September 19, 2011 / 2:59 PM / in 7 years

UPDATE 3-Air Canada, union to meet with labor minister

* Flight attendants in legal strike position Wednesday

* Government will not comment on back-to-work legislation

* Opposition has not decided whether to delay legislation (Adds language audit)

By Allison Martell and Randall Palmer

Sept 19 (Reuters) - The Canadian government pushed on Monday to head off a strike at Canada’s largest airline, but declined to say if it use would use legislation to bring a quick end to a strike if flight attendants walk off the job.

Government House Leader Peter Van Loan said the government hoped Air Canada ACa.TO ACb.TO would reach a settlement with the Canadian Union of Public Employees, which represents the carrier’s 6,800 flight attendants. “That is the best arrangement in these situations,” he said.

Labour Minister Lisa Raitt will meet with representatives of the union and the airline at 4 p.m. (2000 GMT) in an effort to avert a strike, which could start at one minute past midnight on Wednesday. Major issues include pensions for new hires, wages and working conditions.

The Conservative government moved quickly in June to legislate striking Air Canada call-center and check-in staff back to work, but Van Loan declined to say if that would happen this time.

Raitt said on Friday that any work stoppage would hit Canada’s fragile recovery from recession.

The pro-union New Democratic Party said on Monday it had not decided whether to delay passage of any new back-to-work legislation as it did in June with a government bill to force Canada Post workers back on the job.

The NDP is the largest opposition party in the House of Commons. While it does not have the votes to block legislation, it can delay a bill’s passage by several days.

Air Canada’s stock was down 3.1 percent at C$1.57 on Monday morning on the Toronto Stock Exchange.

Shares of WestJet Airlines Ltd (WJA.TO), Air Canada’s main domestic competitor, were up 0.4 percent at C$13.67. WestJet has said that if there is a strike, it will add extra flights.

Air Canada has said it would operate on a partial schedule if there is a strike, using code-share flights operated by partner airlines. [ID:nS1E78H081]


In a possible clue to how some of the issues behind the flight attendants’ strike could be resolved, an arbitrator ruled this weekend on a final issue left over from June’s strike by Air Canada’s call-center and check-in staff.

The ruling favors a compromise on pensions for new hires under which new staff will earn a hybrid pension, with both defined-benefit and defined-contribution portions.

The airline’s flight attendants have already voted down a tentative deal that would have sent the issue of pensions for new hires to arbitration.

Air Canada was pushed to the brink of bankruptcy two years ago, and blamed heavy pension funding demands. Its pension deficit is now C$2.1 billion ($2.1 billion).


Also on Monday, Canada’s Commissioner of Official Languages issued a report saying that Air Canada needs to improve its bilingual services.

Air Canada is the only airline subject to Canada’s Official Languages Act due to its roots as a state-owned corporation. Under the act, it must be able to serve customers in either English or French.

In response to an audit by the commissioner, the airline pledged to develop a three-year action plan to improve its compliance with the law.

$1=$0.99 Canadian Reporting by Allison Martell, Randall Palmer and Louise Egan; editing by Janet Guttsman and Peter Galloway

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