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What went before?
A timeline of the Philippine Airlines labor row -
Citing a $301.4-million loss at the end of its fiscal year last March 2009, PAL president and chief operating officer Jaime Bautista announced intentions of employing cost-cutting measures to stay afloat.
Among these measures include a plan to reduce labor costs, which accounts for 18 percent of PAL's yearly expenses. From 2008-2009, total expenses reached $361 million). Bautista said the company seeks to put manpower costs at a single digit level, aimed at saving at least P1 billion. -
Consultations regarding the outsourcing plan were held as the union asked the National Conciliation and Mediation Board, an attached agency of the Department of Labor and Employment (Dole), to facilitate talks.
However, the 3,500-member Palea later sought the suspension of negotiations in October, citing lack of progress. -
The Palea filed a notice of strike with the Dole to protest the looming job cuts.
Palea cited PAL's "intended mass lay-off of union members and officers by April 2010, illegal outsourcing of regular positions, direct negotiations with union members, unresolved issues during preventive mediation, and non-compliance of pay scale review during settlement of the wage distortion." -
PAL formally announced its plan to outsource 2,600 "non-core" jobs and shutter three departments -- airport services, in-flight catering, and reservations.
PAL president Jaime Bautista said higher fuel prices, the downgrade of the Philippines' aviation safety rating to Category 2 by the US Federal Aviation Administration (FAA), and the European blacklist of all Philippine carriers necessitated the outsourcing program. The airline said around P2 billion will be spent to cover the early retirement packages of would-be retrenched employees. -
The Dole has assumed jurisdiction over the labor dispute, which effectively halted the union's plan to go on strike.
Acting Labor Secretary Romeo Lagman also promised to review and come up with a decision on the validity of the outsourcing plan as soon as possible. -
Acting Labor Secretary Romeo Lagman ruled in favor of the airline's spinoff program, calling it as a "valid exercise of management prerogative."
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Palea filed an appeal, urging the Labor department to reconsider its position. It also assailed Lagman's decision as a "midnight" order, since the term of President Gloria Macapagal-Arroyo ended just a month ago.
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PAL was forced to cancel 11 flights after 25 pilots resigned. The airline warned that charges could be filed over what it called employment contract breaches.
Out of the 25 resigned pilots, two have already served the five-year minimum service while the rest have not yet finished the contract, Bautista added. See full story. -
President Benigno Aquino III ordered government officials led by Transportation Secretary Jose "Ping" de Jesus to talk with representatives from PAL and Palea to discuss the mass resignation of pilots.
"PAL [does] have obligations when [it] secured the franchise to operate this public conveyance; the pilots also have an obligation," he said in a press briefing. Aquino warned that the flight cancellations due to lack of pilots manning the Airbus 319 and 320 planes will be dealt severely by the tourism industry. See full story. -
PAL temporarily suspended its Cebu-Davao flights and reduced operations to other routes in time for the "lean season," which generally last from August to November.
"Capacity rationalization is routinely done in anticipation of lower passenger volume, especially tourists, during the rainy months from August to November. It also coincides with the reduced number of PAL pilots who left for jobs abroad," PAL president Jaime Bautista said. See full story. -
Stalled for the past 12 years, the union presented to PAL management its proposal for a new collective bargaining agreement, which covers a five-year period (2008-2013).
The PAL-Palea CBA was put on moratorium for 10 years in the wake of the bitter 1998 labor dispute that saw a pilots' and ground crew strike, and the closure of the airline. "We believe that the CBA should retroact to 2008 since the CBA moratorium was only for 10 years not 12," Palea president Gerry Rivera said, referring to the 10-year suspension of its pay agreement with the ailing PAL in 1998.
Full story -
The four-month old Aquino administration through Labor Secretary Rosalinda Baldoz affirmed the June 15 decision of then acting labor secretary Romeo Lagman allowing PAL to outsource its call center, catering, and ground service operations.
Baldoz merely referred PAL's move as a "valid exercise of management prerogative," as she increased the early retirement package from P2 billion to P2.5 billion. As expected, Palea criticized the decision as it mulled elevating the case before the Court of Appeals. See full story. -
Palea filed its second notice of strike before the labor department to protest the outsourcing of PAL's airport services, in-flight catering and call center reservations.
The strike notice was based on two grounds, namely: unfair labor practices such as direct negotiation with union members and mass termination of its officers amounting to union busting. However, PAL challenged the strike notice in November 12, citing the complaints have been rehashed. See full story. -
Around 86 percent of Palea's 3,500 members have expressed interest in joining the planned work stoppage to protest the PAL's alleged unfair labor practices.
A strike vote was held last December 6 in all PAL offices and outlying stations from Laoag to Zamboanga. The labor department said the union has to wait seven more days before undertaking the actual strike. See full story. -
President Benigno Aquino III stepped into the labor row as he asked for a review of PAL's outsourcing plan, the first time a President assumed jurisdiction over a labor dispute.
Palea decided to hold off an actual strike while PAL was disallowed from implementing the outsourcing program pending a Palace review. Both parties are also ordered to attend conciliation meetings initiated by Executive Secretary Paquito Ochoa Jr. See full story. -
Unionized workers filed their third notice of strike at the Dole in over a year, after accusing PAL of refusing to enter into a new collective bargaining agreement.
In October 2010, the union presented its CBA proposal to PAL president Jaime Bautista but the management said in a letter last February 16 that talks will only take place once the controversial spinoff program is resolved by Malacañang. See full story. -
Palea held a strike vote among its members regarding PAL's reluctance to hold collective bargaining negotiations even before the release of Malacañang's review of the outsourcing plan.
See full story. -
The Office of the President affirmed the October 29, 2010 decision of Labor Secretary Rosalinda Baldoz, with a modification: increasing the additional gratuity to the employees who will be dismissed from P50,000 to P100,000.
Other benefits such as separation pay equivalent to 1.25 month's salary for every year of service, free plane tickets, automatic one-year stay in the third-party service provider, and medical insurance were also guaranteed. See full story. -
Palea accused President Benigno Aquino III of conniving with PAL's billionaire owner Lucio Tan in the implementation of the mass layoff program.
It also set week-long activities in protest of the Palace's decision and as a run up to the soon-to-be conducted strike. The union said it is still studying possible legal remedies including a direct appeal to the Office of the President. See full story. -
PAL presented its counterpart proposal for a new collective bargaining agreement. Under PAL's proposal, employees will receive pay increases of P750 for the first year, P1,500 for the second year, and another P1,500 for the third year.
"This is what management believes the company can afford at this time, given the string of massive losses suffered by PAL since 2008," said Jose Uybarreta, PAL vice president for human resources. However, the offer will only cover rank-and-file employees within the bargaining unit to be left behind after the retrenchment of 2,600 workers. See full story. -
The seven-day call off period following the successful strike vote ends. Palea can hold an actual strike from April 2 onwards unless the Labor department intervenes anew in the labor dispute.
Under the Labor Code, the secretary of labor has the power to assume jurisdiction over a labor dispute or issue a return-to-work order in case of an actual work stoppage. PAL had said that contingency measures are already in place to address the looming strike, which include the tapping of administrative personnel to do certain functions and transferring passengers to sister airline Airphil Express and 134 interline partners.