PAL’s Pilot Woes, Labor Disputes ‘a Direct Result of Lucio Tan’s Profiteering, Abuse of Workers’


MANILA – The way Philippine Airlines management and some members of the press spin the story, many of the airline’s pilots were motivated by nothing else but money when they resigned en masse the past week to seek employment elsewhere, causing cancellation and disruption of domestic and foreign flights.

But what happened this week at the country’s flag carrier is just one of the results of the systematic degradation of working conditions there, beginning with the company’s decision to spin off certain crucial operations in order to cut costs and increase profit. This resulted in the firing of workers and the contractualization of those who remained.

For four days now, some regional and domestic flights of Philippine Airlines were canceled or disrupted as 27 pilots resigned so they could move to other airlines that offered them better job packages.

Although PAL management said on Tuesday that its flight operations were now back to normal, it is feared that more resignations might follow soon. Pilots interviewed by Bulatlat said the situation remains “very sensitive.”

Earlier, PAL management has threatened to file charges in court against the pilots who resigned, citing “breach of contract” and “debts” owed them for the cost of their aviation school training. Labor secretary Rosalinda Baldoz has echoed PAL management’s denial that the pilots’ mass resignation had nothing to do with the labor disputes in PAL. Baldoz has also suggested a longer notice, which is dubbed as a “slavery bond” in other countries, before pilots can leave PAL for overseas jobs.

Members of Anakpawis PAL chapter and PALEA hold a picket to denounce the spin-offs and contractualization at the airlines. (Photo courtesy of Anakpawis PAL Chapter)

On Monday, airline management met with officials from government to discuss the problem. Worried at the veiled threats against pilots in the statements of the government — from President Aquino to his labor secretary — and at the PAL management’s explicit threats of filing charges, the progressive labor center Kilusang Mayo Uno (KMU or May First Movement) urged the Aquino government to push PAL management to address the causes of the labor dispute in the airline.

“We know it would be the pilots, not the PAL management, who would be hardest hit when government takes legal action,” Elmer Labog, KMU chairman, said in a statement. He asked the Aquino government to “side with the employees” and to view the mass resignation as an SOS not only by the pilots but by all PAL employees.

Today, PAL president Jaime Bautista announced in a press statement that the government “requested PAL to take back the resigned pilots without sanctions. We agreed.” But Bautista warned that “if the pilots will not heed our appeal to return to work within the specified period, the company will seek proper remedies.”

Bautista added: “There is no labor dispute as far as the pilots are concerned. Their main reason for leaving is purely on financial or economic reasons.”

Nothing, according to pilots and workers Bulatlat interviewed, could be farther from the truth.

The mass resignation of pilots that PAL is trying hard to control now is “not a labor dispute” in the eyes of the Department of Labor and Employment and PAL management only because PAL had broken up the pilots’ unions 12 years before. In 1998, as today, PAL was also complaining of losses. In 1998, PAL had profitably used “losses” to justify gaining more concessions and attacking its employees, recalled Anakpawis Rep. Rafael Mariano.

Since 1998, PAL has entered and exited a rehabilitation plan and paid off its loans but clearly at the expense of thousands of its employees, as can be seen in today’s simmering labor disputes between the management and the pilots, cabin crews and ground employees.

Low Salary

Per aviation industry standards, PAL pilots are given “lower salaries” than their counterparts in other airlines, according to pilots interviewed by Bulatlat but who requested anonymity, citing a gag order by management, among others.

But more than the salary, the resentment among the pilots and first officers is rooted in the way the company treated them. A co-pilot revealed that the mass resignation began with the forced resignation of 11 co-pilots who earlier refused to be transferred to Air Philippines, a budget airline also owned by business tycoon Lucio Tan.

Officials of the Anakpawis chapter in PAL said they received information that PAL management is retiring some of its pilots and transferring them to other Tan airlines, specifically Air Philippines and Aero Filipinas, as contractual pilots, with their wages reduced by half. PAL management also wants some pilots to sign contracts stipulating that they would be willing to fly not only PAL planes but these other Lucio Tan airlines as well.

One of the captains who resigned, according to other employees, refused to fly domestic flights for Air Philippines on top of his flying PAL’s routes in Asia.

In an interview on The Rundown, a news show on ANC, Bautista, PAL’s president, denied the allegation that PAL pilots were being transferred to Air Philippines. He also insisted that PAL and the pilots had no labor dispute.

Among the PAL employees, the pilots and first officers are the ones most vulnerable to forced transfer and additional workload: they lost their union following a bruising strike 12 years ago. During that strike, PAL retaliated by terminating about 600 striking pilots and nearly 2,000 cabin crews.

The cabin crews and ground employees had also been badly bruised by PAL management’s retaliation. To this day, the Flight Attendants’ and Stewards’ Association of the Philippines (Fasap) has a lengthy court battle seeking justice for the termination of its members. Meanwhile, the ground employees’ union, Philippine Airlines Employees Association (PALEA), was forced to swallow a 10-year CBA suspension imposed by PAL management and union leaders said to be in cahoots with the company.

“Classic Example of Opportunism”

In a statement, David Cockroft, general secretary of the London-based International Transport Workers Federation, said what the airline has been doing to its employees over the years are “a classic example of opportunism, with the aim of cutting jobs, downgrading conditions and breaking the union.”

The mass resignation of PAL pilots, the impending strike by PAL cabin crew union FASAP, the struggle of ground employees against mass termination and contractualization under a ‘spin-off’ — all of these are interrelated, the Anakpawis chapter in PAL emphasized.

“It all stems from Lucio Tan’s moves to increase his profits even more by intensifying the exploitation of all his employees in the aviation industry,” said Rafael dela Cruz, chairman of PAL Anakpawis.

According to dela Cruz, Tan seeks to increase his profits further by reducing the wages of all its workers and employees even as their workloads were being increased. This is being implemented among pilots, flight attendants and ground employees — by breaking up the employees’ union or buying off its leaders, transforming regular employees into contractual employees, or adding workload or workhours without additional pay.

The 400 or so pilots and first officers have no union. A captain explained to Bulatlat that “we have had no opportunity to form one even if we wished to.” As a result, they had no venue for airing their grievances and demands, so many just left PAL when they could no longer endure the situation.

“Who would want to work for a company that treats you like a property? That forces you to do things against your will, thinking that you owe it big time?” KMU’s Labog said. “We understand the pilots; we sympathize with their plight. The disruption in PAL’s flights is a direct result of the PAL management’s actions.”

Some pilots told Bulatlat that it was not that easy to leave PAL and the country for overseas jobs, although many of them got offers from rival airlines. A pilot who had been with PAL for 11 years when he was terminated for joining the strike and who later reapplied as a new pilot in PAL five years ago told Bulatlat that, sometimes, it is not just the money but the “better opportunities” in other airlines that make pilots leave.

PAL’s Exploitative Schemes

Since April this year, ground employees have been on the edge because of PAL’s plan to spin off certain sections of the companies into entities they suspect to be dummies or partners of Tan. Some of them said the spin-off is merely Tan’s scheme to break up the union and transform its thousands of employees into lower-paid contractual employees.

The spin-off of most ground employees would also pave the way for a more permanent CBA suspension. According to Anakpawis in PAL, the management has been evading negotiations for a new collective bargaining agreement with PALEA following the end of the extended CBA suspension.

PAL management has also been stalling in its negotiations with FASAP, the union of PAL’s flight attendants. Last week, the 1,600-strong FASAP was forced to file a notice of strike to try to break the long deadlock in their ongoing CBA negotiations with PAL management.

FASAP president Bob Anduiza told ABS-CBNnews.com that PAL management has been ignoring their complaints about working conditions. For example, he said, PAL has been flying undermanned flights for sometime now, forcing flight attendants to work more but paid the same amount of salary. Anduiza said each flight lacked at least two more flight attendants and that this undermanning was unilaterally imposed by PAL.

FASAP is also up in arms against the management’s plan to reduce their mandatory retirement age from 60 to 40. “All we ask is for equality in the workplace. In PAL, the other employees are allowed to work until 65 years old. The pilots’ compulsory retirement age for both males and females is 60 years old. But for flight attendants, the compulsory retirement age is as young as 40 years old,” Anduiza said, according to ABS-CBNnews.com.

“We are against age and gender discrimination. PAL cannot continue to turn a blind eye to inequality. PAL should correct this discriminatory policy, instead of using it as a bargaining chip against the flight attendants,” he added.

Years-Long Grievances

What is happening in PAL were crises waiting to happen. This only shows that their years-long grievances that culminated into that strike 12 years ago have not really been resolved, said a former PAL pilot who worked for 20 years at PAL but was terminated for having joined the strike.

The trouble in PAL , this pilot said, is that its employees are routinely being asked to work harder and longer, at first to save and rehabilitate the flag carrier, later to respond to the economic crisis, to the high fuel costs, to the 9/11 attacks in the US, and other justifications.

And when PAL started earning profits again, and even before the employees could ask for a small share, the airline starts “losing” again, said the veteran pilot.

“There is a need to look into the real financial condition of the flag carrier that claimed near bankruptcy status even if its chairman and CEO Lucio Tan was recently listed by Forbes Magazine as the second richest Filipino whose net worth jumped from $1.5 billion in 2008 to $1.7 billion in 2009 – an increase in wealth which contrasts to PAL’s claim of financial losses,” Mariano said today. “ It is proper and necessary to ensure that workers be protected from illegal retrenchments which are based merely on highly questionable claims of bankruptcy.”

Members of Anakpawis PAL chapter and PALEA hold a picket to denounce the spin-offs and contractualization at the airlines. (Photo courtesy of Anakpawis PAL Chapter)

Though PAL registered a lower net profit in 2009 compared to 2008, the global aviation industry’s main data keeper, Official Airline Guide (OAG), declared that PAL is still the country’s top carrier in terms of flights and seat capacity for the last two years, posting a leading share of 35 percent of the 1,859 flights per week and 38 percent of the total 309,616 seats per week flown.

“It is alarming that a major company like PAL can bend and twist labor laws to seal and protect its profit vaults at the expense of its employees,” Mariano said.

President Aquino announced early on that the labor dispute in PAL would be its litmus test in handling industrial relations. As in 1998, what is happening in PAL today will thus set another precedent in labor’s struggle against deteriorating wages and working conditions. In the meantime, the Anakpawis chapter in PAL welcomes the fact that PAL employees, with the growing support of labor advocates, are now uniting to defend their jobs, their benefits and their union.

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