Ottawa won't grant Air Canada waiver for group layoff of employees

By Ross Marowits, The Canadian Press

MONTREAL - Federal Labour Minister Jean-Pierre Blackburn has rejected Air Canada's (TSX: AC-B.TO) request for a waiver that would have allowed the airline to lay off employees Nov. 1 without first setting up a joint union-company committee to examine ways to ease the impact of the cuts.

"There weren't sufficient grounds to grant a waiver because their (collective agreement) was not more than what we have in our labour code about our entitlements," Blackburn said in an interview Friday.

The minister has offered the airline and the union access to mediators and instructed officials to monitor the situation to ensure that any affected Air Canada employees receive entitlements such as severance and termination pay under the Canada Labour Code.

Under the Canada Labour Code, the airline must create a joint committee with employees to try to minimize the impact of the Montreal-based carrier's planned streamlining of about 2,000 jobs, including more than 600 flight attendants, from its 24,000-employee workforce.

In a letter to Air Canada, Blackburn urged the country's largest airline to include all employees who may experience job loss on the joint planning committee, even if they aren't covered by the group termination provisions of the labour code.

The minister conceded his decision may not delay the planned layoffs.

"As Minister of Labour, I don't intervene in the private sector decisions. What I have to be sure is that everything is covered by the Canada Labour Code is there to protect employees."

Air Canada acknowledged Friday that the minister's decision affects all three unions that represent flight attendants, machinists and service agents who face layoffs as a result of its June 17 decision to trim capacity by seven per cent and lay off up to 2,000 workers.

Airline spokeswoman Isabelle Arthur said the airline's goal has never been to avoid consultation about mitigation efforts with its unions.

"It has always been the company's objective to proceed with mitigation discussions as quickly as possible for the sake of affected employees," she said. "The only question was whether those talks take place within the framework of our collective agreement or the Labour Code."

The Canadian Union of Public Employees, which represents the flight attendants, said it was pleased with the minister's decision, but was unclear about what impact it would ultimately have on the timing and size of layoffs.

"It's one step in a very large fight that we have with the employer," CUPE national representative Daniela Scarpelli said in an interview.

The cuts by Canada's biggest airline reflect sharply rising costs for jet fuel that have affected most of the world's carriers and forced tens of thousands of job cuts and significant capacity reductions throughout the industry.

As part of Air Canada's cuts, the airline plans to close flight attendant bases in Halifax and Winnipeg and eliminate 632 light attendant jobs by Nov. 1. The cuts will leave bases in Vancouver, Toronto, Calgary and Montreal.

The union contends that Air Canada hasn't provided proper notice for the layoff of all employees, since the base closures affecting 332 flight attendants were only announced July 9. The airline says notice of the entire package of layoffs was provided June 17.

CUPE plans rallies at Air Canada bases across the country Monday against the closures to pressure Air Canada to stop the layoffs.

"These drastic measures don't make sense," said Lesley Swann, president of CUPE's Air Canada bargaining unit, which represents 7,200 flight attendants.

"There's no justification for the closures, and cutting attendants is only going to reduce the company's capacity to provide passengers with quality services."

Air Canada's shares lost 14 cents, or 2.71 per cent Friday to close at $5.02 on the Toronto Stock Exchange.