Four new providers picked up the work - but the workers' severance stayed behind
Hundreds of airport workers have kept their jobs but have lost their severance in a first-of-its-kind arbitration ruling.
Menzies Aviation had operated ground-handling services at Toronto's Pearson International Airport, employing roughly 540 unionized workers to do everything from staffing ticket counters to marshalling aircraft, loading baggage, and servicing lavatories. Then the Greater Toronto Airport Authority decided not to renew the company's operating licence, effective September 30, 2026.
Things moved fast after that. WestJet, Menzies' largest customer at the airport, pulled its contract effective July 3, 2026. Once that deal was gone, Menzies concluded it was no longer economically viable to continue and decided to shut down operations on June 10.
On March 13, the company issued a group termination notice covering approximately 625 employees - 540 unionized and 85 non-unionized - and told the federal government it expected most workers would transfer to new providers.
Same work, different lanyard
Four competitors stepped in. Unifi Aviation Canada took over the WestJet and Alaska Airlines work. Swissport picked up BermudAir, LOT Polish Airlines, and Sun Country Airlines. GTA dnata assumed Caribbean Airlines. Samsic Assistance Canada took Avianca. In most cases, responsibility shifted to the new provider the moment Menzies serviced its final flight.
For workers moving to Unifi, the transition was especially seamless. The company announced it would honour existing pay, recognize seniority for schedule bidding, assign workers to the same positions, and skip formal interviews. Menzies and Unifi coordinated employee lists, onboarding, background checks, training, and even the handover of crew-room space. The union and Unifi signed a side letter recognizing prior Menzies service and entered into a new collective agreement.
In his October 29, 2026, award, Arbitrator Jesse Kugler found the transition amounted to something more than a series of new hires. "This was not unrelated hiring into a distinct business," he wrote. "It was the organized continuation of the transferred ground handling operation."
A first-of-its-kind ruling
The case turned on sections 189(1.1) and 189(1) of the Canada Labour Code, which deem employment continuous when federally regulated work moves from one employer to another through retendering or transfer. Section 189(1.1), the retendering provision, had never been interpreted by an arbitrator before. Both Menzies and the International Association of Machinists and Aerospace Workers agreed the provision applied - but wanted a formal determination.
The arbitrator found section 189(1.1) applied squarely. The airlines had reassigned their ground-handling contracts to new providers, those providers became responsible for the same federal work Menzies had performed, and the transitioning employees continued doing it - all within the 13-week window prescribed by section 189(1.2). He also found that section 189(1), the broader transfer provision, independently produced the same result under the six-part test from Universal Aviation. That the work split among four providers did not matter - section 189(1) applies to "any part" of a federal undertaking.
The parties also resolved a separate pay-in-lieu issue by agreement. Menzies would pay transitioning employees for the gap between June 10, when operations ceased, and their hire date with a new provider - but nothing for workers who started with a new employer on or before June 9. The severance claim was dismissed. "Under both sections 189(1.1) and 189(1), the Transitioning Employees' employment is deemed continuous with the applicable New Service Provider," the arbitrator held. "Their employment was therefore not terminated for the purposes of section 235 of the Code, and Menzies is not liable for statutory severance pay."
