DOLE justifies decision favoring PAL in labor row

The decision of Philippine Airlines (PAL) to outsource parts and parcels of its core and ancillary services is part of a bitter pill many airlines the world over are taking to cope with the challenges posed by the global financial crisis, an official of the Department of Labor and Employment said Tuesday. PAL is one of the companies severely affected by the global financial crisis, "and it is the management prerogative to do whatever it can to survive," DOLE spokesman Nicon Fameronag said. The airline had a total income of $180.7 million in 2006-2008, but the amount was not enough, as PAL incurred $312.2 million in the next two fiscal years (2009-2010), the department said. "These losses were incurred notwithstanding the fact that PAL continues to enjoy a high market share in both domestic and international routes," the department said in its decision citing the legality of PAL’s move to outsource the some of its services and, as a consequence, lay off 2,600 workers belonging to the PAL Employees’ Association (PALEA). "Apparently, high market share alone does not guarantee profitability of a firm," the Labor Department said. In a statement to the media, the Flight Attendants’ and Stewards’ Association of the Philippines (FASAP) said that it is “alarmed by the recent DOLE decision upholding PAL’s termination of almost 3,000 employees under its outsourcing program," the flight attendants’ association said. “We deeply lament that PAL management decided to push through with the drastic spin-off measure, unmindful of how it will affect the lives of 3,000 workers and their families," FASAP added in the statement. Fameronag said the department is preparing the legal argument defending its decision to side with PAL in the displacement of some 2,600 ground employees of the airline. It argued that PAL had to implement "drastic cost saving measures" to reduce fixed operating expenses that include outsourcing of in-flight catering, airport services (ground handling, cargo terminal, cargo handling and ramp handling), and call center operations. PALEA is set to appeal before the Court of Appeals the Labor Department’s decision. Fameronag said that outsourcing PAL ground operations was already indicated in the Collective Bargaining Agreement between PAL union and management which recognizes the legitimate exercise of the management to "contract out or outsource services." But “surely, there are less painful and humane ways to ensure the viability of PAL," FASAP said. The CBA indicated that even if the displaced workers are absorbed by the outsourcing firms, their rights to "humane conditions of work, security of tenure, self organization and collective bargaining" will be guaranteed based on Articles 106 to 109 of the Labor Code and DOLE order 18-02. — VS, GMANews.TV