“(T)he dispute could cause serious disruption in both the incoming and outgoing flights of international airlines and result in serious revenue losses to the government and derail the growth of our tourism industry.”
by Ducky Paredes
The worst way to solve a small problem is by creating a bigger one. Yet, this was basically what then Acting Customs Commissioner Rolando Geotina did when he issued Customs Administrative Order (CAO) 9-74 which was approved by former Finance Secretary Cesar Virata on July 30, 1974.
Thus began the practice that overtime services rendered by customs personnel are paid by their clients – the airlines and ships – that bring goods and tourist to the Philippines. Overtime pay was computed in US Dollars, which then was pegged at P25 to $1.00.
The rates were adjusted in 1982, 1985 and 1992 through a series of CAOs that derive legitimacy from the Tariff and Customs Code of the Philippines, particularly Section 3506 and Section 608 in relation to overtime work of Customs employees.
Each time, these adjustments were accepted without protest by the airlines.
The last increase in the rates accepted by the airlines was covered by CAO 7-92 which took effect on April 24, 1992 or more than 17 years ago.
The last adjustment under CAO 1-2005 dated Feb. 9, 2005 used the 2005 peso-dollar exchange rate of P55 to $1. This was no longer acceptable to he airlines.
The airlines contested the new rates before the Office of the Secretary of Finance and the Office of the President. The case dragged on until last year with the Office the President handing down on March 14, 2008 a Resolution that upheld the validity of CA0 1-2005 and of its earlier decision dated March 12, 2007.
The Board of Airline Representative (BAR ) filed a Petition for Review with the Court of Appeals. The airlines contended that Section 3506 and CAO 7-92 as amended by CAO 1-95 constitute undue delegation of legislative power and that this was unconstitutional and hence, should not be enforced against the airlines. It also argued that since the Customs personnel are government employees, it is the government that should answer for their overtime pay and meal and transportation allowances.
In a decision promulgated July 9, 2009, the Court sustained the position of the airlines. It set aside the 2007 and 2008 actions of the Office of the President. It also declared that Section 3506 of the Tariff and Customs Code, CAO 7-92 and CAO 1-2005 as unenforceable against the airline companies,
This has created a big, big problem.
If left unresolved, the dispute could cause serious disruption in both the incoming and outgoing flights of international airlines and result in serious revenue losses to the government and derail the growth of our tourism industry.
Representing affected Customs personnel, lawyer and BOC District Collector Carlos So of Collection District III at the Ninoy Aquino International Airport filed a Motion for Reconsideration with the help of the Office of Solicitor General. Acting swiftly however, the members of BAR formally advised the Bureau of Customs that they were stopping immediately the payment of all overtime pay and meal and transportation allowances of Customs personnel.
In letters to BAR chairman Felix J. Cruz and to PAL corporate secretary and senior vice president Eduardo Ceniza, the NAIA Customs Collector protested the decision to stop such payments as premature since the Court decision was not yet final and executory. He pointed out that the decision is on appeal and the case may even reach the Supreme Court.
So reminded the two that since the practice started in 1974, the airlines “religiously paid the overtime services and never questioned the validity of said Rules.” Airline in 1974 were still running on black ink; these days, they see losses everywhere. How many airlines have gone bankrupt?
Customs personnel argue that, under Civil Service rules, government employees cannot be compelled to work beyond 8 am to 12 noon and 1 pm to 5 pm Monday to Friday.
So also posed the question of what would happen “when Customs officials and employees rendering overtime services to member airlines of the BAR do not want to continue performing such services” in the event said payments are stopped.
In this regard, it appears that in the Memorandum filed by the Office of the Solicitor General before the Court of Appeals for and in behalf of the affected Customs personnel, there was a laughable suggestion that the airlines “schedule their flights within the BOC’s working hours.”
This is silly. No airline anywhere in the world will adjust their flight schedules to land and take-off at NAIA only from 8 am to 12 noons and 1 pm to 5 pm.
Later however, the BAR committed to pay the overtime services of BOC personnel at 50 percent of the old rates prescribed in CAO 7-92. There was no mention however, of the BAR position that the payments should be pegged at the 1992 exchange rate of P25 to the dollar since, according to the BAR, “services of the BOC are rendered without spending any foreign currency.”
But, this is at the NAIA. In Davao, Customs personnel, in anticipation of a new airline flying into the country from Malaysia actually offered to render service without any overtime pay.
The way I see it, the Geotina solution was, to begin with, the wrong one. He should have hired a night shift whose hours would not be the regular 8 to 12 and 1 to 5 of the clerical staff. If our soldiers, policemen and firemen can work at odd hours outside of the regular clerical working periods, why can’t their hours also apply to our airport and other port personnel?
In any case, this standoff between the BOC and the airlines definitely bodes ill for air travelers. Imagine the chaos that and the incalculable loss that the airline and tourism industries and our country would suffer should Customs, Immigration and Quarantine stop rendering overtime services – even for just a day.
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hvp 10.28.09
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