Ottawa—Relying on the unusual legal doctrine of “force majeure,” which makes contracts unenforceable when they can no longer be performed due to an act of God, Air Canada claims that the recent war in Iraq is forcing them to layoff 3600 employees, some of whom have guaranteed job security in their collective agreements.

"The outbreak of war confirms our pressing need to achieve our target of $650 million in labour cost savings in addition to the job reductions announced today," said Robert Milton, President and Chief Executive Officer of Air Canada. "I regret the impact of this decision on the many loyal employees affected but we need to accelerate our transformation into a leaner, lower cost carrier."

As a result of the anticipation of war in Iraq and the alleged existence of a "force majeure" situation, Air Canada has been progressively adjusting capacity over the past several weeks in view of reduced demand. Recent capacity reductions, says Air Canada, are equivalent to the removal of 18 aircraft from service in March and 35 aircraft in April and May of 2003.

But, the Canadian Autoworkers, which represents about 600 of the 3600 workers Air Canada plans to layoff, says the no layoff clause in their collective agreement must be respected. “We expect Air Canada to negotiate a solution . . . and not to layoff one of our members,” said Gary Fane, the union’s director of transportation, calling for meetings with Air Canada.

“Air Canada’s attempt to claim ‘force majeure’ to avoid the obligations of a collective bargain is unusual,” says Jorge Talbott, an Ottawa labour lawyer. “It remains to be seen whether an act of God will provide much of a defence in front of the Canada Industrial Relations Board.”

The airline will reduce its non-unionized workforce by approximately twenty per cent across all ranks including senior and executive management to be completed by the end of 2003 and will also reduce its unionized workforce by approximately ten per cent.

The CAW represents 9,500 workers at Air Canada and at Air Canada Jazz.