September 30 is the last day of work for 2,600 of Philippine Airlines (PAL) employees in its catering, airport services and call center reservation units, according to PAL president and COO Jaime Bautista, who revealed Thursday the flag carrier sent separation letters to the affected workers.
“The spin off/outsourcing is a painful but necessary decision to ensure PAL’s viability and long term survival," Bautista said in the press briefing held right after the PAL annual stockholders’ meeting.
“We assure affected workers that they will all receive their separation pay and other benefits that are at par, if not better, than industry standards," the PAL president added.
But some of the workers — members of the PAL Employees Association — are not assured. They picketed outside the venue of the stockholders’ meeting. PALEA said the airline can still keep them on the payroll if it will create and implement a new business model that does not include outsourcing as a feature.
Severance package
According to the October 29, 2010 ruling of Labor Secretary Rosalinda Baldoz last, PAL workers affected by the plan to outsource non-core operations will receive separation pay equivalent to 125 percent of their monthly basic salary for every year of service.
They will also get 100 percent commutable-to-cash vacation and sick leaves, plus trip pass or travel benefits. In addition, the separated employees will get P100,000 in gratuity pay, which was originally P50,000 but the Office of the President increased it by another P50,000.
PAL said the whole severance package will cost the airline P2.5 billion.
“Guaranteed employment also awaits them at our third-party service providers," Bautista also said. Those who will decide to join the outsourcing companies get to start work the next day, October 1. They have until September 9 to formally inform the service providers of their intention to join their workforce.
PAL said the third-party service providers, Sky Kitchen (catering), Sky Logistics (airport services) and SPi Global (call center reservations) will contact the workers in the days ahead.
PAL also offered a one-year extension of medical and hospitalization benefits and guaranteed pay for one year of whatever salary the service providers grant to those who choose to join PAL’s new contractors.
Bautista said PAL informed the Department of Labor and Employment (DOLE) of the separation of its employees.
Market turbulence, losses
The flag carrier chose to take the spin-off path after it lost $312 million in 2008 and 2009. PAL had profits of $72.5 million last year but it posted $10.6 million losses for the first quarter of its current fiscal year. http://www.gmanews.tv/story/229709/business/pal-revenues-up-6-but-expenses-wipe-out-gains
PAL cited unstable fuel prices, the earthquake and tsunami in Japan and the continuing instability in the Middle East and North Africa as the root causes of its poor financial results.
PAL said it also “continues to suffer from the protracted Category 2 rating of Philippine civil aviation regulators, the European Union blacklist against Philippine carriers, cut throat competition and a host of other external factors." — ELR/VS, GMA
