Advances for Air Canada workers or an opportunity lost?

By Andrew Stevens

Air Canada pilots picket outside the Fairmont Palliser during the Air Canada AGM in Calgary, Alberta on June 4, 2012. Source: National Post. Leah Hennel/Postmedia News.

In the waning months of 2014, Air Canada’s pilots signed an historic 10 year agreement. The settlement included wage increases of more than 20 percent over the life of the contract along with and a profit-sharing formula, among other benefits. Both Air Canada and the Air Canada Pilots Association (ACPA) saw this contract both as an “investment in the company’s future” and a means of securing “labour peace”. It then came time for the airline’s customer service agents represented by Unifor Local 2002 to begin negotiations in the winter of 2015. Negotiations finally wrapped up earlier this month.

After a week of voting, Local 2002 members ratified a new five-year collective agreement with Air Canada by 65 per cent. In a press release, Unifor president Jerry Dias remarked, “This agreement secures good jobs for Customer Sales and Service Agents now and into the future.” Flight attendants represented by CUPE’s Air Canada component, and the ground crew and baggage handlers represented by the IAMAW, will also soon settle into bargaining. The tranquility of negotiations to date is a far cry from the events of 2011 – 2012. At that time, the company was enmeshed in failed contract talks with its five major unions. It was only through federal back-to-work legislation that the airline avoided the threat of prolonged work stoppages, and even then pilots and ground crew engaged in a series wildcat job actions throughout the winter of 2012.

Now, with record profits, growing share value, and an end to the airline’s “pension crisis”, labour peace in being secured between Air Canada and its major employee groups. But is this a sign of advancement for workers or the legacy of concessions dating back to the company’s bankruptcy a decade earlier? Most importantly, was Air Canada’s renewed prosperity and the government’s attention to the upcoming election an opportunity lost for Unifor and its members in the airline industry?

Meaningful gains

Going into negotiations, Local 2002’s president, Cheryl Robinson, made it clear that Air Canada’s workers deserve better. With fewer members and a faster pace of work since the airline emerged from bankruptcy protection in 2004, Robinson noted, “Our members are doing a great job under often challenging circumstances. They deserve a reasonable share of the gains the company has made in recent years.” And it seems as though the union’s negotiating team made good on a promise to prioritize better wages for new agents, some of whom started off making little more than minimum wage.

Air Canada CEO Calin Rovinescu. Source: CBC News.

In the new agreement, base rates for junior employees will jump from $11.23 to $14 an hour, a significant bump for agents at the lower end of the grid, but still below a living wage in many bases across Canada. Those workers employed in the upper tier will receive a $9,000 lump sump in years one through three of the agreement, with no percentage increase until year four. By the end of the contract these senior employees will be making just $1.09 more an hour, according to sources. Other advances have been secured in the number of available bereavement leave days, supplemental health plan, time banks, and overtime pay.

There is also language in the agreement to help protect against contracting out, which is no small victory in an industry where cost cutting and subcontracting is an everyday reality. Just ask the IAMAW. In fact, Air Canada has broken the law in the process of sending work offshore. Back in May, Unifor had even landed a rare victory when an arbitrator recognized the union’s right to wheelchair assistance work, preventing local airport authorities from taking over these jobs. Other unions at the company were simultaneously trying to prevent their own members from taking on work currently staffed by Unifor Local 2002 members, demonstrating levels of solidarity unreported in the media. Air Canada was eventually required to stop its attempt to subcontract this valuable service in major airports, namely Toronto’s Pearson International.

But the new contract also includes layoffs. Base closures will be happening in Quebec City, Moncton, Regina, Thunder Bay, Saint John, Saskatoon, and Charlottetown, as per the agreement. About 62 workers in these “C” Bases may exercise their right to transfer to mainline stations or leave the company entirely. Some may have an opportunity to find work at existing bases with Jazz, Air Canada’s subsidiary.

Despite these gains, many workers at the company remain frustrated with the lack of meaningful advances, or an attempt on the part of the union to reclaim what was given up in 2004. Newer employees are particularly disadvantaged. Evidence from the conversation on social media channels suggests that divisions between senior (those hired prior to 2004) and junior (those hired after 2004) employees runs painfully deep. This is the legacy of a two-tier wage structure that the company managed to secure during bankruptcy protection when unions made significant concessions in an effort to keep Air Canada flying.

For those toiling at the bottom tier, it takes a full decade to reach the top rate, which is still well below the earning capacity of pre-2004 employees. As one worker commented in an email exchange, Air Canada’s strategy has consistently been one of “divide and conquer” – not only between bargaining units, but also within employee groups and between newer workers and senior agents. Granting pilots a seemingly sweetheart contract to secure labour peace was part of this strategy, followed by a deal with Unifor before moving on to flight attendants and the IAMAW. Evidently, Air Canada learned a great deal from the events of 2011-2012.

Lessons from 2011-12 unlearned

Source: Andrew Francis Wallace/Toronto Star

Local 2002 had managed to secure a significant strike mandate mid-way through the recent round of bargaining, although the union’s capacity to muster significant collective strength was questioned by customer service agents in conversation. Air Canada was also preparing for the eventuality of a strike by ramping up its use of temps, which existing employees perceived to be replacement workers should a work stoppage occur. The airline’s attention on bracing for a disruption apparently meant neglecting recurrent training for existing employees, leaving some workers without a valid dangerous goods license, as per Transport Canada requirements, according to one customer service worker.

Back in 2011, Local 2002 walked the picket line for a short, three-day strike before then-Minister of Labour, Lisa Raitt, was moving to proclaim punitive back-to-work legislation. Bill C-5 (Continuing Service for Air Passengers Act) had so evidently sided with Air Canada that it required the arbitrator in the final offer selection process to select a package that worked in the airline’s best interest. Both parties went back to the table on their own terms before the law came into force. Flight attendants faced the same threat some months later, but the pilots and ground crew had their right to strike formally suspended before job action could even begin. Wildcat strikes ensued when ground crew, baggage handlers, and eventually pilots protested this suspension of fundamental rights.

In one study on the impact of back-to-work legislation at Air Canada, Local 2002 members made it clear that this type of government intervention benefits Air Canada over that of its workers. Most believed that Bill C-5 also resulted in a worse settlement on pensions, wages and benefits, compared to what could have been achieved if the government had just stayed out of the dispute. Over two thirds believed that the government would again deploy back-to-work legislation in this round of bargaining had they gone on strike. In short, Raitt had succeeded in helping Air Canada break morale in the ranks. But with an upcoming election, some sources suggested that the current Minister of Labour, Kellie Leitch, had no intention of using this tactic. And with the airline now back in a state of profitability, and a CEO who recently received a doubling of his pension, it was increasingly unlikely that even the current government could have callously ended a strike under such conditions. So was the current leadership paralyzed by the potential of another Tory intervention? Are unions that have been legislated back-to-work growing accustomed to conservative demands and lost militancy?

What the demonstrations in 2011 and 2012 revealed was the sensitivity of transportation industry production chains. The unsanctioned actions by ground crew and pilots grounded flights across the country in a few short hours, costing the company millions. These were workers who had struggled against being robbed of their rights and dignity. But instead of looking to union solidarity and a strategy of cooperation during bargaining and in protest, it appears that each party has instead opted to go it alone. As one long-serving customer agent remarked, “Unifor did fail us, we had AC by the balls, a 95% strike vote, and we are worse off than the years prior to bankruptcy.”

What next

With a federal election on the horizon it will be interesting to see how Local 2002 moves ahead. Air Canada’s leadership is widely seen as “in bed” with the Conservatives. The company’s CEO, Calin Rovinescu, even accompanied Harper on a junket to Israel, coming away from these talks with a new destination to outsource work. A federal political strategy for Unifor could at the same time be a strategy to confront the employer. Here, the federal NDP’s proposed $15 an hour minimum wage could potentially impact thousands of workers in the federal sector, including hundreds at Air Canada. This is also a struggle for decent pensions, a labour policy that maintains some semblance of free and fair collective bargaining, as well as the right to strike. In the long term it should mean working to end two-tier contracts and using membership mobilization and demonstrations to garner support for change in the workplace and in politics.

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