Air Canada 2010 Annual Report Download - page 54

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2010 Air Canada Annual Report
54
The investment in Aveos common shares is recorded in deposits and other assets and is carried at cost. The Term Note is
also recorded in deposits and other assets and is carried at amortized cost.
Aveos Certification Order
On January 31, 2011, the Canada Industrial Relations Board issued an order determining that the sale of Air Canada’s former
aircraft, engine and component maintenance and repair business had occurred within the meaning of the Canada Labour
Code, and establishing Aveos as a distinct employer, bound by separate collective agreements. The issuance of this order
triggers the commencement of the process by which certain employees will transition from Air Canada to employment
with Aveos.
Pursuant to this order and a related separation program, Air Canada may be required to provide up to a maximum of 1,500
separation packages to IAMAW-represented Aveos employees employed as of the date of the order (with each package
including up to a maximum of 52 weeks of pay), in the event that such employees are permanently laid off or terminated
as a direct result of Aveos ceasing to be the exclusive provider of airframe maintenance services to Air Canada prior to
June 30, 2015. These packages will also be made available at any time up to June 30, 2013, in the event of an insolvency,
liquidation or bankruptcy involving Aveos resulting in the cancellation of Air Canada-Aveos contracts and in the termination
or permanent layoff of IAMAW-represented employees. The airframe maintenance services agreement may be terminated,
as of June 30, 2013, by either party. The accounting for the separation program will be determined in the first quarter of
2011.