4 Things to know about the Air Canada labour dispute

After months of stalled negotiations, 10,000 Air Canada flight attendants walked off the job early Saturday morning. The federal government stepped in hours later to order binding arbitration, forcing an end to the strike — or so they thought.

The union representing Air Canada flight attendants said Sunday it would defy the back-to-work order and remain on strike.

Here's everything you need to know:

The federal government used a contentious section of labour law to intervene and stop the strike, which began at 12:58 a.m. ET Saturday.

Jobs Minister Patty Hajdu invoked Section 107 of the Canada Labour Code, which gives the minister the power to order the end of a work stoppage to "maintain or secure industrial peace."

Hajdu used her powers to direct the Canada Industrial Relations Board (CIRB) to order both the airline and the striking workers back to work. Air Canada said Sunday it had been directed by CIRB to resume operations and have flight attendants return to their duties by 2 p.m. ET.

Hajdu says she chose to intervene in the labour dispute because "the potential for immediate negative impact on Canadians and our economy is simply too great."

"Now is not the time to take risks with our economy," said Hajdu at a news conference in Ottawa Saturday. "A work stoppage would cause thousands of Canadians to be stranded abroad and across this country and this is simply unacceptable."

WATCH | How Hajdu intervened in the Air Canada labour dispute:

Jobs Minister Patty Hajdu said she has invoked Section 107 of the Canada Labour Code to order binding arbitration between the airline and its union and has ordered operations to resume. Air Canada previously asked Hajdu to intervene with a binding arbitration order, which is one of the powers granted to the minister through Section 107 of the code.

Until recently, Section 107 was a relatively unknown piece of legislation. But last year, the Liberal government invoked it in several major disputes — sending unionized employees back to work at ports, rail yards and Canada Post.

Unions are taking the federal government to court for its repeated use of Section 107, arguing it violates Canadians' constitutional right to strike and sours the bargaining process.

The Air Canada Component of the Canadian Union of Public Employees (CUPE) said Sunday morning it will defy the back-to-work order handed down by CIRB.

Picket lines remain outside of airports in Toronto, Montreal, Vancouver and Calgary.

In a statement Sunday, the union pointed to "a staggering conflict of interest" involving the chair of CIRB, Maryse Tremblay, who served as legal counsel for Air Canada for nearly seven years from 1998 to 2004, according to her LinkedIn profile.

WATCH | Air Canada flight attendants defy back-to-work order:

Air Canada flight attendants will defy the back-to-work order and remain on strike after the federal government ordered binding arbitration to end the work stoppage, the Canadian Union of Public Employees told Radio-Canada on Sunday. The union has also accused federal Jobs Minister Patty Hajdu of caving to Air Canada's demands by ordering binding arbitration on Saturday.

Air Canada had been advocating in recent days for government intervention to resolve the bargaining impasse.

"We will be challenging this blatantly unconstitutional order that violates the Charter rights of 10,000 flight attendants, 70 per cent of whom are women, and 100 per cent of whom are forced to do hours of unpaid work by their employer every time they come to work," the union said.

Air Canada and CUPE have been negotiating a new contract for flight attendants after the previous 10-year contract expired in March. CUPE says that wages, work rules and unpaid hours are the big issues in contention.

According to CUPE, many duties performed by flight attendants prior to boarding and after deplaning, including performing required safety checks and assisting passengers, go unpaid under the current pay structure.

The federal government has invoked Section 107 a number of times in recent years. But it is unusual for a union to defy a CIRB order.

"The penalties could be significant" for the union, labour law expert Adam King told CBC News in an interview.

Defying a legal back-to-work order could result in fines for the union or workers being fired. It could also lead to criminal prosecution in some cases.

WATCH | Picket lines remain at major Canadian airports:

Hundreds of Air Canada flight attendants demonstrated outside Vancouver International Airport Saturday. The strike prompted a warning for passengers to avoid the airport unless they have confirmed a booking on a different airline. Shaurya Kshatri reports.

In 1978, members of the Canadian Union of Postal Workers were ordered back to work during a national strike. Union president Jean-Claude Parrot defied that order, with workers staying on the picket lines for a week after it was issued. Parrot was jailed for two months for refusing to comply.

But King says it's also possible that CUPE's refusal to comply could work in the union's favour.

He pointed to the example of Ontario Premier Doug Ford's government ordering CUPE's education workers back to work when they went on strike in 2022.

"The entire labour movement in the province responded with the threat of a general strike. And the government was forced to back down and take their legislation away," said King.

"If something similar happens here, we could very well see no penalties. If labour mobilizes in support of the flight attendants, they could very well be victorious in this."

CBC News has reached out to Hajdu for comment on how the government will respond and will update this story with any response.

Air Canada said in a statement Sunday that it will suspend plans to resume operations after CUPE indicated its intentions to remain on strike. The airline says 240 flights that were scheduled to operate beginning this afternoon have now been cancelled.

The airline said it will resume flights as of Monday evening.

With flight attendants refusing to return to work, it is unclear how Air Canada plans to operate these flights. CBC News has reached out to the airline for clarification.

Flights by Air Canada Express, which are operated by third-party airlines Jazz and PAL, are not affected.

About 130,000 customers will be affected each day the strike continues, the airline said last week.

WATCH | The impact of the flight attendants' strike on travellers:

Canada's largest airline is now mostly grounded after a strike deadline passed for more than 10,000 Air Canada flight attendants. Hundreds of flights have been cancelled impacting over 100,000 travellers and leaving some stranded.

The airline says customers whose flights have been cancelled will be notified and are "strongly advised" not to go to the airport unless they have confirmed flights on other airlines.

Air Canada will offer those with cancelled flights other options, including a refund or credit for future travel. For customers due to travel soon, the airline said it will also offer to rebook customers on other carriers, "although capacity is currently limited due to the peak summer travel season."