The Canadian Auto Workers union said on Wednesday it has reached three-year tentative contract agreements with Air Canada and Groupe Aeroplan covering around 5,000 customer service and sales agents.
CAW President Ken Lewenza said the deal includes a small wage increase and it gives employees of Aeroplan a two-year window to return to former sister company Air Canada if they want, or vice versa.
"We put together a two-year transition, that if people wanted to come back from Aeroplan to Air Canada, they can do that with their full seniority, so that was key in this bargaining," he said.
Air Canada, the country's biggest airline, and Aeroplan, best known as Air Canada's frequent flier program, were both under the umbrella of ACE Aviation at one time.
ACE said in December it would end the holding company structure it set up in 2004 as part of Air Canada's bankruptcy protection proceedings and distribute its Air Canada stock and other assets to shareholders. ACE spun off its remaining shares of Aeroplan last May.
"Since the beginning of the spinoff of the company, the agents at our two contact centers have been Air Canada employees who have been contracted by Aeroplan," said Aeroplan spokeswoman Michele Meier.
"It makes a lot more sense for us to have control of our own work force... and given that the collective agreement was about to expire, it was perfect timing to do that," she said.
The current collective agreement expires in May 2009.
If employees accept the deal, to be voted on in the next two weeks, they will receive a CAD$1,000 signing bonus to be paid out at the end of the year. The second year of the contract will have a 1.5 percent wage increase, and the third year, a 1.75 percent increase.
Lewenza said health care and pension benefits would remain in place.
Air Canada said further details of the deal will be released after the ratification vote.
"This is a very important development because the CAW is the first Canadian union to reach a tentative agreement in a year when all of Air Canada's labor contracts are up for renewal," Air Canada President and CEO Montie Brewer said in a statement.
