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.

Labor party, PAL ground crew to support flight attendants strike

Press Release
September 30, 2010

The labor group Partido ng Manggagawa (PM) and the Philippine Airlines Employees Association (PALEA), the ground crew union at the national flag carrier, both expressed support for the planned strike of the Flight Attendants and Stewards Association of the Philippines (FASAP).

Judy Ann Miranda, secretary general of PM, declared that “FASAP’s brothers and sisters in the labor movements stand as one body and speak with one voice in solidarity with the struggle of the flight attendants. We will mobilize our members, especially women workers, to support their fight.”

Meanwhile Gerry Rivera, PALEA president, stated that “PALEA members will respect any picketline that will be setup by FASAP. We will be with them in the picketlines.”

Yesterday FASAP announced the collapse of mediation talks with the Philippine Airlines (PAL) management in the face of the company’s hardline position on the contentious issue of retirement age. The flight attendants union is asking that the retirement age be raised from 40 to 60 years in order to remove the discrimination suffered by the predominantly female flight crew. FASAP declared that it will go on strike anytime by end of October or early November, the start of the peak season.

PALEA also has a pending notice of strike but the dispute over the planned retrenchment of some 3,000 ground personnel has been assumed by the Secretary of Labor and Employment. In comments that PALEA submitted to Labor Secretary Rosalinda Baldoz last September 14, it called on her to declare the mass layoff as illegal and to find PAL guilty of unfair labor practice.

“The demand of the flight attendants for higher retirement age is a call for gender equality and an issue of job security. They are too young to retire at age 40 but then too old to find a decent job. These are issues of women workers in general. That is why we support the FASAP fight. Women factory workers will link up arms with them in the event of a strike,” insisted Miranda.

Rivera also argued that fight of the PAL ground personnel against contractualization is a struggle for job security. “One common thread that runs through the grievances of PAL employees—whether ground crew, flight crew and even pilots. That is the demand for job security. We all want regular jobs with decent wages, sufficient benefits, good working conditions and the protection of a union that serves as the workers voice in the workplace. Unfortunately secure and protected jobs contradicts Lucio Tan’s new business model of a union-free and non-regular workforce,” he explained.

PAL Labor Dispute Brief

The intended mass dismissal of more than two 2,600 rank-and-file employees of Philippine Airlines, Inc., who are members and officers of Philippine Airlines Employees Association (PALEA), is in violation of the law and the collective bargaining agreement (CBA) of PAL and PALEA.

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. The intended closure and “outsourcing” would affect around 70% of PALEA’s membership and the total number of rank-and-file employees, 62% of the union leadership, and around 35% of the total employee complement of PAL.

PALEA maintains that the mass retrenchment is invalid and constitutive of unfair labor practice:

1.) It violates the law and the parties’ CBA.

   1.a) The termination of thousands of its regular employees is not necessitated by the company’s financial situation.

   1.b) PAL violated the CBA provision against labor contracting.

   1.c) PAL violated the CBA provision on Job Security.

2.) It violates Article 248 of the Labor Code, and Department Order No. 18-02.

    2.a) Despite PAL’s insistence, what it planned to do was not a “spin-off” but an “outsourcing,” which is equivalent to contracting-out of services.

There is no spin-off of company departments in this case. No subsidiary corporation was formed by PAL, and not one of its divisions was transformed into an independent company. What is involved here is contracting out of functions wherein regular rank-and-file employees and union members will be terminated and the functions that they are performing will be farmed out to service providers. Worse, the terminated regular employees themselves are envisioned to be the employees of the service providers, i.e. upon their termination, they will just be transferred to a different employer but will be performing the same tasks that they had been performing as regular employees of PAL.

Contracting out, whether labor-only contracting or legitimate job contracting, is absolutely prohibited by the parties’ CBA. Section, 4, Article XXIV states:

“Section 4. The Company undertakes not to contract out existing positions, jobs, divisions, and departments presently occupied by present or future regular employees within the collective bargaining unit.”

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.

The mass termination of employees constitutes unfair labor practices. It will dissipate union membership and will exclude from the coverage of the bargaining unit the positions that are now held by union members. This will result to the abolition of PALEA. This grim scenario is made even worse when the timing for implementing the retrenchment program is considered. The contracting out of the various departments and the consequent retrenchment of union members are being undertaken at a time when a new CBA between the parties is about to be negotiated. It should not be amiss to state that the CBA negotiation is being proposed by PALEA after more than a decade of suspension of the CBA between the parties. It is aimed at defeating the negotiation of a new CBA.

Job security is also the demand of the PAL pilots and flight crew. Thus PAL management is faced with a three-front war with its airline pilots, flight crew and ground personnel because of its drive to demolish job security, replace regular employees with contractual workers and bust the remaining unions in the company.

The public should know the truth. PAL keeps on repeating the lie that it is losing money and so the workers will have to be the burden of its rehabilitation. Of course PAL will be in the red because the sources of revenues, even its assets, have been transferred to sister companies like MacroAsia and Air Philippines. PAL’s maintenance and engineering department was shifted to MacroAsia and so expenses are charged to the former but the income is reflected in the latter. PAL ground personnel in the outlying stations services Air Philippines so the costs are borne by the former but latter keeps the savings.

Contractualization at PAL is just the tip of the iceberg. In factories, shops, offices and malls contractual workers are working side-by-side with regular employees in doing the same job for lesser pay and worse working conditions. We demand that Congress institute reforms to enhance job security and stop contractualization schemes. PALEA calls for a stop to the race to the bottom in working conditions and labor standards. Ang kontraktwalisasyon ay baluktot na landas.

In the conciliation meeting between PAL and PALEA last Thursday, management moved for the Labor Secretary to decide on the legality of the planned layoff. On the other hand PALEA is asking that mediation continue until an agreement acceptable to both sides is forged.

Contractualization is the cause of PAL labor row

Press Statement
August 17, 2010
Gerry Rivera
President. PAL Employees’ Association (PALEA)
Vice Chairperson, Partido ng Manggagawa (PM)

The scourge of labor contractualization lies at the root of the labor dispute at Philippine Airlines. The contracting out of jobs of the ground personnel will lead to the massive layoff of some 3,000 PAL employees. Regular employees will be retired from PAL only to be rehired as contractual workers in companies owned by Lucio Tan’s Kamag-anak Inc. These companies will be money-earning service providers to PAL and so we end up doing the same work as before but for cheaper pay, less benefits and no security of tenure.

Job security is also the demand of the PAL pilots and flight crew. Thus PAL management is faced with a three-front war with its airline pilots, flight crew and ground personnel because of its drive to demolish job security, replace regular employees with contractual workers and bust the remaining unions in the company.

The public should know the truth. PAL keeps on repeating the lie that it is losing money and so the workers will have to be the burden of its rehabilitation. Of course PAL will be in the red because the sources of revenues, even its assets, have been transferred to sister companies like MacroAsia and Air Philippines. PAL’s maintenance and engineering department was shifted to MacroAsia and so expenses are charged to the former but the income is reflected in the latter. PAL ground personnel in the outlying stations services Air Philippines so the costs are borne by the former but latter keeps the savings.

The Department of Labor and Employment has assumed jurisdiction (AJ) of the PAL labor dispute and this has enjoined PALEA from proceeding with a strike. The AJ should also stop management from making any actions that will exacerbate the dispute. However in violation of the AJ, PAL is shifting work from its in house call reservations center to an outside contractor. Reservations calls are being rerouted to ePLDT Ventus while dropped calls are answered by PAL’s call center department. Thus regular jobs are being transferred to an outside contractor and only excess work is maintained in PAL.

Contractualization at PAL is just the tip of the iceberg. In factories, shops, offices and malls contractual workers are working side-by-side with regular employees in doing the same job for lesser pay and worse working conditions. We demand that President Aquino make concrete his promise that democracy should work for all by instituting reforms to enhance job security and stop contractualization schemes. We call for a stop to the race to the bottom in working conditions and labor standards. Ang kontraktwalisasyon ay baluktot na landas.

In the conciliation meeting between PAL and PALEA last Thursday, management moved for the Labor Secretary to decide on the legality of the planned layoff. On the other hand PALEA is asking that mediation continue until an agreement acceptable to both sides is forged.

But even as we negotiate in good faith we have to be prepared for all eventualities including the necessity of a strike if the planned layoff pushes through. Thus we are appealing for support and understanding from fellow workers, institutions such as the Church and the broad public. Our job is our life and if necessary we will strike to defend our livelihood for the sake of our families.

PAL labor row intensifies as ground crew union prepares for strike

Press Release
August 12, 2010

The Philippine Airlines Employees’ Association (PALEA), the ground crew union at Philippine Airlines (PAL), met management in a mediation meeting this afternoon at the Department of Labor and Employment (DOLE) but announced that it is prepared to do everything to stop the disputed contracting out of jobs. “Our job is our life and if necessary we will strike to defend our livelihood for the sake of our families,” declared Gerry Rivera, PALEA president and Partido ng Manggagawa (PM) vice chairperson.

PALEA’s readiness to strike intensifies the labor row at PAL with none of the resigned pilots returning and the flight attendants union threatening to stop work unless the deadlock in collective bargaining negotiations is resolved. PAL’s ongoing labor dispute with its ground crew arose out of the planned contracting out of jobs that will lead to the layoff of some 3,000 employees. Workers in airport services, inflight catering and ticketing reservations will be retrenched and then rehired as contractuals in service providers also owned by Lucio Tan to do the same job for less pay and no job security.

“PAL is faced with a three-front war with its airline pilots, flight crew and ground personnel because of its drive to demolish job security, replace regular employees with contractual workers and bust the remaining unions in the company. We are asking the government of P-Noy through Labor Secretary Rosalinda Baldoz to review the policy on contractualization and strengthen protection for job security or else it faces a wave of labor unrest,” explained Renato Magtubo, PM chairperson.

PM members joined PALEA and other labor groups in a picket today to ask the DOLE to tighten regulations and plug loopholes that have allowed employers to massively supplant regular work with contractual labor. “In factories, shops and offices contractual workers are working side-by-side with regular employees in doing the same job for less pay, no benefits and without security off tenure. Contractualization at PAL is simply the tip of the iceberg. We demand that President Aquino make concrete his promise that democracy should work for all by instituting reforms to enhance job security and stop contractualization schemes,” argued Magtubo.

The mediation meeting today arose out of PALEA’s pending motion for reconsideration of the former Acting Labor Secretary Romeo Lagman’s “midnight decision” that affirmed PAL management’s prerogative to contract out jobs of ground crew. “We welcome the preference of Secretary Baldoz to mediate the dispute on job contracting in PAL unlike Lagman who unilaterally issued a midnight decision favoring management. But even as we negotiate in good faith we have to be prepared for all eventualities including the necessity to strike if the planned layoff pushes through,” Rivera stated.