibo, Zamboanga, Puerto Princesa, Cotabato and Davao.

INTERNATIONAL FLIGHTS

Mr. Aquino said PAL will strive to maintain its international flights once the strike takes place. However, he said PAL does not expect international flights will be affected as there are enough foreign carriers to service overseas-bound passengers.

The APLU went on strike due to alleged unfair labor practices committed by management. Among the reasons cited by the unions as basis for a strike include violation of the economic provisions of existing CBAs; termination of 183 officers and members of PALEA and violation of existing work rules, among others.

The strike was held despite two assumption orders issued by Labor Secretary Leonardo Quisumbing. The PAL unions denounced the Labor Chief's orders as biased in favor of the airline's management.

Meanwhile, PALEA filed a motion for contempt versus PAL management, particularly its President and Chief Operating Officer (COO) Jose Antonio Garcia for defying DoLE's directive of "committing any act that may exacerbate the situation."

MEMO

The union alleged the COO defied DoLE's Oct. 24 assumption order when he issued a memorandum, dated Oct. 25, directly addressed to "all employees."

The memo circular announced the ESOP and also explained the status of the union's long-standing CBA.

But the APLU branded the ESOP as a "`pie in the sky' solely designated to mislead the public and veer attention away from the refusal of PAL management to meet with its employees and negotiate terms for new CBAs."

"PAL and Mr. Garcia, by their provocation, have demonstrated utter contempt for the temporary and fragile industrial peace forged last Oct. 24... Management broke the peace and drew the first blood," it added.