PAL’s service providers ‘overlooked labor rules’

Friday, September 9, 2011
THREE service providers of the Philippine Airlines (PAL) that are expected to absorb workers the airline company will lay off have overlooked labor rules, the company’s union said on Thursday.
Quoting a document from the Department of Labor and Employment (Dole), legal counsels of the PAL Employees Association (Palea) said Sky Kitchen Philippines Inc., Sky Logistics Philippines Inc., and SPi Global Holdings Inc. are not registered as a contractor or sub-contractor.
The document dated September 7 and signed by National Capital Region director Raymundo Agravante stated that the three firms violated the Department Order 18, Series of 2002.
The order requires companies to register their businesses with the department since failure to do so would mean that the contractor is engaged in labor-only contracting, which, in turn, is prohibited under Section 5 of the same order.
This finding was confirmed to Sun.Star by PAL vice president for corporate communications Joey de Guzman.
De Guzman, however, received assurances from Sky Kitchen and Sky Logistics that they have necessary permits to prove their eligibility.
“We are unaware however that a service company needs to register with Dole. We assure everybody, however, that in the performance of our service, Sky will comply with all the legal requirements,” Sky, as quoted by De Guzman, said.
Sun.Star tried to reach SPi Global for comment but received no response.
De Guzman said PAL has yet to discuss the matter with the business process outsource company.
For his part, Palea president Gerardo Rivera said the outsourcing plan should be immediately suspended and the notices of termination issued by PAL should be voided as well since the service providers are “illegal labor-only contractors.”
Sky Kitchen and Sky Logistics are owned by Cebuano businessman Manny Osmeña, while the SPi Global is managed by telecommunications mogul Manny Pangilinan.
Sky Kitchen will absorb workers from PAL’s in-flight catering workers, Sky Logistics are expected to employ those from the airlines’ airport service workers, while SPi Global are seen to hire the company’s call center reservations employees.
However, Rivera had said that Osmeña is just fronting for PAL owner Lucio Tan.
“Manny Osmeña is not related to the Osmeñas of Cebu. He is a Chinese immigrant who acquired Filipino citizenship by naturalization and in the process changed his name to Manny Osmeña. He is a cousin of Tan,” he said.
PAL to stop outsourcing plan if court intervenes
Meanwhile, PAL assured Thursday that the retrenchment of 2,600 workers will not push through if the Court of Appeals decided to declare the outsourcing plan as illegal.
“PAL will proceed with the spin off/outsourcing as scheduled (on October 1), but will respect the appellate court if ever it issues a restraining order,” PAL president Jaime Bautista said.
The PAL workers’ union brought the labor dispute to the appellate court last August 26 after the Office of the President rejected its appeal, which then allowed the airline to proceed with its outsourcing program.
Bautista maintained that PAL management has to adopt the restructuring plan to save the airline and ensure the continuous employment of its remaining 5,000 employees.
He cited the case of Japan Airlines, one of the world’s largest carriers, which filed for bankruptcy protection in 2010, prompting the Tokyo government to infuse fresh funds into the state-backed carrier.
“PAL’s financial difficulty is not an isolated case,” Bautista said. “Other airlines worldwide are reeling from the adverse impact of high fuel prices, global recession and intense competition.”
This line of reasoning, however, was met with deep skepticism by the union.
“If there would be court interference, PAL will use this is an alibi not to increase salaries because of the supposed financial setback brought by the CA decision. Also, since PAL is a national carrier, the government will surely help it due to national interest,” Palea-Mindanao board member Eugene Cosare told Sun.Star.
Bautista explained that workers who have received the P100,000 gratuity pay or part of such cash benefit would not be required to return the amount “in lump sum” should the CA stop the implementation of the spin-off/outsourcing.
Instead, the amount would be deducted monthly from their salaries.
“Since this will be done on a staggered basis, we have to make sure that an employee will still get 60 percent of his salary come pay date, that is, if the outsourcing program will be blocked,” De Guzman told Sun.Star.
Financial management for workers
Pending the court’s action on the matter, PAL likewise said it will organize financial management seminars for workers affected by the spin-off of the company’s three non-core units.
Bautista said the seminars aim to help workers properly manage and invest their separation benefits.
The company has lined up a series of seminars to be conducted by financial experts to guide workers in managing their finances and encourage them to engage in other sources of livelihood to boost their income.
Town hall meetings are currently ongoing to discuss with affected workers the mechanics of the spin-off program, as well as the procedures on how to avail of their retirement benefits and gratuity pay.
This is part of the continuing dialogue between management and workers to facilitate the smooth and orderly implementation of the spin off/outsourcing, PAL said.
PAL has allocated about P2.5 billion in severance benefits for the workers of in-flight catering, ground-handling and call-center reservations.
The firm assured that all separation/transition benefits are tax-free and that workers will still get their 14th month pay (pro rata, 9 over 12 months).
Affected employees who were recipients of PAL shares of stock are still entitled to such shares even if they are separated from the company.
PAL management also said it will request the service providers not to include the results of the medical test as a precondition for the regularization of the PAL workers. (Sunnex)
Source: http://www.sunstar.com.ph/manila/local-news/2011/09/09/pals-service-providers-overlooked-labor-rules-178269
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