Air Canada Unions Call for Airline to Stop Attacking Pensions in Joint Statement

May 30, 2011, 10:15 AM EST

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Three of the unions representing Air Canada workers -the CAW, CUPE and the IAMAW have released a joint statement calling on Air Canada to halt the attack on its workers' pension plan in the current round of contract talks.

The statement says that the unions and its members are fully intent on maintaining the current pension model, although the exact details of the plan will be subject to negotiation.

Below is an excerpt of the statement:

"Air Canada is known as one of the highest-quality airlines in the world, precisely because of the skill and commitment of its employees to provide the best, safest service possible.  Yet Air Canada's workforce has endured many years of economic sacrifice and uncertainty.  Through repeated episodes of corporate bankruptcy and near-bankruptcy, Air Canada employees have endured wage cuts and wage freezes, the loss of benefits and paid time off, and ongoing deterioration in working conditions and stress levels.  We have also experienced an erosion in the financial well-being of our pension plan - a plan to which the workers contribute through significant payroll deductions.

Most recently, to assist the company through the difficult economic aftermath of the global financial crisis of 2008-2009, the workers and their unions agreed to the deferral of major pension contributions that would have otherwise been required under federal pension law (reprising a similar deferral which was implemented in 2003-2004). 

Now, as both the economy and Air Canada's financial results continue to recover, Air Canada's workers have been presented with offensive demands for dramatic, permanent reductions in pension benefits for existing employees - and a parallel demand to eliminate defined pension benefits altogether for new employees.  The company points to the plan's present deficit (implying increased company contributions in future years) as evidence that the plan is somehow "unsustainable." Although pension plan deficits are largely a result of interest rates and market returns, AC employees have assisted AC in dealing with these deficits by agreeing to special pension regulations allowing AC to defer deficit payments.   The purpose of the deferrals was obviously not to provide the company with a subsequent excuse to eliminate pension benefits; it was to provide the company with financial breathing room (at critical periods in its history), on the expectation and the explicit promise that the company would subsequently make up for lost time, with extra contributions once financial circumstances improved. 

We believe that the AC defined plan is sustainable as long as AC lives up to its legal and moral obligations to adequately fund the plan (complemented by employee contributions of course). 

The fact that Air Canada's top executives continue to receive extremely generous defined benefit pension credits (on top of the other components of their multi-million-dollar compensation) disproves the claim that defined benefit pensions are no longer feasible or desirable.  If wealthy corporate executives can enjoy the security and certainty of a defined benefit pension, then so too can the workers who deliver the service that makes Air Canada successful.

Air Canada's workers and their unions are fully committed to maintaining the integrity of the current pension model.  While the precise features of the pension are determined through the normal collective bargaining process, the fundamental structure of our pension is not up for negotiation.  With this joint declaration, the leadership of the CUPE, CAW, and IAM bargaining units at Air Canada declare our joint commitment to preserve Air Canada's defined benefit pension plan for current retirees, current employees, and future employees alike.  We will make the maintenance of the plan, including employer contributions that are the necessary consequence of past funding deferrals, a central priority during our coming collective bargaining with Air Canada.  And we commit to the most determined and active solidarity between our members to defend the pension against the company's illegitimate demands for benefit reductions and two-tier structures."

The CAW represents 3,800 members at Air Canada, who work in customer service and sales in major airports and call centres. CUPE represents 6,800 on board flight attendants at Air Canada. The IAMAW represents more than 11,000 mechanics, baggage handlers, cargo agents, scheduling, warehouse staff and financial staff office of the airline.

To read the full statement in English, please visit:

To read the full statement in French, please visit:

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