COVID-Strapped Airline Can Cut Inactive Employees’ Benefits to Stay in Business

Feeling the strains of the pandemic, a business travel company put 90% of its workforce on temporary layoff. The only good news was that the company promised to maintain their benefits until what it expected to be a short layoff ended. Unfortunately, the financial situation didn’t improve and the company had to cut costs. When the union refused to make concessions, the company unilaterally cut inactive employees’ health benefits, and access to CEWS via its payroll system. The union grieved but the federal arbitrator sided with the company. The collective agreement didn’t require the company to maintain the benefits; nor was the decision to cut benefits arbitrary or unreasonable given that the company desperately needed to cut costs to stay in business [Porter Airlines Inc. v Unifor, Local Union 2002, 2021 CanLII 82403 (CA LA), September 2, 2021].