Air Canada customer service workers can keep pension plan: arbitrator: Arbitrator sides with union over issue that led to three-day strike

The union representing Air Canada's customer service workers can keep its defined benefit pension plan, an arbitrator has ruled. The controversial issue played a key role in the union's three-day strike earlier this year.

"This is an extremely important ruling and demonstrates that no employer, regardless of how large or small, should believe they have the unmitigated right to destroy a worker's retirement security," said Canadian Auto Workers (CAW) union president Ken Lewenza in a release. "We ultimately won on the merit of our argument for fairness."

Federal arbitrator Kevin Burkett rejected Air Canada's demand to put new hires into a defined-contribution pension plan. Instead, he sided with the CAW's proposal to maintain the defined-benefit pension plan for new hires, along with a defined-contribution portion to their pension. The result will be a "hybrid" pension for future new hires at the airline, consisting of both defined-benefit and defined-contribution components. Current CAW members at Air Canada remain in the existing defined-benefit plan.

The airline's 3,800 customer service workers took to the picket lines in June 2011. The union and the airline reached an agreement before back-to-work legislation, prepared by the federal government, could be debated in Parliament. The two parties agreed to send the issue of pensions for new hires to a mediation and arbitration process after they could come to an agreement on the matter.

Air Canada is currently negotiating with its 6,500 flight attendants for a new contract. The earliest the Canadian Union of Public Employees members could walk off the job is Sept. 21, 2011. Labour Minister Lisa Raitt plans to meet with both parties in order to avert a strike.

Canadian Labour Reporter, Mon Sept 19 2011

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