Tuesday, 02 November 2010 00:00
BY DARWIN G. AMOJELAR SENIOR REPORTER AND JOMAR CANLAS REPORTER
The Manila Times
Buoyed by a favorable decision of the Department of Labor and Employment (DOLE) on the flag-carrier’s planned spin-off of three non-core business units, Philippine Airlines (PAL) on Monday said that it wants to be profitable again.
As a result of such decision, according to Cielo Villaluna, PAL spokesman, the airline now would be able to implement its restructuring program.
Earlier, the Labor department affirmed a previous order of then acting Labor Secretary Romeo Lagman, denying a motion for reconsideration of the PAL Employees Association (Palea) because the airline’s spin-off plan was a “just, reasonable, humane and lawful exercise . . .”
The affected units involving 2,600 employees were in-flight catering services, airport services (including ground handling, cargo terminal/cargo handling and ramp handling) and call-center reservations.
Villaluna, in a statement, said that the planned spin-off was done in good faith and justified by management’s prerogative to reorganize its corporate structure for the viability of its operations.
“Most airlines in the world, and almost all carriers in Asia, are now using third parties to supply and render non-core services. In PAL’s case, it is implementing the spin-off [plan] to cut costs and ensure the airline’s continued survival,” she added.
The flag-carrier expects to save about P500 million to P1 billion a year with the plan.
Unlike state-owned airlines that enjoy subsidies and bailouts in times of difficulty, Villaluna said, PAL is entirely on its own.
“As a purely private enterprise, PAL receives no financial assistance, not even concessional loans from the Philippine government,” she added.
Jaime Bautista, PAL president, also earlier said that reduction of PAL’s workforce was part of the company’s plan to become more attractive to investors.
Talks with possible investors, however, were put on hold because of labor disputes in the flag-carrier.
PAL also earlier increased its authorized capital stock from P16 billion to P20 billion, divided into 100 billion shares in preparation for the entry of new investors.
Net loss
Bautista had said that PAL this year aims to be profitable after posting a $14.4-million net loss for its fiscal year ending March 2010.
In the first quarter ending June, the flag-carrier recorded a net profit of $31.6 million, lower by 11 percent compared to the same period last year.
The airline’s revenues went up by 30 percent to $426.7 million for the first quarter of its fiscal year 2010 to 2011 over the same period of $327.7 million.
It sought rehabilitation in 1998 after racking up $2.12 billion in debts.
PAL brought down its liabilities to about $1 billion since entering corporate receivership and emerged from rehabilitation after recording a profit in 2007.
But the airline’s finances collapsed in the succeeding three years, with $350 million, or at least P15 billion, in losses during its last two fiscal years.
DOLE assurance
The Labor department said that none of the 2,600 affected PAL employees will be rendered jobless and they can always appeal the decision on the matter.
Labor Secretary Rosalinda Baldoz said that the ruling will not be final and executory if a court issues a temporary restraining order or status quo ante order against it.
She added that Palea can appeal the decision within 15 days under the Rules of Court.
PAL employees staged a rally in front of Labor department office in Manila on Monday to protest the ruling and said that they will elevate the case to the Court of Appeals.
Palea President Gerardo Rivera said that they see no hope in their case with Baldoz and even with President Benigno Aquino 3rd.
“Secretary Baldoz’s decision released on the eve of All Souls’ Day is symbolic for it will conjure up 3,000 zombie positions [that] will have cheaper wages, fewer benefits, no security of tenure and no protection by a union,” Palea said in a statement.
But in its decision, the Labor department said, the 2,600 affected employees were all guaranteed employment and hefty transition benefits.
In declaring valid the termination of the employees, it added, parameters were set under PAL’s collective bargaining agreement (CBA) with the union: exercise of management prerogative was done in a just, reasonable, humane and lawful manner; and observance of the 45-day consultation period before implementing reorganization of PAL.
Baldoz said that the just and humane exercise of the management prerogative to close and outsource certain services was reflected in the improved transition benefits that will be granted all the affected employees.
The Labor department’s decision stated that the benefits were “over and above the benefits granted in the original decision and even under existing laws.”
It also gave the employees a one-year guarantee on entry point salaries with service providers and a guarantee on payment of their salaries for at least one year from the time of their dismissal.
Those fired will be absorbed by SkyKitchen Phil. Inc. (catering), SkyLogistics Phil. Inc. (airport services) and ePLDT Ventus, a PLDT subsidiary (call center).
The employees will also continue to enjoy trip pass benefits in accordance with the CBA and the PAL Personnel Policies and Procedures Manual, graduated under the following terms: lifetime trip passes for employees with 15 years in service and more; eight sets of trip passes for those with 10 to 15 years of service; five sets of trip passes for those with five to 10 years of service; and two sets of trip passes for those with less than five years in service.
Gratuity pay
In addition, the Labor department ruling provided additional gratuity pay of P50,000 per affected employee; vacation leave balance that is 100-percent commutable to cash regardless of years of service; sick leave balance that is 100 percent commutable to cash regardless of years of service; and extension by one year of the medical and hospitalization package based on the CBA and pertinent company policy.
Baldoz said that the first two benefits were ordered in the original decision but that she expanded the benefits.
The rest of the benefits were initially offered by PAL to its employees affected by the outsourcing program under its early retirement program.
The Labor secretary said that the flag-carrier contracting out its services was lawful and reasonable under the CBA between PAL and Palea.
“The CBA affirmed the management prerogative of PAL to organize, plan, direct and control operations” and to “reorganize its corporate structure for the viability of its operations,” she added.
“The ‘good faith’ efforts of the company to prevent business losses and maintain competitiveness negate any suspicion that contracting out services was motivated by the intention to discourage the exercise of, or interfere with, the right to self-organization,” Baldoz’s decision stated.
“Palea shall continue to exist even after the outsourcing of services in the three departments with its officers and members in unaffected operations and departments,” it said.
No comments:
Post a Comment