Air Canada workers dig in heels despite back-to-work threat

Share

The union representing striking Air Canada workers says it won't budge on contentious pension reforms being proposed by management, leaving the two sides at an impasse even as Ottawa threatens to end the walkout.

The Canadian Auto Workers union said it is sticking to its opposition to the company's proposal to place new hires on defined-contribution plans, which don't provide a guaranteed level of payout upon retirement.

Union leaders are vowing to defend defined-benefit pensions, saying those plans are much more attractive to workers than the defined-contribution system.

"Our members fought for a decent pension plan over the years. We want to ensure a decent pension for the next generation of workers," the CAW said in a bulletin to its members Wednesday. "Two standards of pensions - one poor pension for new hires and decent pension for current employees breaks solidarity among union members. When the defined-benefit pension plan is closed off to new hires, the defined-benefit pension is left with retirees and a senior work force. The financial health of the plan is in jeopardy."

But Air Canada argues that it can no longer afford to maintain the existing pension structure. "As a 75-year-old former Crown Corporation, Air Canada has about $13-billion of pension liabilities," the airline said in a recent statement. "As at Jan. 1, 2011, based on preliminary estimates, the company's pension deficit stood at $2.1-billion, which was $600-million better than a year ago as a result of a strong fund performance in 2010. However, this deficit is not sustainable and has not been sustainable for most of the decade, as it puts at risk both the viability of the company and the pensions of all employees."

About 3,200 airport customer-service agents and 600 call-centre staff are in their second day of the strike.

The two sides broke off formal bargaining late Monday night, but Air Canada spokesman Peter Fitzpatrick said Wednesday that management is staying in touch with union negotiators. "We are in communication. There is a dialogue," he said.

CAW spokeswoman Shannon Devine said it would be a stretch to characterize any exchange Wednesday as progress.

"We've initiated discussions, but there doesn't seem to be much desire by Air Canada to actually get to a negotiated settlement. There is some dialogue, but so far, it hasn't been very fruitful," Ms. Devine said.

The Conservative government is threatening to legislate an end to the Air Canada strike if union negotiators and airline management can't reach a deal.

Ottawa is also encouraging both sides to send their dispute over pensions to an arbitrator.

The government is preparing to introduce a back-to-work bill as soon as Thursday. But it could take until middle of next week before such legislation passes into law and spells relief for passengers.

"We are concerned by the effect that this strike will have on our economic recovery, which is still fragile, and on Canadians in general," Labour Minister Lisa Raitt said Tuesday.

Ms. Raitt said her threat to end the strike is not meant to benefit one side in the disagreement.

She cautioned that Air Canada and the union should realize her solution might not be the one each had preferred.

Ottawa could send the dispute to arbitration as part of the back-to-work bill, she noted. That would give her the power to pick the judge who arbitrates it.

At Toronto's Pearson International Airport, customer-service agents said they've made sacrifices over the past decade to help Air Canada, and now it's time to reap some rewards.

"We've agreed to so many concessions in the past," said Judy Norwell, who has worked at Air Canada for 27 years. "It would seem only fair that we be given something in return. It's time."

Wade Sun, who has been with the airline for 24 years, said veteran employees are looking to the union to protect rules governing how much money future retirees will receive from their defined-benefit pension cheques. "It is still the corporation's responsibility to keep pensions properly funded," he said.

Air Canada said it has contingency plans in place to maintain its flight schedule, aided by 1,700 managers and non-union staff at nine major Canadian airports.

The Labour Minister urged Air Canada and the union to reach a settlement by themselves, suggesting they send their dispute over pension changes to arbitration as part of the deal.

"If Air Canada management and the union are at such a point where they know that they have a big-ticket item on the table that they're having a struggle to deal with in a short period of time - and presumably it's the pension issue - they can voluntarily send this to an arbitrator of their own choice," Ms. Raitt said.

She said this would have been preferable to letting talks deteriorate and a strike ensue. "Why would they inflict this kind of economic issue on the Canadian public?"