CA favors job cuts in PAL

MALACANANG had it right when it approved the plan of flag-carrier Philippine Airlines (PAL) to outsource 2,600 jobs in late 2011 to ensure viability of its operations, cut costs, and guarantee the airline’s continued survival.

In an 87-page decision, the Court of Appeals said the Office of the President did not commit grave abuse of discretion in August 2011 when it sided with the findings of the Department of Labor Employment (Dole) favoring the spinoff of PAL's catering, ground handling and call center reservation units amid losses in recent years.

“While we commiserate with the plight of all employees affected by PAL’s outsourcing, we cannot, however, blindly uphold with absoluteness their plea to reject the outsourcing of the three non-core operations, especially when we find nothing capricious and arbitrary on the OP when it affirmed the ruling of the labor officers sustaining the validity of the issue,” stated the decision penned by Associate Justice Priscilla Baltazar-Padilla of the Special Eighth Division.

PAL’s outsourcing program was first recognized as legal and valid by acting Labor Secretary Romeo Lagman on June 15, 2010, and affirmed by Labor Secretary Rosalinda Baldoz on October 29, 2010.

On appeal before Executive Secretary Paquito Ochoa Jr., Dole’s ruling was affirmed but slightly modified by increasing the gratuity pay by another P50,000 per worker.

PAL spent about P2.5 billion for the severance package which includes separation and gratuity pay, trip pass benefits, and one-year extension of medical and hospitalization benefits, among others.

The Ramon Ang-led airline had said that the company’s P15-billion losses in 2008 and 2009 necessitated the restructure program, which includes cutting down on manpower costs.

“It is readily apparent that PAL has a fluctuating financial condition and it is understandable if it continues to explore cost-saving measures to attain full financial stability. Hence, we decline to interfere with PAL’s judgment in the conduct of its business by making a legitimate business decision to outsource certain services to maintain a healthy and viable financial standing,” the decision read.

The CA said it only resolved the issue of grave abuse of discretion and not PAL’s alleged engagement in labor-only contracting since it was not raised in the petition by the PAL Employees Association (Palea).

PAL has yet to comment on the decision while Palea president Gerry Rivera said they will file a motion for reconsideration sometime in April.

“It was very unfortunate. We’re totally surprised with the ruling. The decision was a copy paste of the findings of the Labor department and Malacañang,” he told Sun.Star.

Aware that the legal dispute may drag on for years, Rivera said the union has been talking with PAL management since December last year to come up with a “justiciable” solution.

“Our members had been fighting for reinstatement because we believe that the old management locked us out when many refused to be outsourced,” he said.

The CA said Palea will remain existent despite the permanent outsourcing.

The remaining members who are not affected by the measure will be commencing their collective bargaining negotiations with PAL while those who have been outsourced are still entitled to their right to self-organization. (Virgil Lopez/Sunnex)