A postal worker walks past Canada Post trucks at a sorting centre in Montreal, Friday, July 8, 2016. The Canadian Union of Postal workers has called for a 30-day truce to negotiate a new contract and avoid a strike or lockout.

Image Credit: THE CANADIAN PRESS/Ryan Remiorz

OTTAWA - Hope that a work stoppage at Canada Post could be avoided for at least one more month faded Friday as a proposed truce fell apart over what the union called a "poison pill" from the Crown corporation.

The Canadian Union of Postal Workers, facing being locked out by their employer on Monday, and Canada Post were both ready to agree to a 30-day cooling off period that would keep packages and mail moving under the old contract and let negotiations continue without the threat of a work stoppage.

But Canada Post said it was willing to continue bargaining for another month only if the union agreed to binding arbitration in the event a deal could not be reached — a proposition CUPW had previously rejected.

The union's executive couldn't agree to the Canada Post proposal, saying binding arbitration would be giving up their right to negotiate a deal.

Without a truce or deal, Canada Post will be in a legal position to lock out the 50,000 unionized employees starting Monday at 12:01 a.m. ET, after pushing back a Friday ultimatum.

In a statement, the postal service said binding arbitration would eliminate uncertainty for workers and for customers, who are already moving business to private couriers.

"What Canada Post has put forward is a reasonable approach that will end the uncertainty immediately and allow for meaningful discussions at the bargaining tables," the statement said.

The union rejected binding arbitration earlier this week after Labour Minister MaryAnn Mihychuk floated the idea.

The two sides appear to be far apart on several major issues after seven months of negotiations, including 60 days of conciliation talks and more than 30 days with federal mediators.

The sticking points remain wages and pensions.

The union wants rural and suburban mail carriers to be paid by the hour, like urban letter carriers, rather than by how many packages they deliver.

Canada Post wants to change the pension scheme for new hires, moving them to a defined contribution plan instead of a defined benefit plan. Many private sector companies have moved to defined contribution plans because they reduce costs for companies and shift the risk for future payouts onto employees, who are no longer guaranteed a set return in retirement.

The pension proposal is one other public sector unions are watching closely. If Canada Post's proposal is adopted, it could signal the direction the government wants to take in future talks with other unions.

"We are watching this very closely. This is the first — and by the way, only — Crown corporation that has come to the table with this approach in the federal government," said Hassan Yussuff, president of the Canadian Labour Congress.

"I've made it very clear the union has our full support to resist any attempt to do that and I think there are other ways for the corporation to try and work with the union."

News from © The Canadian Press, 2016