Palace upholds DOLE decision on PAL outsourcing services

MANILA, Philippines - Malacañang had upheld the decision of the Department of Labor and Employment (DOLE) allowing Philippine Airlines to outsource some of its services that could lead to the layoff of more than 2,000 employees.

Presidential spokesperson Edwin Lacierda said the Palace, however increased the gratuity from P50,000 to P100,000 for each employee to be retrenched.  

PAL welcomed Malacañang’s ruling that upheld the DOLE ruling issued on Oct. 29, 2010 that recognized the flag carrier’s right to restructure operations by spinning off its Airport Services, In-flight Catering and Call Center Reservations units.

Almost four months after assuming jurisdiction over the PAL-labor union row, the Office of the President upheld the earlier ruling of the labor department recognizing PAL’s right to spin-off three non-core businesses. The office of Executive Secretary Paquito Ochoa Jr. released the Palace decision yesterday.

PAL said the company would respect and abide by the Palace order that increased the gratuity pay for each affected worker from P50,000 to P100,000.

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.

Bautista expressed gratitude to President Aquino and Executive Secretary Ochoa for “recognizing the difficulties experienced by PAL which necessitated the spin-off of its three units.”

The more than 4,000 PAL employees that will remain with the airline are equally grateful because they know that the spin-off is necessary for the airline’s continued survival, he added.

“Our hearts go out to the employees who will be affected by the restructuring move,” Bautista stressed. He assured affected workers of the following benefits:

• Separation pay equivalent to 1.25 month’s salary for every year of service;

• Gratuity of P100,000 per affected employee (a P50,000 increase per the latest Malacañang order);

• One hundred percent (100 percent) commutation to cash of unused vacation leave and sick leave balances;

• One (1) year extension of the medical and hospitalization benefits;

• Trip pass benefits depending on the number of years of service.

The President assumed jurisdiction over the labor dispute last Dec. 15, 2010 to avert a planned strike by PALEA that filed a notice of strike on Nov. 5, 2010.

Earlier, the ground workers union filed a petition for presidential intervention before the Office of the President after DOLE ruled in October last year that management’s decision to spin off of its three non-score units is “a valid exercise of management prerogative.”

The flag carrier has maintained that it needs to outsource its three non-core units as part of cost-control strategies to ensure the airline’s long-term survival.

Close to 2,600 workers who will be part of the restructuring program would be assured of slots in the service provider, which will take over the operations of the three units to be spun off.