Almost all unionized pilot contracts in North America contain job security provisions. Collective agreements negotiated by the Air Line Pilots Association, International (ALPA) normally include a section titled “Scope and Job Security” or “Scope” for short. This is customarily the first section of the contract as it is the most important, and without job security, the rest of the contract becomes meaningless.
A Scope section to a collective agreement provides professional pilots with job protection by securing commitments from the employer not only to ensure that the local pilots perform the flying for the airline, but also to provide safeguards should the nature of the business change in the future. As a general principle, the more diverse the nature of the employer’s business, the more scope protections are needed. For instance, a pilot contract for a large international airline flying around the world would likely have numerous layers of job security protections, including a guarantee on the number of aircraft in the airline’s fleet (ensuring there are jobs for the pilots), block-hour guarantees (ensuring that the pilots will fly a certain amount of time each year as such guaranteed time also guarantees income and jobs), outsourcing limitations (also known as “wet leasing” or subcontracting that specifies when and how much of the pilot group’s work can be moved to other entities), limitations on code sharing (where another airline operates a flight on behalf of the original airline), boundaries on the number of smaller aircraft operated by other contractors (to prevent the pilot group’s work being performed by another airline), restrictions on the transfer of aircraft (to protect against the pilot group’s work being shifted to another (usually lower cost) entity, merger protections (to ensure that the pilot group is protected if the airline is sold or acquires another airline), and more.
While PAL Airlines is not a giant international airline, it does have a complex business structure that raises serious job security concerns for the pilots. First, PAL Airlines is owned and operated by the PAL Companies. The PAL Companies also owns PAL Aerospace and owns a minority interest in Air Borealis while controlling all its operating functions. PAL Companies also owns Moncton Flight College, which is a training center for future aviators. In this environment, it possible for the PAL Companies to transfer flying between their three flying entities, build one up at the expense of another, and combine the entities. It is also easy for them to seamlessly replace seasoned (and generally more expensive) pilots by operating a flight school. To add to this complexity, the PAL Companies is owned by the Exchange Income Corporation (or EIC) that also owns Bearskin Lake Air Service, Calm Air International, Carson Air, Keewatin Air, Perimeter Aviation, and Regional One and has an equity investment in Wasaya Airlines.
If ever there was a need for comprehensive job security protections, it is at PAL Airlines with its integrated structure within the PAL Companies and EIC. Recognizing this, the pilot negotiators presented management with a comprehensive Scope proposal on April 11, 2021. That proposal sought to:
Without such comprehensive protections, the PAL Airlines’ pilots’ careers are at risk. These protections are discussed more fully below.
A Scope and Job Security section clearly defines who performs flying for the airline, and what “flying” actually entails. During the PAL pilot negotiations, management, in an unrelated discussion, copied a portion of the Jazz Aviation pilots’ scope clause and presented it to the PAL Airlines’ pilot negotiators as a potential solution during those talks. The JAZ language provides:
All pilot positions and all flying performed by or on behalf of the company shall be occupied and performed by pilots on the Pilot System Seniority List in accordance with the terms and conditions of this agreement. Such company flying shall include, without limitation, all revenue, nonrevenue, scheduled, unscheduled, passenger, cargo, placement, ferry, charter, training, maintenance test flights, and publicity flights.
During that conversation, the pilot negotiating team advised management that they appreciated management’s proposal but that, while it is a very strong start for when the parties turn to talking about scope and job security, it was not appropriate for the current discussions.
The pilots presented their scope and job security proposal to management on April 11, 2021. In that proposal, the pilots sought to protect their flying by presenting language substantially similar to what management had presented to the pilots from the Jazz collective agreement. When management finally countered the pilots’ proposal, they shockingly watered down the original version of the language they previously presented (and that ALPA had largely accepted) to:
Only pilots whose names appear on the Pilot Seniority List (PSL) shall be assigned to any revenue flying as pilots on aircraft operated by the company, unless otherwise authorized by this agreement.
Why management weakened their original proposal is unknown, but it certainly raises questions about whether they are engaged in bad faith bargaining, which is impermissible under the Canada Labour Code.
Some may question what is wrong with management’s proposed language. Their one sentence falls far short of their original proposal (and the one proffered by the pilot negotiators) in the following aspects:
In addition to ensuring that all PAL Airlines flying would be performed by PAL pilots (with certain recognized exceptions), the pilot negotiators also propose two other common approaches to provide additional protections. The first requires PAL Airlines to guarantee a percentage of the pilot jobs that are in effect when the collective agreement is signed. Further, pilots will not be laid off due to the company engaging in other busines relationships such as code sharing, joint ventures, or the transfer of work between PAL Companies or EIC-owned airlines. The second requirement is for PAL Airlines to maintain a certain fleet size going forward. Management struck both concepts from their counterproposal.
The pilots recognize that given the nature of their flying to remote locations in extreme weather conditions that there must be at least two qualified pilots operating an aircraft at all times in the same flight deck. Management apparently does not agree with this concept and struck it from their counterproposal.
The PAL pilot negotiators understand that unexpected situations often arise within the aviation industry; as such, there may come a time when the airline must contract out flying typically performed by PAL pilots to other air operators. The pilot negotiators included provisions allowing for this to occur if it was necessary to fulfill the flying schedule or fulfill a contract provided that the company does not have the aircraft to perform such flying and that no pilots will be laid off or downgraded (where a captain becomes a first officer due to a lack of captain jobs) because of the subcontracting. Further, the pilot negotiators limited the duration to 30 days, which could be extended for specific reasons or upon mutual agreement.
Management’s response allowed them to subcontract for just about any reason for up to 120 days without the PAL pilots approval and, shockingly, allowed the company to subcontract any of the PAL pilots flying for any reason to any other airline they desired—including Air Borealis, PAL Aerospace, and any of the EIC airlines. To be crystal clear, PAL Airlines management is articulating a desire to do exactly what Scope sections are designed to prevent—the willy-nilly transfer of pilot work.
The Canada Labour Code provides that, should a unionized business be merged with another business, the collective agreement is binding on the successor and an arbitration will be used to resolve seniority issues if the parties cannot reach an amicable solution on their own. While the Labour Code provides a good foundation, it does not address certain issues that are relevant to pilots in merger situations. For example, there are no prohibitions on the successor transferring aircraft or routes immediately upon the closing of the corporate transaction, which could endanger pilot jobs. Similarly, the successor could begin comingling the flight deck with pilots from both airlines upon the transaction’s closing, which raises safety concerns.
With these concerns in mind, the PAL pilot negotiators proposed language that makes the successor bound by all terms of the collective agreement, provides for a fair seniority integration either under ALPA’s merger policies or under the Labour Code’s arbitration requirement, and prohibits laying off or having the pilot’s flying hours reduced as part of a corporate transaction.
The management team’s lazy response was that the Labour Code provides sufficient protections for pilots.
As previously discussed, PAL Airlines is a key component of the PAL Companies, which provides significant profits to its owner, the Exchange Income Corporation. Given EIC’s portfolio of air operators and the fact that PAL aircraft have previously been transferred to other EIC entities, the pilots are seeking protections to ensure that their jobs are not transferred away.
As such, the pilot negotiators are proposing that if the company transfers any PAL aircraft to a subsidiary of PAL Companies or EIC, then the transferee must provide PAL pilots with jobs. If a large number of aircraft are transferred to another entity other than one owned by the PAL Companies or EIC, then similar requirements would apply.
Management rejected this concept outright without an explanation.
Violations of Scope and Job Security provisions can result in significant harm to individual pilots. As such, the pilot negotiators proposed that if there was a perceived violation of this contract section, that the parties would accelerate the dispute resolution process by bypassing all steps in the grievance process and proceeding directly to arbitration under one of two pre-agreed-upon arbitrators. Management rejected that proposal, likely because they prefer to delay and obfuscate matters instead of seeking timely remedies.
Most PAL Airlines pilots have dedicated their careers to the success and growth of the airline. It is now time for management to recognize the sacrifices the pilots have made for the company and provide them with true job security. Without comprehensive scope and job security contract protections, the pilots’ careers remain at risk.
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