PALEA files new bid to reverse ruling on PAL outsourcing scheme

MANILA, Philippines—The Philippine Airlines Employees Association (PALEA) is asking the Court of Appeals to reverse its ruling which affirmed Malacanang’s decision approving the plan of the Philippine Airlines (PAL) to cut 2,600 jobs in 2011.

In a 17-page motion for reconsideration filed Tuesday, PALEA told the appeals court that PAL’s outsourcing scheme was not done in good faith.

PALEA stressed that the outsourcing scheme was done during the negotiation period for a new collective bargaining agreement (CBA).

It said the CBA prohibits contracting out of services performed by regular employees and that this prohibition is absolute.

“PAL bound itself not to contract out existing and future positions, jobs, divisions and departments presently occupied by present or future regular employees within the collective bargaining unit,” the motion stated, adding that under the CBA, temporary contracting arrangements will be restored to normalcy after need for it has ceased.

They added that the Office of the President and the Secretary of Labor’s decision to affirm PAL’s outsourcing “would result in disastrous situation where PAL would dismiss workers due to outsourcing, instead of adopting less serious measures.”

PAL’s spin-off/outsourcing program was first recognized as legal and valid by acting Labor Secretary Romeo Lagman on June 15, 2010, and was affirmed by Labor Secretary Rosalinda Baldoz on Oct. 29, 2010. Baldoz’ ruling was affirmed by the Office of the President prompting PALEA to file an appeal with the Court of Appeals.

The appeals court said the permanent outsourcing of non-core operations of PAL is part of the company’s exercise of its right to reorganize its business structure “to enable it to thrive and grow in highly competitive airline industry.”

But PALEA, in its appeal, said PAL failed to produce proof that its business is suffering thus, the need to outsource and cut jobs.

Based on the financial statements of PAL, it incurred a comprehensive loss of US$297.8 million for fiscal year 2009 and US$14.3 million for 2010.

“In a number of cases, the Supreme Court clarified that it is not enough that only the financial statements for the year during which the retrenchment was effected are presented by the employer. It must also be shown that the employer expected no abatement of such losses in the coming years, and that the condition of the company is not likely to improve in the near future,” PALEA said.