The PALEA Struggle – Global Picketline

30 August 2017

By: Gerardo “Gerry” Fangon Rivera, PALEA President

The Continuing Struggle of the Philippine Airlines Employees’ Association (PALEA).

Ang Laban ng PALEA ay Laban ng Lahat! (The Struggle of PALEA is the Struggle of All!)

In 1998, Philippine Airlines, Inc. (PAL) suspended the PAL-PALEA Collective bargaining Agreement (CBA). It was a condition precedent to the approval by the creditors of the PAL Rehabilitation Program for a period of Ten (10) years. The suspension was coterminous with the rehabilitation program.
Ahead by one (1) year or on September, 2007, PAL exited the rehabilitation program. However, the suspension of the PAL-PALEA CBA was not lifted. Ironically, in the year 2008, when it was time to negotiate for a new Collective Bargaining Agreement, the company asked then union leadership for the extension of the CBA moratorium on allegations that the company was again suffering financial losses. The Union leadership, without the knowledge of the general membership, acceded to PAL’s request.
On August 26, 2009, PAL laid down to then union officers the company’s plan to outsource several departments of the company. Meantime, on February 2010, the PALEA national election was held. A new leadership took over the administration of the Union. Accordingly, the new leadership protested the impending outsourcing program of the company which would result to the contractualization of regular jobs.

In 2011, Philippine Airlines’ (PAL) implemented the outsourcing program. More than 2,500 regular employees were affected. This was despite the PAL’s reported comprehensive income of $72.5 Million in that fiscal year. In protest, PALEA set up a picket line in front of PAL’s In-flight Center. The protest camp lasted for more than two (2) years. However, from the more than 2,500 dismissed employees, only about 600 employees were able to sustain the struggle for justice. By sheer necessity, the others claimed their separation package. Some agreed to be rehired as contractual workers of the service contractors.

In 2012, in the middle of the labor dispute, San Miguel Corporation (SMC) took over the management of PAL, after buying 49{dc82ecffb446e5a290b4ffdfcab636203ac76aafdaf2c3c9584f41c74cc6f0ab} of the stocks of PAL (through PAL Holdings). Mr. Ramon S. Ang, the SMC President, became also the President of PAL. With a new management, the two (2) parties exerted efforts to find a mutually beneficial resolution of the labor dispute. Thus, on November 14, 2013, Philippine Airlines (PAL) and the Philippine Airlines Employees’ Association (PALEA) signed a “Settlement Agreement”. It was agreed that PAL and PALEA jointly cause the withdrawal of all the pending cases related to the dispute. PAL also agreed to an additional 75{dc82ecffb446e5a290b4ffdfcab636203ac76aafdaf2c3c9584f41c74cc6f0ab} financial assistance. On top of the afore-cited agreement, PAL agreed to re-employ the covered workers to regular positions in PAL. That the covered employees shall be the priority in filling up vacant positions in the company.

While the two parties were discussing the full execution of the “Settlement Agreement”, the Lucio Tan Group regained full control of PAL by way of buying back the 49{dc82ecffb446e5a290b4ffdfcab636203ac76aafdaf2c3c9584f41c74cc6f0ab} held by SMC. As soon as the Lucio Tan Group re-assumed the management of the company, PALEA sought to resume discussions on the full implementation of the Settlement Agreement. However, until to date, PAL refuse to fully execute the agreement. The re-employment to regular positions in PAL of the more or less 600 workers has not been implemented.

Meanwhile, PALEA sent its Collective Bargaining Agreement proposals to PAL. PALEA also reiterated the request for meetings to discuss the implementation of the Settlement Agreement. However, instead of commencing negotiations for the CBA and resuming discussions for the implementation of the Settlement Agreement, PAL initiated a new wave of mass termination of employees.

On 02 September 2015, through a letter signed by Mr. Servillano D. San Gabriel, AVP-Human Capital Department, PAL sent Notices of Termination to 117 regular employees, 108 of them are PALEA members. The Notice of Termination cited an alleged organizational restructuring which had rendered “several positions in the Company redundant”. While the Notice of Termination provides that the termination shall be effective on November 9, 2015, most of the employees who were given the notice were terminated effective on the day that they received such notice. They were no longer allowed to work, as soon as they had been given the Notice of Termination. Contractual employees (of PAL’s service contractors) with security escorts were already on standby and immediately replaced the terminated employees. This negates the “redundancy” as the reason for the terminations.

PALEA questioned the termination of the employees due to alleged “redundancy”. In a letter dated September 4, 2015, sent by PALEA President Gerardo Rivera to PAL President and COO Jaime J. Bautista, PALEA immediately asked for the recall of the said Notice of Termination, to no avail. In the same letter, PALEA again repeated its request for the commencement of CBA negotiations, and the resumption of discussions for the implementation of the Settlement Agreement. To date, PAL has not replied to any of these letters. PAL has refused to negotiate for a CBA. PAL has refused to discuss the Settlement Agreement. Hence, on October 08, 2015, PALEA filed with the National Conciliation and Mediation Board (NCMB-DOLE) a Notice of Strike (NOS) due to Unfair Labor Practices (ULP) due to “interference, restraint and coercion of the workers on the exercise of their right to self-organization and due to the mass dismissal of more than 100 Union members”.

Amidst this new wave of mass termination and underhanded treatment of loyal employees, PAL has publicly brandished its profits, with PAL’s parent company, PAL Holdings, reporting that its profits for the first half of 2015 soared to nearly 10-fold, rising to P5.8 billion ($126.20 million) from P560 million ($12.18 million) during the same period last year, 2014).

In the meantime, the positions previously occupied by the terminated employees which had allegedly been redundant, are not vacant. These positions are now occupied by workers who are employees, not of PAL, but of PAL’s service providers. The same dirty tactic that was adopted by PAL through the 2011 “outsourcing” program is now resurrected through the current “organizational restructuring/redundancy” program.

On November 04, 2015 and December 2, 2015, in the Congressional Inquiries conducted by the Labor Committee of the House of Representatives chaired by Cong. Karlo Nograles, the management representatives, when grilled by the Congressmen, admitted that the termination of the 117 PAL workers are due to the outsourcing program of PAL. Further, they admitted to the validity of the Settlement Agreement and to their legal obligation for a Collective Bargaining Negotiations. They also announced that the November 9, 2015 effectivity of the termination of the 117 employees is moved to November 30, 2015. Nevertheless, despite the Union’s protestations and the Congressmen’s pleas, on December 1, 2015, PAL terminated the 117 employees.

Anent the above averments, Conciliation Conferences within the auspices of the National Conciliation and Mediation Board (NCMB) of the Department of Labor and Employment (DOLE) continue. This January, 2016, the PAL management panel raised the idea of a new round of Collective Bargaining Agreement negotiations with PALEA. It was insinuated that the same may proceed as a means to improve the fragile employer-employee relationship between the parties.

As a response to the issue of CBA negotiations, PALEA forwarded a formal letter to the PAL management relative to the Union’s willingness to proceed with the negotiations. Attached therewith is the copy of the Union’s CBA proposal.

In the subsequent conciliation conferences, the management panel manifested that the Notice of Strike subject of the conciliation conferences be first withdrawn before a formal CBA negotiations ensue. PALEA contends that the withdrawal of the NOS shall be simultaneous to the actual formal and official start of the negotiations. This stance is anchored on the continuous threat of PAL to further implement the outsourcing program.

To date, the membership of PALEA has tremendously declined to more or less six hundred (600) and continues to decline due PAL’s outsourcing program.

Since November, 2015 or for one (1) year now, PAL management, despite due demand by PALEA, withheld the remittance to the Union the Check-off representing the members’ Union Dues. This makes the Union financially unstable.

In the intermediate period or last May 09, 2016, the National Election in the Philippines was held. President Rodrigo Roa Duterte, whose campaign subject was a “stop to contractual employment” won as the new president. Immediately upon his assumption into office last June 30, 2016, labour groups pressed the demand to stop contractual labour. The issue of the PALEA serve as a banner topic in numerous workers’ mobilizations. PALEA also made representation with the officials of the Department of Labor and Employment.

With our representation with the new DOLE Secretary, Sec. Silvestre Bello, a new round of mediation proceedings were called. The mediation efforts were delegated to the office of the Undersecretary for Labor Relations. No less than USec. Joel Maglunsod acted as the mediator. However, after several conferences, the PAL management was adamant in its position that its obligations under the Settlement Agreement were already complied with by PAL. This is despite the fact that not even one among the 600 workers covered in the settlement agreement has been re-employed by the company.

Surprisingly, when the mediation proceedings were terminated, the Secretary of DOLE resolved to anchor his decision on basis of “interpretation of contract”. Thus, in his Order, the Secretary recommended that the issue is better resolved by the Supreme Court.

What the Secretary of DOLE miserably disregarded is the fact that what happened to the PAL employees is a clear case of Massive Contractualization of Regular Jobs. The issue is not simply the interpretation of contracts or the compliance thereof. It is the violation of the basic rights of the workers to secure and decent jobs.
On February 27, 2017, Labor representatives from all groups including NAGKAISA and KMU was able to discuss the plight of workers and the need to end contractualization with President Duterte in the Malacanang Palace. The President advised the group that he will not renege with his campaign promise to end contractualization and ordered the Secretary of Labor to facilitate. Likewise, the PALEA president was also in the said meeting and was able to present the plight of the Philippine Airlines workers and the need for his assistance.
On March 3, 2017, The Secretary of Labor issued a Department Order – DO-174, replacing the DO-18A from the previous administration. The new DO was opposed by labor for it was far more worse than the previous one that caused widespread protest from the labor groups. Until, Labor Day last May 1, 2017, when the President met with labor in Davao and promised again that he will abolish the new order and advise labor to submit a draft Executive Order were he will sign and promised to make a priority measure the enactment of the Security of Tenure Bill still pending in Congress. Until today the draft EO has not been signed by the president but a technical working group is on going in Congress for the passage of the bill.
On March 15, 2017, the Department of Labor and Employment called for a meeting based from an Administrative Order AO 76, issued by the Secretary to conduct the Special Assessment Visit Establishment (SAVE) in PAL, PAL Express and its Contractors. It is an inspection/audit in PAL of any violation of labor standards, facilities and the labor only contracting which is illegal. The union see’s this as an opportunity for the implementation of the Settlement Agreement provision of re-employment and the regularization of workers in PAL. PAL and PAL Express opposed the participation of PALEA as an observer in the said inspection but the DOLE ruled otherwise. The SAVE program was conducted nationwide from March to June 2017.
On August 30, 2017, the Department of Labor called for an Exit Conference to all stakeholders in the just concluded SAVE program in PAL, and PAL Express. All were required to submit the additional documentation required before September 10, 2017 and findings and resolution will be issued thereafter. PALEA remains vigilant on the forms of management tactics not to implement the agreement and to employ divisive tactics to the union.

Thus, the struggle of PALEA continues until Justice is finally achieved. The case of PALEA is a test case. A test case to the government, under the new administration, to finally put a stop to contractualization.