Apparent federal policy to use back-to-work legislation may have made strikes redundant
A fragile economy, the threat of another recession and a federal government ready to quickly invoke back-to-work legislation are all “profoundly changing” collective bargaining at Air Canada, according to some airline industry experts. And it could have a trickledown effect in other transportation industries.
“What we’re seeing is a modified form of collective bargaining,” says Ian Lee, a strategic management expert at Carleton University in Ottawa. “There’s no evidence the federal government will amend the framework legislation (for collective bargaining), but it’s creating a de facto list of industries that can’t go on strike. By taking that right away, it renders those unions with no ‘tool’ in their arsenal.”
And that’s not the worst of it for unions. He says with airlines having little control over most business costs — including fuel and landing fees — Air Canada is targeting the only thing it can: wages.
“What they’re trying to do is deal with labour costs,” he says. “So unions need to ask themselves, what’s most important? Is it job security — or the number of days flight attendants are funded on a layover?”
Against this backdrop, Lee notes the overarching decline in union density, particularly in the private sector. According to Statistics Canada, just over 16 per cent of private sector workers in Canada are unionized compared to fewer than seven per cent in the U.S. where non-unionized discount airlines are “reinventing the business model.”
“At seven per cent, it might as well be at zero,” he says, adding the North American commercial aviation industry has been collectively losing money since 2000, making unions an easy target.
Lee says union leaders need to recognize the industry requires long term structural changes in labour relations.
“This is not cyclical. It’s permanent,” he says, adding that unless the Canadian air space is opened to competition — which would likely lead to the demise of domestic airlines — the unions and Air Canada will continue to be at loggerheads every three or four years.
But they may have only themselves to blame, says Fred Lazar, an airline analyst who teaches economics at the Schulich School of Business at York University in Toronto.
He says union leaders and senior managers at Air Canada “failed miserably” in recent negotiations to get across to rank-and-file members the urgency of the airline’s financial situation.
“They didn’t do a good job of explaining the competition, the laws and that to survive they must go low cost,” says Lazar, adding that also explains why three unions in a row rejected the deals reached by their leaders and senior managers.
“How many more rejections do you have to have before Air Canada says, there’s a problem here?” he says.
Among those problems, says Lee, is that airline executives have seen their pay cheques increase while those on the front line haven’t.
“The flight attendants, for example, have made concession after concession and they’re saying, we want a process to begin to recover some of those losses,” he says. “And they have a legitimate argument. But how do you reconcile that with the longer-term economics of the airline industry?”
Lazar says Air Canada and the unions should be holding town halls to explain why the next time the airline is on the edge of bankruptcy “the consequences could be a lot worse” and what it will take to keep that from happening.
He says the only hope for survival is for unions to accept a two-tier system that protects existing employees and allows a lower-cost structure for new hires.
