Privatisation Of The Canadian Air Navigation System

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Privatisation Of The Canadian Air Navigation System

39TH ANNUAL CONFERENCE, Marrakech, Morocco, 6-10 March 2000

WP No. 162

Privatisation Of The Canadian Air Navigation System

Introduction

In expectation of a presentation to the International Labour Organisation regarding the privatisation or commercialisation of Air Navigation Systems around the world and the effect on their workforces, IFATCA requested that Member Associations, who had gone through such a transition, document some of their experiences The EVPP asked that particular attention be paid to the management/labour issues.

As a result of that request, this Working Paper was written by the Canadian Air Traffic Control Association. At the time (Fall 98), the Association was in the midst of a very acrimonious set of “first contract” negotiations. Since then, a contract has been ratified and the Working Paper has been revised.

Discussion

Changes to Employment

Until the ratification of the first private sector collective agreement, there had been, officially, no changes to the terms or conditions of employment as Canadian Labour Law dictated a freeze during the time of collective bargaining. Bargaining had been ongoing for twenty-two months and negotiations had broken down. Job action/strike was about to be taken when a last minute settlement was reached. This settlement came under the threat of government intervention and legislation.

This legislation would have removed permanently the right to strike by any union against the ANS provider. The Government would unilaterally appoint an arbitrator in all future labour disputes. Hefty fines against individuals ($5000CDN) and union officials ($50,000CDN) were included for any decrease in output such as increased sick leave or refusal to work overtime. Most surprising was that the right to strike had been discussed at length with government and stakeholders when the company was created and had been granted.

The union’s demand for significant wage increases and the employer’s demand for concessions in scheduling flexibility and sick leave highlighted negotiations for this first collective agreement in the private sector. A tentative agreement incorporating both was rejected by the membership.

The reasons for this rejection and complex and numerous. The employer had asked for longer workweek, more flexibility in hours per day and days on/off per cycle. The employer also required that the first two days of sick leave for each absence would be without pay.

Most of the wage increase was offered to the “higher density’ units and was incorporated not in pay but in an operational bonus which was not included in overtime calculations. This had the effect of reducing the overtime rate.

Job security for air traffic controllers is not presently a concern as the air navigation system is substantially understaffed and traffic is forecasted to continue to increase. Further, the company is looking to expand its services in to international airspace such as Oceanic and Polar.

Because of the breakdown of collective bargaining, labour relations have suffered very seriously. Both union and management fight almost all issues and most grievances are referred to arbitration. This requires a great deal of time and resources to resolve issues. Management is very slow to implement arbitration awards where the union is successful. While union resources are limited, the company has the right to set fees as required to cover costs, (with the stipulation that as a not for profit company excess income be returned to the users.) This gives the company unlimited funds to fight grievances and provides an opportunity to bankrupt the union in the courts.

The company wishes to ensure a defined line exists between represented and excluded employees. To this end they have changed the title of the supervisor (represented) to “team leader” in an attempt to move them away from management responsibilities and into more of a “Senior Controller” role. All non-represented employees have been given the title of “manager”.

Obviously, in these conditions, relations with local management have suffered as well.

There is no profit pay. As noted above, legislation requires that excess revenues are returned to the users. However, since the last round of negotiations, the employer has suggested that future negotiations should explore Gain Sharing, a concept where individuals and units would be financially rewarded for increased productivity


Provision of the ATC Service

This system is not unsafe but the margins for safety have been reduced since privatisation. Because a privatised system should be more flexible and able to respond more quickly, the potential for better equipment and more operator input into procedures seems to exist. In Canada, however, we have seen none of the upside and all of the downside. The company has reduced the number of engineering staff and increased the call out time. It has closed a number of smaller units.

As noted during negotiations, the company is perceived to be taking a callous position with regard to Human Factors. Controllers are being ordered to extend shifts to twelve, and in some cases sixteen, hours. Overtime is substantial and mandatory.

Shift start times also reflect little HF consideration. Management of traffic levels through the use of flow control is now an absolute last resort and managers get directly involved in the operation and control decisions of individual controllers to ensure maximum output. Staff moral has suffered as a result of these changes to the point that the advisory committee of stakeholders believes that poor morale itself may begin to affect safety.

Interestingly, corporate liability insurance now comes in to play. It would seem that the number of operating irregularities has a direct impact on premiums paid. Therefore, management has decreed that controllers will be subject to disciplinary action if they have losses of separation. Controllers who have an unspecified number of incidents will be terminated.

Because of the decrease in the use of flow control restrictions, the provider can claim that the system is more efficient.

Six hundred million dollars has been set aside for “new technology”. We are concerned that it is the engineers who are writing the operational requirements and not the operations personnel. Rather than operations identifying a deficiency and engineering finding the technology to mitigate it, engineering finds interesting technology and operations tries to make use of it. Controller input into new systems is minimal. Union representation is almost non-existent.

Large capital projects such as the replacement of the radar processing and display systems were particularly prone to mismanagement under the government. Since privatisation, management of these super projects has tightened and payments are no longer made for work not completed, however, there are still no concrete results. The CAATS project has been stuck at the 80-90% complete level for years and the timeline for a finished project continues to slip.

Funding for equipment and staff is a problem. As stated above, money is set aside for new projects, but when problems are identified by local operations in current systems, it is difficult to obtain approval for a fix. The company has committed $100 million to training but as their figures show, this will only result in an additional 30-40 controllers. The system is currently 200 controllers short and has an attrition rate of approximately 75 per year. This does not factor traffic increases or airspace expansion.


The Privatised System

Nav Canada is a not-for-profit private company. It raises capital through the issuance of corporate bonds on the public market. It is run by a Board of Directors who represent the public, the users, the government and labour.

It appears that the airlines have a disproportional influence on the company. While they have only four or five seats on the Board, their expertise may be deferred to by other members who have no aviation experience. Further, most of the Executive Management of the company comes directly from the airlines.

While the company is not-for-profit in name, obviously any reduction in the cost of running the system will result in lower user fees and therefore increased profit for the users.

The Government of Canada, through the Ministry of Transport regulates the Air Navigation System and monitors the company’s safety management. When the system was privatised, a new set of aviation regulations was created. It must be noted that the number of regulations that deal with the provision of Air Navigation are about one-tenth the number that deal with airline operations. One reason for this is that the regulator adopted a performance-based partnership rather then compliance-based monitoring. In other words, the regulator waits for visible failures in the system to point to deficiencies rather than seek them out. This is reactive rather than a proactive, and CATCA strongly opposes it.

This has also resulted in regulatory action being taken against individual controllers for losses of separation since separation standards are now defined in regulation. In a number of cases, fines have been levied against these controllers. The employer has sometimes paid these fines on the controllers’ behalf but, as noted, the employer often takes disciplinary action of its own. Controllers acting as on-job instructors are also now responsible to the regulator for the actions of their trainee. This makes it difficult for the instructor to comfortably allow the trainee the latitude required to prove their abilities in the latter stages of their training.


Association’s Response to Privatisation

CATCA considers itself to be both a trade union and a professional association for Canadian air traffic controllers. Since privatisation, it has had to greatly expand both these roles. The labour attitude of the current management has forced CATCA to take more of a traditional trade union stance in our relationship with management. CATCA has had to become more hostile, militant and entrenched in labour issues. This has put a serious strain on resources. Regardless of management attitude, a move to the private sector brings with it a new style of collective bargaining and new pressures (and possibly rewards) and in the first years it was expected that the labour relations’ workload would increase.

Now that interest groups have a say in the running of the system, CATCA has had to begin the lobbying process to ensure that its voice is heard by all parties. New and stronger ties have had to have been forged with airline, government, private users and other labour organisations. For the first time, CATCA has started to make the public aware of who we are and the job we do. This has been done this primarily through the media, TV, radio and print. All of this has required the hiring of more permanent labour relation staff and the use of consultants for their expertise in law, negotiations, research and public relations.

CATCA is also pursuing a co-operative relationship or possible merger with a larger more traditional trade union.


Views on Privatisation

The difficult first years of privatisation has lead to a split in the opinion of the membership. Some believe that they would have been better had they stayed in the government – even though government wage increases are averaging 1.5%. Others still see the private sector as better able to efficiently run the system while still leaving room for good labour relations and employment conditions. The system envisioned by CATCA a decade ago when they began the push for privatisation has never materialised. The present system appears to be run as if it were a business in a highly competitive market where reducing the bottom line is the primary goal. Services that don’t pay for themselves are reduced. Human Factors and employee relations are given scant regard.

While CATCA believes that the present system in Canada is nothing short of a disaster, they still do not know if the system that they attempted to create would fare any better. But they do believe it would and so, for the most part, still support privatisation.

Conclusions

CATCA discovered that once the ball started rolling toward privatisation, it was difficult to control and impossible to stop. Other interests – airlines and government – shaped the final product. Privatisation is a viable alternative to a stagnant and bureaucratic government run system but the structure, purpose and direction of the private system must be defined before its creation. Labour’s input into the operation of the new company and employee’s working conditions need to be at the forefront of the creation process.

Air Traffic Controllers are the key ingredient to the success of a privatised system, but once the transfer is complete, promises are worth nothing. Member Associations facing the possibility of privatisation would be advised to review the experiences of countries like Canada and then carefully consider the pros and cons of their particular situation.

Recommendations

This Working Paper be accepted as information material.

Last Update: September 28, 2020  

March 11, 2020   251   Jean-Francois Lepage    2000    

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