It looks like Air Canada has bought itself some labour peace for the peak summer travel season.

The airline reached a tentative settlement Thursday with its 3,800 striking customer service workers, just hours after Labour Minister Lisa Raitt tabled back-to-work legislation in the House of Commons.

Air Canada spokesman Peter Fitzpatrick said the airline is delighted to have an agreement, and is focused on getting passengers to their destination.

The workers are scheduled to return to work on Friday. It is unusual to return before a ratification vote, but the union says workers owe it to the flying public. Ratification votes will take place over the next two weeks.

Few details are being released, but a source says the four-year deal includes wage increases of 9 per cent over the term of the contract, and protects the defined benefit pension of current employees.

The union said there would be some minor changes to pension benefits, but they would not go into effect until 2013.

However, on the most controversial issue of putting new hires on a defined contribution plan from the defined benefit plan, the parties agreed to send that to mediation-arbitration.

“For future Air Canada employees, we regret that we were not able to put in the collective agreement a defined benefit pension,” CAW president Ken Lewenza told reporters at a news conference.

“I’m not giving up,” he said, adding that the union will fight for it during arbitration. “But for us to prolong the strike, it would absolutely make no sense at this time.

“Do I feel good passing on a risk to a new generation? I’m not happy about that,” Lewenza said. “At the end of the day, bargaining is tough and you have to make tough decisions.”

Air Canada will have to do this all over again with three other unions that represent the pilots, flight attendants and mechanics.

However, given the complicated legal process involved in contract talks, only the Canadian Union of Public Employees, which represents nearly 7,000 flight attendants, would be in a legal strike position, but not until late August at the earliest.

The airline’s 3,000 pilots resoundingly rejected a tentative deal in the spring that called for the different pension scheme for new hires, and the possible creation of a discount airline, where pay and work rules would be different.

The pilots were so upset by the proposals that they voted out four union officials. Contract talks are expected to restart next month.

It appears the airline may have dropped its plans for the low-cost carrier to vacation destinations in Europe and down south, after pilots rejected the idea. There was no mention of the low-cost airline in the CAW’s tentative agreement.

Dave Ritchie, general vice-president of the International Association of Machinists and Aerospace Workers, which represents 12,000 mechanics, ground crews and baggage handlers, said his union is ready to fight.

“Our members are still mad as hell,” said Ritchie. “We’ll have to see what we can do at the bargaining table.”

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When news leaked out on Thursday of a deal, the CAW strikers at Pearson airport began cheering.

“We won baby!” Sam Ponzi shouted into a megaphone outside the terminal.

“Perseverance pays,” said Charlotte Lewis. Asked how she felt, Lewis shouted “Fantastic!” and then began to dance with co-workers on the sidewalk outside the terminal.

It was a quite turnaround from Wednesday, when CAW leaders complained that the airline was not interested in getting a deal and suggested it was waiting for government intervention.

Raitt called the tentative settlement “excellent news.”

“The best deal you can have is the one they did themselves. We’re very, very pleased with how it unfolded,” Raitt said in Ottawa.

She said the threat of back-to-work legislation was a “tool that was needed to focus the parties and narrow the issues.”

Lewenza attacked the Harper government for interfering with collective bargaining process, by threatening legislation on Tuesday, mere hours after the union walked off the job. It is doing the same in the Canada Post dispute.

“This is an assault on workers,” he said, calling the action, “distasteful, immoral and unconstitutional.”

With files from Bruce Campion-Smith and Peter Edwards

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