PAL-PALEA Conflict
Business conflicts often inflict companies, sometimes causing small effects but other times, it can be a reason for reducing services or to some extent closure of the company. Because companies are composed of different kinds of people, with different wants, expectations and needs, misunderstanding occurs. Misunderstanding or conflicts in a company can occur between two persons, a person against management or a group against management. Conflicts can be good for the company because they can foster different opportunities for improvement, creativity of even collaboration when they are resolved. However, unresolved conflicts could be costly to the company or to the parties involved and prove to be devastating.
The total cost of all the aspects affected by the conflict in a company is usually referred to as the “costs of conflict.” When calculating the costs of conflicts, not only economic costs from all involved are taken into account. Social, political, environmental, developmental and strategic costs are also being included in the calculation. Basically, the costs of conflict try to calculate the conflict’s overall effect to the people involve.
An example of a conflict that is currently affecting not only the company but also their services is the long standing conflict between the Philippine Airlines (PAL) and the PAL Employees Association (PALEA). Philippine Airlines in the national flag carrier of the Philippines. The conflict between the PAL management and PALEA started when the PAL management announced in September 2009 that management plans to outsource services for some of its department like the Information Technology, Human Resources, Tickets, and Reservation. Lucio Tan, the owner of the company, reasoned that the need for downsizing is because the company is losing. PAL offered Early Retirement Programs for the affected rank-and-file employees and said that they are optional and voluntary in nature.
The PALEA did not like the idea of outsourcing and initiated several meetings with the management to talk about the outsourcing plan but to no avail until the union decided to hold a strike citing intended mass layoff, illegal outsourcing of regular positions, direct negotiations to avail of ERP and promise of re-employment and adjustment of pay scale as some of the reasons. In April 2010, the PAL management issued a letter to the union informing them of the closure of most of the departments of the company and the abolition of its regular positions. The regular employees affected were given termination notices through registered mails. Upon the unions initiative, the Department of Labor and Employment (DOLE) suspended the Notice of Termination issued to the employees to be revoked by the new head of DOLE. This initiated further strike from the PALEA and asked for the intervention of the President of the Philippines to resolve the issue.
The costs of this conflict to the parties involved is already big. This long standing conflict has great economic costs to both parties, since on the side of the PAL some of their flights were canceled due to the strike of the employees thereby giving them less income. Social costs could be its effects their passengers. The management also experience effects of developmental and strategic costs. Since the conflict has been brought to different levels, the management now can’t decide on their own hampering any strategic plans they may have.
On the part of the PALEA members, they have been experience extreme stress as a result of this and has also affected their respective families. Their economic situation is also greatly affected by this conflict. Analysts has also said that the ongoing conflict has made the divided further the workers and employers around the world.
Since the conflict has not been totally resolved, the Department of Labor must intervened with the issue to support the cause fight by PALEA, since they are the once most affected by this because they are left unemployed. However, the Department of Labor must also find ways to help PAL on its plight to downsize its operations.
Reference:
Philippine Daily Inquirer (2011, Oct 3). Editorial. In Inquirer Opinion. (2012, Feb 4). Retrieved from http://opinion.inquirer.net/13301/storm-at-pal
