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Lessons from the Air Canada Strike’s Dramatic End
Last Tuesday morning, standing on our rooftop deck overlooking Billy Bishop Toronto City Airport, my spouse and I were surprised to see an Air Canada plane coming in for landing. Last we’d heard, the airline’s flight attendants were still on strike despite orders from the Canada Industrial Relations Board (Board) to return to work. The union president had declared he’d risk jail time to oppose what he considered an unjust back-to-work order by the federal government, using a little-known part of the Canada Labour Code called section 107.
I soon learned that while we were sleeping that night, the union (Canadian Union of Public Employees or CUPE) and Air Canada had reached an agreement through a nine-hour mediation session. But what got us to this point? What is section 107, why is it controversial, and how might similar cases play out in the future?
Promoting “Industrial Peace”?
Section 107 of the Canada Labour Code allows the federal Minister of Labour to do pretty much anything the Minister thinks will promote “industrial peace” or “the settlement of industrial disputes.” To this end, the Minister may “direct the Board to do such things as the Minister deems necessary.”
The Board has confirmed that this phrase means what it says: the Minister of Labour can give the Board directions which the Board must follow.
In this case, the direction was to order the striking flight attendants to resume their duties by 2:00 p.m. on Sunday, August 17, and to order the use of binding arbitration to settle the new collective agreement. These are the orders the union president claimed he would risk jail time to oppose.
The Why is section 107 controversial?
Section 107 has been around since 1984, so why is it suddenly generating controversy now? Mainly because it was rarely used before 2024, but the federal government has invoked it repeatedly to end strikes and lockouts in the last year.
There’s always some controversy when the government orders workers back to work instead of letting the collective bargaining process play out. Part of the current controversy is the use of administrative orders instead of passing “back to work” legislation through Parliament that would attract more public scrutiny. Another part involves the tension between collective bargaining rights and the heightened pressure to keep transportation and infrastructure running during a trade war, while yet another is whether the government used its extraordinary power too quickly: CUPE argues it was unreasonable to order its members back to work after only 12 hours of striking, while the government argues that CUPE and Air Canada were bargaining for eight months before that and were clearly at an impasse.
A lot of criticism from unions is about the pattern since 2024 of using section 107 to end strikes. They argue that if large employers expect that the government will protect them from strikes anyway, the unions will lose their negotiating leverage. Employers could bargain in bad faith, create an “impasse,” and get binding arbitration instead of strikes. Smaller unionized employers might also be concerned about discrepancies between themselves and larger employers that are more likely to secure section 107 orders.
What’s wrong with binding arbitration?
But why is arbitration controversial? Isn’t that a fair way to settle a collective agreement?
Many people have political perspectives about strikes, but let’s keep this to a legal conversation.
Early in my career, I helped with some of these arbitrations, called interest arbitration, and I learned two key principles. First, interest arbitration is meant to replicate what the parties would have agreed to through free collective bargaining. To do that, we comb through recently negotiated collective agreements in similar industries to use as comparisons.
Second, interest arbitrators aren’t supposed to make major changes to the previous collective agreement. They will look at industry comparisons to choose fair wage increases and small-scale rules changes, but any significant changes should happen through bargaining.
That’s fine if you’re happy with the status quo plus industry-standard wage increases, but not if you want to try to set a trend, change a policy, or address a pain point that could seriously affect the other party. It’s more often the union in that position, wanting to achieve larger changes through bargaining that an arbitrator is unlikely to award. But sometimes the employer also wants rule changes for more operational flexibility, which they’re unlikely to get through arbitration.
How might future cases play out?
What was remarkable about the Air Canada case is how it ended. After the union ignored two Board orders to return to work, the parties bargained a new collective agreement through mediation. Interest arbitration wasn’t necessary.
In the days since, some have argued that CUPE did the right thing by protesting what they see as an unjust order, resulting in a successful negotiated agreement and making it less likely the government will invoke section 107 in the future. Others see a dangerous precedent in allowing unions to ignore valid government and Board orders.
It’s too early to say how future cases may play out. CUPE is already bringing a constitutional challenge against a previous use of section 107, and much about the future of these cases will depend on its outcome. It will also depend on which “side” ultimately pays a higher political price for what happened in the Air Canada case.
But the lesson for employers is clear: we don’t want to get into this situation in the first place. Strikes and interest arbitrations are both expensive and disruptive, and controversy can follow major work stoppages however they are resolved. Of course, employers can’t give in to every union demand just to avoid a strike. Rather, the core strategy begins months or years before the next collective bargaining round. It involves cultivating strong union relationships, continually monitoring and finding new ways to build employee trust, ensuring management takes accountability for upholding your standards for respectful treatment of employees, and to the extent possible working collaboratively to find mutually agreeable solutions to workplace challenges. All of this is easier said than done, and can be very difficult in practice, but sustained efforts at relationship- and trust-building can help make progress toward patterns of healthy conflict and constructive debates. These, in turn, make it more likely that problems can be solved before reaching an impasse.
