Gov’t offers to help ‘sell’ stock plan to PAL unions

Business World
September 15, 1998
Leotes Marie T. Lugo, Patrisha Joan F. de Leon

The government interagency task force on the rehabilitation of Philippine Airlines, Inc. (PAL) yesterday met with the flag carrier's ground crew, flight attendants and pilot unions to offer assistance in "selling" the controversial employee stock option plan (ESOP) to their respective members.
However, Malacañang does not see yet the need to intervene in the lingering labor problem threatening the very existence of the flag carrier.
BusinessWorld sources said the task force is closely monitoring the developments after the ratification of the ESOP encountered opposition from some members of the ground crews' PAL Employees Association (PALEA).
The sources, however, declined to discuss the kind of assistance offered to the unions.
Over the weekend, 12 of the 15 members of the PALEA board of directors voted to accept the management-proposed ESOP which provides for the transfer of P3 billion worth of PAL shares to regular employees in exchange for a 10-year suspension of the workers' collective bargaining agreements (CBAs).
Immediately, Bukluran ng Manggagawang Pilipino chairman and long-time PALEA ally Filemon "Popoy" Lagman, along with some PALEA members, accused the union leadership of "selling out."
"What has happened so far is just the acceptance of the board of directors. Hindi pa tapos ang trabaho diyan (the issue is not settled yet)... The decision still has to be ratified by the union membership," a union source said.
"Regarding the CBA (suspension), the PAL management and the union themselves must work out the details that will be acceptable to both parties," Palace spokesman Fernando Barican said in a briefing yesterday.
He said the reported discord does not merit a presidential intervention. "If there are disputes, they have to work out those disputes among themselves. If there are requests for intervention by the parties, I suppose that would have to come after the parties have their positions firmed up," he added.
Mr. Barican, however, stressed the Palace, particularly President Estrada, is willing to step in if the need arises.
"At the appropriate time, we will make the appropriate mediation efforts, if that is called for or asked for... In the normal course of events, unless the President is specifically asked to intervene and approve a particular plan, the Palace will not intervene," he added.
When PALEA went on strike last July to protest certain provisions in their CBA, it was Mr. Estrada who helped broker the talks between the union and PAL management.
Mr. Barican also said the President is studying the recommendation of the interagency task force created to come up with measures to help the cash-strapped airline. "The President is still studying the recommendation of the interagency task force. He will take action very soon," he added.
The task force, headed by Finance Secretary Edgardo Espiritu, recommended that the government renegotiate a number of its bilateral air agreements and temporary operating permits granted to foreign carriers during the previous administration to level the playing field. These agreements and temporary operating permits, it said, exposed PAL to more competition that it can handle.
The interagency task force is also keeping an eye at the developments with the Flight Attendants and Stewards Association of the Philippines (FASAP).
Although the FASAP board rejected the ESOP, a BusinessWorld source said this has yet to be ratified by the union members.
In an earlier interview, a FASAP official told BusinessWorld the union's 10-man board voted to reject the ESOP, but informed both the task force and the PAL management that the matter would still be referred to the members.
The FASAP official said the final decision would still come from the membership body.
The official said union leaders plan to consult all 2,100 FASAP members, including the 1,400 who were laid off last July 15.
At present, he said only about 650 remained employed in PAL.@