Canada Orders Binding Arbitration to Resolve WestJet Labor Dispute — Update

By Paul Vieira

OTTAWA--Canada's labor minister ordered WestJet Airlines and the union representing the carrier's maintenance engineers enter into binding arbitration on a new labor agreement, averting strike action during a holiday long weekend in the country.

Labor Minister Seamus O'Regan, in a statement posted Thursday on the social-media platform X, said the decision comes because the parties remain far apart on talks to secure a first collective agreement, and that "tensions have only increased" this week.

Canada's second-biggest airline by seat capacity started to cancel flights after it received a second-strike notice from the Aircraft Mechanics Fraternal Association, a union representing WestJet maintenance engineers and other technical operations workers. A strike by unionized members could have started as early as Friday, ahead the start of a holiday long weekend as the country's birthday, Canada Day, falls on Monday.

WestJet is owned by Toronto-based buyout firm Onex, which trades on Toronto's main stock exchange.

The two sides were negotiating their first collective agreement. Previously, O'Regan, under labor-law provisions, referred the WestJet-mechanics dispute to the Canada Industrial Relations Board, with a mandate to assess the state of talks and work toward bringing the two sides together. Following that move, the union rescinded an initial strike notice, and negotiators from both sides returned to bargaining.

A spokesman for O'Regan said the minister ordered final binding arbitration via a clause in Canadian labor laws that gives federal officials the power "to maintain industrial peace."

The union said there is "no modern precedent" for the minister's decision Thursday to impose final binding arbitration.

Nonetheless, the union said it would comply and direct its members to refrain from any unlawful job action.

A spokeswoman for WestJet didn't immediately respond to a request for comment. In a previous statement, it said about a quarter-million passengers were scheduled to travel on WestJet aircraft this holiday weekend.

Write to Paul Vieira at paul.vieira@wsj.com

(END) Dow Jones Newswires

June 27, 2024 17:50 ET (21:50 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.