The Philippine Online Chronicles

If labor rulings were like boxing titles, flag carrier Philippine Airlines (PAL) would be just like “Pacman.” Its undefeated record in labor disputes, however, cannot be a reason for Filipino workers to rejoice.

Early this month, PAL reaped its latest prize as the Department of Labor and Employment (DOLE) upheld for the second time the company’s plan to outsource its three departments to allegedly cut losses, saying that PAL’s outsourcing is a legal exercise of “managerial prerogative.”

The decision was issued in response to ground workers’ union PAL Employees Association’s (PALEA) appeal to reconsider former DOLE acting secretary Romeo Lagman’s ruling last June in favor of PAL.

On top of this, the labor secretary issued two separate Assumption of Jurisdiction (AJ) orders within the year, barring ground employees and flight attendants from staging strikes and other mass actions.

As part of its corporate restructuring plan, PAL will sell its In-flight Catering and Airport Services to Sky Kitchen and Sky Logistics, respectively, while its Call Center reservations will be contracted out to ePLDT Ventus, a subsidiary of PLDT. Around 2,600 regular ground employees, or more than half of the total union membership, will be affected by the scheme.

PAL welcomed DOLE’s decision and said the planned outsourcing was done in good faith and and “justified by management’s prerogative to reorganize its corporate structure for the viability of its operations.” It also argued that most airlines in the world are now using third parties to supply and render “non-core” services.

The airlines company, which is owned by tycoon Lucio Tan, will spend around P2.5 billion for the corporate restructuring. In a separate report, PAL president and CEO Jaime Bautista said retrenched PAL workers will receive P1 million each on average in severance benefits.

Workers fight back

PAL workers said that job security is priceless and cannot be bought by P1 million worth of separation pay.

PALEA strongly denounced Labor Secretary Rosalinda Baldoz’s decision, saying that “it sounded the death knell not just of the nation’s oldest functioning labor union but also of job security in the country,” a report said.

“Baldoz’s order means the green light for contractualization at PAL via a retrench-rehire scheme. PAL will retrench 3,000 regular unionized workers who will be rehired as contractuals by service providers that are partly owned by Lucio Tan,” PALEA president Gerry Rivera said.

The union has also urged lawmakers to “pierce the corporate veil” behind the third-party service providers, particularly Sky Logistics and Sky Kitchen, which they accuse as fronts of Lucio Tan.

PAL’s cabin crew union, Flight Attendants’ and Stewards’ Association of the Philippines (FASAP) announced its support for PALEA’s fight for job security.

Recently, 16 huge labor groups of varying political viewpoints, from the militant labor center Kilusang Mayo Uno (KMU) to the moderate Trade Union Congress of the Philippines (TUCP), banded together to fight DOLE’s “anti-labor” ruling. Such a move in the country’s labor movement was unprecedented in recent history.

Inconsistent Palace stance

With the labor dispute once again raging at the flag carrier, deputy presidential spokesperson Abigail Valte said the Palace supports DOLE’s decision. She added that affected employees could use remaining legal remedies regarding the ruling, like filing a motion for reconsideration to the appelate court.

However, President Benigno “Noynoy” Aquino III hinted on November 2, two days after the ruling came out, that he will review the labor department’s decision allowing the retrenchment of 2,600 rank-and-file employees.

At the sidelines of the Asia Pacific Economic Summit in Japan last November 12, Aquino said he has intervened in the labor dispute after meeting “several individuals” from the labor sector and PAL management. He said the Palace will act as “bridge” between two parties for a “negotiated settlement.”

On the same day, Labor Secretary Baldoz issued a statement which said “the President has the power to review all decisions of the members of his Cabinet, and this applies to the DOLE ruling on the labor dispute of the Philippine Airlines Employees Association (PALEA) with the management of the Philippine Airlines (PAL)."

Secretary Baldoz said in the same statement that companies should not take the PAL ruling “as a green light for contracting out jobs, work, or services.”

Apparently, the statement was made to assuage the growing pressure on the labor department, particularly in light of the PAL employees’ call for Baldoz’s resignation.

In September, the Aquino government threatened the cabin crew union, who are protesting the unjust mandatory retirement age, with an “open skies policy.”

Déjà vu

Since April, the flag carrier has repeatedly claimed that it lost around USD312 million in the last two years due to a number of factors, including the global economic crisis.

At the opening of the third Congress last July, Anakpawis party-list Rep. Rafael Mariano filed House Resolution 111 which calls for a congressional probe on PAL’s financial health and outsourcing plan.

Mariano said in a report that Lucio Tan only wants to increase PAL’s profit margins at the expense of thousands of PAL employees. The tycoon is the currently the second richest man in the country, according to Forbes magazine.

"No one in his right mind would believe that PAL is in a bad financial position and will only implement retrenchment to save the entire airline from closing down. This is the same devious modus operandi that Tan used in 1998 when it 'staged' PAL’s temporary closure to force the then Estrada government to approve the anti-worker PAL rehabilitation program that led to the 10-year CBA moratorium and strike suspension at PAL," Mariano explained.

In June 1998, PAL laid off 5,000 of its nearly 14,000 employees during that time, using the same claims of huge losses as justification. PAL pilots and ground employees went on a crippling strike, after which the labor department assumed jurisdiction over the dispute. With the help of then president Joseph Estrada, Lucio Tan managed to ram a 10-year Collective Bargaining Agreement (CBA) moratorium with the ground crew union.

In January 2002, the Supreme Court upheld the legality of the CBA moratorium over the right of unions to periodically negotiate, or review, CBAs.

“PAL now wants to seal the CBA moratorium for eternity to actually rake in more profits rather than avoid alleged bankruptcy,” labor NGO Ecumenical Institute for Labor Education and Research (EILER) warned during the House Committee on Labor and Employment hearing last week.

KMU vice president Joselito “Lito” Ustarez said in a Bulatlat report that the massive retrenchment and CBA moratorium had set dangerous precedent in the country’s labor relations. “Many big capitalist groups followed the lead of Lucio Tan and PAL,” he said, adding that the decimation of many unions due to illegal layoffs and outsourcing followed PAL’s example.

Other victories

Lucio Tan also demonstrated that he is the man to beat at the highest court in the land.

On July 22, 2008, the SC ruled on FASAP’s case against PAL’s illegal dismissal in 1998, declaring the company guilty of illegal dismissal and ordered the reinstatement of around 1,400 flight attendants who had been laid off at the height of the strikes a decade earlier.

The following year, the high court denied with finality PAL’s motion for reconsideration and upheld its 2008 ruling. But in a bizarre turn of events, the SC granted PAL’s second motion for reconsideration last January.

Now that another mass retrenchment is in the offing at PAL, the case of flight attendants still hangs in the balance. By this time, PAL workers should have learned one important lesson: Lucio Tan is invincible in courts and in the labor department. Why not fight him all-out in the open air?

Photos: by J.C. Maningat and Mira Tacadao. Used with permission