Second reading of Bill S-217, An Act to amend the Canada Labour Code (successive contracts for services)

By: The Hon. Pierre Dalphond

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Hon. Pierre J. Dalphond: Honourable senators, I’d like to take a few minutes to speak today at second reading stage of Bill S-217, a very short bill with just one provision that seeks to amend section 47.3 of the Canada Labour Code to provide airport workers with wage protection in the case of what is known as contract flipping.

I will begin with a review of the context that led to the tabling of this bill. The outsourcing of work to third parties is common practice at Canadian airports. The process starts with the request for proposal, or RFP, issued by the airport authority for the performance of certain work, such as airfield maintenance, mechanical work, baggage handling, pre-board security screening, plumbing, fuelling, security and customer service on and off board. The service contract is then awarded to the best bidder, usually for a period of three years.

At the end of the contract, the airport authority may choose not to extend it regardless of the quality of the services provided by the workers. The airport authority will then go through another RFP process and award the contract to a different contractor, with possible savings or more benefits for the airport, but potentially made on the back of the workers. This practice is commonly referred to as “contract flipping,” and it is the source of uncertainty for many airport workers.

When a contract is awarded to a new contractor, employees of the previous contractor are often laid off or rehired by the new contractor in order to retain knowledge and expertise and avoid disruption of service. Under federal law, since there is no contractual relationship between the two contractors, any collective agreement that may exist is not binding on the new contractor. As a result, workers that were previously unionized lose their union representation as well as any vested rights, including pay, seniority and benefits. The effect of contract flipping is that workers are often rehired by the new contractor to perform the same task but at the lower wage and with fewer benefits than they were used to receiving from the previous contractor.

I was made aware of the abusive practice of contract flipping in 2019, when over a hundred workers responsible for fuelling aircraft at the Pierre Elliott Trudeau International Airport lost their job when a new subcontractor replaced Swissport International Ltd. — Fuelling Services. The services were then provided on an ongoing basis by another new subcontractor, Trans-Sol Aviation Service, or TSAS, which is now the second-largest non-unionized employer to provide services at the Montreal airport.

Travellers did not experience any interruption in services as a result of this contract flipping, but it was all done at the expense of unionized Swissport employees, who had to collect employment insurance or who were rehired by the new subcontractor with working conditions inferior to those they had before.

The abusive practice of contract flipping is becoming increasingly common in the airline industry. This means that workers who had acquired benefits over time have had those benefits taken away and their pay cut even though they are doing the same work. That can have a significant impact on them and their families because they still have to maintain their standard of living even though they aren’t earning the same income.

Unfortunately, existing section 47.3 of the Canada Labour Code has a very narrow application. Only employees who provide pre-boarding security screening services may benefit from its protection, which is limited to salaries. The provisions to provide for equal remuneration were added to the code when the Canadian Air Transport Security Authority was created and given the mandate to take actions — either directly or through the hiring of contractors — for the screening of travellers. The protection was added to ensure the specialized screening workers do not fall below their existing wage level and leave the airport, resulting in a loss of expertise and personnel, regardless of which contractor is put in charge of the screening process.

There have been multiple proposals to expand the scope of section 47.1 of the Labour Code to go beyond the employees affected through the boarding security services to include all other airport service employees working for third-party contractors.

Bill S-217 aims to do that. The bill will expand the protection to all the employees working in airports, including in plumbing, mechanical work, baggage handling and crew scheduling. The provisions clarify that the list of services in the bill is not meant to be exhaustive or limited.

I tabled Bill S-217 last fall with the hope that it would eventually lead to regulatory changes that will expand the scope of the equal remuneration provisions under section 47.3, since the government has the power by order-in-council to expand the protection.

Two weeks ago, when Budget 2021 was tabled, my hope was more than fulfilled. The government announced its intentions to introduce legislation to expand the scope of the equal remuneration protections to more employees, noting that:

This would ensure that, when a service contract changes hands, affected employees are not paid less, if they are laid off and rehired to do the same work they were doing before.

I’m happy to report that the government has introduced such legislative changes in Bill C-30, the budget implementation act. I dare say that the budget implementation act has greater chances of passing than my Bill S-217. This is therefore the first and last time you will hear me talk about this bill. In a matter of weeks, I hope Bill S-217 will become moot, and I am glad for it.

That said, even though the wage protection proposed in Bill C-30 is a step in the right direction to mitigate the negative consequences of contract flipping, there are other provisions that could be added to the Canada Labour Code to protect not only wages, but also job security and benefits gained through collective bargaining. I will continue to look at this issue, and I hope the government will do the same in collaboration with the unions.

Thank you, meegwetch.

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