Canadian Labour Reporter

7 Canadian HR Reporter, a Thomson Reuters business 2014 CANADIAN LABOUR REPORTER news Photo: Mike Cassese (Reuters) Under the new contract, Air Canada pilots will get a $10,000 signing bonus, annual pay increases of two per cent over the life of the agreement and an additional two per cent cash bonus in the years 2016 and 2017. Terms of agreement extremely unusual: Arbitrator < from pg. 1 ment, with 84 per cent of those votes in support of the deal. The agreement provides improvements to compensation, pensions and work rules. Additionally, it pro- vides the company with a mecha- nism to gain labour stability until September 2024. Considering the bitterness that defined past negotiations, both parties see the deal as a positive step forward. "The new agreement provides greater stability and long term cost certainty as well as a framework for a strong partnership with our pilots. It is also the most tangible indication of the shift in culture underway at Air Canada," said Air Canada's president and CEO Calin Rovinescu in a statement. "This 10-year agreement with the Air Canada Pilots Association is a ground-breaking development which allows us to accelerate the implementation of our business strategy on a win-win basis with our pilots." According to the ACPA, pilots will receive a $10,000 signing bonus under the new agreement. Pilots will receive an annual pay increase of two per cent over the life of the agreement with an additional two per cent cash bonus in the years 2016 and 2017. The pilots' defined benefit (DB) pension was improved and Air Canada agreed not only to implement a protection plan for the union's narrow-body fleet, but also to expand its wide-body planes. The company has agreed to a floor for flying time, guarantee- ing pilots will spend a minimum number of hours in the air each year. The new deal also allows for a significant profit-sharing scheme, based on the same metric used by the company's senior manage- ment. Michael Lynk, an arbitrator and mediator and professor at Western University's Faculty of Law in Lon- don, Ont., called the deal a "mile- stone in modern Canadian indus- trial relations." "A 10-year agreement is, maybe not unprecedented, but certainly extremely unusual," Lynk said. "For them to have a 10-year agreement — particularly after their last round of bargaining went so poorly with all of their major unions — I think this was probably an achievement for Air Canada." During the last round of talks, dozens of Air Canada flights were disrupted or cancelled after pi- lots staged a sick-in and baggage handlers and ground staff held a 12-hour illegal walkout. A back-to- work bill was tabled by government and a final-offer selection resulted in an arbitrator siding with the air- line. Lynk said the volatility of the airline industry was likely a driving factor for Air Canada during the negotiations. Labour is one of the few costs the company can con- trol, and this deal will provide some structure and long-term predict- ability. The union, however, sees the agreement in a slightly more opti- mistic light. "What we've done is facilitated a contract that gives the company flexibility to grow," Blandford said. "We've basically invested in the airline so that they can do that. We have invested, and we've done it in spades." The key to the agreement, ac- cording to Blandford, are a num- ber of growth targets agreed upon by both parties. If those targets are met— in 2017, 2020 and 2023 — there will be no strikes and no lock- outs. Should the company fail to meet its expected outcomes, how- ever, the contract is null and void and the union regains its full rights under the Canada Labour Code, in- cluding the right to strike. Blandford said the ACPA con- siders the agreed-upon bench- marks to be more than achievable, with many believing Air Canada will far surpass expectations. This confidence in the company is an integral part of the agreement, he said. "We've invested in the compa- ny's future by agreeing to a 10-year plan that gives them some assur- ances and some guarantees. They know where they're going and they don't have to worry about negotiat- ing an agreement with probably the most important employee group," Blandford said. "When you've got the pilots on board, the leaders of the airline, then it's a safe bet that any business plan can succeed." While the deal was a distinct improvement in labour relations between the two parties, Lynk said he remains skeptical whether it will hold weight with other workers. "The pilots tend to be the most powerful of the Air Canada unions but also the most conciliatory with the employer," Lynk said. "The real test would be to see whether or not those terms have any legs, if Air Canada would try to sell those terms to any other unions." It is likely the company will ap- proach the mechanics and baggage handlers unit, the flight attendants unit and the ticket agent unit with similar proposals as additional long-term agreements will build even greater cost certainty for Air Canada. Lynk, however, said he would be shocked to see other em- ployees — at Air Canada or else- where — strike comparable deals in the future. "What the length of this agree- ment and the terms of this agree- ment tell us is that unions have not, in recent years, been able to regain their militancy or self-confidence in wanting to take on employers," he said. "I don't see any great sign that unions are on the offensive, either in terms of the wage gains or ben- efit gains that they're making at the bargaining table. Mostly, it's been defensive victories that they're win- ning. It's indicative of the direction some unions are headed in."

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