The news — first reported by the Star — was confirmed in a press release by the airline. The announcement comes after discussions between federal officials, the airline and its unions about whether or not the company would be eligible for the 75 per cent wage subsidy announced as part of the government’s COVID-19 aid package.
Air Canada spokesperson Peter Fitzpatrick said in an email that the employees being brought back will be paid, but won’t actually have any work.
“Furloughed employees will get returned to payroll but will not be brought back to active duty status (i.e. come back to work) as there is no work for them given we have reduced our schedule by approximately 90 per cent,” Fitzpatrick said in an email. “By being brought back to payroll, they will get full benefits and stay connected to the company.”
While employers have an option of topping up the 75 per cent from the government and giving employees their full pay, Air Canada won’t be doing that.
In Air Canada’s press release, airline CEO Calin Rovinescu praised the federal wage subsidy program, which is being capped at $847 per week per employee.
“The Canada Emergency Wage Subsidy (CEWS) is an extremely important program to help employees and employers during this time of crisis, and as one of Canada’s largest employers most affected by COVID-19, we want to acknowledge the leadership of the Government of Canada in introducing it,” Rovinescu said in the release. Rovinescu and Air Canada’s chief financial officer, Michael Rousseau, are also giving up 100 per cent of their salaries, the press release said.
“We are trying to keep as many of our employees as possible during the crisis and this measure will certainly help. Depending on wage levels, many furloughed employees will get a somewhat higher amount under CEWS than they would otherwise receive from Employment Insurance payments, plus they will maintain their health insurance and other benefits,” Rovinescu said in the release.
The Canadian Union of Public Employees, which represents 10,000 flight attendants at Air Canada and its discount carrier Rouge, praised the decision in a press release.
“This would be an important piece of relief for our members who have endured some very difficult times over the past several months,” said Wesley Lesosky, president of the Air Canada component of CUPE. “They are due for a little bit of good news.”
Flight attendants will be paid 75 per cent of normal hourly wages until June 6, or until they’re recalled for duty — whichever comes first, CUPE said in its release.
The federal wage subsidy program, announced April 1, had originally been directed at companies that have seen their revenues drop by at least 30 per cent because of the pandemic.
According to their press release the airline meets that qualification.
Prime Minister Justin Trudeau announced today that the government will be loosening the standards to allow businesses to use the CEWS if their revenues have dropped by 15 per cent.
“We want to make these emergency measures as effective and inclusive as we can,” Trudeau said during a press conference Wednesday.
“We know that not every company operates in the same way. That’s why we’re making changes to include as many of you as possible,” Trudeau added.
But businesses still need to demonstrate the larger 30 per cent drop in revenue to get the subsidy in April and May, compared with the same months one year earlier.
Trudeau also said some businesses will be allowed to use January and February as the reference point for their falling revenue.
The rehiring would be retroactive to March 15 and run at least until the end of the CEWS program on June 6.
Trudeau said he hopes legislation introducing the CEWS will be passed soon, with the goal of having money flowing to companies within three weeks.
“I certainly hope the opposition joins me in moving quickly. … I recognize that these are the largest government measures passed in decades, if not ever,” Trudeau said.
WestJet, which laid off almost half its 14,000 workers late last month, is taking a wait-and-see approach, said spokesperson Morgan Bell.
“We are continuing to evaluate the wage subsidy program as the government finalizes the details of the program prior to the passing of the legislation into law. WestJet’s top priority is the well-being of our employees and the continued viability of our airline,” Bell said in an emailed statement.Robert Williams is a reporter at the Waterloo Region Record.
Josh Rubin is a Toronto-based business reporter.