Gov't intervenes against PAL outsourcing

Assumes jurisdiction to prevent strike

April 28, 2010

The Department of Labor and Employment (DOLE) has assumed jurisdiction Tuesday to resolve labor dispute against retrenchment plan at Philippine Airlines (PAL) and ordered its management to defer the decision to terminate 3,000 of the company’s 7,500 employees on May 31, 2010 after the PAL Employees Association (PALEA) filed notice of strike against the ailing flag carrier.

DOLE also ordered PALEA to refrain from doing any act that could paralyze the operation of the airline to the detriment of its passengers pending the resolution of the dispute which remains to be the biggest challenge of the labor department to date.

The Labor Department has 30 days to resolve the dispute before the employees are permitted to legally strike under Philippine Labor Laws. The department said it would meet with both the union and the company’s management on April 30 to try to resolve the issues.

An airline is considered by jurisprudence as an industry indespensable to national interest that require the governments intervention to avoid disruption of air transport services.

The government has been asked to bail out the airline following the footsteps of Thai and Malaysia airlines but the government refused to invest in the flag carrier considering its present state of finances.

PAL recently announce the planned outsourcing earlier this month in a bid to boost its profitability amidst losses it incurred during the last three years, mainly because of fuel price increases and the worldwide recession that followed affecting travel demands around the world to which the airline was badly affected. Most of the airline's revenues were derived from its international operations.

The airline recently awarded the reservations and customer supports center to a PLDT subsidiary which service is expected to take effect on June 1.

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