Air Canada outsourced legally required maintenance to Aveos; a court found it broke law

Under the Air Canada Public Participation Act, the airline had to maintain heavy-maintenance centres in Montreal, Winnipeg and Mississauga, a task it had contracted out to Aveos. When Aveos went bankrupt in March 2012, the centres closed. On 10 November 2022 the Quebec Superior Court ruled that Air Canada had violated federal law by not keeping them operational, finding in a 154-page decision by Judge Marie-Christine Hivon a 'continuous violation' from March 2012 to June 2016.

The class action covered nearly 2,200 former Aveos workers, most of them in Montreal. Judge Hivon ordered Air Canada to compensate them for loss of income, employment and social benefits, and for 'stress, questioning, decrease in self-esteem, insecurity, feelings of injustice and loss of enjoyment in life', and to pay individual claims from workers who suffered moral damages such as psychological problems, insomnia, family problems and divorce.

The court rejected two of Air Canada's arguments: subcontracting did not release the company from its legal obligations when the subcontractor stopped operating, and the federal government's June 2016 amendment easing the obligation was not retroactive. Air Canada 'did not take reasonably serious steps to comply with the law after the closure of Aveos', the judge wrote.

Air Canada contracted out to Aveos the maintenance work the law required it to keep in three named centres.

The judge found Air Canada took no reasonably serious steps to comply after the closure.

Air Canada argued the 2016 amendment clarified what the law always meant; the court held it was not retroactive.

The ruling found no proof that Aveos' collapse itself came from Air Canada's bad faith or wilful misconduct, so punitive damages were not awarded.

Outsourcing a legal obligation does not transfer it. When the contractor fails, the duty stays with the company that signed the law.

The judge dismissed the workers' claim for C$110 million in punitive damages for lack of evidence of bad faith or wilful misconduct by Air Canada in the Aveos collapse. Air Canada said it had 'always acted in good faith', noted the court did not find it caused Aveos' failure, and said it would consider an appeal. The union representative called it a win after a 14-year battle and urged Air Canada's shareholders to settle.