Palace adopts hands-off stance on PAL anew as Aquino reviews ruling

Posted on 09:25 PM, November 02, 2010
Business World

Palace adopts hands-off stance on PAL anew as Aquino reviews ruling
THE PALACE said yesterday it would not intervene into the planned layoff of some 2,600 ground employees of Philippine Airlines (PAL), advising the workers to seek all legal remedies.
The Philippine Airlines Employees’ Association (PALEA) can file a motion for reconsideration, a petition for certiorari at the Court of Appeals (CA), and eventually bring the case to the Supreme Court, Palace deputy spokesperson Abigail D. Valte said in a briefing at Malacañang yesterday.

“As of the moment, we advise them to avail [themselves] of the remedies available under the law,” she said.

President Benigno Simeon C. Aquino III said he was reviewing the ruling of the Labor department.

Ms. Valte said Labor Secretary Rosalinda D. Baldoz’s affirmation of PAL’s plan to outsource three units, namely in-flight catering, airport services, and call center services, which requires laying off workers, was “based in law.”

“The exercise of management prerogative was valid and they were given benefits that are entitled to them under that situation. So we don’t have a problem with that, as long as the decision is based in law and is rendered on the basis of the facts as pleaded,” she added.

PALEA members trooped to Mendiola yesterday to protest the Labor department’s decision. “We will [pursue] legal moves. We’ll file an appeal with the CA,” PALEA president Gerardo F. Rivera said in a text message.

On Monday, the airline said the planned spin-off was done “in good faith” and justified by the management’s prerogative to reorganize its corporate structure for the viability of its operations.

“The PAL union [has] been aware of the planned spin-off since 1998 but it was deferred as PAL Chairman Lucio C. Tan tried to make PAL profitable amidst the difficult operating environment,” the company said. “So far only PAL’s maintenance and engineering department was spun off and bought by Lufthansa Technik Philippines in 2000.”

PAL claims to have lost $312 million over the last two years due to a global recession, volatile fuel prices, the United States Federal Aviation Administration’s downgrade of the country’s aviation safety rating to Category 2, and competition with low-cost carriers.

“Despite the implementation of major cost control strategies and cash generation initiatives, PAL was still way short of its goal to keep the company afloat. Hence, PAL crafted a comprehensive plan which includes restructuring and spin-off as key initiatives for survival,” PAL had said. -- Ana Mae G. Roa