AD HOC 159
IN THE MATTER OF AN ARBITRATION
BETWEEN: VIA RAIL CANADA INC.
AND CANADIAN BROTHERHOOD OF RAILWAY, TRANSPORT AND GENERAL
WORKERS
AND IN THE MATTER OF A DISPUTE RELATING TO THE APPLICATION OF THE
MAINTENANCE OF EARNINGS SPECIAL AGREEMENT
SOLE ARBITRATOR: J. F. W. Weatherill
A hearing in this matter was held at Montreal on July 30, 1987.
©u35rA. Cerilli, T. McGrath and G. Cote, for the union.
©u45rM. St-Jules, D. J. Matthews and C. 0. White, for the company.
©b64r AWARD
This grievance relates to the interpretation of Article E of the
Special Agreement between these and other parties dated July 7, 1978,
and continued in force at all material times. The Joint Statement of
Facts is as follows:
Article E.1 of the Special Agreement states that:
An employee whose position is reduced by $2.00 or more per
week, by reason of his position being abolished or his being
displaced will continue to be paid at the position rate
(exclusive of incidental overtime) applicable to the position
permanently held at the time of the change providing that, in
the exercise of seniority, he first accepts the highest-rated
position at his location to which his seniority and
qualifications entitle him. An employee who fails to accept
the highest-rated position for which he is senior and
qualified, will be considered as occupying such position and
his incumbency shall be reduced accordingly.
Article E.3 states that the maintenance of employee's
earnings will continue until:
(i) the dollar value of the incumbency above the prevailing
position rate has been maintained for a period of five years,
and thereafter until subsequent general wage increases
applied on the basic rate of the position he is holding
erase the incumbency differential; or
(ii) the employee fails to apply for a position, the rate of
which is higher by an amount of $2.00 per week or more than
the rate of the position which he is presently holding and
for which he is qualified at the location where he is
employed.
The Brotherhood contends that the employee's incumbency is
maintained for the full five-year period if all the
requirements of Article E.3 are met, regardless of the
position he holds. If after acquiring a higher-rated
position than his incumbency during the five-year period, he
is affected by a change not requiring a three-month notice
which requires him to hold a lower rated position than his
former incumbency, he would be entitled to that incumbency
for the remainder of the original five-year period.
The Corporation contends that an employee who is entitled to
receive the benefit of the above provisions will continue to
receive such benefit only so long as his incumbency rate is
higher than the rate of the position he actually holds, and
he |fulfils the requirements of Article E.3. If, within a
five-year period of the time his position is abolished or of
the time he is displaced, such an employee is awarded a
permanent position with a job rate equivalent to or higher
than his incumbency, his incumbency protection ceases at
that point in time.
The Special Agreement is between three employers, including VIA Rail,
and four trade unions, including the C.B.R.T. & G.W. The general
purpose and scope of the Agreement are set out in clauses (i) and
(ii) of the Preamble, as follows:
(i) The Purpose of this Special Agreement shall be to provide
the terms, conditions and benefits for employees adversely
affected as intended by Regulations 4, Sub-section (a)
through (i), |5(l)(a) and (b), 5|(2), |6(a) and (b) and 7 of
the Railway Passenger Services Adjustment Assistance
Regulations.
(ii) This Special Agreement shall apply to all employees
who have two or more years of accumulated compensated
service, except that Article G shall apply to all
employees regardless of length of service. Employees who
have less than two years of cumulative compensated service
shall be entitled to the layoff and severance benefits as
provided in the Job Security - Technological, Operational,
Organizational Chances Agreement.
The Special Agreement provides certain benefits for employees
"adversely affected" within the meaning of the Agreement, that is to
say within the meaning of the Railway Passenger Services Adjustment
Assistance Regulations above referred to. Among those benefits is
"maintenance of employee's earnings", as provided for by article E of
the Special Agreement. In the instant case, no issue is raised as to
the circumstances in which a person initially becomes entitled to the
benefit of the Special Agreement: the issue, rather, is as to the
duration of the benefit in the cases in which it applies, and in
particular whether or not the benefit - maintenance of earnings -
continues and may "revive" following an eligible employee's
appointment to a permanent position whose rate is at or higher than
the rate of his incumbency.
The company's position is, in effect, that the benefit of the Special
Agreement may be acquired once with respect, to any "change" to which
the Agreement applies, and that where an employee entitled to the
benefit of an incumbency rate subsequently obtains a permanent
position having the same or a higher rate, the benefit ceases. If
that position is later abolished, or if the employee is displaced,
the situation will then either be one to which the provisions of the
Special Agreement apply afresh (if the loss of the position be due to
a "change" to which the Agreement applies), or it will be one to
which the provisions of some other agreement apply. The situation
would, however, no longer be governed by the Special Agreement as it
applied to the original change, and the original incumbency rate
would no longer be in effect.
The union's position is, in effect, that where the benefits of the
Special Agreement apply, the maintenance of earnings provisions
create a guarantee of the incumbency rate, and while subsequent
appointment to an equal or higher-rated position may mean that no
payment is required under the "guarantee" while that position lasts,
earnings at the original incumbency rate (as modified over time) will
again become payable if the subsequently-acquired position is
abolished or the employee is displaced.
As the company quite properly stresses, the maintenance of earnings
benefit under the Special Agreement applies only where there are
staff reductions resulting from a "change" within the meaning of the
Agreement and the Regulations. It does not apply to "normal' staff
reductions, such as those due to fluctuations in traffic. Where the
wage maintenance system is not of universal application, it will
necessarily lead to what might otherwise be thought to be anomalous
situations, where otherwise similar cases are not treated in similar
ways.
Even where employees may be affected by changes of the sort
contemplated by the Agreement, the maintenance of wages benefit
applies only where an employee's position rate is reduced by $2.00 or
*ore per week. Although the matter is not in issue here and I do not
decide it, it would appear that in the case of an employee affected
by a "change", but not to the extent of a loss of $2.00 or more per
week, that employee's wages are not maintained, he has no
"incumbency", and any subsequent changes in his position would not
bring into effect any benefits attendant on the original "change".
Here too, such an employee's position might appear anomalous when
compared with that of an employee who, his rate having been reduced
by $2.00 or more as the result of a 'change', received the benefit of
an incumbency and who (if the union's position is correct), would
continue to have that benefit, during the period contemplated by
Article E.3, notwithstanding subsequent changes in his rate giving
earnings greater than those of the incumbency. This anomaly would
favour, in this respect at least (and for the period contemplated by
the Agreement), the more adversely affected employees. Again,
however, such anomaly is really only a function of a non-universal
benefit system and would, as I have noted, be of limited duration.
It would be a result of the agreement made, and is certainly not
contradictory of its scheme or of any of its provisions.
I agree with the employer's submission that a job loss "not
attributable to a Special Agreement change" cannot itself trigger the
Maintenance of Earnings benefit of the Special Agreement. The issue
in the instant case, however, is not whether the benefit is
triggered, but rather, what is its nature, and how long it endures;
more particularly the issue, as noted above, is whether or not the
benefit is a form of guarantee payable from time to time during the
period contemplated, depending on the rate payable for the situation
held by the employee.
It may well be that rate changes subsequent to a "change" triggering
the Maintenance of Earnings benefit would not themselves constitute
adverse effects of a "change" pursuant to the Special Agreement. But
if the union's position is correct, that would not be a relevant
consideration: the "guarantee" would be valid, and could be invoked
as necessary to protect an 'incumbency" once properly acquired.
As a matter of interpretation of Article E of the Special Agreement,
it is my view that the union's position is correct. There is no
dispute in the instant case as to the acquiring of a right to
"maintenance of earnings". Such a right arises where an employee
(having at least two years' cumulative compensated service), has his
position rate reduced by $2.00 or more per week by reason of his
position being abolished or his being displaced on the occasion of a
change to which the Special Agreement applies. Such an employee is
then entitled to an "incumbency". The dollar value of the incumbency
is subject to requirements that the employee, in effect, mitigate his
loss by accepting the highest-rated position to which he is entitled,
as the provisions of Article E require. This requirement continues
for the period during which the benefit endures.
By Article E.3, the maintenance of earnings "will continue' first,
for a five year period during which "the dollar value of the
incumbency above the prevailing position rate" is maintained and
second, for a period during which the rate is, in effect, "red
circled'. By Article E.3(ii), maintenance of earnings is subject to
the employee's applying for higher-rated positions for which he is
qualified. The effect of failure to make such applications is set
out in the paragraph of Article E.3 which follows E.3(ii):
In the application of Article E.3(ii) above, an employee who
fails to apply for a higher-rated position (excluding a
temporary vacancy of less than three months), for which he is
qualified, will be considered as occupying such position and
his incumbency shall be reduced correspondingly. In the case
of a temporary vacancy of three months or more, his
incumbency will be reduced only for the duration of that
temporary vacancy.
It would, in my view, be inconsistent with this scheme, and with the
whole purpose of the Special Agreement, simply to "reduce the
incumbency" of the employee who fails to apply for a higher-rated
position, while eliminating that of the employee who successfully
applies for one. Such, however, is the result of the company's
interpretation, which would not continue maintenance of earnings for
the successful applicant, even although the job obtained disappeared
during the period contemplated by Article E.3. The treatment of the
employee who fails to apply for a higher-rated temporary vacancy is
significant: his incumbency is reduced, as though the temporary
vacancy were his position, only for the period of the temporary
vacancy; thereafter, it springs back to its full value. Failure to
apply for a permanent vacancy means that the employee will thereafter
be treated as though the position for which he failed to apply were
his position, and the value of his incumbency will be reduced.
Nothing in any of this suggests that where the employee actually
obtains such a position, the value of his incumbency then vanishes.
The provisions of the Special Agreement do not, in my view, support
the position of the employer that when an employee entitled to
maintenance of earnings under the Agreement is awarded a permanent
position with a job rate equivalent to or higher than his incumbency,
his incumbency protection then ceases. Rather, the provisions of
Article E.3(ii) requiring the employee to apply for higher-rated jobs
contemplate that this occur against the background of the incumbency
to which the employee returns (subject to its alteration by reason of
his failure to make certain applications), and Article E.3(i) simply
provides that maintenance of earnings will continue for five years,
followed by a "red circle" period. The question is not whether or
not the employee continues to be "adversely affected" by the original
change. It is rather how long the benefits continue for an employee,
once he has been adversely affected and is entitled to those
benefits.
For the foregoing reasons, it is my conclusion that the union's
position in this matter is correct. The grievance is allowed.
DATED AT TORONTO, this 31st day of August, 1987.
J.F.W. Weatherill,
Arbitrator