February 22, 2012 / 10:17 PM / in 6 years

Air Canada mechanics, baggage handlers reject labor

(Reuters) - Air Canada’s 8,600 mechanics, baggage handlers and cargo agents have rejected a tentative contract agreement with the country’s biggest airline, a union spokesman said on Wednesday, marking another setback for the carrier during a year of rocky labor relations.

Some 65.6 percent of the members of the International Association of Machinists and Aerospace Workers (IAMAW) who took part in the ballot voted against the agreement, union spokesman Bill Trbovich said.

At the same time, 78 percent voted in favor of giving union negotiators a mandate to strike, Trbovich said.

However, an airline sector analyst said he did not expect the union, which is Air Canada’s largest, to call a strike.

“I don’t think that’s a very likely outcome ... I expect to see both sides return to the table,” PI Financial analyst Chris Murray said, pointing out that union members had not overwhelmingly rejected the contract.

Trbovich said union negotiators were likely to meet to discuss their next move.

Air Canada said it would issue a statement shortly.

The union announced on February 10 that it had reached a tentative labor deal with Air Canada. The proposed four-year contract provided wage increases, improved benefits and secured a defined benefit pension fund for workers.

The agreement was reached with the aid of a government-appointed conciliator, retired judge Louise Otis. Otis was subsequently appointed by Labour Minister Lisa Raitt to mediate in tough labor talks between Air Canada and its pilots, which are ongoing.

The rejection by the mechanics union is the latest in a string of contracts turned down by union members at Air Canada over the past year.

The airline faced a shortlived strike last year by its ticketing and sales agents and just averted another strike by flight attendants when the government stepped in to halt it.

Reporting By Nicole Mordant in Vancouver and Allison Martell in Toronto; editing by Peter Galloway and Rob Wilson

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