PRESS RELEASE
24 September 2009
Rampant violation of labor rights in the country is most probably the cause why the International Labor Organization’s (ILO) High Level Mission to the Philippines is swamped by many complaints that go beyond the mission’s specific mandate of looking into the eight particular cases brought before the body in 2007.
Once such additional complaint is from Philippine Airline employees who face a second wave of mass retrenchment due to the management’s planned spin-off of its ground handling operations and other functions beginning November 15, 2009.
Philippine Airlines Employees Association of the Philippines (PALEA) president, Gerry Rivera, said the ILO forum yesterday was very memorable for them since it was also on September 23, 1998 that PAL ceased its operations and sent termination notices to its employees. This was after employees rejected Lucio Tan’s proposal to offer stocks options to its employees and three seats in the Board of Directors, on the condition that all the existing Collective Bargaining Agreements (CBAs) with its employees would be suspended for 10 years.
Upon intervention from Malacanang, however, employees were forced to accept the CBA suspension. Rivera, who is also the Vice President of Partido ng Manggagawa (PM), said “the continuing saga of contractualization and labor rights violation all began from here.”
Another round of retrenchment in the offing
The PALEA leader disclosed that on September 9, 2009, Philippine Airlines President & Chief Operating Officer, Jaime J. Bautista, in a memorandum, informed the Philippine Airlines Employees Association (PALEA) of the management’s plan to outsource/spin-off some operational units. The memorandum is but a formalization of the company’s earlier verbal notices to the Union.
Citing heavy losses and to prevent further bleeding, PAL is planning to outsource/spin-off the Catering, Passenger Handling, Ramp Handling and Cargo Handling operations. The management is also studying the possibility of doing the same to other functions such as the Information Technology, Revenue Accounting, Reservations and Call Centers, Medical and other Human Resources Operations.
“Once implemented, this second wave of outsourcing/spin-off will affect the job security of some 2,000 – 4,000 PAL employees currently assigned in those departments. And expected to be done under the same scheme that the management had employed in 2001, the remaining 7,000 PAL employees are therefore in for another round of mass retrenchment,” said Rivera.
Worse, adds Rivera, the plan may cast the proverbial last nail on the coffin for the PAL union which, for the last ten years, has been weakened and undermined by previous spin-offs and outsourcing, notwithstanding the effects of the state-sanctioned 10-Year CBA moratorium implemented since 1998.
10-Year CBA Moratorium 1998
The 10-Year suspension of PAL-PALEA CBA in 1998 was first in Philippine history, and perhaps one of the most blatant violations of ILO Conventions in the country on the right to organize and collectively bargain.
The management, with full blessings from the government, used the 1997 Asian financial crisis and the crippling pilot strike in 1998 against union-busting as pretext to force the issue of a moratorium despite strong opposition from PAL employees and the Philippine labor movement as a whole.
“Unfortunately, the Supreme Court came out with a surprisingly controversial decision affirming the validity of the CBA suspension,” Rivera said.
The decision created the jurisprudence that a CBA contract can be suspended even beyond its mandated lifetime. The decision also put PAL workers in limbo on how to exercise their Constitutionally-mandated right to organize, collectively bargain, and to strike.
As a consequence, internal conflict arose in the union afterwards as the management refused to recognize the new set of officers that won the union elections in April 2002, in clear violation of Conventions 87 and 98. The case remains pending before the Supreme Court.
On June 1998, PAL workers were rendered defenseless against the first wave of retrenchment which affected some 5,000 employees out of the approximately 14,000 employees before the 1998 strike. Included from those retrenched were some 1,400 flight attendants who were members of the Flight Attendants and Stewards Association of the Philippines (FASAP), who, just recently won a Supreme Court decision against illegal dismissal.
Spin-off 2001
On 2001, the Maintenance and Engineering Department was spun-off to a joint venture of Lufthansa Technik Philippines and MacroAsia Airport Services where PAL owner Lucio Tan Sr. also holds interests. MacroAsia’s Chairman of the Board is Lucio Tan, Jr., its President and CEO is Joseph Chua, the son-in law, while PAL President Jaime Bautista is the Treasurer. As a result, former PAL employees and PALEA members were terminated from PAL and rehired as contractual employees for Lufthansa Technik, and MacroAsia, of course, without the rights and benefits they previously enjoyed as PAL and unionized employees.
“The move was a classic example of how the PAL management has managed to implement contractualization scheme in the airline business effectively undercutting labor rights and undermining the Union existence,” lamented Rivera.
Spin-off 2009
PAL employees fear that the same spin-off and outsourcing scheme is going to happen now. This time, however, there is only a world recession to blame but no crippling strike the management can condemn. “Yet, there is a contractualization scheme to impose to once again to make labor assume the burden of flawed management decisions since the time PAL was privatized in the early 90s,” said Rivera.
In a Labor Management Council Meeting held last September 8, 2009, the PAL President & COO told the Union that the management has already invited prospective bidders for those departments targeted for spin-off. Again, as expected, one interested bidder is Lucio Tan’s MacroAsia Airport Services.
“It seems 10 years of labor sacrifice were not yet enough. Again, to save PAL from its current financial mess, the management is asking PAL employees to bleed some more,” explained Rivera.
Today, the PAL union has put forward the following recommendations as the ILO High level mission is set to meet with concerned government bodies and employers’ representatives.
1. For the Malacanang to certify as priority bill the passage of the proposed Security of Tenure bill and for Congress to pass the same in order to align the Labor Code to the letter and spirit of Convention 87 and 98. The security of tenure bill seeks to amend the pertinent provisions of the Labor Code to strictly regulate the practice of labor contracting and plug the loopholes in the law.
2. For the Labor Department to review Department Order No 18 specifying allowable and illegal forms of labor contracting. The Department Order has significantly liberalized the scope of legal contracting, thus giving legal blanket to outsourcing such as the PAL spinoff even if it weakens unions.
3. For the PAL management to suspend the planned outsourcing/spin-off.
4. For the Supreme Court to decide with dispatch on GR 155097 on the local election dispute within PALEA considering the inordinately long time of 7 years.
5. For the Congress and the Supreme Court to consider forming a special court or special division to handle purely labor cases to expedite the disposition of mounting cases at the NLRC, Court of Appeals, and the Supreme Court.
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