Air Canada says it has suspended plans to resume limited operations after the union representing the airline's flight attendants said Sunday it will defy a federal back-to-work order for binding arbitration to end the work stoppage.

"Approximately 240 flights scheduled to operate beginning this afternoon have now been cancelled," the airline said in a statement.

Air Canada said it will instead resume flights as of Monday evening, but with more than 10,000 flight attendants remaining on strike, it is unclear how Air Canada plans to operate these flights.

CBC News has reached out to the airline for clarification.

Earlier, the Montreal-based airline announced it planned to resume flights starting Sunday evening, a day after the federal government issued a directive to end a cabin-crew strike that caused the suspension of around 700 daily flights, stranding more than 100,000 passengers.

But just hours later, the Canadian Union of Public Employees (CUPE) said in a statement that members would remain on strike, even after the Canada Industrial Relations Board (CIRB) ordered both parties back to work by 2 p.m. ET.

It invited Air Canada back to the table to "negotiate a fair deal."

"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," it said in a statement.

"I don't think anyone's in the mood to go back to work," Lillian Speedie, vice-president of CUPE Local 4092, told CBC's News Network at a picket line outside Toronto Pearson International Airport on Sunday.

"To legislate us back to work 12 hours after we started? I'm sorry, snowstorms have shut down Air Canada for longer than we were allowed to strike."

Some passengers say they left for the airport in the early afternoon with their flight status showing as "on time," only to arrive and find out that their trip had been cancelled following the airline's mid-afternoon announcement.

All Air Canada and Air Canada Rouge operations are affected, though flights by Air Canada Express, operated by third-party airlines Jazz and PAL, are not.

The airline says customers whose flights are 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. The carrier also said it will offer to rebook customers on other carriers, "although capacity is currently limited due to the peak summer travel season."

Ottawa moved to intervene in the labour dispute on Saturday, less than 12 hours after the strike and lockout took effect, with federal Jobs Minister Patty Hajdu saying she was invoking Section 107 of the Labour Code to ask the CIRB to send the two sides to binding arbitration, and to order the airline and its flight attendants back to work in the meantime.

CBC News reached out to Hajdu to ask how the federal government will respond to the union defying the back-to-work order.

Although Hajdu asked the CIRB to hand down the order, her office directed inquires to the board.

"Like many Canadians, the minister is monitoring this situation closely. The Canada Industrial Relations Board is an independent tribunal. Please refer to them regarding your question," said a statement to CBC News from Hajdu's press secretary, Jennifer Kozelj, on Sunday afternoon.

The union has accused Hajdu of caving to Air Canada's demands.

The CIRB also ordered that the terms of the collective agreement between the union and the airline, which expired on March 31, be extended until a new agreement is reached.