AD HOC – 4
IN THE MATTER OF AN ARBITRATION
Canadian National Railways
THE LONGSHOREMEN OF THE PORTOF NORTH SYDNEY, NOVA SCOTIA, LOCAL 1259, INTERNATIONAL LONGSHOREMEN’S ASSOCIATION
IN THE MATTER OF AGREEMENT NO. 17.1 - Articles 9 and 20
IN THE FURTHER MATTER OF: A REPORT BY THE SAID BOARD OF ARBITRATION
ARBITRATION BOARD: Judge A. H. McKinnon – Chairman
V. A. Morrison – Union Nominee
Professor A. J. Meagher, Q.C. – Company Nominee
A hearing in this matter was held at Antigonish on March 8 and May 12 1960.
[Includes dissent by Company nominee.]
1. An Arbitration Board was appointed herein consisting of Chairman Judge A. H. McKinnon Professor A. J. Meagher Q.C., and V. A. Morrison, LL.B.
2. The Terms of Reference are as follows:
Whether Article 9.3 of the current wage agreement should be made retroactive to January 1st, 1959, as contended by the Union or whether the effective date of Article 9.3 is July 5th, 1959, as contended by the Company.
3. The Board was organized on March 8th, 1960. Briefs, submission and argument were heard at Antigonish and hearings adjourned for further examination by the Board. The Board reconvened at Antigonish on May 12 1960, to consider the matter under arbitration.
4. The Terms of Reference herein relate to two sections of the Collective Agreement between the parties dated June 24th, 1959.
Article 9.3 reads as follows:
9.3 An employee who at the beginning of the calendar year has retained a continuous employment relationship for at least fifteen years and has completed 3750 working days cumulative service, shall be allowed three calendar weeks vacation with pay. Vacation pay shall be allowed in the amount of six percent of the employees wages in the preceding calendar year.
Article 20.1 reads as follows:
20.1 This Agreement supersedes Agreement signed at Moncton, N.B., August 24th 1956, and is in full settlement of the proposals of May 28th, 1958, respecting rates of pay and working conditions of Longshoremen of the Port of North Sydney, N.S. submitted by the International Longshoremen’s association, Local 1259. This Agreement, except as otherwise provided, shall become effective on July 1st, 1958, with respect to rates of pay, end effective July 5th, 1959, with respect to rules, and shall continue in force until the 30th of June, 1961, and then from year to year until either party gives to the other party sixty days notice in writing prior to the 30th of June in any year, including the year ending the 30th day of June, 1961.
5. The Company contends that the vacation provisions of Article 9.3 does not apply to rates of pay but to rules and, therefore, does not become effective until July 5th, 1959. The Union contends that the opening phrase of Article 9.3, "An employee who at the beginning of the calendar year - ", Which both parties agree to be January 1st, 1959, expresses the purpose and intention to make that date effective as the start of the qualifying period and also effective as the date of full implementation.
The Company explains its interpretation of Article 9.3 by the following example:
If a workman, who had 15 years service plus 4,500 days as required by the former Agreement, elected to take his vacation between January 1st, 1959 and July 5th, 1959 he then exhausted all his rights under the old Agreement and is entitled to no further benefits under the new Agreement. If, however, on January 1st, 1959, he had 15 years service and between 3750 and 4500 days, and he took the two weeks vacations to which he was entitled under the old Agreement, before July 5th, 1959, he is still entitled to one extra week of vacation which he may take after July 5, 1959, as provided by the terms of the new Agreement.
The Company contends further that a workman who, in 1959 did not take his vacation until after July 5th, is entitled to all the increased benefit of Article 9.3 under the new agreement, although his qualification may be exactly the same as the workman who received the less beneficial provisions of the old Agreement by taking his vacation before July 5th.
The Board’s Terms of Reference must be read in conjunction with Article 14.3 of the Collective Agreement:
The Arbitration Board shall not be authorized to make any decision inconsistent with the provisions of this Agreement, nor to alter, modify, add or amend any part of this Agreement.
If the Company’s interpretation of Articles 9.3 and 20.1 is correct, and if this was so understood and agreed by both parties herein when they entered into the Collective Agreement, it is rather difficult to understand why a substantial number of workmen would elect to take their vacations prior to July 5th and thus lose the benefits of more favourable provisions under 9.3. This, and other circumstances revealed in the submissions herein, lead us to the conclusion that the Company’s interpretation of Article 9.3, as set forth herein, was not the interpretation and understanding of the said Article by the Union when it entered into the Collective Agreement of June 24th 1959.
The wording of Article 9.3 would appear to be simple, unequivocal and mandatory:
An employee who at the beginning of the calendar year has ... shall be allowed three calendar weeks’ vacation with pay.
Reading Article 9.3 alone would leave no doubt that the beginning on the calendar year (January 1st, 1959) constituted the date of both qualification and entitlement. However, it is argued that the intervention of 20.1 limits the provisions of Article 9.3 by making the effective date for entitlement July 5th, 1959.
The relevant portion of Article 20.1 reads as follows:
This Agreement, except as otherwise provided herein, shall become effective on July 1st, 1958, with respect to rates of pay, and effective July 5th, 1959 with respect to rules, ... .
It would appear that the wording of Article 9.3 is sufficiently emphatic and explicit to bring it within the exception mentioned in Article 20.1, namely, except as otherwise provided herein, allowing the conclusion that the effective date Of implementation under Article 9.3 is "the beginning of the calendar year".
One would normally expect that such a date would be subsequent to the date of the contract, but both parties herein agreed in their submissions that the Board was limited to a consideration of January 1st, 1959, as the material date.
We, therefore, find that Article 9.3 became effective as to qualification for vacation provisions and as to entitlement to vacation provisions on January 1st, 1959.
Submissions were made to the Board regarding the potential effect the decision of the Board would have with respect to the vacation provisions contained in Article 9.1 and 9.2, but as the Board’s Terms of Reference does not extend to these sections of the Collective Agreement consideration of their provisions must be excluded.
All of which is respectfully submitted.
Dated at Antigonish in the County of Antigonish, Province of Nova Scotia, this 24th day of June, 1960
(signed) A. H. McKINNON (signed) V. A. MORRISON
Chairman Union Member
I regret that I must disagree with the report of the other two members of the Board.
As mentioned in the majority report the reference to the Board is as follows:
Whether Article 9.3 of the current wage agreement should be made retroactive to January 1st, 1959, as contended by the Union, or whether the effective date of Article 9.3 is July 5th 1959, as contended by the Company.
The dispute involves the interpretation of Article 9.3 of the Collective Agreement entered into between the parties dated June 24th, 1959, which reads as follows:
An employee who at the beginning of the calendar year has maintained a continuous employment relationship for at least fifteen years and has completed 3750 working days’ cumulative service, shall be allowed three calendar weeks’ vacation with pay. Vacation pay shall be allowed in the amount of six percent of the employee’s wages in the preceding calendar year.
In interpreting Article 9.3, regard must first be given to Article 20.1 of the Collective Agreement which reads as follows:
This agreement supersedes agreement signed at Moncton, N.B., August 24, 1956, and is in full settlement of the proposals of May 28, 1958, respecting rates of pay and working conditions of Longshoremen of the Port of North Sydney, N.S., submitted by the International Longshoremen’s association, Local 1259. This agreement, except as otherwise provided herein, shall become effective on July 1, 1959, with respect to rules and shall continue in force until the 30th day of June, 1961, end then from year to year until either party gives to the other party sixty days notice in writing prior to the 30th day of June in any year, including the year ending the 30th day of June, 1961.
It is my opinion that the interpretation of Article 9.3 and Article 20.1 establish that the effective date of Article 9.3 is July 5th, 1959.
Under Article 20.1 rates of pay are retroactive to July 1st, 1958, while rules become effective on July 5th, 1959. I am of the opinion that rates of pay only relate to those established by Article 5 of the Agreement which is entitled "rates of pay", so that Article 9.3 is a rule which becomes effective on July 5th, 1959.
If this interpretation is correct, then on July 5th, 1959, there would be three classes of employees involved in the dispute who have at least fifteen years service and have completed 3750 working days, namely:
(a) employees who did not take their holidays prior to July 5th, 1959. These employees came within the scope of the new agreement and were entitled to three calendar weeks vacation pay. There is no dispute about this type of employee.
(b) employees who took their three weeks vacation prior to July 5th, 1959. The dispute in question mainly involves these employees.
(c) employees who have taken part of their holidays prior to July 5th, 1959 and were entitled to the remaining portion after that date.
The employees in class (b) who took their holidays prior to July 5, 1959, were bound by the collective agreement which came in force on July 1, 1956, ant which continued in force until it was superseded by the existing agreement on July 5, 1959.
These employees took their holidays during the negotiations for the new agreement and thus elected to exercise their rights under the old agreement. The Union now contends that these employees are entitled to the difference between what they received under the old agreement for holiday pay and the amount which employees who took their holidays after July 5th would receive under the new agreement. In short, this would be the difference between three weeks salary payable under the old agreement, and 6% of their 1959 earnings payable under the new agreement.
What rights are given to an employee under Article 9.3 of the new agreement? If the conditions set out in the first part of the article are met, namely, that in cases where an employee on January 1st, 1960 had maintained a continuous employment relationship for at least fifteen years and had completed 3750 working days cumulative service, then the employee is entitled to:
(a) three calendar weeks vacation;
(b) pay at 6% of his wages in the proceeding calendar year.
In other words under Article 9.3, such an employee receives two rights, namely, first, a stated vacation, and second, a stated amount for holiday pay. If an employee has had his three weeks holiday prior to July 5th, then it is impossible for him to exercise his right to "three calendar weeks vacation" after July 5th, as he has already taken his holidays. In other words, such an employee has exhausted all his rights under the old agreement and he is not entitled to any new rights under Article 9.3 of the new agreement during the calendar year 1959. Likewise, he cannot claim the 6% pay unless he was also entitled to the three weeks holidays, which he was not.
The qualifying words of Article 9.3 namely, "an employee who at the beginning of the calendar year" merely create a condition precedent to define those coming within the article and do not establish any new rights.
The third class of employee would be one who has taken part of his holidays prior to July 5th, 1959 and is entitled to the remaining portion of his holidays after that date. It is submitted in respect of such an employee that any holidays taken prior to that date would come under the provisions of the old agreement and that any holidays taken after that date may come within the provisions of the new agreement. Thus a man who is still entitled to one week’s holiday under the new agreement has exhausted all his rights with respect to the previous two weeks holidays which he has taken. However, he should be entitled to a further week at 2% of his wages during the preceding calendar year under the new agreement.
Retroactivity under Article 20.1 of the agreement is subject to the words "except as otherwise provided herein". I am of the opinion that the exception clause would not apply unless a clause shows a clear intention that it is not subject to Article 20.1 which is not the case under Article 9.3. If the opening words of Article 9.3 mainly, "an employee who at the beginning of the calendar year" are interpreted as a condition precedent, then this clause would not come within the above exception.
The Company strongly contended that both parties knew that Article 9.3 would not have retroactive effect at the time negotiations were being entered into. During negotiations the Union did not request that it be made retroactive. It would appear that this issue was also a matter of comment during negotiations. This contention is borne out by Exhibit 3-D, a letter dated August 4th, 1959 from the Regional Employee Relations Officer of the Canadian National Railway to Mr. C.C. Connors, Port Superintendent at North Sydney. The letter contained this reference:
It was never implied in the negotiations with the I.L.A. that there would be retroactivity for vacation payments. In fact, my recollection is that in our discussion with the I.L.A. Committee several months ago, one of the members of the Committee passed a remark to the effect that he had some, if not all, of his vacation, while another member of the Committee had not had his vacation, and that there would be an advantage gained by the man who had not had his vacation. If I remember correctly, one of the Company representatives remarked "that’s too bad".
It is also noted in Exhibit 5 of the Company’s memorandum, that an ambiguity arose in connection with Article 9.2 of the new agreement and this was resolved to the satisfaction of the parties by a special agreement. The Company also pointed out that in the twenty-seven collective agreements listed in Exhibit 4 of the Company’s memorandum, all the unions involved accepted the Company’s interpretation of Article 9,3. This supports the Company’s contention that the parties knew that Article 9.3 would not have retroactive effect.
Exhibit 6 of the Company’s memorandum shows that the adoption of the Union’s interpretation of Article 9.3 will inevitably work a hardship on the greater number of employees of the Company at North Sydney and that only a few will benefit by it. In fact, 119 employees stand to lose $3,465.73 if the Union interpretation is adopted, while only 56 employees will gain $1,350.82 under that interpretation. This again supports the Company’s contention that the parties did not intend that Clause 9.3 be made retroactive.
I wish to express my thanks to the parties and to the other members of the Board for their assistance and co-operation.
All of which is respectfully submitted,
DATED at Halifax, Nova Scotia this 27th day of June, 1960.
(signed) A. J. MEACHER
Nominee for the Company