Update of the PALEA-PAL dispute by Gerry Rivera, President of PALEA

February 19, 2011

Last 11 Feb, PAL & PALEA finally had a conciliation conference before the Office of the President with one Secretary and two Assistant Secretaries in attendance.

For the first time, PAL admitted that the financial status (crisis?) of the company is not the main reason for the outsourcing program that may eventually lead to contractualization of jobs of the regular employees. The “FINANCIAL SITUATION” of PAL, they said, is just one of the reasons. They also raised the issue of “OUTSOURCING AS A GLOBAL TREND IN THE AIRLINES” . In addition, they interposed the legal defense of of “MANAGEMENT PREROGATIVE” as one of the basis for the outsourcing program.

On the part of PALEA, we stood firm on our stand against “outsourcing”. It is our position that since we have already submitted to the management our “COLLECTIVE BARGAINING PROPOSALS” as early as October 8, 2010, the issues involved in the instant case can be the subject of CBA negotiations. In fact, last 27 January, after our monthly Labor Management Cooperation Council (LMCC) meeting with the top management, PAL President and COO, Mr. Jaime J. Bautista, informed the Union that the panels of both parties should now convene and start the CBA negotiations. After which, I already sent the management a letter stating therein the Union panel.

At the Conciliation conference chaired by officials of the Office of the President, the PAL President reneged on his prior stand of CBA negotiation. Instead, it is now the position of the management that the CBA negotiation would only start after the outsourcing program has been implemented.

Anyway, in the said conciliation meeting, the management agreed and promised to furnish the Office of the President and PALEA the unaudited financial report of the Company for the 1st and 2nd quarter of 2010-2011 fiscal year which ends on March, 2011. We have received our copy last Monday, 14 Feb. We found out that the Company posted a comprehensive income of around US$60M for the 1st six months of the fiscal year. In addition, PAL was able to pay its maturing financial obligation or US$46.5M last June, 2010 (the prevailing exchange rate is Php43.70 to the US$1.00).

We are given 10 calendar days, or until 24 Feb 2011, from receipt of the financial report within which to submit our comments and/or position paper.

Report by Gerry Rivera, President of PALEA

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