ANALYSIS | Air Canada's 'frustrated' bargaining process

The repeated contract rejection by Air Canada flight attendants is unusual, but veteran labour leader Buzz Hargrove and other labour experts say the political climate in Ottawa is also playing a large role in the Air Canada situation.

The airline and its flight attendants: the issues in the stalemate

Air Canada flight attendants at a rally at Montreal airport in September 2011.

Having a union membership reject a deal recommended by its leadership not just once but twice is "very unusual," says former union leader Buzz Hargrove.

But as he and other labour analysts tell, the very real prospect of the federal government forcing Air Canada's flight attendants back to work, as it threatened to do with the airline's support staff in June, has hung over these negotiations from the outset and changed the bargaining dynamic.

Hargrove, the longtime head of the Canadian Auto Workers who stepped down in 2008, said Tuesday he couldn’t recall another instance in Canadian labour annals to rival the current situation involving Air Canada and its flight attendants. 

The flight attendants have now rejected two tentative agreements negotiated by their union bargaining committee since their contract expired on March 31, 2011.

The issues 

Low-cost airline: Probably the biggest sticking point in the negotiations is Air Canada's plan to set up a low-cost carrier to service "leisure routes" to sun destinations like Mexico and the Caribbean in order to compete with the likes of Air Transat and West Jet.

Flight attendants fear such a move would poach routes away from the main carrier, threaten their job security and drive wages down.

According to the Canadian Union of Public Employees, the top wage at the low-cost airline would be only three-quarters of what veteran Air Canada flight attendants make (which is somewhere between $46,400 and $51,500 according to figures quoted by union and management representatives).

Air Canada reportedly plans to hire 1,400 flight attendants and 460 pilots for the discount carrier. In the second tentative agreement, the union withdrew clauses in which it had given its support in principle for the discount airline.

Wages: The second agreement includes wage hikes of 9.3 per cent over four years. The first agreement had proposed an increase of 12.6 per cent over five years. The starting salary for a flight attendant is $18,000 a year, which union members complain puts them below the poverty line.

Pensions: CUPE agreed to a blended pension model for new hires that will combine a defined benefit plan, which guarantees a set payout at retirement, and a defined contribution plan, in which the payout is variable and which is less costly for the employer.

Duty days: Management agreed to compensate flight attendants for a greater portion of overnight shifts on domestic flights that include airport layovers.

It agreed to the union's proposed "duty days minus four hours" model of compensation, meaning attendants would receive nine hours of wages for a 13-hour duty period as opposed to the current 6.5 hours of wages for such a shift. The changes wouldn't take effect until October 2012, which some union members feel is too long of an implementation period.

Banked time: Management reportedly withdrew an offer included in the first agreement to allow flight attendants to bank time for vacation days.

Per diems: Air Canada withdrew its offer to reduce the minimum length of a stopover required in order to have hotel room costs covered. It currently pays hotel costs only for stopovers of five hours or more, but in the first agreement it offered to reduce this to four hours.

Premiums: Management scrapped new rules that had been proposed in the first agreement that would have obliged it to pay premiums to junior flight attendants for some on-call shifts.

"It really raises a question of the confidence the members have in the leadership of the union," said Hargrove. 

But he also observed that the political climate in Ottawa is playing a large role in the situation.

Labour Minister Lisa Raitt has said the federal government will intervene if the flight attendants go on strike and may change the federal Labour Code if needed. Late Tuesday afternoon, she said the federal government is referring the situation to the Canada Industrial Relations Board

"I think one of the big differences here, and the big problems, is the government looking over everyone's shoulder," said Hargrove, who worked in the airline industry for nearly 25 years.

"Everyone knows the government is going to legislate something, so everybody feels pretty comfortable to ignore everything. It's just bastardizing, for lack of a better word, the whole collective bargaining process."

'Real frustration' at Air Canada

While times have been unsettled at Air Canada for years, Hargrove says that really doesn’t explain the current situation.

"I think there is a degree of real frustration there, and rightfully so, but that doesn’t explain how the [union] leadership not once but twice gets into this kind of a situation where they so misread the members, on the second go-around, especially."

Hargrove said it's up to union leaders what happens next, and that they're in a "very difficult situation."

"No matter what they do, it's apparent they don't have the confidence of the membership. That is the worst case for a union committee or a union leader to be in."

Maurice Mazerolle, associate professor at the Ted Rogers School of Management at Ryerson University, and head of the school's Centre for Labour Management Relations, agrees that, under normal circumstances, the failure to ratify agreements that the union bargaining committee had unanimously endorsed would be seen as a sign the union leadership didn't really understand the concerns of its membership or did not effectively communicate with its members.

In some industries, standard practice would be for the committee to resign right away and be replaced by representatives who do have the confidence of the membership.

What's different about the Air Canada situation, however, is that from the beginning of the negotiating process, both sides knew that the most likely outcome, if it came to a strike, would be that the flight attendants would be legislated back to work quickly and a settlement would be imposed by an arbitrator.

That's not only because Raitt said as much but because she's done it before. The government used the threat of back-to-work legislation to thwart a strike by Air Canada sales and support staff in June; then, that same month, it legislated locked-out Canada Post workers back to work.

Opportunity lost

Given that fact, the flight attendants' votes against the two proposed contracts can be read as an indication that the membership felt the union squandered the only opportunity to get the best deal possible, said Mazerolle.

"Part of it is the message to the leadership: 'Why not take a tough stand all the way to the end? Why should you compromise with the employer when you could have hung tough on our issues, knowing you're not going to get an agreement, and then we'll have a better case at arbitration'," he said.

Management's will to negotiate in good faith at the bargaining table has also been compromised by the threat of back-to-work legislation, Mazerolle says.

"Why would they give their best last offer to the union? They have to reserve something for the arbitrator," he said.

Knowing that any walkout is likely to be cut short by legislation also greatly diminishes the effectiveness of a strike as a bargaining tool, since both sides know the cost of a strike under such circumstances — compared to the usual threat of an open-ended shutdown — will be minor.

"There's not as much incentive to engage in truth-telling when there's nothing at risk," said Mazerolle.