MANILA, January 10, 2011 (AFP) – Philippine Airlines said Monday it had rejected a government order to raise pay for its cabin crew and allow air hostesses to fly until they turned 60, calling the ruling absurd and illegal.
The loss-making flag-carrier’s president, Jaime Bautista, said it had appealed the labor ministry ruling, given last month after the government forced management and flight crew into arbitration to head off a strike.
The arbitration went in the crew’s favor when the ministry ordered PAL to raise salaries worth 222 million pesos (about five million dollars) over three years and to push back the retirement age from 45 to 60.
“DOLE (the Department of Labor and Employment) expects PAL to produce the money but as to how, the decision did not say,” Bautista said in a statement.
He said the ruling suggested the airline would be forced to set aside future profits to cover the salary raises.
“But this will result in an absurd situation. It is an unthinkable fiscal manoeuvring,” Bautista said in a statement.
Bautista said the airline had made it clear that it had been in no position to raise salaries after incurring hefty losses for its last three fiscal years.
He said the ruling had also ignored the fact that the current age limit for female cabin crew of 45 was the result of an agreement between the airline and the union, and that this was legal under the country’s labour code.
“DOLE (also) failed to consider the fact that the average retirement age of most, if not all, of PAL’s fiercest competitors in the (Southeast Asian) region is much less than 60 years old,” Bautista said.
Union president Bob Anduiza said in a statement the 1,600-member cabin crew union was dismayed by the airline’s response.
“PAL is being arrogant and foolish, but (the flight crew union) will not be discouraged. We will fight for our rights and dignity until its rightful and just conclusion,” Anduiza added.