PALEA's Greed

How much more is more?

Retrenchment benefits

Before Malacañang took over the labor case at PAL, the labor department had approved a compensation package for the affected employees worth P2.5 billion.

PAL said the Malacañang approved the spin-off but required an additional P50,000 gratuity pay per affected ground crew.

Thus, each of the around 2,600 employees who will be retrenched will receive the following:

  • Separation pay equivalent to 1.25 month’s salary for every year of service;
  • Additional gratuity of P100,000 per affected employee (higher by P50,000 per Malacanang order);
  • 100% commutation to cash of unused vacation leave and sick leave balances;
  • 1-year extension of the medical and hospitalization benefits;
  • Trip pass benefits depending on the number of years of service.
March 28, 2010

The Office of the President approved and confirmed the ruling of Department of Labor and Employment (DOLE) on the plan of carrier Philippine Airlines (PAL) to spin-off 3 non-core units that authorizes layoff of more than 2,000 employees.

Coinciding with the spin-off decision is the announcement of Philippine Airlines Employees Association (PALEA) to file notice of strike anew to the flag carrier.

On Thursday, 95% of PALEA's union members approved a strike vote on the ground of refusal to enter into Collective Bargaining Agreement (CBA) with the union, perhaps pre-empting the decision of the government approving the spin off.

This is the second time a decision from the executive department was announced on the heels of PALEA's plan for a work stoppage.

Earlier, Labor Secretary Rosalinda Baldoz affirmed PAL's outsourcing plan as a "management prerogative" and directed PAL to increase retrenchment benefits to P2.5 billion from P2 billion.

PALEA held a strike vote but also appealed to Malacañang to take over the matter.

Majority of PALEA's members agreed to go on a strike, but this was averted when President Aquino himself announced that the Office of the Executive Secretary will assume jurisdiction of the case.

PAL and PALEA have been conducting talks at the Palace, but these have been slowly progressing.

Aside from discussions on the outsourcing plan, PALEA also pushed for the negotiation of a collective bargain agreement.

PALEA's leaders said the CBA has been put on hold for 12 years and negotiations now should be revived since PAL reported a huge financial turnaround in its fiscal year 2010.

PAL insisted on finalizing the outsourcing issues first and the CBA later.

That's when the labor union went back to the labor department for another round of strike voting.

Aside from PALEA, the Lucio-Tan led airline also have ongoing labor woes with its cabin crew employees.

Executive Secretary Paquito Ochoa Jr. said Malacañang agreed with the DOLE position that PAL can contract out services; that the severance of employment of rank-and-file employees to be affected by the outsourcing of services was valid; and that PAL could not be held liable for unfair labor practice for pursuing a legitimate exercise of management prerogative.

Ochoa said the airline’s management, however, modified a component of the transition benefits package that will be given to employees who will be affected, such as increasing the separation pay to equivalent to 125 percent of the employee’s monthly salary per year of service from the one-fourth of one month’s salary that had been provided in DOLE’s original decision.

He said they also affirmed several compensations like the 100 percent cash payment of vacation and sick leave balance regardless of the number of years of service; a one-year extension of the medical and hospitalization package; and the continued trip pass benefits depending on the years of service rendered.

He said the Office of the President also increased the additional gratuity pay to affected workers to P100,000 from P50,000.

PAL president and chief operating officer Jaime Bautista said Malacañang’s decision upholding Labor Secretary Rosalinda Baldoz’s decision, removes all legal impediments on the implementation of the spin-off program.

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

He said management would reach out to affected workers to discuss the smooth and orderly implementation of the ruling. He urged members of the PAL Employees Association (PALEA) to respect and abide by the decision for the sake of industrial peace and the welfare of the flying public. - - - with excerpts from abs-cbnnews.

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