PAL releases separation benefits

MANILA, Philippines - The Philippine Airlines (PAL) started releasing yesterday separation benefits to its workers from three non-core units whose functions were outsourced to third-party service providers last Oct. 1.

PAL’s human resources department said the first batch to receive the package are employees who did not join the Sept. 27 wildcat strike and are now working for PAL’s service providers.

Next in line are those who declined the job offer but did not participate in the work stoppage. They will receive their checks starting Oct. 15, 2011.

“Per instructions of PAL management, we will give priority to employees who heeded PAL’s appeal for a smooth and orderly implementation of the spin-off/outsourcing program,” said PAL spokesperson Cielo Villaluna.

“Management is grateful for their dedication and loyalty and for honoring calls for cooperation during the transition period,” she said.

Of the more than 2,300 recipients of the retirement package, more than 600 transferred to the service providers while the rest chose not to join PAL’s third party contractors.

The workers will receive an average of close to P800,000 in separation pay, which includes 125 percent of their monthly salary for every year of service, P100,000 gratuity pay and 100 percent converted-to-cash accrued vacation and sick leaves.

Per PAL HRD records, more than 28 percent will receive P1 million and above; 37 percent will get between P750,000 and P1 million; and 22 percent below P500,000. The highest package reached P2.4 million, while those who only served PAL for a minimum of one year will receive about P120,000. The cash component of the benefits will be tax-free.

A guaranteed salary and hospitalization benefits for one year are also assured by PAL for those who transferred to the service providers.

The non-economic component of the package includes free tickets for the employee and qualified dependents depending on years of service.

Villaluna said checks for 338 former employees who joined the PAL Employees Association’s (PALEA) wildcat strike on Sept. 27 are on hold pending their final clearances.

The work stoppage led to the cancellation of domestic and international flights, ahead of the Oct. 1, 2011 implementation of the outsourcing program, which caused massive inconvenience to 14,000 passengers at the height of typhoon ‘Pedring’.

PAL will spend about P2.6 billion to cover the transition benefits, partly financed through a $50-million loan from European bank Credit Suisse.

Villaluna said components of the package are much higher than industry levels and more than the prescribed benefits under the Labor Code and PAL’s own Collective Bargaining Agreement with its ground workers’ union.