July 25, 2008 / 9:28 PM / in 9 years

Ottawa holds Air Canada to layoff rule obligations

CALGARY, Alberta (Reuters) - Air Canada must live up to its labor-code obligations to laid-off workers as it embarks on a plan to cut 2,000 jobs to deal with surging fuel prices, the Canadian government ruled on Friday.

<p>Air Canada passengers wait in line to check baggage at Pearson International Airport in Toronto in this June 17, 2008 file photo. REUTERS/ Mike Cassese</p>

But Air Canada, the country’s biggest airline, said the ruling would not affect its plans to complete its cuts by November 1.

“I have instructed labor program officials to monitor the situation to ensure that any affected employees receive their entitlements under the Canada Labor Code,” Labor Minister Jean-Pierre Blackburn said in a statement.

Air Canada had asked for a waiver from its labor code obligations after it announced the cuts in June. Union officials had argued there was no justification for Air Canada to be exempted.

Under the rules, employers cutting 50 or more jobs in a four-week period must notify the minister, union officials and nonunion employees at least 16 weeks before the termination date.

They must also establish a joint planning committee to make all reasonable efforts to develop an adjustment program for the terminated staff, the ministry said.

Air Canada plans to lay off 7 percent of its workforce by November as it reduces capacity amid record fuel costs and an economic slowdown.

“Our objective was to proceed with mitigation discussions as quickly as possible for the sake of the affected employees so that everyone knows what their options are,” Air Canada spokeswoman Angela Mah said.

“The only question was whether those talks take place within the framework of the collective agreement or the Canada Labor Code.”

Among the affected workers are 632 flight attendants, more than half of whom will lose their jobs due to the shutdown of cabin-crew bases in Halifax, Nova Scotia, and Winnipeg, Manitoba, the carrier has said.

Flight attendants, represented by the Canadian Union of Public Employees, plan rallies across the country on Monday to protest the base closures.

Reporting by Jeffrey Jones; Editing by Peter Galloway

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