Philippine Airlines' service providers 'illegal'

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Thursday, September 8, 2011


MANILA (Updated 12:56 p.m.) -- The three service providers hired by the Philippine Airlines (PAL) should not be allowed to operate as they are not registered as a contractor or subcontractor, said Philippine Airlines Employees’ Association (Palea) legal counsel Marlon Manuel on Thursday.

He said they received a letter last September 7 confirming that the three providers are not registered.

Also based on the Department of Labor and Employment (Dole) certification, labor department on National Capital Region (NCR) director Raymundo Agravante stated that the three service providers -- Sky Kitchen Philippines Inc., Sky Logistics Philippines Inc., and SPi Global Holdings Inc. -- violated the Department Order 18 Series of 2002.

“Kahapon lamang nakakakuha kami ng certification na nagsasabing ang 3 contractors na gusting kunin ng PAL para ipagawa ang trabaho ay hindi rehistrado sa ilalim ng department order 18 – 2002. Sa ilalim ng order na ito, ang sinumang contractor na hindi rehistrado shall be presumed to be engaged in illegal labor-only contractinig. Ganyan kalinaw po ang pagiging illegal ng gustong mangyari ng pal,” Manuel said.

He said the Sky Kitchen Philippines, Sky Logistics Philippines and SPI Global Holdings are now included in the case that Palea has filed before the Court of Appeals (CA).

Department Order 18 Series of 2002, section 11 on the registration of contractors or subcontractor, stated that “the registration of contractors and subcontractors shall be necessary for purposes of establishing an effective labor market information and monitoring.”

It added that failure to register shall give rise to the presumption that the contractor is engaged in labor-only contracting.

Section 5 also stated that “Labor-only contracting is hereby declared prohibited.”

In the labor law, it stated that there are two things that the Dole office must consider for them to be qualified as a legal contractor or subcontractor companies; one, the contractor or subcontractor does not have substantial capital or investment which relates to the job, work or service to be performed and the employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal; two, the contractor does not exercise the right to control over the performance of the work of the contractual employee.

Palea earlier called on lawmakers to investigate the third party service providers contracted by the Lucio Tan-owned airline to take over its airport, in-flight catering and call center reservation services.

“Congress must attempt to pierce the corporate veil behind these service providers. A probe may reveal that Sky Logistics and Sky Kitchen are not third-party companies but simply fronts with Lucio Tan as the real owner,” said Palea president Gerry Rivera.

The Sky Kitchen will take over PAL's catering department; Sky Logistics will capture the 70-year-old airline's ground and passenger handling; and SPi Global will handle the airline's call center reservation department.

The Sky Kitchen and Sky Logistics are owned by Cebuano businessman Manny Osmeña, while the SPi Global is managed by telecommunications mogul Manny Pangilinan.

However, Rivera earlier said that Osmeña is just fronting for Lucio Tan.

“Manny Osmena is not related to the Osmeñas of Cebu. He is a Chinese immigrant who acquired Filipino citizenship by naturalization and in the process changed his name to Manny Osmeña. He is a cousin of Tan,” he said.

Aside from this, Rivera said that PAL president and chief operating officer Jaime Bautista also has stakes in the three outsource companies.

The airline earlier said that the three service providers “are not related in any way to the Lucio Tan Group of Companies.”

“Palea officers have a penchant for spreading false accusations and rumors without proof. Worse, it is using Congress to serve its malicious agenda. PAL hopes lawmakers would not allow themselves to be used by Palea in its ‘witch hunting’ activities,” the airline said.

Earlier, the PAL management announced that it will start firing 2,400 employees from airport services, catering and call center reservation units on October 1, 2011.

However, the affected workers will be absorbed by their third party service providers and the said companies are now currently processing applications from PAL workers who have until September 9, 20011 to express their intention to join their new employer.

So far, the PAL management said that there are 400 employees who expressed its intention to work for the service providers.

“The outsourcing plan should be immediately suspended and the notices of termination issued by PAL should be voided too given that the service providers are illegal labor-only contractors,” Partido ng Manggagawa (PM) chairman Renato Magtubo said.

Most PAL employees to be terminated, Magtubo said, are being offered a monthly wage of P11,111.50 monthly salary for working eight hours a day for six days a week.

Also, from regular employee status, the lay-off workers will become contractual workers at the service providers until such time that they completed the requirement before they become regular employees.

“PAL employees who have been working for years will be downgraded to probationary status for six months and after which he or she can simply be terminated since there is no security of tenure at the service providers,” Magtubo said. (SDF/Sunnex)

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