Canadian Ua Workers Lawsuit

[FrugalFlyerv2.0]

I'm curious, why does UA still have employees in Canada? I thought that with AC being in * alliance plus all the code-share flights between AC and UA, all UA flights in Canada would be handled by AC (ticket counter, gate, baggage, etc)?


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Toronto Star, Feb. 2, 2005

Canadian workers sue United Airlines
Unions fighting decision to scuttle pension plans Carrier is trying to emerge from insolvency

RICK WESTHEAD
BUSINESS REPORTER

In move that could have wide-ranging repercussions on its efforts to reorganize and emerge from bankruptcy protection, UAL Corp.'s United Airlines has been sued by its 150-plus Canadian employees over its decision to stop funding their cash-strapped pension plan.

UAL was sued late yesterday in Toronto by the International Association of Machinists and Aerospace Workers and the Canadian Auto Workers. The IAMAW represents the airline's workers in Vancouver and Calgary, while the CAW represents United employees in Toronto.

A Canadian-based lawyer for UAL couldn't be reached to comment.

The lawsuit comes at a critical juncture for United. The airline, which has been in bankruptcy protection the past 26 months, remains at loggerheads with several of its largest unions over proposed wage cuts. If the CAW and IAMAW are successful in their suit, it could put pressure on United to renew its contributions to the pension plans of its U.S.-based unions.

UAL has said it needs to scuttle each of its four pension plans to lure a financier to help fund its exit from insolvency. The carrier is set to spend the next few months reviewing pension plan alternatives and has asked for a possible trial to consider terminating the pension plans.

In September, an Ontario court judge granted UAL's request to stop funding the pension plans of its Canadian employees. At about the same time, the carrier stopped funding the plans of its U.S. unions.

Yet in its factum filed in court yesterday, the IAMAW charged that "the circumstances justifying a stay of proceedings were not established by UAL, and if they were, those circumstances no longer exist."

As of Jan. 1, 2004, the IAMAW's pension plan had an unfunded solvency liability of $1.2 million, according to an affidavit filed by Steve Vodi, the IAMAW's airline co-ordinator. The airline would need to make five annual contributions of $344,525 to fund its pension plan and retire the unfunded liabilities of the plan, according to the IAMAW's court filing.

In a factum accompanying its statement of claim, the IAMAW alleged that the carrier hasn't proved that making its pension fund payments "would in any way impair the successful restructuring of UAL." It's unclear by how much the CAW's pension plan is underfunded.

Included in the IAMAW's 143-page motion record was a Sept. 3, 2004 letter to UAL from a lawyer with the Office of Superintendent of Financial Institutions, the government regulator that oversees pension issues, that reiterated OSFI's position that "the outstanding payments should be remitted immediately."

"Up until recently, United Airlines has remitted all contributions to its pension plans. It is OSFI's position that United Airlines is obliged to make these contributions pursuant to the Act and the plan," wrote OSFI lawyer Carol Taraschuk.

On Monday, United reached a deal with unions representing pilots and flight attendants that would save more than $300 million (U.S.) a year, and asked a bankruptcy court judge to approve a temporary pay cut to mechanics and cleaners.

 

[FrugalFlyerv2.0]

Here's an update.

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Toronto Star, Mar. 1, 2005.
RICK WESTHEAD
BUSINESS REPORTER

Airline ordered to boost pension
United employees' plan underfunded

Ruling impact may spread to U.S.


UAL Corp.'s United Airlines has been ordered by an Ontario judge to begin funding the cash-strapped pension plan of 150 Canadian-based employees, a development that may have wide-ranging repercussions on its efforts to reorganize and emerge from bankruptcy protection.

UAL, which has said it needs to scuttle its four pension plans to lure a financier to help fund its exit from insolvency, was sued last month in Toronto by the International Association of Machinists and Aerospace Workers and the Canadian Auto Workers. The IAMAW represents the airline's workers in Vancouver and Calgary, while the CAW represents United employees in Toronto.

The decision by Ontario Superior Court Justice James Farley comes at a critical juncture for United's parent company. The airline, which has been in bankruptcy protection the past 27 months, remains at loggerheads with several of its largest unions over proposed wage cuts. Farley's decision might put pressure on United to renew its contributions to the pension plans of its U.S.-based unions.

"There is no evidence before me that UAL either (i) does not have sufficient funds to make the pension funding payments or (ii) that its (debtor in possession) arrangements are such that it cannot make such payments," Farley said in a handwritten decision.

In September, an Ontario court judge granted UAL's request to stop funding the pension plans of its Canadian employees. At about the same time, the carrier stopped funding the plans of its U.S. unions.

Yet in its factum filed in court yesterday, the IAMAW charged that "the circumstances justifying a stay of proceedings were not established by UAL, and if they were, those circumstances no longer exist."

A lawyer in the case said UAL would be required to contribute to its Canadian pension plans as soon as April 1.

As of Jan. 1, 2004, the IAMAW's pension plan had an unfunded solvency liability of $1.2 million, according to an affidavit filed by Steve Vodi, the IAMAW's airline co-ordinator. The airline would need to make five annual contributions of $344,525 to fund its pension plan and retire the unfunded liabilities of the plan, according to the IAMAW's court filing.

 

[johnny gearpin]

Thanks for the update Frugal.

Best regards,

Johnny Gearpin