Pension plan to be sent to arbitrator if agreement can’t be reached in mediation
Air Canada's nearly 4,000 customer service and sales staff have ratified a new contract, voting 87.7 per cent in favour of the collective agreement reached shortly after the federal government threatened to legislate striking workers back to work.
“The Harper Conservatives’ intervention into these talks was heavy handed and only made bargaining even more difficult,” says Canadian Auto Workers (CAW) President Ken Lewenza. “This was an unprecedented intrusion into free collective bargaining.”
The new agreement gives workers wage increases of nine per cent over four years:
· March 1, 2011 – 2 per cent – $25.07 hourly rate
· March 1, 2012 – 2 per cent – $25.57 hourly rate
· March 1, 2013 – 2 per cent – $26.08 hourly rate
· March 1, 2014 – 3 per cent – $26.87 hourly rate
The CAW also says that 560 new permanent jobs will be created because of the elimination of 65 temporary summer positions, the re-instatement of a paid half-hour lunch break creating 135 jobs, the improvement of the voluntary separation packages creating 250 new jobs, and the improvement of the vacation purchase program creating 100 new jobs.
Throughout negotiations, the biggest obstacle to the deal continued to be the pension. Currently, Air Canada contributes 12.7 per cent of the employee’s earnings to the pension plan with members contributing 5.1 per cent.
In the new plan, Air Canada is proposing a defined-contribution plan for new hires where the employee would contribute 3.0 per cent, matched by the employer. After 15 years the employee could contribute up to 6.0 per cent of earnings with matching employer contributions.
For current members, current pension plan conditions would remain in effect until January 1, 2013. This would give members a year and a half to decide if they want to take their pension under the current pension plan terms or work past 2012 and leave under the new pension plan terms. The new plan would see the pension formula change to 1.3 per cent of earnings for all years of service, as opposed to the current formula of 1.9 per cent or 1.75 per cent of earnings to the YMPE for service before and after December 31, 1995. The formula would use final average earnings over 60 months compared to the current model of 36 months. It would also increase the unreduced early retirement age to age 60 from 55.
Under the tentative agreement, the decision on the pension plan will be sent to mediation and then to arbitration if it is not resolved. The arbitration agreement for the new hires’ pension plan sets August 19, 2011 as the deadline for a decision that will affect new members hired after yesterday’s ratification.
The new collective agreement will be in force to February 28, 2015.