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Round 3 in Air Canada’s Labour Woes Goes to Air Canada. A Recap

The first arbitration award under the various Air Canada back to work legislation was issued this week.  It was decided pursuant to Bill C-33, which applied to the maintenance crews and the pilots.  This award, by well respected and leading Arbitrator Michel Picher, dealt with the maintenance crews.

Background Recap

If you are keeping score, this is Round 3  in the ongoing Air Canada saga. In Round 1, the CAW, representing customer service agents agreed with Air Canada to send the one outstanding issue–the status of the pension plan–to Final Offer Selection arbitration, thereby bypassing Bill C-5, the Tories back-to-work legislation. The arbitration panel selected the Union’s proposal. I explained that award here. Unions: 1  Air Canada: 0

In Round Two, the flight attendants’ union bargains two proposed collective agreements under the threat of back-to-work legislation if they elected to strike, both of which are rejected by the membership in ratification votes.  Fearing a strike before she can pass the legislation, the Minister files a highly unusual and cynical reference under the Canada Labour Code, claiming that an Air Canada work stoppage could pose a imminent threat to the health and safety of Canadians. This tactic would delay a strike long enough for the government to pass no strike legislation.  The union and AC then agree to refer the dispute to the Chair of the CIRB, again under a process of final offer selection.  The Chair selects the Employer’s proposal, principally on the basis that the agreement that was agreed to by the union’s bargaining committee, but rejected by the membership, was strong evidence of where the bargaining process would have ended up had there been a right to strike or lockout.  I summarized that award here. Unions: 1  Air Canada: 1

This is Round 3, involving the maintenance crew.   Recall that there were nasty wildcat strikes involving this group after the Feds, once again, introduced Stay-at-Work legislation, this time Bill 33.  That legislation imposed Final Offer Selection, and includes the controversial attempt by the state to limit the arbitrator’s discretion in crafting an award by imposing mandatory criteria that must guide the selection of  the proposal.  It is controversial because the criteria emphasize the employer’s concerns more so than the employees’ interests in improved wages and benefits.  It required Picher to ‘take into account’ the tentative agreement that was rejected by the membership, and terms and conditions of employment in other airlines, and the economic viability and competitiveness of the employer, and ‘the sustainability of the employer’s pension plan’.

The award issued this week by Arbitrator Michel Picher is the first to be decided under the Tories interventionist model.  Air Canada won.  Unions: 1  Air Canada: 2

The Picher Award

Here is Picher’s decision.

In his view, the employer’s proposal was most consistent with the criteria that restrained his discretion in Bill 33.  Here is what Picher says about that statutory language:

It must also be noted that the instant arbitration is unique, to the extent that it is governed by Bill C-33, a law which places certain clearly defined obligations on the arbitrator.  For the purposes of this Award, section 13 and parts of Section 14 of the Act bear close examination….  As a matter of general practice, Canadian arbitrators called upon to resolve interest arbitration disputes have effectively given little or no weight to ‘ability to pay’ arguments submitted to them by employers.  While I consider that approach to be valid and appropriate generally in interest arbitrations in both the public and private sector, I am compelled to recognize that the legislation that defines this process, and my corresponding jurisdiction is clearly more constraining.  That is particularly so as relates to my obligation to take cognizance of the company’s pension plan burden, a factor of such magnitude that it goes indisputably to the long term sustainability of the Company.

According to Picher, the Employer’s proposal was most consistent with the criteria imposed upon him in the legislation.  The employer was clever, because it offered to sweeten the pot slightly (by returning a benefit that the union had reluctently conceded in earlier bargaining) on condition that the union fully back the employer’s efforts to obtain a long term extension of a penson funding holiday from the federal pension authorities.  Since obtainng that extension was, in Picher’s opinion, key to the long term viability of the pension plan, a criteria he was required to emphasize by virtue of Bill C-33, the employer’s proposal wins.  He noted that, even under the employer’s proposal,  the union still obtains a better deal than the one the bargaining committee had recommended earlier, but which has been rejected by the membership.   So, in this way, the employer’s proposal both addressed the sustainability of the pension plan, and the earlier tentative settlement, although it actually gave the union more than what it had bargained in the tentative (rejected) agreement.  We are not told much about the union’s proposal, other than it would have been more costly to the employer.

So, do you think that the restrictions in Bill C-33 imposed on Picher’s arbitral discretion ended up making a difference to the outcome? Stay tuned for Round 4, involving the Pilots!


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