Palace upholds PAL spinoff as union votes to hold strike

By Paolo Montecillo
Philippine Daily Inquirer
First Posted 02:04:00 03/26/2011

MANILA, Philippines—Malacañang on Friday upheld a decision of the Department of Labor and Employment allowing Philippine Airlines (PAL) to spin off its non-core services but doubled the amount of gratuity to be given to the affected 2,600 employees.

The decision was announced on Friday night by presidential spokesperson Edwin Lacierda only hours after the airline’s union, the PAL Employees Association (Palea) announced that 95 percent of its members had voted to strike to force management to negotiate a collective bargaining agreement.

Lacierda, in a text message, said the Palace decided to increase from P50,000 to P100,000 the gratuity to be given to employees affected by the spinoff.

He said he has yet to have a copy of the decision of Executive Secretary Paquito Ochoa.

It was an affirmation of the ruling of Labor Secretary Rosalinda Baldoz on October 29, to allow PAL management to spinoff non-core services such as inflight catering, airport services and call center reservation.

In a press statement, PAL welcomed the Malacañang decision and said it would abide by the order, which recognized its right to spin off non-core businesses in order to survive as an airline.

Survival

PAL president and chief operating officer Jaime Bautista said the decision removes all legal impediments of the spinoff program.

“PAL can now focus on its restructuring efforts in order to survive in the long term,” Bautista said.

He said management will reach out to affected workers to discuss smooth and orderly implementation of the ruling.

Bautista said that besides the P100,000 gratuity, each affected employee would receive separation a pay equivalent to 1.25 month’s salary for every year of service, 100 percent commutation of unused vacation and sick leave balances, one-year extension of medical and hospitalization benefits, and trip pass benefits depending on the number of years in service.

Earlier Friday, Palea announced the result of Wednesday’s strike vote.

The airline, however, shrugged off the strike threat as it assured its passengers that flights would not be disrupted.

In a statement on Friday before the Malacañang announcement, Palea said the nationwide tally of its strike vote showed that less than five percent of the union’s members opposed the work stoppage.

Palea represents more than half of the airline’s 7,000 employees. It hopes the strike would paralyze PAL’s operations, leaving a large hole in the air travel sector that no other airline can compensate for.

“Prepare for a strike,” Palea president Gerry Rivera said in a text message on Friday.

“The massive vote for a strike is an expression of protest at the 13-year long suspension of the CBA and the planned ‘contractualization’ … Our demand for new CBA negotiations has remained unheeded for the past five months thus we are forced to go on strike,” he said.