Air Canada, union to meet with Labour Minister

The Globe and Mail
Allison Martell and Randall Palmer
Reuters

The Canadian government on Monday pushed for a settlement to a labour dispute that could hobble Canada’s largest airline, but declined to say if it would act promptly to legislate any strikers back to work.

Government House Leader Peter Van Loan said the government hoped Air Canada (AC.B-T1.57-0.05-3.09%) would reach a settlement with the Canadian Union of Public Employees, which represents its flight attendants. “That is the best arrangement in these situations,” he said.

Labour Minister Lisa Raitt will meet with representatives of the union and the airline on Monday afternoon in an effort to avert a strike, which could start at one minute past midnight on Wednesday. Major issues include pensions for new hires, wages and working conditions.

The Conservative government moved quickly in June to legislate striking Air Canada call-centre and check-in staff back to work, but Mr. Van Loan declined to say whether that would happen this time.

Ms. Raitt said on Friday that any work stoppage would hit Canada’s fragile recovery from recession.

The pro-union New Democratic Party said on Monday it had not decided whether to delay passage of any new back-to-work legislation, as it did in June with a government bill to force Canada Post workers back on the job.

The NDP is the largest opposition party in the House of Commons. While it does not have the votes to block legislation, it can delay a bill’s passage by several days.

WestJet Airlines Ltd. (WJA-T13.630.020.15%), Air Canada’s main domestic competitor, has said that if there is a strike, it will add extra flights.

Air Canada has said it would operate on a partial schedule if there is a strike, using code-share flights operated by partner airlines.

In a possible clue to how some of the issues behind the flight attendants’ strike could be resolved, an arbitrator ruled this weekend on a final issue left over from June’s strike by Air Canada’s call-centre and check-in staff.

It favoured a compromise on pensions for new hires under which new staff will earn a hybrid pension, with both defined-benefit and defined-contribution portions.

The airline’s flight attendants have already voted down a tentative deal that would have sent the issue of pensions for new hires to arbitration.

Air Canada was pushed to the brink of bankruptcy two years ago, and blamed heavy pension funding demands. Its pension deficit is now $2.1-billion.

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