PAL, Pilots in New Clash on P2-B Fund

Manila Bulletin

Wednesday, December 23, 1998

A dispute flared up yesterday between the Philippine Airlines (PAL) and the Airline Pi­lots Association of the Philippines (ALPAP) over the $2.2-billion PAL Pilots Retire­ment Benefit Plan (Re­tirement Plan) currently deposited in three banks — Bank of Philippine Is­lands (BPI), Metrobank, and PCI Bank.

The dispute arose over the administration, management, invest­ments, payments and distribution of the retirement fund following AL­PAP's strike on June 5, 1998, and PAL management declaration on June 7, a day after the pilots struck, that “all pilots who did not return to work until noon of June 7, 1998, were fired.”

It is the position of manage­ment that since ALPAP members were fired after defying the June 7 return-to-work order of the Department of Labor and Employment (DOLE), they are no longer entitled to the retire­ment fund.

ALPAP disagreed with the position of PAL management. In a press conference yesterday at the Manila Hotel, the pilots, led by ALPAP President Sotico Lloren and Florendo Umali, said the PAL Pilots' Retirement Board has complete and absolute authority to administer and manage the Plan.

Trust agreements were en­tered into with three banks -- BPI, Metrobank and PCI Bank -- only to hold and invest the Fund,” ALPAP said. “Upon in­struction from the Retirement Board, these trustees are duty bound to make the necessary payments from the Fund as the Board may dictate without any conditions whatsoever.”

The pilots decried that after the labor dispute between ALPAP and PAL broke out, the trustee banks in effect froze the Fund as they held in abeyance the processing of the instruction of the retirement board. These include releasing the retirement benefits of pilots who have reached mandatory retirement age, who were disabled for medical reasons, or were dismissed from the company due to the strike.

“Of course we understand that banks have their own interest to protect. But we can't see why that should be suffi­cient reason to perpetuate the injustice committed by PAL to us despite the Trust Agreement to which they are signatories. It is easy to see that the banks have everything to gain and nothing to lose by withholding payments from the retirement fund.”

The pilots stressed that they are not asking the trustee banks to bend over backwards. “We want the banks to honor their duties as trustees so that monies of the Fund go where they are intended,” they stressed.