Machinists union files labour relations applications against Air Canada

MONTREAL - Air Canada's largest union is seeking the help of the country's labour relations board to protect its members from the airline's cost-cutting efforts and a feared move to outsource some of their jobs.

The International Association of Machinists and Aerospace Workers filed two applications Friday with the Canada Industrial Relations Board to have Air Canada (TSX:AC.B) declared the employer of its low-cost Rouge subsidiary and Sky Regional Airlines, an privately owned partner.

The applications are designed to ensure the union continues to do work for both airlines despite discussions on lowering costs similar to the terms of the 2011 arbitration with pilots and flights attendants.

"The work that we currently do today is work that we want to ensure that we secure up for the future," IAMAW general chairman Fred Hospes said in an interview from Vancouver.

The union contends Sky Regional and Rouge were created to fly Air Canada planes and routes at lower costs, but are controlled and directed by the country's largest airline.

Union members mainly provide mechanical and baggage handling services for Rouge aircraft. But the airline contends the work is based on service level agreements Air Canada has with Rouge, rather than a collective agreement.

In its application, the union said it fears the work could be "lost" if Rouge decides not to continue the agreement and instead contracts it out to third parties.

Hospes said it's a strategy used by other Star Alliance partners like United Airlines and by Air Canada itself at London's Heathrow airport.

"We're saying you can have whatever agreement that you want but you're wholly owned by Air Canada so it's all our work under our current collective agreement."

The union provides service for Sky Regional at some locations on 15 Embraer 175 regional jets transferred from the mainline carrier. Since the transfer, the union said Air Canada has argued the work no longer falls under the scope of its bargaining agreements.

It said Air Canada advised last month that the union will only continue to provide ground handling work for two years. The union doesn't do ground handling work on Q400s at Billy Bishop Toronto City Airport and no longer provides "cabin grooming" at Toronto Pearson or Montreal airports.

“What Air Canada obtains from Sky Regional is neither seat capacity, nor routes, nor aircraft, nor access to a pre-existing infrastructure, but rather the opportunity to have operations carried out outside the scope of its own bargaining certifications by lower-cost, non-union labour,” the application said, noting that these arrangements serve to undermine the integrity of existing bargaining rights.

Hospes said the union is willing to continue discussions with Air Canada about lowering costs, but hasn't been given a target or how the airline wants to achieve savings. Rouge and Sky Regional have lower operating costs due to lower wages, more flexible work rules and lower overhead.

"There's no doubt they want to reduce their labour costs so part of these applications is to create a foundation in order to enter into discussions to try to reach a resolution that protects all of this work that we currently do today into the future."

Air Canada spokesman Peter Fitzpatrick said the airline has worked "co-operatively" with its employees to create Rouge as a low-cost competitor.

"Relationships with smaller carriers for regional flying is a fundamental component of Air Canada's network, and our employees recognize the importance of these carriers for Air Canada's competitiveness and profitability," he wrote in an email.

Until it sees the filings, Air Canada doesn't have enough information to comment on the union applications, he said.

The union wants the labour relations board to bind Rouge and Sky Regional to the collective agreement it has with Air Canada, like it did in 2003 with Air Canada Zip Air and later with maintenance and overhaul company ACTS. The agreement expires in 2016

The IAMAW represents more than 8,800 workers, including line maintenance mechanics, auto mechanics, baggage handlers, cargo agents, aircraft cleaners, cabin groomers, millwrights, electricians and technical writers.

Launched last July, Rouge serves routes to sun destinations and Europe. With more seats, lower wages, more flexible work rules and lower overhead, Rouge flights are cheaper to operate than Air Canada's main network.

Operating under the Air Canada Express banner, Sky Regional operates flights between Montreal and Toronto City Airport as well as flights mainly from Toronto and Montreal to the U.S. Northeast.

Follow @RossMarowits on Twitter.

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