Air Canada union agrees to hybrid pensions for new hires

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The union representing Air Canada flight attendants has agreed to a pension system for new hires that will place them on a hybrid plan of defined benefit and less-costly defined contribution.

The Canadian Union of Public Employees, which represents 6,800 flight attendants, agreed to pensions for new hires that will be modelled after the Canadian Auto Workers union's recent case handled by arbitrator Kevin Burkett.

In June, agents represented by the CAW ratified a four-year collective agreement, but the contentious pension issue was referred to the arbitrator. Defined benefit pensions provide a guaranteed payout level on retirement, but defined contribution plans don't.

A copy of CUPE's tentative agreement, obtained by The Globe and Mail, notes: "In the event that there is disagreement as to the application" or interpretation of the CAW's hybrid pension model, "the issue will be referred to arbitrator Burkett."

CUPE leaders also opted for a four-year pact in their tentative agreement, which calls for wage hikes of 2 per cent in each of the first three years and 3 per cent in the final year – the same pattern as the CAW's pact.

CUPE members are being encouraged by union leaders to ratify the tentative pact because it removes concerns about job security by "shelving" support for a proposed low-cost carrier and improves working conditions. The new tentative agreement crosses out previous passages referring to the union's support in principle for a discount leisure airline, which would have introduced a lower wage scale for the proposed low-cost division of Air Canada.

Effective Oct. 1, 2012, wages will be boosted for certain shifts that incorporate stopovers in a new payment method dubbed "duty day minus four hours," according to a new amendment to the collective agreement.

Certain shifts last 13 hours, which currently pay out 6.5 hours of wages, but that will rise to nine hours of pay.

Jeff Taylor, president of CUPE's Air Canada component, has said that employees are disenchanted by an existing payment system that they argue fails to fully compensate them.

There will also be per diem increases to cover items such as meal expenses.

CUPE officials held a road show Thursday in Toronto to outline details of the tentative deal signed on Tuesday, just hours before flight attendants were slated to go on strike. Ottawa threatened to introduce back-to-legislation if there was a walkout.

Last month, nearly 88 per cent of flight attendants who cast ballots rejected a five-year tentative agreement recommended by their own union negotiators.