On August 3, 2000 the CIRB declared Air Canada and Canadian to be a single employer under Canada Labour Code, section 35 for purposes of the pilot bargaining unit. That declaration resulted in commencement of the process of determining appropriate bargaining units and consequential issues under Code, section 18.1. The unions representing the two pilot groups had already signed a Protocol establishing a seniority list integration process. By that Protocol, an arbitrator was jointly selected by the parties and given all the powers to merge seniority lists that the CIRB has under the Code. The CIRB granted its approval of the seniority list integration process established by the Protocol. In his award, the arbitrator failed to articulate specifically the principles applicable to a bargaining unit consolidation triggered by a single employer declaration under the Code, but rather made a factual finding of economic disparity between the two carriers. This was the primary rationale supporting his award--as well as the necessity for protecting those Air Canada employees having negotiated "no lay-off" guarantees extending to June 2005. The award also took into account the disparity in hiring patterns: while Canadian hiring ended in 1990, from 1995 on Air Canada had experienced an unprecedented rate of growth in its complement of pilots. In the result, all the Canadian pilots had been hired pre-1990 while almost half of Air Canada's pilots had been taken on since 1995. This made a "date of hire" integration inequitable, so the arbitrator went for a ratio approach to seniority list integration. Furthermore, Air Canada pilots were accorded a substantial ratio premium on the rationale that Air Canada had rescued Canadian. In addition, the Air Canada pilots were given the benefit of restrictions, referred to as "fences", on the ordinary operation of the seniority list such as exclusive bidding rights on wide-body aircraft and layoff protection.
The CIRB did not err in concluding that sections 35 and 18.1 are to be read together and that their purpose is remedial in terms of protecting bargained rights and promoting sound labour relations. It further found that a "winner take all" approach that gives one group a premium while disadvantaging others is inconsistent with the intent of section 18.1. ... and took into account the necessity for integrating seniority in a manner consistent with both the Code regime for conducting a bargaining unit review and existing labour relations realities.
[4]Effective January 4, 2000, Air Canada and Canadian began carrying on associated businesses while awaiting formal court approval of their intended corporate merger. Several months later, on May 19, 2000, ACPA brought an application before the Board to have Air Canada and Canadian declared a single employer pursuant to section 35 of the Canada Labour Code...
[6]On August 3, 2000, the Board declared Air Canada and Canadian to be a single employer under section 35 of the Code for the purposes of the pilot bargaining unit. The result of that declaration was to commence the process of determining appropriate bargaining units and consequential issues pursuant to section 18.1 [as enacted by S.C. 1998, c. 26, s. 7] of the Code. Those sections read as follows:
18.1 (1) On application by the employer or a bargaining agent, the Board may review the structure of the bargaining units if it is satisfied that the bargaining units are no longer appropriate for collective bargaining.
(2) If the Board reviews, pursuant to subsection (1) or section 35 or 45, the structure of the bargaining units, the Board
(a) must allow the parties to come to an agreement, within a period that the Board considers reasonable, with respect to the determination of bargaining units and any questions arising from the review; and
(b) may make any orders it considers appropriate to implement any agreement.
(3) If the Board is of the opinion that the agreement reached by the parties would not lead to the creation of units appropriate for collective bargaining or if the parties do not agree on certain issues within the period that the Board considers reasonable, the Board determines any question that arises and makes any orders it considers appropriate in the circumstances.
(4) For the purposes of subsection (3), the Board may
(a) determine which trade union shall be the bargaining agent for the employees in each bargaining unit that results from the review;
(b) amend any certification order or description of a bargaining unit contained in any collective agreement;
(c) if more than one collective agreement applies to employees in a bargaining unit, decide which collective agreement is in force;
(d) amend, to the extent that the Board considers necessary, the provisions of collective agreements respecting expiry dates or seniority rights, or amend other such provisions;
(e) if the conditions of paragraphs 89(1)(a) to (d) have been met with respect to some of the employees in a bargaining unit, decide which terms and conditions of employment apply to those employees until the time that a collective agreement becomes applicable to the unit or the conditions of those paragraphs are met with respect to the unit; and
(f) authorize a party to a collective agreement to give notice to bargain collectively.
. . .
35. (1) Where, on application by an affected trade union or employer, associated or related federal works, undertakings or businesses are, in the opinion of the Board, operated by two or more employers having common control or direction, the Board may, by order, declare that for all purposes of this Part the employers and the federal works, undertakings and businesses operated by them that are specified in the order are, respectively, a single employer and a single federal work, undertaking or business. Before making such a declaration, the Board must give the affected employers and trade unions the opportunity to make representations.
(2) The Board may, in making a declaration under subsection (1), determine whether the employees affected constitute one or more units appropriate for collective bargaining.
[7]In contemplation of the Board issuing a single employer declaration, ACPA and ALPA signed the Protocol which established a seniority list integration process.
3. Should the CIRB issue a single employer declaration and find that the two mainline bargaining units at Air Canada and Canadian Airlines ought to be combined, and provided that ACPA and ALPA have not by that time agreed upon an integrated seniority list, ACPA and ALPA will jointly request that an integrated seniority list for Air Canada and CAIL pilots be determined by the following process under Section 18.1 of the Code:
(a) The integration of the two seniority lists shall be determined by a sole arbitrator jointly selected by the parties, namely Morton Mitchnick;
(b) The arbitrator shall integrate the seniority lists based on such principles as he finds applicable to a bargaining unit consolidation triggered by a single employer declaration under the Code;
. . .
(f) The scheduling of the arbitration, and the manner in which it will be conducted, will be determined by the arbitrator having regard to such submissions and further agreements (if any) the parties present to the arbitrator;
(g) The arbitrator shall have all the powers that the Board would itself have in merging seniority lists under the Code;
(h) Prior to the introduction of evidence in the arbitration, ACPA and ALPA will exchange detailed information on the pilot seniority lists at Air Canada and CAIL respectively, as those lists stood on January 3, 2000.
(i) The arbitrator shall not make an award that alters the relative seniority rankings among employees who are legitimately on the seniority list of either of the two pre-merger pilot groups;
