PAL A Flag-Carrier of Unprecedented Anti-Labor Rulings?

Under the plan approved by the Department of Labor and Employment, PAL would outsource the in-flight catering, call center reservations and airport services (passenger, cargo and ramp handling) departments to “third-party providers” , eVentus PLDT and Skylogistics, two of which, employees revealed are Lucio Tan dummies if not directly under his group’s Macro Asia.


Related Story: Strong Mass Actions, Not Just Legal Redress, Urged vs Labor Rights Violations in PAL

In 1998, PAL retrenched some 5,000 employees. Among those retrenched were 1,400 flight attendants who believed they were dismissed for having availed of maternity leaves. The PAL management, for its part, had cited other reasons for sacking them.

Amid an ambitious re-fleeting program, PAL in 1998 was complaining of losses and threatening the country that it would close the flag carrier. These complaints of “losses” had prompted the Philippine government to intervene and help PAL with a rehabilitation plan, in the process committing many anti-labor acts.

This rehab caused the wholesale dismissal of PAL pilots and union-busting of the pilot’s union. It gave rise also to the unprecedented 10-year CBA moratorium for those that remained in PAL’s employ after the massive retrenchment.

Now that these are over – both the rehab and the CBA moratorium – and PAL has been able to fully pay all its loan-purchased aircraft, both FASAP and PALEA, the remaining unions of cabin and ground crew, are decrying the mass lay-off and contractualization awaiting some 3,000 long-time ground crew.

“Is this the thank you we would get for sacrificing our CBA to help in PAL’s rehab?” employees now asked.

Citing their survival plan, which, employees and labor leaders said, dangerously echoed PAL’s rehab plan, another PAL union now faces the risk of being busted or losing its members, if the mass layoff pushes through. Worse, the DOLE’s approval of the spin-off plan, citing “management prerogative” in implementing contractualization, wage cuts and union-busting even in a profitable company as PAL now worry many labor activists as it sets new anti-labor precedents.

“PAL Survival Plan” – Same Script as PAL Rehab Plan?

PAL management has been explaining since April this year that the mass layoff and spin-off are needed for the flag carrier’s “survival plan,” a coinage that sparks an angry case of déjà vu to most labor groups in the country. Twelve years before, PAL, with government backing, had justified anti-labor decisions as a bitter pill for saving PAL. But the massive retrenchment and CBA moratorium had reportedly set a dangerous precedent in the country’s labor relations.

“Many big capitalist groups followed the lead of Lucio Tan and PAL,” said Joselito Ustarez, vice-president of progressive labor center KMU. Ustarez cited many unions allied or friendly to KMU whose ranks were decimated due to barely justifiable massive retrenchments and outsourcing, as well as others whose CBA’s were delayed or reduced as employers tried to follow Lucio Tan’s example.

It did not help that the government has fully backed the CBA moratorium and barely-justified retrenchments, said Ustarez. The Supreme Court, for instance, had even upheld the legality of the CBA moratorium.

PAL’s rehab eventually ended with Lucio Tan rising to the number two ranking in the Forbes list of wealthiest Filipinos. Aside from controlling PAL, during PAL’s rehab, the tycoon has also formed and expanded another aviation company called MacroAsia.

Today, PAL spokespersons are talking once again of a “PAL survival plan,” citing ‘losses’ yet again largely because it has started paying for the loan-purchase of some 23 new aircraft, and trying to implement some “restructuring” such as outsourcing. Given this survival plan’s similarities to the PAL rehab plan, labor groups and supportive partylist representatives are now wary of yet more landmark anti-labor precedents in the offing.

In fact, the DOLE decision approving PAL’s outsourcing program, citing “management prerogative,” is being seen already as “a dangerous precedent in the airline industry, in Lucio Tan’s conglomerate, and in other large scale corporations in the country,” as Anakpawis Rep. Rafael Mariano puts it.

Mariano said the decision of Secretary Rosalinda Baldoz is comparable to the actions of former labor chief Bienvenido Laguesma who brokered the 10-year CBA moratorium and strike suspension in 1998. “Laguesma now serves as a legal counsel for PAL management, defending Lucio Tan and his anti-worker policies.”

Under the plan approved by the Department of Labor and Employment, PAL would outsource the in-flight catering, call center reservations and airport services (passenger, cargo and ramp handling) departments to “third-party providers” Skykitchen, eVentus PLDT and Skylogistics, respectively. But employees revealed that most of these so-called third party providers, especially those that would take over catering and airport services are Lucio Tan dummies if not directly under his group’s Macro Asia.

Maintenance and engineering, a profitable and strategic PAL department spun-off under PAL rehab was transferred to Lucio Tan’s MacroAsia. At a time when PAL was supposedly incurring losses for prepaying some new aircraft, Tan’s MacroAsia is making big profits, according to its own disclosure.

Today, PAL estimates that if its planned spin-off of three departments pushes through, it would reduce its operation costs by US$86.1-million or P3.874-billion in five years. “PAL intends to rake in more profits, at the expense of its employees,” Mariano said.

Employees told Bulatlat that the “incoming service providers” might rehire them for up to a year or more depending on their performance, at salaries that are 50-percent less than what they are receiving currently or perhaps even lower. (

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