The labor dispute took off when PAL announced it was going to spin off three non-core units namely: airport services, in-flight catering services and call-center reservations operations to third-party service providers. PAL explained this was part of its emergency restructuring efforts in the face of a tough environment ruled by cut-throat competition in the worldwide airline industry.
PAL and other international carriers have been hammered by global financial turmoil, economic liberalization, tough competition and the birth of aggressive budget carriers.
PAL’s losses amounted to $312 million in 2008 and 2009. While it registered a modest profit of $72.5 million in 2010, it again posted a loss of $10.6 million in the first quarter due to weak demand.
To keep flying, PAL management had no choice but to come to a difficult decision. Management had to adapt, Darwinian-style, in order to remain competitive and to ensure the company’s long-term survival. Streamlining the airline’s manpower was critical to creating a stronger, though leaner organization.
The decision was immediately met by turbulence. Rabble-rousers comprising a minority in the Palea staged a wildcat strike as well as protest actions that disrupted airline operations.
Thousands of passengers were left stranded in faraway airports as PAL strikers with nary a bit of concern about the welfare of the riding public abandoned their posts. The confusion at the Ninoy Aquino International Airport and at the PAL counters overseas resulted in an unquantifiable economic disruption, not to mention the loss of lives.
A case in point: Mr. Leonardo Villegas, 70, a businessman who had just attended an international convention in India, found out his flight on September 29 to Manila had been canceled. He and his party were forced to take a labyrinthine and tortuous route that took them from New Delhi to Bangkok, Taiwan and Hong Kong, before finally arriving in Manila.
The fatigue from the two-day-long trek of shuttling from airport to airport, instead of taking a New Delhi to Manila flight that normally takes just several hours, took its toll. His immune system collapsed. He had to be taken to the hospital a day after he arrived after complaining of difficulty in breathing. Doctors found he had a particularly virulent strain of pneumonia. He passed away six days later.
According to former Rep. Jonathan de la Cruz, our co-host in our radio program Karambola sa dwIZ and firebrand militant in his youth, even the Kilusang Mayo Uno has condemned the illegal strike of Palea as detrimental to the interests of the riding public. Public interest must prevail. It is unfortunate that the government itself has been a half a step late in enforcing the rules and laws to maintain order in this situation. As it is, the country’s economic interests are being irreparably damaged by the PAL strikers.
In order to survive, airlines in every part of the world have had to adopt new business models and practices in order to cope with the harsh realities of the travel industry. Most, if not all, have been forced to adjust by adhering to cost-cutting measures and spinning off or outsourcing noncore functions.
PAL announced it was going to take this route to ensure its survival. After a series of consultations with its labor unions, management issued notices of separation to affected employees, with the assurance that third-party service providers were willing to absorb all of those who were willing to signify they would like to go on working for the new companies.
A generous transition package —more than the prescribed benefits under the Labor Code—has been laid out: Separation pay amounting to 125 percent of the employee’s monthly basic salary for every year of service, P100,000 gratuity pay, 100-percent commutable-to-cash accrued leaves, guaranteed salary for one year of whatever salary being given to those who accept the employment offer of the service provider as well as medical and hospitalization benefits.
If these are not enough, then the government must exercise its power to impose sanctions against those who put the country hostage to their whims and caprices. There has to be stability and continuity in government policies on the rights and welfare of the riding public.
PAL’s outsourcing programs has been declared a legal and valid exercise of management prerogative a total of four times already: twice by the Department of Labor and Employment, and twice by the Office of the President.
By clinging to archaic notions of job security, these narrow-minded spoiled brats who defy government rulings and masquerade as vanguards of labor rights have no one else but themselves to blame for the people’s wrath.
Ed Javier is a co-host of the daily radio show, Karambola sa dwIZ, which airs Mondays to Fridays, from 8 a.m. to 10 a.m. on 882 khz AM radio. Radio station dwIZ is a sister company of the BUSINESSMIRROR.
