BUSINESS

Air Canada Strike: Union Serves Notice, Action Could Start Tuesday

06/10/2011 11:25 EDT | Updated 08/10/2011 05:12 EDT
CP

THE CANADIAN PRESS -- The heat was turned up in contract talks between Air Canada and its customer service and sales staff as the union representing the workers gave 72-hour strike notice Friday, but the airline tried to minimize the potential impact of job action.

”Air Canada left us no other choice, we obviously still have major concessions facing us at the table,” said Bob Chernecki, lead negotiator for the Canadian Auto Workers, the union representing the 3,800 workers.

The notice clears the way for the workers to walk out at 12:01 a.m. Tuesday, but the union hopes to not have to resort to job action, Chernecki said in an interview late Friday.

“It’s avoidable and how it’s avoidable is the corporation recognizing that this is not the time to attack workers’ pension plans and it’s time to reward the workers for a lot of hard work,” he said.

Talks were to continue this weekend, Chernecki said. He wouldn't say whether the union was considering a widescale strike or rotating walkouts.

A proposal to change the employees' pensions has been a key sticking point in the talks.

Under the airline's proposal, new hires would receive defined-contribution pension plans instead of the defined-benefit plans employees currently earn.

Defined-benefit plans are designed to provide retirees with a predictable income, but they expose the airline to additional costs if the pension fund's assets aren't able to pay for the benefits.

With defined-contribution plans, the airline's contribution is limited to a set, negotiated amount and payouts to retirees depend on the performance of the underlying investments.

The union also contends the airline wants to make massive changes to the plan for existing members that it says would gut their pensions.

The strike notice was not unexpected as the union threatened Thursday it would resort to job action if there wasn't movement at the bargaining table.

The prospect of a strike has prompted some passengers to express concern about their travel plans.

But Air Canada said in a news release if there is job action, it has a contingency plan to continue operating a full schedule and minimize the impact on customers.

"Air Canada is firmly committed to negotiating a new contract with the CAW and avoiding strike action," Duncan Dee, the airline's chief operating officer, said in the release.

"However, should this not be possible, Air Canada has contingency plans in place to operate a full schedule and all bookings will be honoured."

The airline statement also urged customers to familiarize themselves prior to travel with the self-service check-in and booking tools available at the airline's website.

Air Canada faces other labour problems.

Last Monday, the Canadian Union of Public Employees — which represents 6,800 Air Canada flight attendants — asked for a federal conciliator to assist in its contract talks with the airline.

Air Canada was forced into creditor protection from April 2003 to September 2004, due in part to the cost of dealing with the company's pension deficit.

The company's unions agreed to accept numerous concessions worth billions to help the company to survive, but they insisted their defined-benefit pension plans be saved.