TORONTO — A tentative collective agreement ending a strike by Air Canada front counter staff contains wage increases, but it will be up to an arbitrator to settle a dispute over pension plans for new hires.
Canadian Auto Workers union president Ken Lewenza said the tentative deal includes higher wages and addresses quality of life and other issues raised by members.
But he said the agreement does not settle the issue of defined benefit pensions — the major stumbling block in the negotiations.
Lewenza said the union representing the airline workers agreed to send the pension issue to an arbitrator in order to minimize the strain on the 3,800 workers that were on strike.
“For us to prolong the strike as a result of future hirees would absolutely make no sense at this time but it will give us an opportunity in future years to bargain on behalf of those new hires,” Lewenza told a news conference called shortly after the union announced that a deal had been reached.
The tentative agreement means customer service agents and other staff who walked off the job Tuesday will return to work Friday.
The main sticking point in the dispute was over defined contribution pensions versus defined benefit plans for new hires. Air Canada had wanted new hires to be included in a defined contribution plan.
Defined benefit plans are designed to provide retirees with a predictable income, but they expose plan sponsors, in this case Air Canada, to additional costs if the pension fund’s doesn’t have enough money to pay for the benefits.
With defined contribution plans, the company’s contribution is limited to a set, negotiated amount and payouts to retirees depend on the performance of the underlying investments.
“Do I feel good about passing on a risk to new generations of workers that deserve our representation today? The answer is, I’m not happy about that,” Lewenza said. “But at the end of the day bargaining is tough and you have to make tough decisions.”
Travellers have seen minor delays but no major disruptions since the strike began.
Further details of the deal will not be released until the it is ratified in the next four to five days, but Lewenza said it is a four-year collective agreement.
“We are very pleased to have reached a tentative agreement with the CAW,” Duncan Dee, executive vice-president and chief operating officer of Air Canada said in a statement. “The agreement will help ensure the long-term sustainability of Air Canada while maintaining industry-leading compensation and benefits for our employees.”
The tentative settlement came less than an hour after the federal government tabled back-to-work legislation that would have forced the striking Air Canada employees back on the job sometime next week.
Labour Minister Lisa Raitt said she believes the deal would not have happened so quickly if the government had not intervened.
“We’re very pleased with how it unfolded and I know that putting the legislation on the order paper ... was a tool that was needed in order to focus the parties and narrow the issues,” she told reporters.
Raitt said the bill won’t be debated.
NDP Leader Jack Layton and Liberal Leader Bob Rae both argued there was no emergency requiring swift action and the back-to-work legislation should never have been tabled.
“I think we’re seeing record speed here in the case of the government and I think it indicates a bias on the side of the employer,” Layton said of the Air Canada dispute.
Rae had accused Ottawa of interfering with the union’s ability to defend the pensions of members. Both Rae and Layton said back-to-work legislation was putting the unions at a disadvantage in the bargaining process.
Earlier, Raitt said the country’s economy would be damaged by a prolonged strike. She said she was told major disruptions would likely occur by early next week if the workers did not return.
She denied the government was setting a precedent by intervening in the strike so quickly after it began and so soon after winning a majority election.
“When there’s going to be a prolonged work stoppage that is going to effect the Canadian economy, and that’s going to impact on Canadians, the government is going to give their intention on how we’re going to react,” she said.
— With files from Julian Beltrame and Pat Hewitt