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Union slams arbitrator’s decision in AC case

Canada Industrial Relations Board arbitrator and chairwoman Elizabeth MacPherson endorsed Air Canada's position that the provisions be imposed without alteration.

The new four-year deal expires March 31, 2015.

"I'm disappointed and frustrated and I think that would reflect where most flight attendants are coming from and big chunk of them would be angry with this entire round of bargaining,'' CUPE national president Paul Moist said in an interview Monday.

Moist said flight attendants deserve better than the decision and better treatment from Air Canada and the federal government.

"I place this decision in the context of the way this entire round of bargaining has gone on, . . . '' he said. "The interference by the federal government created conditions that were less than favourable for flight attendants.''

Air Canada said it was pleased with the decision to implement terms of the deal reached with the "democratically elected'' union leadership in September.

"The implementation of a new collective agreement with our flight attendants ends a period of uncertainty for our customers and will allow Air Canada and its employees to move forward together,'' stated chief operating officer Duncan Dee.

Moist suggested that the government's constant interference in collective bargaining tipped the scales in favour of the company.

But MacPherson said the union won improvements in the second tentative agreement that was unanimously recommended by its bargaining committee.

"An objective comparison of the two tentative agreements reveals that the union bargaining committee did a superb job of extracting additional concessions from Air Canada,'' she wrote in the 12-page ruling issued Monday.

MacPherson said her decision most closely resembled what would have been achieved had the case not been referred to an arbitrator by the federal government and instead been allowed to run its course through collective bargaining — including the right to a strike or lockout.

More than 65 per cent of employees who voted rejected the second agreement, yet only 73 per cent of members voted, suggesting they weren't so unhappy that they felt compelled to vote against it, she added.

A threatened strike was averted at the last minute when federal Labour Minister Lisa Raitt referred the dispute to the quasi-judicial board.

The Canadian Union of Public Employees had wanted the arbitrator to improve upon the second tentative agreement by adding four provisions, including further increasing wages and adding crew rest seats on long Embraer flights and not charging workers for commuter flights to work from cities where the airline has closed operating bases.

In her ruling, MacPherson said the airline argued the second tentative deal was a fair and equitable settlement that was not impeded by the threat of government intervention.

The country's largest carrier said in the second deal it increased meal allowances and agreed to a hybrid pension system for new hires.

It also withdrew demands for provisions related to a low-cost carrier and for variable scheduling that would have provided the flexibility it had hoped to achieve.

After the deal was negotiated, local union president Jeff Taylor said negotiators achieved 80 per cent of what members wanted.

Despite the union outcry against the ruling, labour specialists said it makes sense. "It actually sounds like a fair outcome,'' said George Smith, a fellow at Queen's University and former director of employee relations at Air Canada.

Ian Lee, a professor of strategic management at Carleton University, said MacPherson made a very compelling argument that is unlikely to rouse anger by union members.

"I couldn't see them imposing a more generous settlement on Air Canada and the union because it could have literally pushed (the airline) over the edge,'' he said in an interview.

Lee also described the union's reaction as illogical since it had twice recommended members approve negotiated settlements reached.

"They're trying to re-establish their bond or their relationship with the rank and file which clearly repudiated them twice,'' he said, adding it could be a pre-emptive strike against any potential uprising by members.

The ruling marks the second arbitration decision to resolve disputes between the airline and its workers. Kevin Burkett selected the customer service workers' proposal for a hybrid pension plan over the airline's desire for defined contributions for new hires.
The airline dropped a threatened challenge of that decision.

The rulings are expected to be the benchmark for resolving contracts with pilots, machinists and other unionized employees.

The airline angered its pilots by seeking Ottawa's help in reaching an agreement through the appointment of conciliators — whose role is to help the two sides work through their differences.

The arbitration ruling comes days after Air Canada reported third-quarter results that beat expectations.

Even though its lost $124 million, largely the result of a strong Canadian dollar and high fuel costs, its adjusted pre-tax operating profit (EBITDAR) was $535 million, compared to forecasts of $472 million.

Still, Walter Spracklin of RBC Capital Markets has reduced his growth assumptions because of expected further weakening of the economy  in the first half of 2012.

"Overall, Air Canada reported solid third-quarter results in which controllable costs were effectively managed. However, year-over-year traffic growth rates continue to moderate,'' he wrote in a report.