PAL Set to Formalize Stock Plan as Unions Soften Stance

Business World
Wednesday, September 9, 1998
By Patrisha F. De Leon
Reporter

Beleaguered Philippine Airlines, Inc. (PAL) may soon begin seeing light at the end of the tunnel as its labor unions have reportedly softened their stand on the management-proposed employee stock option plan (ESOP).

This as the government's inter-agency task force on PAL is expected to submit its report on the flag carrier's five-year rehabilitation plan to Malacañang within the week.

Business World sources said the flag carrier's management is scheduled to submit its official proposal on the ESOP to the task force after the leaders of the three PAL unions expressed openness towards the plan.
An official from the Flight Attendants and Stewards Association of the Philippines (FASAP) told Business World the unions are "all too willing" to participate in the ESOP but have yet to receive the official proposal from the management.

"So far all we've been doing is talking...and as long as everything remains as talk, we all know well enough that nothing is still official,” the FASAP official said.

Under the stock option plan, the PAL management will offer each regular employee a maximum of 60,000 shares from the existing personal shareholdings of company Chairman Lucio Tan.

Sources disclosed the total shares to be offered to the employees would be worth P3 billion and this translates into three seats on the airline's board of directors.

Sources also said the PAL management has also offered to loosen the employees' work rules in exchange for a 10-year suspension of the workers' respective collective bargaining agreements (CBAs).

For their part, representatives of the PAL Employees’ Association (PALEA) also denied earlier reports the union had rejected the ESOP because of the 10-year CBA moratorium. PALEA representatives clarified the union "did not turn down" the ESOP but told the task force it was not amenable to accept new CBA proposals.

However, the PALEA representatives also said the union was open to the suspension of certain provisions of their CBA. The PALEA wants management to include in its official proposal a list of the CBA provisions it wants to suspend.

Yesterday, leaders of the PALEA, FASAP and Airline Pilots Association of the Philippines held a meeting to discuss a "united response” to the ESOP as well as the flag carrier's five-year rehabilitation plan.

"But for now all we're going on are the unofficial reports...We're expecting official communication from the Finance department who is heading the task force. We're hoping to get something official from them...As of now; we have no direct communication with the PAL management,” the FASAP official explained.