PALEA tells House Labor Committee that negotiation is the solution to the PAL labor row

Press Statement

May 19, 2011

PALEA

The Philippine Airlines Employees’ Association (PALEA) calls on the House Labor Committee in its hearing today on the labor row at Philippine Airlines (PAL) to uphold labor rights and defend workers in our country. Further we call on the LaborCom to exert moral suasion on PAL to open negotiations with the PAL unions as the solution to the labor row at the flag carrier. We have lost hope in the Department of Labor and Employment (DOLE) that it will protect workers from abuse by employers. Thus we consider the LaborCom as a venue where PAL employees can seek redress of our grievances.

Since this is an investigation in aid of legislation, we call on the House Labor Committee to, first, uphold workers security of tenure by reporting out the Security of Tenure bill and second, protect workers the right to strike by drafting a bill to rationalize and restrict the government’s assumption and certification power by limiting its application to cases of “essential services” as per ILO’s recommendation instead of “national interest.”

The case of PALEA is a perfect example of the continuing threat to workers' rights and trade unionism in the Philippines. PALEA is a big labor union with a long history. It has an existing CBA that prohibits the contracting out of jobs that are performed by regular employees. Despite these, PALEA is now under threat of annihilation.

In August 2009, during the period for the negotiation of a new CBA between PAL and PALEA, PAL announced its intention to close several departments of the company (In-Flight Catering operations, Airport Services operations and Call Center Reservation operations) and “outsource” its functions to various service providers. With PAL's outsourcing plan, the CBA prohibition will be ignored; more than 2,600 employees will be terminated. Thirteen out of twenty one PALEA officers will be terminated. Only 900 rank and file employees, mostly administrative staff, will remain after the first wave of the mass termination. We expect that the first batch of 2,600 employees will be followed by further termination as the contracting out of the core services will also affect the administrative staff.

There are no sufficient bases for retrenchment. Retrenchment is a measure of last resort which should only be undertaken in case of serious and imminent losses. A close review of the financial statements and disclosures of PAL reveals that its business condition is improving and not deteriorating, thereby negating the necessity for retrenchment.

Despite the excellent financial condition of the company--US$ 75.0 Million or PHP 3 Billion, for nine months--PAL refuses to share the benefits of the company’s operations to its workers, through a CBA. After making its workers sacrifice their collective bargaining rights for more than a decade, PAL now rewards them with termination and refusal to bargain.  

PAL is adopting a three-strike approach against PALEA: 

§    First, PAL violates the workers’ RIGHT TO SECURITY OF TENURE by terminating thousands of regular employees;

§    Second, PAL violates the workers’ RIGHT TO SELF-ORGANIZATION through its efforts to bust the union;

§    Third, PAL violates the workers’ RIGHT TO COLLECTIVE BARGAINING by refusing to bargain with PALEA for a new CBA.

We had expected the administration of President Benigno Aquino III to uphold workers’ rights, but we were greatly disappointed.   Unfortunately, the government, first, through the DOLE, with Secretary Rosalinda Baldoz, and, now, the Office of the President, with Executive Secretary Jojo Ochoa, has sided with PAL, and has permitted PAL’s assault against the workers’ fundamental rights.

Further government has denied PALEA its right to defend itself through the abuse of the assumption and certification power of the Labor Secretary. Three assumption and certification orders were imposed on PALEA in the course of its struggle against outsourcing thus denying it the right to strike in defense of PAL employees. This has led to the protracted labor dispute at PAL that will now reach the international arena with the planned filing of a complaint at the ILO.