10/12/2011 10:59 EDT | Updated 12/12/2011 05:12 EST

Air Canada flight attendants say they will begin strike just after midnight

MONTREAL - Air Canada passengers are breathing a sigh of relief that a day of uncertainty has ended with the blocking of a planned strike by flight attendants just hours before it was set to begin.

The Canadian Union of Public Employees, which represents 6,800 flight attendants, said it cancelled the strike after Labour Minister Lisa Raitt submitted two referrals to the Canada Industrial Relations Board at 2 p.m.

"One of the minister’s letters concerns Section 87 of the Canada Labour Code, dealing with essential services to be maintained in the event of a strike or lockout. The minister’s intervention with the labour board, as it stands, postpones the calling of a strike until the question of essential services has been ruled on," the union said in a statement on its website.

"During all previous discussions and negotiations between Air Canada and its flight attendants, at no time did the employer make a formal request for the maintenance of 'essential services' in the event of a strike."

CIRB executive director Ginette Brazeau said the minister's action automatically suspends the workers' right to strike.

"The parties cannot resort to their right to strike or lockout until such time as the board disposes of this particular referral," Brazeau said in an interview.

While a legal strike is not permitted, workers could have gone on wildcat strikes, as was done recently by airport security guards employed by Garda World Security. However, union leaders could have faced large fines.

The union accused Raitt of misusing the federal labour board, which is intended to be an independent, quasi-judicial body.

CUPE has negotiated two contracts with Montreal-based Air Canada in the last three months but both have been rejected by the flight attendants.

The workers are angry about the airline's plans for a discount carrier that would require lower wages for new hires and the company's position on pensions and other work issues.

Under Section 87.4 of the Canada Labour Code, the minister asked the board to consider whether the employees need to provide essential services "to prevent an immediate and serious danger to the safety and health of the public."

She also asked the board under the broader Section 107 to consider either imposing a settlement or sending the dispute to binding arbitration.

"Our government received a strong mandate to protect the Canadian economy and Canadian jobs, so we have been closely following the negotiations between Air Canada and CUPE," Raitt said in a statement Wednesday.

"I have asked the CIRB to review the situation at Air Canada to ensure that the health and safety of the public will not be impacted, and to determine how best to maintain and secure industrial peace and promote conditions that are favourable to the settlement of industrial disputes."

Raitt noted that Air Canada (TSX:AC.B) and the union have failed twice to produce a suitable collective agreement, despite the assistance of her ministry's mediation and conciliation services.

"Two rounds of collective bargaining resulted in tentative agreements that were recommended by the bargaining committee. In each case, the union membership rejected the agreement," Raitt said.

Raitt acted in a similar fashion a couple of weeks ago when she referred a dispute by the Fredericton Airport to the CIRB.

In the past, the board has determined that airport firefighters provide essential services.

In this case, it could decide that some or none of the flight attendants are essential after hearing from the two sides.

"We'll look at whether there are certain services that the flight attendants provide that are essential and necessary to prevent serious danger to the safety and health of the public in this context," Brazeau added.

Brazeau couldn't say how long it would take the labour board to deal with Raitt's referral. It could simply seek submissions from the union and the airline, or also call a hearing.

Either way, the board won't resolve the matter before the House of Commons resumes sitting on Monday, when back-to-work legislation could be used by the government to prevent a service disruption at Canada's largest airline.

Air Canada issued a statement saying that, since the labour minister has asked the CIRB to impose a new collective agreement or a binding method of resolving the dispute "we accordingly expect that this process will lead to a definitive resolution for our customers."

The CIRB is chaired by Elizabeth MacPherson, who was appointed in 2008 by former Conservative labour minister Jean-Pierre Blackburn.

She will decide whether the board will sit as a three-member panel, or be undertaken by herself or by a vice-chairman

Moist, who heads Canada's largest labour union, said Raitt's tactics were "indefensible."

"These disgraceful tactics can be seen as nothing else but an outright attack on the rights of every worker in Canada," Moist said.

He said the union will "explore all avenues to challenge this abuse of ministerial discretion."

However, the union's only option is to challenge the minister's referral in Federal Court, said Brazeau.

Earlier, legal experts and observers criticized the government's referral.

"(It's) a cynical ploy to stall the process long enough to pass back-to-work legislation," said David Doorey, associate professor of labour law at York University.

He said the reference is designed to interfere with private collective bargaining. Such a move would cause the "radicalization" of employees, since workers without a strike option would demand more and more.

"The government is removing the incentive for the parties to make the sorts of compromises that a real strike threat encourages. Rarely is this a good thing for labour relations."

Ian Lee of Carleton University believes the government has a broader goal to make all communications and transportation workers in Canada essential employees who are unable to strike.

Canada has four times the OECD average in days lost to strikes.

"They're determined to confront that policy problem and one of the ways they are going to do it I think is through designation of industries in industries that cut across many other industries, which means transportation and communications," he said in an interview.

With a file from David Paddon in Toronto