Question Period Note: BETTER PROTECTING EMPLOYEES AFFECTED BY CONTRACT RETENDERING

The Government amended the Canada Labour Code to extend the equal remuneration protection to a greater number of employees in the air transportation sector in 2021. Do these changes still apply? What happens to subcontracted airport workers after a change in employer?

• Many airports and airlines contract out certain services, such as aircraft cleaning and baggage handling. Contract retendering is when a service contract changes hands from one contractor to another.

• Effective June 29, 2021, we amended the Canada Labour Code to extend equal remuneration protection to more employees in the federally regulated air transportation sector working at airports.

• These changes still apply and ensure that employees affected by contract retendering are not paid less than what was provided for under their previous collective agreement if they undertake the same or substantially similar work.

Contract Retendering

• Contracting occurs when an organization hires, under a service contract, a contractor to perform certain services. Contract retendering is the practice of a service contract changing hands.

• Many employers, including those in the air transportation sector, hire contractors to perform certain services. Upon the termination of such a service contract, either through its scheduled end or because it is severed, an organization may award a new contract for the same service to the previous contractor or may select a new contractor through a process called contract retendering.

• Contract retendering is a valid business practice. It is commonly used in the air transportation industry, particularly in airports where many services, such as baggage handling and aircraft cleaning, are outsourced from the airport authority or airlines to contractors. However, contract retendering is associated with some problems for employees.

Equal Remuneration Protection

• The equal remuneration protection in section 47.3 of Part I of the Canada Labour Code (Code) ensures that, after a case of contract retendering, the new contractor cannot remunerate pre-board security screeners at a rate lower than that provided by the previous contractor under the terms of a collective agreement. This only applies if the employees of the previous contractor provided services under a collective agreement that is subject to Part I of the Code. The provision also provides that regulations can be made to extend this protection to other services in any other federally regulated private-sector industry.

• This protection for pre-board security screeners was introduced in 1998 in response to transportation officials’ concerns regarding the high level of turnover amongst these employees following the deregulation and commercialization of the majority of Canadian airports in the early 1990s, and the impacts such turnover could have on the continuity and security of the domestic aviation industry.

Extending the Application of the Equal Remuneration Protection

• The extended protection applies to all employees covered by a collective agreement in the federally regulated air transportation sector working at airports. This ensures that, when a service contract changes hands, affected employees are not paid less than employees of the previous contractor who provided the same or substantially similar services.

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