Waiting in the wings

Win some. Lose some. This seemed to be the see-saw situation of the Philippine Airlines (PAL) in its continuing labor problems with their pilots, flight attendants and ground crew. Filipino-Chinese taipan Lucio Tan who is the majority owner of PAL is no stranger to surviving labor disputes that erupt every now and then in the flag carrier through all these years.

Over the weekend, the Department of Labor and Employment ruled in favor of the petition of the Flight Attendants and Stewards Association of the Philippines. The DOLE ruling approved three management policy issues raised by FASAP in their petition against PAL.

In a 21-page decision, Labor Secretary Rosalinda Baldoz granted the petition of FASAP to raise the retirement age of flight attendants to 60 years instead of the PAL’s mandatory retirement of 45. The same DOLE ruling also approved the salary increase that would be paid on a staggered basis over three years, and for maternity leaves to be credited in the computation of the length of service upon the filing for retirement benefits by FASAP members.

The row between FASAP and PAL management had been going on since June this year. The DOLE chief assumed the labor case in October after negotiations for a new collective bargaining agreement (CBA) bogged down. There are 1,542 FASAP members who threatened to go on strike after negotiations with PAL management for a new CBA ended in a deadlock.

They filed a notice of strike last month before the National Conciliation and Mediation Board (NCMB) against the PAL management. The DOLE Secretary immediately assumed jurisdiction over the PAL-FASAP row.

On the other hand, PAL won earlier favorable DOLE ruling in a separate labor dispute with the flag carrier’s ground crew under the PAL Employees Association (PALEA). The DOLE released two separate orders in June and in October that approved PAL management’s plan to lay off 2,600 employees and for the airline to outsource its catering, ticketing, and ground operations to third party service providers.

The PALEA decided to file a notice of strike after losing their DOLE petition to stop PAL management from its spin-off plans that would result to huge retrenchment of many of their members. They held a “strike” vote to oppose management’s cost-cutting plans.

Already hobbled by a string of bad publicities about the safety of tourists in our country, the unsettled labor problems bugging PAL threaten to further aggravate the situation for the government.

Hence, President Benigno “Noynoy” Aquino III decided to step into the picture and assumed jurisdiction over this specific labor case involving the PALEA. The Chief Executive temporarily stopped the DOLE decision from being implemented pending a review of this decision by the Office of the President.

In an assumption order dated Dec. 15, President Aquino directed both the PAL management headed by its president and chief executive officer Jaime Bautista to “hold in abeyance” the implementation of two DOLE orders on the spin-off plans. He also asked PALEA to “desist” from proceeding with their planned strike. PAL was given 10 days after it received the order to file a comment on the President’s move to intervene in the labor dispute.

Mr. Aquino though, did not state in his order when he will decide on the PALEA labor row. While the PALEA case remains pending at Malacañang Palace, the DOLE ruling in favor of FASAP came out on Dec.23. Since the ruling was in their favor, this should effectively set aside FASAP’s notice of strike.

On the other hand, obviously because the DOLE ruling on FASAP was adverse to the flag carrier, PAL official spokesperson Cielo Villaluna announced PAL lawyers would still study the DOLE decision and determine the legal options available to the airline.

Meanwhile, the 10-day period given by the Palace for PAL management to file its comment on the PALEA case was supposed to lapse on Dec. 25, coincidentally falling on Christmas day. Both private and government offices are still on official holiday until today.

So, Bautista told me, they would only be able to submit PAL’s comment to the Office of the President by tomorrow, when everyone is back to work from the long holidays. In brief, Bautista disclosed they would merely argue before the Office of the President to uphold the DOLE ruling on the legality of PAL’s spin-off plan contrary to PALEA’s claims that it was illegal.

PAL has always maintained that Malacañang has primary jurisdiction over the labor dispute since it involves the country’s flag carrier. Bautista noted the Palace order came most timely with the Christmas travel season, especially for hundreds of overseas Filipino workers and balikbayan who fly here to spend the holidays with their loved ones.

Bautista shared his thoughts on these matters at the sidelines of a Christmas lunch that PAL hosted last week for newspaper editors and senior reporters at the Century Park Sheraton, also owned by Mr. Tan.

The twin labor disputes rocking PAL were literally causing a turbulent situation in the country’s flag carrier. It could paralyze not only the flag carrier’s operations but also spell trouble for the country’s tourism industry.

There are other airlines, including the Tan-owned budget fare Air PhilExpress, ready to fill in the slack that might disturb PAL operations. In fact, a new regional airline called Air Asia Philippines, is being put on stream by the group led by Antonio “Tonyboy” Cojuangco. As everyone knows, Cojuangco is a second cousin of the President and one of his biggest presidential campaign donors.

But for now, a new competitor like Air Asia Philippines is the least of worries for Bautista. The incoming competitor, he pointed out, still has to go through the rigid entry process that would take them until the middle or third quarter of next year, at least to complete.

Bautista sees, however, opportunities for PAL to improve their services amid competition. But the immediate challenge is on President Aquino who is expected to come up with a win-win formula in these turbulent labor disputes rocking PAL. He must protect the interest of the public more than the narrow, self-interest of those parties in dispute and those waiting in the wings.