Question Period Note: CONTRACT RE-TENDERING

What is the Government doing to address the precariousness that exists for workers at airports when services such as baggage handling are contracted out and re-tendered?

• Some stakeholders in the air transportation sector have expressed concerns regarding what happens after contracts change hands. There are accounts of workers being re-hired to work at the same location and perform the same tasks, but at a lower wage than provided under the previous contract.

• This is why our government conducted a preliminary consultation in 2019 on a proposal to extend the scope of the current equal remuneration provision under the Canada Labour Code to ensure that more employees at Canadian airports who are laid off and rehired to work at the same location and perform the same tasks cannot be paid a lower wage than provided by previous contractors.

• The Government is currently considering the results of this consultation to determine next steps.

• In some industries, such as airports, it is common when contracts switch hands for a new contractor to hire the employees who had worked for the previous contractor because these employees are typically already trained and experienced in the work; and, in the case of airports in particular, they will already possess the security clearance and specific certifications required.

• However, when this happens, the previous collective agreement ceases to exist and the employees lose their union representation (unless they undertake a new certification drive).

• While re-tendering is a legitimate business practice, the Canadian Labour Congress. the International Association of Machinist and Aerospace Workers and Unifor, have suggested that contract re-tendering is not used to achieve legitimate efficiencies, but rather as a way to undermine seniority entitlements and substitute a cheaper, non-union contractor for a more expensive one. As a result, they have called for increased protection for employees at airports and more generally in the federally regulated sector. Unions have indicated that affected occupations tend to be ground services such as refueling, baggage handling, ramp (wheelchair) attendants and mechanics

• On November 1, 2018, the then Minister of Employment, Workforce Development and Labour announced intent to propose regulations to extend Equal Remuneration protection under section 47.3 of the Canada Labour Code to other affected airport workers.

• From February 23, 2019 to April 8, 2019, a Notice to Interested Parties was published in the Canada Gazette Part I, to formally announce the intent to stakeholders and to solicit feedback.

Canada Labour Code protections

• The Canada Labour Code (Code) provides only the following protections for workers affected by a re-tendering process, and none for their collective bargaining rights:
o Section 47.3 (Equal Remuneration) of the Code ensures that contractors cannot lower the wage paid to employees in one airport occupation - pre-board security screeners - by the previous contractor. However, the provision does provide that regulations can be made to extend this protection to other services in any other federally regulated private-sector industry.
o Recent changes to Part III of the Code in section 189 ensure that employees whose employer changes due to contract re-tendering do not lose their rights and entitlements provided under Part III as a result of a break in service. For example, when an employee is re-hired by the new employer/contractor, the amount of time that employee worked for the previous employer/contractor counts towards eligibility requirements for vacation entitlements.

• Although the Code does not provide successorship rights (i.e. the union’s certification rights and the existing collective agreement continue under the new employer/contractor) when a contract is re-tendered, it does provide successorship rights to a bargaining agent in cases where the ownership of a unionized business is transferred by sale (section 44).