TORONTO, Sept. 18, 2011 /CNW/ - The CAW has won the right to
maintain the defined benefit pension plan for new hires at Air Canada,
an arbitration ruling released Friday says.
In the 62 page ruling, federal arbitrator Kevin Burkett rejected Air
Canada's demand to put new hires into a defined contribution pension
plan with an inferior, more precarious benefit. Instead Burkett sided with the CAW's proposal
to maintain the defined benefit pension plan for new hires, along with
a defined contribution portion to their pension. The result will be a
"hybrid" pension for future new hires at the airline, consisting of
both defined benefit and defined contribution components. Current CAW
members at Air Canada remain in the existing defined benefit plan.
"This is an extremely important ruling and demonstrates that no
employer, regardless of how large or small, should believe they have
the unmitigated right to destroy a worker's retirement security," said
CAW President Ken Lewenza, after the ruling.
In the case, the union argued that the defined benefit pension plan was
an efficient, effective and economically productive way of providing a
pension benefit and that a complete shift to a defined contribution
system would have a detrimental impact on future workers, and on the
health of the existing defined benefit plan.
The new hybrid DB/ DC plan will see new hires receive part of their
benefit from the existing DB pension plan (under a reduced formula) and
part from a DC plan, contributed to by both workers and the employer.
The issue of pensions for new hires was sent to a mediation and
arbitration process after the union and Air Canada were unable to come
to an agreement on the matter in June. But Air Canada refused to
engage meaningfully in the mediation phase of that process, and tabled
a final offer for a 100 per cent defined contribution plan that was
inferior to what it had offered during bargaining. The CAW, following
the failure of mediation, proposed the hybrid DB/ DC model which the
arbitrator eventually accepted.
"Despite unprecedented government interference in our collective
bargaining, the union was able to build a clear case for the need to
continue the DB pension plan, for all members, regardless of their age
or start date," said Lewenza. "We ultimately won on the merit of our
argument for fairness."
"Air Canada's proposal would have been a major step back for the
membership. Instead, because of the union's efforts, the defined
benefit plan will be maintained for current and future members," said
Jamie Ross, CAW Local 2002 president.
CAW members went on strike for three days at Air Canada in mid June
after negotiations broke down over demands for cuts to existing
pensions, the elimination of defined benefit pensions for new hires,
and other economic issues. Just hours after the strike began, the
federal government prepared legislation to force CAW members back to
work. Before the legislation was debated, the CAW and Air Canada
reached an agreement on June 16. The government passed similar
legislation forcibly ending the lockout at Canada Post shortly
CAW Local 2002 represents 3,800 members at Air Canada, who work in
customer service and sales in major airports and call centres.
To read the full ruling, please visit: http://www.caw.ca/en/10610.htm
SOURCE Canadian Auto Workers Union (CAW)
For further information:
For more information, please contact CAW Communications Director Shannon Devine (cell) 416-302-1699 or Assistant to CAW National President Bob Chernecki (cell) 416-543-7084