Unethical Practices in Philippine

Airlines
CASE ANALYSIS

Flow

Introduction

Stakeholders

Legal Analysis

Ethical Analysis

Utilitarianism Approach

Deontology Ethics

Ethical Decision Factors to Consider

Recommended Corrective Action

Introduction
Philippine Airlines also known as PAL, is the flag carrier and national
airline of the Philippines, headquartered in the Philippine National Bank
Financial Center in Pasay City. Philippine Airlines maintains aircraft with the
highest degree of airworthiness, reliability and presentability in the most
cost-effective manner; and conduct and maintain safe, reliable and costeffective flight. It continues to achieve on-time performance on all flights it
operates, as well as providing safe, on time, quality and cost effective in
flight service for total passenger satisfaction. But PAL is also a primary
example of a firm that practices unethically. Because of heightened
competition in the airline industry in the Philippines, with Cebu Pacific
slowly increasing their market share, through selling tickets at a very low
price, Philippine Airlines created PAL express to combat this, PAL decided to
relocate the pilots working for PAL, who are getting better benefits and
better pay compared to pilots who work for PAL express. It is considered as
unethical practice because the management is basically forcing PALs pilots
to work for its sister company and force them to receive less pay and
benefits which causes a lot of conflict between the management and the

Stakeholders
The stakeholders of the company are its employees because they
are the one that keeps the business going and continues to give good
service but some were fired, the Labor union because it was affected
when the management decided to relocate their pilots to PAL express
and give them lesser pay and benefits and had conflicts with the
management, President of Philippine Airlines Employees' Association
(PALEA) and vice-chair of Partido ng Manggagawa (PM)Gerry Rivera
because he protested to the managements decision, The secretary of
Labor and Employment Rosalinda Baldoz because of her decision to
allow PAL to outsource its jobs, International Transport Workers
Federation (ITF) because they criticized the companys outsourcing
efforts, and also PALs Shareholders and the management itself.

Legal Analysis
Their act of terminating the employees from their work is a clear
violation of Article 279 of the Labor Code of the Philippines. Under the
said article, it clearly prohibits the baseless termination of any
employee. A baseless termination can be defined using the provisions
of Article 283 of the same code. It states that:
The employer may also terminate the employment of any
employee due to the installation of labor-saving devices, redundancy,
retrenchment to prevent losses or the closing or cessation of operation
of the establishment or undertaking unless the closing is for the
purpose of circumventing the provisions of this Title, by serving a
written notice on the workers and the Ministry of Labor and
Employment at least one (1) month before the intended date thereof.

Ethical Analysis
First, PAL counter-attacked Cebu Pacific by serving the population
with limited experienced pilots which has lower wage. It is ethically
wrong to give service to the passengers with low experienced pilots
because the pilots hold the passengers safety, there is a high rate of
danger and is more prone to accident.
Second, PAL decided to relocate the old pilots and employees to its
sister company PAL Express which have lesser benefits and salary than
the previous one. It caused a lot of conflict between the management
and the labour union.
In the said case, PAL violated the right of the customers to have a
quality service and safe service. It also abused its power and violated
the rights of the relocated old pilots and employees by letting them
have less benefit and pay which must be higher because of their
experienced and labour years.

Utilitarianism Approach
Through utilitarianism approach, we are to think of an
alternative/solution for this that will maximize and provide the greatest
satisfaction to a large number of people. If the workers dont get the
right salary and benefits, they must have then it would affect their job
or performance. To be ethical and to make the employees work at their
best and satisfactory in order to have a better service to its customers,
then give or grant the employees need, a right wage and benefits.

Deontology Ethics
It is PALs duty to prioritize the welfare of their employees. Dealing
with a public transportation business, it is the utmost responsibility of
the company to provide safety for its customer before profit, so how
can this be provided if they cant even secure their employees need.
There must be an equal treatment for both parties, if the company
wants a good profit then they should provide a enough salary and
benefits which means taking care and being responsible unto them so
the employees would work hard and gain the customers trust and
satisfaction as they avail the services they offer like arriving at their
destination safe and sound.

Ethical Decision Factors to Consider

The ethical factors that are needed to be considered by the
management of PAL in respect to the ethical perspectives are as
follows:
The management of PAL company should have thought first of their
responsibilities and obligations for their employees to avoid such
unethical act. They must give importance and value to their
subordinates in such a way that they will not be deprived of their rights
and benefits as a member of the institution. They shouldnt have
forced their workers to be transferred in a sister company and receives
a low salary and benefits compared to the offer of the previous
company.

Recommended Corrective Action

In order to assert PALs issue with their workers, PAL should give what it is
that is fair for both parties. The workers gave their full effort for their
respective jobs, and they have done everything they could just to get what
they wanted. Because of their effort, they deserve to have the same salary
they have from the previous company or a raise.
PAL should also be careful of their move of hiring limited-experienced
pilots; this would harm their company, because the customers will be alarmed
and be frightened of their safety with the airlines. With this problem, the
companys profit will surely be going down. To solve this problem, PAL would
need to have its own training program for limited-experienced pilots to
improve/develop them into better pilots.
Philippine Airlines must develop their communication with their workers.
They should establish a connection with each other. If they can communicate
with their workers, PAL will be able to know what their workers need and want.
They can also solve issues regarding with their workers much easier.

Unethical Practices in Philippine

Airlines
CASE ANALYSIS