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AC machinists meeting Tuesday to discuss ruling

The International Association of Machinists and Aerospace Workers was withholding comment on arbitrator Michel Picher's decision until after Tuesday's meeting, spokesman Bill Trbovich said.

The Montreal-based airline announced Sunday that the long-standing labour dispute with its largest union ended with the arbitrator's ruling.

The new five-year deal marks an end to 14 months of negotiations and mediated talks.

The airline's 3,000 pilots are still in the process of working through their dispute with a separate federal arbitrator. A decision is required by the end of July.

The threat of a lockout of pilots, and a strike notice from the Machinists, had prompted the federal government to intervene with back-to-work legislation in both disputes. The law allowed federally appointed arbitrators to impose settlements within 90 days.

Air Canada has been engaged in an often bitter labour dispute with most of its unionized employees in recent months.

The resolution of outstanding labour contracts is being seen as significant as it could decide Air Canada's ability to launch a low-cost carrier — currently a top priority at the airline.

Picher's decision maintains the current defined benefit pension plan for current employees but includes pension changes for any new hires, as was accepted by other unions.

It also contributes to the reduction of the pension deficit and establishes a protocol for the sustainability of the pension plan, taking into account any short-term funding pressures on the company, the airline said in a statement.

Air Canada said it won't comment further while details of the new collective agreement are being communicated to its employees.

The IAMAW represents 8,600 mechanics, baggage handlers and cargo agents employed by Air Canada.