MONTREAL (Reuters) -Air Canada flight attendants rejected the airline's proposal for binding arbitration on Tuesday and continued direct talks, the Canadian Union of Public Employees said on Tuesday.

Flight attendants, who demonstrated on Monday at major Canadian airport hubs, could strike as early as August 16.

Higher wages and ending the current practice of paying flight attendants only when the plane is in motion are key issues in the contract talks. Flight attendants at U.S. carriers such as American Airlines have made some gains in recent contracts.

The union said Air Canada has offered to begin compensating flight attendants for some work that is currently unpaid but only at 50% of their hourly rate.

Air Canada was not immediately available for comment. The union represents the more than 10,000 flight attendants at Air Canada.