PROCEEDINGS llventy-fifth Annual Meeting

Theme: "Beyond Deregulation: Let Freedom Ring!"

October 22-24, 1984 Parker House Boston, MA

Volume XXV • Number 1 1984

T R F

TRANSPORTATION RESEARCH FORUM in conjunction with

4CANADIAN TRANSPORTATION RESEARCH FORUM 403

The Eastern Provincial Airways— Canadian Airline Pilots Association Industrial Dispute, 1982-84 by Robert A. Ellison*

INTRODUCTION leading to significant efficiencies; considerable im- provements in labor productivity; and substantial On May 10, 1984, the Canadian Minister of stimulation of new demand.' In the past five years Transport, the Hon. Lloyd Axworthy, announced airlines operating in the deregulated U.S. environ- a"New Canadian Air Policy'! This new Canadian ment flew 20.907o more revenue passenger miles while air policy represents the first phase of a long term overall Canadian air traffic declined by 2.7070.9 One plan to liberalize economic regulation of the airline specific objective of the new policy is to counter the industry. The announcement came six years after seepage of passenger traffic via U.S. gateways just the Airline Deregulation Act of 19782 in the United across the border. States. During the past three years various agencies The central thrust of the new policy is to invigorate and groups, mainly governmental, had called for the industry and provide a stimulus to growth the deregulation of the Canadian airline industry through encouraging innovation and improving the Including the Economic Council of Canada,' the airline industry's efficiency and productivity. Airline Ministry of Consumer and Corporate Affairs,4 the managements, no longer hampered to the same ex- House of Commons Standing Committee on tent by regulatory constraints, would be freer to Transport,' and the Director of Investigation and manage. The same major elements outlined in this Research for the Combines Investigation Act.'The policy statement were the core elements in the re- reports and papers published from these agencies cent industrial dispute between Eastern Provincial were based upon the experience of the airline in- Airways Limited (EPA)and the Canadian Airline dustry in the United States following deregulation. Pilots Association(CALPA): innovation, efficiency The report unveiling the new Canadian air policy and productivity. stated there was evidence that regulation has: The objective of this paper is to examine the in- hindered innovation in services and pricing; reduc- dustrial dispute between EPA and CALPA during ed the flexibility of airline managements to pursue 1982-84, which from a negotiating environment new market opportunities and to adjust their opera- perspective can be regarded as a transition period tions to minimize costs; allowed airline employees from an era of regulated competition to an expected and suppliers to charge too much for their inputs, era of deregulation. A new air policy was expected because airline managements were freer under reg- but it was uncertain whether it would be as encom- ulation to pass along cost increases to their passing as the U. S. deregulation. EPA, owned by customers; and contributed to the unsatisfactory the holding company Newfoundland Capital Cor- earnings record of the industry as a whole.' In con- poration, is the designated regional carrier for the trast to these drawbacks of the present regulatory Atlantic Provinces of Canada. It also has flights to regime, the report stated it has become increasing- Montreal and Toronto in central Canada. Given the ly evident that airline deregulation in the U.S. has recessional economic environment and the an- delivered many important benefits, including the ticipated deregulatory environment in Canada in the emergence of new, low-cost airlines offering spec- early 1980's, EPA management wanted to establish tacular price cuts for no-frills services on certain a low cost, no-frills, propeller equipped subsidiary routes; a rationalizing of the airline route structure of the Newfoundland Capital Corporation(NCC), separate from EPA. Management was also deter- *Associate Professor, School of Business Ad- mined to achieve increased productivity through ministration, Dalhousie University, Halifax, Nova having pilots fly more hours per month and having Scotia a wage incentive plan. CALPA, a sister organiza- 404 TRANSPORTATION RESEARCH FORUM

tion to Air Line Pilots of America in the USA,holds of EPA. If Air Maritime was successful in being bargaining rights for the pilots of most major licensed, it could hire its own pilots and not respect airlines in Canada. CALPA was certified by the the EPA pilots seniority system list. CALPA wanted Canada Labor Relations Board to represent the to modify the Scope clause in the collective agree- pilots of EPA on June 9, 1975. It had since entered ment (sections 4.01 and 4.02) so as to protect its into five collective agreements with EPA and was members against the consequences of this eventuali- attempting to come to terms over the sixth collec- ty becoming a reality!' The company was not pre- tive agreement in the dispute analyzed in this paper. pared to do this. The commissioner recommended Until recently, CALPA had been highly successful the issues be shelved to be dealt with at future in obtaining concessions for its members resulting negotiations when the reality of the issues were in enviable working conditions and benefits!' It was known. A month later both parties signed a letter concerned about the proposals and plans of EPA of Agreement accepting the conciliation commis- and also that any concessions in negotiations with sioner's report. There had already been a hearing EPA could spread to other Canadian airlines. There before the Air Transport Committee of the Cana- was also the influence of the deregulatory experience dian Transport Commission(CTC) to transfer cer- in the U. S. with wage concessions and the establish- tain commercial air services with fixed wing aircraft ment of new low cost carriers. from EPA to Air Maritime Limited, an application The industrial dispute between EPA and CALPA which CALPA opposed. lasted from the fall of 1982 until the spring of 1984. On October 8, 1982, a CTC decision (no. 6956) This dispute, which included a four month strike, issued a license to Air Maritime. As the collective decisions by two different panels of the Canada agreement had expired on September 30, 1982, the Labor Relations Board, two return to work agree- question of the Scope clause became a major issue ments and two decisions by the Federal Court of Ap- again. peal will be traced and analyzed. Three unusual The other major difference between the parties aspects of this dispute were(1) the potential to make was the desire of EPA to increase the maximum Canadian labor history by settling the status of hours of work for all of its pilots. EPA equated a replacement employees hired during a legal strike;" profitable organization with increased productivi- (2)the importation of American jurisprudence in- ty to be achieved by longer hours of work and also to the jurisprudence of Canadian labor relations by installing an incentive pay formula. CALPA boards;" and (3) a directive from the Transport showed interest in an incentive pay formula but Minister to EPA to separate its union from non- resisted it and the demands for longer hours. The union replacement cock-pit crews because the bit- CLRB panel reported that CALPA no doubt resisted ter feelings between the two groups had the poten- these demands because of the domino effect its tial to jeopardize passenger safety!' agreeing to them could have on their collective agreements with other airlines!' The commissioner Background to the Dispute proposed an alternative recommendation tying the issues of longer hours and incentive pay together The first Canada Labor Relations Board report which EPA reluctantly accepted but CALPA re- in 1983 stressed that(1) the labor relations climate fused. If the tying proposal was refused the com- between these two parties has already been vitiated missioner had proposed a 12070 wage increase retro- for many years, and (2) the issues which led to the active to October 1, 1981. A collective agreement was present confrontation already existed, and had lurk- signed but only for one year and to terminate on ed and surfaced many times in recent years!' The September 30, 1982. This was agreement no. 5 be- hostile union-management climate at EPA goes tween the two parties and it was signed almost back to a strike in 1980. The negotiations for the simultaneously with the statutory notice to bargain 1981-82 contract were protracted, requiring concilia- for its renewal. tion and finally the appointment of a conciliation The major issues affecting the renewal of contract commissioner in late 1981. Normally a conciliation no. 4 were not resolved; they were left outstanding commissioner has 14 days to report success or failure and became the central issues in the renewal of con- in assisting the parties and to make his findings and tract no. 5 in the fall of 1982: the Scope clause and recommendations known, if he failed. Extensions productivity, longer hours and an incentive wage were granted to the commissioner and he reported system. on April 26, 1982, that he could not get an agree- The chairman of the CLRB panel, Marc Lapointe, ment from the parties and, thus, he was forced to characterized CALPA as a labor organization which make recommendations. undoubtedly still benefits from the mystique of the One of the fundamental basic differences between "gods" who man the cockpits. However, it is also the parties was the Scope clause. A Scope clause is a union which has recently been confronted by the a statement of Company intent, embodied in the col- challenges of many airline owners, financially lective agreement, which outlines the entitlement squeezed by the recession which has severely stricken of the pilots on the system seniority list to all flying that industry, and had begun to have to yield, and conducted by the employer irrespective of aircraft has yielded some ground, a union which had final- types, new services developed and subsidiaries ly felt the bite of numerous layoffs and become sen- established. CALPA was concerned because the sitive to further erosion of its gains. The union was Newfoundland Capital Corporation (NCC), the determined to fight EPA on some basic issues and holding company of EPA,intended to set up a new was also fed up with prolonged negotiations. He corporation, to be known as Air Maritime Limited, referred to the employer as led by a highly visible which would take over the HS/748 prop operations and outspoken group of entrepreneurs, as aggressive EASTERN PROVINCIAL AIRWAYS PILOTS DISPUTE 405

in labor relations as in business practices, and deter- tion, under Section 148(a)of the Code, with the mined to eliminate all sources of financial losses, CLRB, by requesting a review by the Appeals including the ditching of the HS/748 operations, Division of the Federal Court under Section 28 and to obtain higher productivity through longer of the Federal Court Act. hours and an incentive wage system!' The stage was 3. It filed two applications of its own set with the for negotiating contract no. 6. CLRB:applications alleging unfair labor prac- tices by CALPA' Negotiations and the Strike The Canada Labor Relations Board convened a panel and called for public hearings which would The union acted as if it were in a position of be postponed if both parties jointly requested it in strength from the outset of negotiations on October order to resume negotiations. By March 28, 15, the 1982. By October 28 it became apparent that no mediator appointed by the Minister of Labor and further progress was likely considering the adamant contested by EPA had reported out. On March 29, Position taken by both parties. The negotiations had the eve of the beginning of public hearings, both picked up where the last negotiations left off. parties made a joint request to postpone so as to CALPA requested that a conciliation officer or com- resume negotiations. The parties met and were missioner not be appointed as they did not wish to unable to settle all of their outstanding issues. The go through another round of protracted third par- strike proceeded with another raft ty of accusations interventions. The Minister of Labor nevertheless and counter accusations. CALPA then requested the appointed a conciliatory and he was asked by Board to reconvene the panel and to proceed with CALPA to bring to a head the issue of the HS/748's. the public hearings. The parties were advised that Conciliation lasted one day, November 30, 1982, as these public hearings would commence on April 18. EPA refused to discuss the major issue. The Minister did not appoint a conciliation commissioner. Ear- ly in January 1983 a series of direct meetings were THE FIRST CANADA LABOR RELATIONS arranged by the parties. The negotiating team for BOARD REPORT EPA announced the employer was willing to con- sider the operation of the HS/748's on an in-house The hearings before the panel of the Board com- basis, even though it had been announced they menced on April 18 and went until April 21. The would be transferred to Air Maritime. However, pro- Board reported on May 27 and found EPA in breach cedures would have to be taken to stop the opera- of: tion from losing money. CALPA was interested in I. Section 184(3)(a)(vi) and 184(3)(c) when: i) it cooperating but wanted to modify the Scope clause conferred permanent status on the replacement to ensure that in-house meant exactly that. Meetings pilots hired during the lawful strike who in the middle of January centered on the issue of originated from outside the ; hours of work. CALPA decided to increase the and ii) it imposed an acquired rights or pressure by calling for a strike ballet to give a man- privilege clause in the Return to Work Agee- date to the negotiating team. The Board of Direc- ment on the replacements originating from tors of CALPA approved the strike vote and the within the bargaining unit and promoted dur- members voted largely in favor of a strike. The last ing the strike. direct meeting between the parties occurred on II. Section 184(3)(a)(vi) and 184(3)(b), when it January 26 and the strike was declared on the 27th discriminated against the striking pilots as to of January. reinstatement, after the strike, to their former Negotiations began being conducted through the positions for the sole reason of their participa- media as both sides resorted to extensive contacts tion in a lawful activity. with them and accusations, recriminations and III. Section 184(1)(a), by imposing a "no reprisal" denials of foul play were reported in public. EPA clause wherein it interferes with the internal announced that it would attempt to continue union affairs of CALPA. operating with management pilots and with the help IV. Section 148(a), when it failed to bargain in of a few pilots who decided not to go out on strike. good faith and make every reasonable effort The strike extended through February and in early to enter into a collective agreement by: i) ad- March EPA began to hire replacement pilots from ding to the matters which were in agreement outside. On March 11, 1983, two important events between the parties on April 4, 1983, new pro- took place: visions for the addition of a third year to the 1. three applications of unfair labor practice were two year term negotiated up to then by both filed with the Canada Labor Relations Board parties; ii) negotiating to an impasse the ir- by CALPA; removability of the replacements originating 2. the Minister of Labor appointed, apparently from outside the bargaining unit hired during upon the request of CALPA,a special mediator the strike; iii) negotiating to an impasse ir- to meet with the parties and attempt to bring removiability of the replacements originating about a settlement!' from within the bargaining unit promoted dur- When confronted by the events of March 11, EPA ing the strike; and iv) negotiating to an impasse did three things: a "no reprisal" clause wherein it interferes with 1. It attacked the validity of the nomination of the the internal affairs and administration of the mediator. Canadian Air Line Pilots' Association." 2. It attacked the validity of the consent granted The three member panel later wrote concerning by the Minister to CALPA to file its applica- the witnesses and exhibits "Together with the ex- 406 TRANSPORTATION RESEARCH FORUM

hibits referred to above, the testimony of these ing issues, until none was left. witnesses tells the whole sad story of this industrial What brought on this rapid disintegration in the conflict".' What were the salient facts in the vast position of CALPA? The evidence before the Board amount of evidence presented before the panel? revealed that when the subject of the conditions for 1. The Board did not find any violation of specific the return to work was broached, at the end of provisions in the Code in the collective bargain- February, CALPA learned that EPA was not offer- ing process up to the strike declaration by CALPA ing to recall to work all of its striking pilots on the on January 27. basis of seniority rules and status, that the promo- 2. There was a number of bargaining demands by tions it had proceeded with concerning two pilots each side which had not been fully negotiated by would stand, and that EPA was insisting that the time of the strike, but there was nothing CALPA agree that it would exercise no disciplinary radically wrong with this stance as a strike may measures against any union pilot flying during the bring the parties to reasonable terms. strike. Job security for its members had become at 3. The employer decided to attempt to operate upon stake. Worse, having a job at all had become the key the strike declaration. This is the essence of the issue. economic warfare if a collective agreement is not The Board found that, as of April 4, 1983, there signed. It may shock the pilots but it is not were no more issues left forbidden. outstanding between the two parties. The stumbl- 4. Management asked management pilots to fly. ing block was in preparing a return to work agree- Again this is not forbidden by the federal Code. ment, namely the determination of CALPA to 5. A small number of pilots decided to cross the secure the return of all of its striking members. An- "picket lines" and continue working. This is not cilliary problems were the replacement pilots hired forbidden by the Canada Labor Code, although during the strike and the request by EPA that it is under the anti-strike breaker provisions of CALPA exercise no disciplinary action against its the Quebec Labor Code. members who broke ranks. 6. After March 1, 1983, EPA decided to hire new Without the benefit of the public hearings the pilots to operate on an even larger scale. This Board would have been in no position other than galvanized CALPA to take a number of actions to find this industrial conflict was following its nor- to prevent the large number of pilots who had mal course with both parties eventually coming to been laid off by various airlines in Canada from their senses and making adequate concessions to applying to fly for EPA.The Canada Labor Code generate a settlement. The hearings were conducted does not prohibit this tactic by an employer who to assess the merits of five applications filed by the has decided to conquer during a strike. parties, all alleging unfair labor practices. The Board 7. CALPA, through its national offices and lines reported that the evidence in support of CALPA's of communciations with almost all pilots in allegations against EPA was overwhelming." Canada,reacted with a stream of appeals to the A number of letters and telex messages from EPA loyalty of its members not to cross the picket lines to the striking pilots were introduced as evidence and fly for EPA. It blacklisted EPA. The Code that EPA had received over 100 applications from does not prohibit such tactics. pilots looking for permanent jobs, that EPA would 8. The evidence before the Board showed that in the start hiring replacements and that jobs for striking course of the months of January and February, pilots might not be available after the strike. The as well as in the first days of March and most Board pointed out the hiring of replacement pilots definitely at the direct negotiation meetings is based upon the entering into an individual con- which were substituted for the Board's public tract of employment. If it was for a temporary term hearings in the week of March 28 and the first terminating on the same day that the strike is days of April 1983, CALPA's local committee at brought to a conclusion, then it does not create any EPA,and CALPA nationally, had given in to the problem. However, by EPA granting a term extended employer on all of the issues which were still beyond the date of termination of the strike, these outstanding as at the day the strike was declared, replacement pilots were granted a super seniority January 27, 1983. These were: status and this constitutes a violation of Section (a) A 24 months collective agreement. 184(3)(a)(vi)of the Code. The granting of any status (b) The in-house operation of the HS/748's with other than temporary to these replacement em- the concomitant adjustments to make a ployees constitutes an automatic violation of Sec- financial go of it in exchange for the discar- tion 184(3)(a)(vi) in three ways: i) the granting of ding of Air Maritime. CALPA had agreed a super-seniority status to these replacements not to modify the Scope clause to guarantee discriminates against and penalizes those employees security of employment of its members fly- who participated in a legal strike, a right conferred ing this aircraft. upon them by the Code; ii) the right to participate (c) The wage offer of the employer for a two- in a legal strike is guaranteed by Sections 110(1)and year period. 180(2) of the Code; iii) if, at the end of the strike, (d) The increased number of hours of work for the employer refuses to reintegrate the striking pilots the 737 and the HS/748's. by reason of their positions having been filled per- The Board thought CALPA had made a miscal- manently by replacements who were not in the culation in calling this strike as its bargaining bargaining unit represented by CALPA, it is con- strength was eroded from January 26th to March travening Section 184(3)(a)(vi) because it penalizes 28th and it conceded to the employer from meeting the strikers who have refused to cross picket lines to meeting successive chunks of the major outstand- by discriminating against them as opposed to those EASTERN PROVINCIAL AIRWAYS PILOTS DISPUTE 407

employees who,in addition to the replacements from parties on June 10, 1983; however, on June 1, 1983, outside decided to cross the picket lines, for the sole EPA applied to the Federal Court of Appeal under reason that they exercise a right conferred upon them Section 28(1) (a) of the Code asking that the Deci- by the Code, under the provisions of Section sion and Order of the Board be reviewed and set 184(3)(c)." aside. The Board concluded the act of conferring a per- Fianent status on a replacement employee upon hir- The First Federal Court of Appeal Decision ing, and prior to specific hearings governed and directed by the Code, constituted an unfair labor The Federal Court of Appeal on October 5, 1983, practice which disqualified an employer from keep- set aside three complaints under the Canada Labor ing the replacement employee in his position once Code by CALPA against EPA and two complaints the strike is terminated. by EPA against CALPA and referred the matters The Board cited that the Mackay decision by the back to the CLRB. The Court directed that if fur- Supreme Court of the United States contained the ther proceedings are taken before the Board that a seeds of, and subsequently allowed for the develop- new panel be formed which would not include any ment, by the National Labor Relations Board, of members of the previous panel. Two justices agreed the "conversion doctrine" of an economic strike into that EPA did not receive natural justice and that the an "unfair labor practice strike"." The key passage Board exceeded its authority; one justice dissented. in the Mackay decision was "it does not follow that The Court found that EPA,on points it considered an employer guilty of no act denounced by the significant, was denied a fair opportunity to make statute has lost the right to protect and continue his out its own case before the Board and to answer business by supplying places left vacant by strikers. CALPA's case by the refusal of the Board to receive And he is not bound to discharge those hired to fill evidence." the places of the latter to resume their employment, Justice Mahoney saw no reviewable error if the in order to create places for them!' Therefore, the Board intended the adjective "permanent" only to Court implied that if an employer was guilty of an comprehend the terms of the replacement pilots' act denounced by the statute, he would lose the right employment if found would give them preference to supply, at least permanently, the places left va- over the striking pilots after the strike. If, however, cant by the strikers.25 The Board added that in the "permanent" was used in its ordinary meaning, as Zambri case, handed down by the Supreme Court the antonym of "temporary',' it was a different mat- of Canada in 1962, a Mr. Justice Locke by endors- ter. He felt the Board may have intended this in ing the Mackay principles knew of the subsequent stating that if the replacement pilots term of employ- developments which that judgment had prompted ment terminates on the same day the strike is con- in American labor jurisprudence and was aware that cluded, no problem would be created. He thought the same developments could ensue in Canada as it would be for Parliament, not the Board, to man- a result of his opinion." Therefore the Board date that the only replacements a struck employer reported that in the case of a purely "economic can legally engage are ." Justice strike:' the strikers do not have an absolute right to Mahoney said the nature of the arrangement made return to their jobs, whereas in the case of an "un- by EPA with the replacement pilots was a central fair labor practice strike:' they have that right and issue before the Board and the Board should have absolutely, to the point that the employer has to heard all the evidence EPA wished to present. He dismiss the substitutes or replacements or displace also stated the purpose of the Board purporting to or lay them off. Since the very fact of EPA granting import into Canadian labor law from U. S. labor the permanent status to each replacement con- law the concept of a strike, which had begun as an stituted an unfair labor practice which triggered the economic strike, being converted into an unfair labor conversion to an unfair labor practice strike, it means practices strike from its inception, was not clear. each replacement employee must be considered as Nothing, not otherwise held to have been an unfair temporary as at the date of his hiring and will have labor practice, was found to have been one because to be transferred, demoted, laid off or terminated the strike was deemed to have been converted into upon the return to his job by the striking employee an unfair labor practices strike from its beginning. whose position he filled during the strike. It was an exercise in pure tautology, and therefore, The Board ordered the employer to cease and entirely obiter dicta." desist from negotiating in bad faith; directed Justice Thurlow shared the opinion of the Mr. CALPA to examine the proposed collective agree- Justice Mahoney. Justice Cowan could not agree ment, submitted by EPA on April 4, 1983, delete that the Board exceeded its jurisdiction. any reference to a third year and submit the text to Upon the handing down of the decisions of the the ratification of its membership; directed the Federal Court of Appeal,EPA declared that its col- employer to cease and desist from conferring per- lective agreement was null and void and it replaced manent status to the replacements from outside the some forty-five pilots who had returned to work bargaining unit, not to interfere in CALPA's inter- after the strike with the group of new pilots. That nal affairs and not discriminate against striking action prompted a complaint from CALPA alleg- pilots as to reinstatement; and directed the parties ing an unlawful lock-out by EPA. to negotiate in good faith a Return to Work Agree- ment. It also pointed out to CALPA that disciplinary The Second Canada Labor Relations Board Report activity against strike breaking members of the union would be unlawful. The Board ordered the employer to cease and A Return to Work Ageement was signed by both desist from negotiating in bad faith; directed 408 TRANSPORTATION RESEARCH FORUM

CALPA to examine the proposed collective agree- work of all CALPA members, displacing all newly ment, submitted by EPA on April 4, 1983, delete hired pilots, over a two month period. The Com- any reference to a third year and submit the text to pany recognized that CALPA maintains there still the ratification alternately, not to recall those that exists a dispute regarding the status of some pilots it does not wish to recall. The Board also found for the period from Ocober 11, 1983. There was also CALPA had violated Section 148(a) by bargaining a clause stating employees should behave har- publicly in late February and March, by making moniously and shall make no reference to the strike gross misstatements and contradictory offers thus in the work-place, subject to the most severe undermining the bargaining process." disciplinary action up to and including discharge The Board reported on December 20 and took in accordance with the established procedures of the several remedial steps designed to counteract the Collective Agreement. consequences of the failure of the parties to com- ply with the provision of the Code that they had con- The Second Federal Court of Appeal Decision travened: both parties ordered to comply with the sections of the Code they had contravened; collec- A new panel of the Board was convened on Oc- tive bargaining to resume; EPA ordered to place on tober 24, 1983, to re-hear the five original com- the bargaining table its offer of April 4 with no plaints. The Board found i) EPA's communications reference to Scope, flight data recorders, discipline direct to the pilots were in violation of Section and contracting out; CALPA ordered to submit the 184(1)(a) of the Code in that they interfered with proposed contract to its membership for ratifica- the union's exclusive representation of the pilots; ii) tion; the seniority of all pilots to be the date of hiring; EPA in violation of Section 148(a) by not bargain- all promotions granted during the strike to be null ing in good faith because it constantly went behind and void; and ordered both parties not to take any CALPA's back to the pilots; iii) the calls from the reprisals against employees or members. President of EPA to employees constituted intimida- EPA advised CALPA on December 29 that it was tion as prohibited by Section 184(3)(a)(vi); and EPA filing an application for review of the CLRB deci- is blatant discrimination of Section 184 (3)(a)(vi) sion by the Federal Court of Appeal, as it had by the effect of clause 12 in the Return to Work previously in June. On December 30, CALPA met Agreement which would suspend the seniority pro- with EPA to resume collective bargaining as ordered visions long enough for EPA to accomplish what by the CLRB. This should have been a simple pro- it could not lawfully do otherwise. That is, to keep cess, given the order, but EPA wanted to include a the new pilots and those who crossed the picket lines clause to the effect that if it was successful in its on the active workforce out of seniority. Clause 12 Federal Court action the contract would be null and also provided EPA with the opportunity to selec- void. CALPA could not agree because apart from tively recall whom it wishes, out of seniority or presi- such an agreement being different to the April 4, dent of EPA, Harry Steele, said,"The law is the law. 1983, contract ordered, by virtue of the additional Whatever it says. The important thing is to run this clause, there was much doubt as to what EPA meant business:' by "successful:' There was also a clause as to the full reserve of EPA's legal rights. After some amend- ment of these clauses, the contract was agreed to SUMMARY AND CONCLUSIONS and ratified by the pilots on January 16, 1984. In addition to the EPA application for a review of the In retrospect, this strike and long industrial CLRB decision by the Federal Court, both EPA and dispute should not have occurred. The management lawyers for the new hirees filed motions in Federal of EPA, which had turned the airline around from Court for a stay of the CLRB's decision. The ap- an ill-equipped, money-losing one, had to bring the plications were heard on January 9 and the motions airline through the recession and wanted to posi- denied. tion the airline to take advantage of the expected Meetings began immediately to forge the second deregulation in Canada. This included the establish- return to work agreement. The talks dragged on with ment of a low cost, no frills, commuter airline opera- a major roadblock being EPA's insistence that any tion to serve the smaller centers of the Atlantic reference by an employee to the past year of trou- region. Management only had to look at the U. S. ble, or any indication that the strike had not been experience since 1978: the bankruptcy of Braniff., put behind, would lead to dismissal without the wage concessions sought and won by major car- recourse. This was unacceptable to CALPA and led riers such as Pan Am, Republic and Western; and to CALPA breaking off talks. Indicative of the state the growth of low cost carriers such as Peoples' Ex- of affairs was the announcement of the Transport press, Muse Air and Southwest. EPA's labor costs Minister on January 27,directing EPA to separate were 3707o of operating costs, comparable with the its union from non-union cockpit crew members 3407o-3707o share of major U. S. carriers but con- because the bitter feelings between the groups had siderably higher than the 1907o-27,7o range of the U.S. the potential to jeopardize passenger safety. Talks low fare airlines." resumed and an agreement was reached on February Subsequent events have shown the financial situa- 1. It recognized the Section 28 proceedings before tion of EPA during this period, particularly the ef- the Federal Court and the agreement would be null fects of the recession which has lasted longer in and void and would have to be renegotiated in the Canada than in the United States. A cooperative ar- court quashed the Collective Agreement,the Return rangement sharing certain routes with CP Air started to Work Agreement or the promotions during the in the spring of 1983." EPA moved its head office strike. It provided for the retraining and return to from Gander, Newfoundland to Halifax, Nova EASTERN PROVINCIAL AIRWAYS PILOTS DISPUTE 409

Scotia, as a cost cutting measure. Faced with capital 5. House of Commons Standing Committee on requirements of $200 million, Harry Steele, the Transport,Domestic Air Carrier Policy, Ottawa: President of EPA,sold EPA to CP Air in the spring Minister of Supply and Services Canada, 1982. of 1984 for $20 million." CP Air will also take over 6. Hunter, L. A. W., Economic Regulation in responsibility for $16 million of capital leases and Transportation and the Growing Need for guarantees covering $9.2 million of EPA bank debt. Change, Address at Fredericton, N. B., February :The existing management will operate EPA as an 17, 1983. independent subsidiary of CP Air. 7. Axworthy, Lloyd, Op. city., p. 2. The first Board report was correct in stating that 8. Ibid., p. 2. CALPA made a miscalulation in calling this strike, 9. Esabrook, B., "Axworthy: Trucking next given the concessions it made after the strike was deregulation target, But it will be trickier than called on January 27 until April 4, 1983. CALPA with the airlines:' Financial Times of Canada, could also look across the border and see the U.S. May 21, 1984, p. 2. experience. It knew that some form of Canadian 10. Canada Labor Relations Board (1)Eastern Pro- deregulation policy was likely in the future and may vincial Airways Limited, May 27, 1983, have decided to take a stand with a small regional unreported Board Decision 419, Ottawa, carrier rather than with a major carrier such as Air Canada. Canada or CP Air which had been laying off pilots 11. Napier, J. A.,"Old Wounds Reopened for EPA and staff. It knew that Harry Steele believed that and CALPA:' The Mail-Star, Halifax, N. S., Oc- increased productivity and lower labor costs were tober 25, 1983, p. 13. necessary. Steele believed a carrier of EPA's size, 12. Canada Labor Relations Board (a), Op. cit., p. Which now employed about 840 people, could run 84. more profitably and just as efficiently with only 350 13. MacDonald, D., "EPA must separate cockpit people and that the trend set by crews-Axworthy' The Chronicle-Herald, in hiring new pilots for $18,000 a year rather than Halifax, N. S., January 28, 1984. $36,000 is more realistic." 14. Canada Labor Relations Board (1), Op. cit., p.11 The question of how harmonious is the rela- 15. Ibid., p. 13. tionahip between the unionized pilots and mangae- 16. Ibid., p. 15. ment remains. CALPA officials have expressed 17. Ibid., p. 16. satisfaction at the CP Air takeover, referring to the 18. bid., pp. 20-21. "muturity" of the company's labor-management 19. Ibid., p. 22. relations over more than 40 years." An indication 20. Ibid., pp. 91-92. of reproachment between EPA and CALPA 21. Ibid., p. 29. transpired during early June 1984 when an "out of 22. Ibid., p. 50. Court" settlement between the pilots and 23. Ibid., p. 57. managemnet resulted in the withdrawal of 19 charges 24. Ibid., p. 81. of unfair labor practices filed with the CLRB. The 25. Ibid., p. 82. airline agreed to rehire six pilots fired in 1983 and 26. Ibid., p. 83. the settlement ensures all the strikers will resume 27. Federal Court of Appeal, Eastern Provincial their previous positions of seniority. Airways Limited vs. The Canada Labor Rela- In the future, under deregulation, would CALPA tions Board, et. aL, E C. A., unreported deci- call a strike? The issue of replacements for striking sion, File #A-783-83, p. 15. pilots may be a moot one if new low cost airlines 28. Ibid., p. 7. are established. The new Canadian policy recognizes 29. Ibid., pp. 7-8. the need for an adjustment period and that a form 30. Canada Labor Relations Boad (2), Eastern Pro- of staged movement toward more competition and vincial Airways Limited, December 20, 1983, less regulation is a desirable approach. Both unreported Board Decision #448, Ottawa, management and the unions will need to take a more Canada. cooperative approach and develop a mutual reward 31. Meek, J., "Court says CLRB had authority,' The System rather than the traditional adversarial Mail-Star, Halifax, N. S., April 26, 1984, p. 34. relationship. 32. "Airlines in Turmoil:' Business Week, October 10, 1983, pp. 98-102. REFERENCES 33. Ellison, Robert A., Gerald E. Simpson and Er- rold D. Smith, "Cooperation: A Pragmatic 1. Axworthy, Lloyd, New Canadian Air Policy, Response by Canadian Airlines to Deregula- Press Release by Transport Canada, May 10, tion:' Paper presented at the Transportation 1984. Research Forum, XXIV (1983), Washington, 2. 95 Stat, 504 (1978) D. C. 3. Economic Council of Canada, Reforming 34. Watkins, Lyndon, "Bird with a broken wing: Regulation, Ottawa, 1981. Harry Steele was planning a new deregulated 4. Jordan, W. A.,Performance ofRegulated Cana- start for EPA,but sold instead to CP:' Atlantic dian Airlines in Domestic and Transborder Business, p. 7. Operations, Ottawa: Consumer and Corporate 35. Ibid., p. 10. Affairs Canada, 1982. 36. Ibid., p. 8.