PAL union official to stop attending board meetings

LABOR PROBLEMS are threatening to complicate flag carrier Philippine Airlines’ (PAL) move to cut costs and streamline operations amid financial difficulties, with rank-and-file workers protesting supposed plans to outsource jobs and flight attendants playing hardball in collective bargaining talks.

The head of the PAL Employees’ Association (PALEA) filed an indefinite leave of absence from the airline board last August 31, protesting management moves that workers claim could displace thousands.

In a letter addressed to PAL President Jaime J. Bautista, PALEA officials said their president, Edgardo C. Oredina, would not be attending board meetings "until further notice."

"While we greatly acknowledge the importance of labor representation in the PAL board, the current directions taken by the PAL management will likely compromise the integrity of the [union] ... and [will] adversely have [an] impact on the PALEA and may result in loss of jobs," the letter, dated Aug. 31, read.

It was signed by all PALEA officers and was received by the office of Mr. Bautista last Sept. 4.

The union claims PAL management has been moving to outsource and spin-off a number of services, which could affect reservation clerks, maintenance crew, caterers, cargo handlers and load controllers.

PAL has more than 8,000 employees, half of whom belong to the rank-and-file union.

Airline officials could not be reached for comment.

"We deeply lament these drastic actions by PAL management in arresting the current situation ... While we recognize that indeed the airline industry is much affected by the global financial crisis, we are much saddened that PALEA will bear the brunt of the planned manpower rationalization program," the letter stated.

In an interview, Mr. Oredina said the spin-off and outsourcing of services was against a collective bargaining agreement, but expressed optimism that PALEA and the PAL management would be able to resolve the issue when they meet this Friday.

"The outsourcing and spin-off is unacceptable to us. We are going to present [options] to the PAL management if it is really in a dire financial need," he said.

Mr. Oredina said PALEA members were open to pay cuts through job rotations to reduce working hours. If a spinoff of operations was inevitable, the new management should absorb the employees to be affected and give them higher salaries while at the same retaining existing benefits, he said.

"Those are the best offers we can [give]," he said, adding that PALEA was prepared to go to the Department of Labor and Employment should the airline prove obstinate.

PAL was put in a similar situation more than a decade ago at the height of the Asian financial crisis. Suffering from financial woes, PAL was forced to cut flights and retrench thousands of employees.

Some of the job cuts involving over a thousand flight attendants were later ruled illegal by the Supreme Court, which ordered PAL to pay the employees compensation packages amounting to P2.5 billion.

PAL has appealed the decision while at the same time offering to settle the case with the Flight Attendants’ and Stewards’ Association of the Philippines (FASAP) out of court.

FASAP is said to have rejected management’s P35-million offer. The high court is expected to come out with a final ruling this month.

Late last month, FASAP issued a statement hitting PAL management for using heavy losses as an excuse to avoid obligations to workers. It said two-year-old collective bargaining talks "have turned sour."

"Sadly, despite the bitter lessons of the past, despite undergoing rehabilitation for eight years, PAL seems to once again sliding back to its old anti-labor ways," the FASAP statement said. "Why should the cabin crew pay for the company’s bungled bottomline?"

In 1998, PAL was forced go into receivership in the aftermath of the Asian crisis. It returned to profit in 2000 and was declared in financial health two years ago.

For fiscal year ending March, PAL lost $301.4 million as a result of higher expenses brought about by the cost of operating more flights and last year’s record-high fuel prices.

Revenues went up slightly to $1.6 billion but were not enough to cover operating expenses of $1.9 billion, up from $1.539 billion the previous year. Total liabilities also went up by almost a fifth to $869 million.

Burdened with debt and ballooning costs, the company is now looking at various options, including selling aircraft, reducing flights, and letting go of employees. It is also on lookout for potential white knights who can ease its financial woes. — K. J. R. Liu