AH - 160












(the “Company”)








(the “Union”)





SOLE ARBITRATOR:     Mr. Maxime Langlois



There appeared on behalf of the Company:

                                Mr. Richard Lande



And on behalf of the Union:

                                Mr. Laurent St. Pierre


S-1          Letter dated June 19, 1979.


S-2          Collective Labour Agreement between the Canadian Brotherhood of Railway, Transport and General Workers, Local 277, and le Chateau Frontenac, CP Hotels, in effect between November 1, 1978 and December 31, 1979.


S-3          Consent to an extension of the term for the grievance.


S-4          Samples of passes.


S-5          Notice to pensioners and those receiving survivor allowances


S-6          Notice of cancellation of the passes signed by the Personnel Manager and dated June 26, 1979.


S-7          Letter addressed to Mr. H.C. Whitemore, signed by Mr. H. Dorange on July 20, 1979, returning his pass


S-8          Sample of a pass application


S-9          Sample of a Long Service Pass issued to Mrs. M.A. Tremblay.


S-10        Extract from the Railway Act (sections 290-294).


S-11        General Order No. T-27.





P-1          Notice to all employees, signed by Mr. Claude Rondeau, Personnel Supervisor, on May 11, 1979, canceling free passes as of June 15, 1979.


P-2          Letter of June 19, 1979, to Mr. Claude Rondeau, Personnel Manger, from Cecile Deschenes, Chairman, Local 277.


P-3          Letter of August 27, 1979, to Miss Cecile Deschenes, Chairman, local 277, from Mr. Claude Rondeau, Personnel Supervisor.


P-4          Letter of September 25, 1979, to Mr. Leo Schmid, General Manager of Le Chateau Frontenac, from Mr. L. St. Pierre, Representative.


P-5          Letter of October 25, 1979, to Mr. Laurent St. Pierre, Representative of the Canadian Brotherhood of Railway, Transport and General Workers, from Mr. Leo Schmid, General Manager.


P-6          Letter of November 21, 1979, to Mr. Leo Schmid, General Manager, from Mr. Laurent St. Pierre, regarding the names of arbitrators suggested.


P-7          Letter of December 5, 1979, to Mr. Laurent St. Pierre, Representative, from Mr. Leopold Schmid, General Manager.


P-8-1      Circular No. 79-18, Issuance of Passes on the “Canadian”, trains nos. 1, 2, 3 and 4, issued by the Manager, Passenger Services, Mr. J.A. Forbes, on May 11, 1978.


P-8-2      Document dated July 29, 1971, File 102, Circular No. 232.


P-8-3      Circular No. 79-17, Issuance of Passes on the “Canadian”, trains Nos. 1, 2, 11 and 12, issued on September 24, 1971.


P-8-4      Notice to chief of Services, File 74-C, dated June 4, 1976, concerning the Long Services Passes.


P-9          Letter of March 13, 1979, to Mr. D. Nicholson, President of the Associated Non-Operating Railway Unions from Messrs. K.E. Hunt and J.C. Anderson, and J.P. Laroche for the President of Via Rail Canada Inc.





-               Mr. Roland Fouquet

-               Mr. Rene Felury

-               Mr. Henri Dorange





-               Mr. Claude Rondeau

-               Mr. Christian Wendland





The grievance at the origin of this arbitration reads as follows:


Quebec City, June 19, 1979.


Mr. Claude Rondeau

Personnel Manager

Le Chateau Frontenac

Quebec City, Que.


Dear Mr. Rondeau:


In accordance with Article 25, I hereby wish to present a collective grievance on behalf of the employees who have been advised that their passes would no longer be valid after June 15, 1979.


As these passes have been acquired rights for many years, these employees, including about one hundred employees whose signatures you have on the recent petition, and pensioners have been treated unfairly, particularly in view of the fact that his ruling does not apply to the Canadian Hotels employees who have passes.


I hope that you will give all your attention to this request for the good of the persons concerned.


Thank you.


Yours truly,



                Chairman, Local 277

                CBRT & GW


cc.           Mr. Leo Schmid, General Manager, Le Chateau Frontenac.

                Mr. Georges Thivierge, Regional Vice-President, for the Brotherhood.

                Mr. Laurent St. Pierre, Representative, for the Brotherhood.


To this letter was attached the grievance, which reads as follows:


Nov 1111 Local 277, Quebec City


Mr. Ron Nicholson

National President

Canadian Brotherhood of Railway Workers


Having been advised by our employer that our passes would no longer be valid after June 15th, we request your immediate intervention so there will be no discrimination between the hotel employees and the railway employees, and also the CN hotel employees who seem to have kept their passes.




J.B. LARRIVEE                                                                                   H. FARLEY

R. COTE                                                                                                J.C. GIROUX

CONSTANCE DOMBRAWSKI                                                       P.G. GAUTHIER

R. CHAREST                                                                                       PARENT EDWARD

G. LEX GUERIN                                                                 ROLAND VAILLANCOURT

GASTON GODIN                                                                                RITA BUTEAU

FERNANDE TARDIF                                                                         RENE LANGLOIS

MADELEINE BARTHELL                                                               CECILE LANGLOIS

MARIE-ANGE AUGER                                                                     E. * RIOS

MC LALLEN, J.M.                                                                              MERCIER TRETREAULT

J.C. CLOUET                                                                                       JULIE THIBAULT

PAULINE SAMSON                                                                           ANTONIA LABRECQUE 

ROBERT DION                                                                                   MARTHE PELLETIER

B. MARCOUX                                                                                     HENRI RACINE

R. REMILLARD                                                                                 ROSE BRASSARD

L. GIROUX                                                                                           JULIETTE RODRIGUE

*                                                                                                              SIMONE REMILLARD

* DUPUIS                                                                                             CAMILLE FILLION

RON NICHOLSON                                                                             W. ALAIN

NATIONAL PRESIDENT                                                  F. FOURNIER

FLORIENNE NOEL                                                                            B. BRULOTTE

FLORENCE DOYON                                                                          * PETTIGREW

ANDRE LEMIEUX                                                                             R. PLANTE

JOSEPH MENARD                                                                             * FOURNIER

ARTHUR DELISLE                                                                           *

LUC GAGNIER                                                                                   *

JACQUES DION                                                                                  JACQUES CARRETTE

RACHEL RENE                                                                                  ROGER ROY

RAYMOND TRUDEL                                                                        GUSTAVE GUILLEBAULT

R. GIGUERE                                                                                        JULIEN LEPIRE

JANINE HUOT                                                                                    J.H. PARENT

ROLAND DUBE                                                                                  ALBERT BERTRAND

* MALTAIS                                                                                         PATRICK CLEARY

GEORGES MAILLOUX                                                                    ISABELLE DENIS

ELIZABETH AUCLIAR                                                                   LUCIE THIBAULT

J. LAFOND                                                                                           RITA BISSONNETTE

ROSE MORIN                                                                                     BEATRICE GAINE

HENRI BLAIS                                                                                     LAURENT VERRET

ALEXANDRE SIMARD                                                                    EVELYNE BLAIS

F. FERLAND                                                                                        BRIAN BINOTTO

ARTHUR ROY                                                                                    HURLEY




* illegible


I hope that you will give all your attention to this request for the good of the members concerned


(signed) CAROLE (illegible)

                Filing Section (illegible word)


                P.O. box 729, Upper Town

                Quebec City, Que.

                G1R 4S7




P.S          About one hundred (100) Chateau Frontenac employees with passes, plus pensioners.


                No pass was issued after 1965.





Mr. Roland Fouquet, a waiter at the Chateau Frontenac, has been employed by the company since August 7, 1941.  He has had a pass to make a trip between Quebec and Montreal and between Montreal and Fort William.  He states that at the beginning he had a ticket, after 5 or 10 years’ service, for certain stations and now he has a pass for all the stations.


In November 1979 he wanted to use his pass to go to Abitibi, but he was not permitted to do so, being told that this was a station belonging to Canadian National Railway and Via Rail.  However, Canadian Pacific coaches went there.  He was not notified of the cancellation of his pass and never received anything in writing to this effect.  He is still in possession of his pass.


Questioned by the employer’s representatives, he mentions that he did not read the words on the back of his pass “not transferable; revocable at any time.”


Mr. Rene Fleury, a Chateau Frontenac pensioner, worked from September 17, 1945 to 1978.  He mentions that he received a pass but that the Company wrote him a letter asking him to return his pass.


He adds that when he received the letter he tore it up and threw it out, and then he sent in his pass.  He mentions that he had already used his pass to go to Vancouver and Montreal, and that since he retired he has gone to Ottawa twice.


Mr. Henri Dorange, a Chateau Frontenac pensioner, gives testimony.  He mentions that he started work in June 1928 and retires on November 2, 1970.  He occupied various position at the Chateau Frontenac Hotel and in 1939 he left to fight in the war.  He had his pass to go to Halifax, and when he returned his pass was still good.  In 1945 he had his pass and was able to travel from Quebec city to Vancouver without paying and this continued until he received a letter from Mr. Whitemore on June 26, 1979.  The pass had a financial and amusement value for him.  On receipt of the letter he returned his pass.


The evidence for the Union is declared ended.


Speaking on behalf of the Employer, Mr. Claude Rondeau, Personnel Manager at the Chateau Frontenac, states that he started work in 1943 in the Accounting Department.  It was he who issued the passes and he mentions that Canadian Pacific Railway has always issued the passes.  There were passes on the boats and, of course, on the railway.


When he was advised that the passes were no longer valid, he posted a notice on a bulletin board for one (1) month.


He took part in the negotiations on question of withdrawal of privilege, but no mention was made of passes.


During the negotiations pensioner were excluded from the Collective Agreement.


After ten (10) years of service, there was no limit…the pass was considered permanent.


He explains that in order to obtain a pass, applicants filled out a form which was issued by Canadian Pacific.  When he retired, a pass holder kept his pass.  To his knowledge, this is the first time that passes have been canceled.


He also mentions that in view of the new structure of the Chateau Frontenac, since 1966 new employees have not received passes.  He states that as Personnel Manager, he was advised of the cancellation of the said passes and posted a notice on the bulletin board.


He did not send a personal notice to pass holders.  At that time Miss Deschenes, who is Chairman of the Union, gave him to understand that the Union would present a grievance.


About 85 employees and 12 pensioners are affected.


Mr. Christian Wendland is employed by Canadian Pacific in the Law Department.  He has worked on the negotiations between CP Rail and Via Rail and also memorandum presented by the Company.  He mentions that CP Rail has become a division of CP Limited and that in 1966 a new company was formed to administer hotels, i.e. the Canadian Pacific Hotel Company Ltd.  Since that date new employees are hired by the hotel company, which is completely independent of Canadian Pacific Limited.


In 1977 the Government decided to form a single company for railway operations and in 1978 Via Rail took over form CP Rail and Canadian National Railway.


Since April 1, 1979, via Rail has had the right to decide on fares, and Canadian Pacific Railway does not form part of Via Rail.  Afterward all the passes were canceled by Via Rail, which only agreed to railway employees having passes.


He testifies on the difference between acquired rights and privileges.  He also mentions that the passes become invalid.  Since Canadian Pacific no longer had trains, the employees cannot force Canadian Pacific to validate their passes.  Canadian Pacific has transferred its employees to via Rail since the creation of Via Rail in September 1978.  That is why Canadian Pacific cannot require Via Rail to maintain the passes.


As regards CN’s hotel employees, they work for the railway.  It is impossible for Canadian pacific to negotiate for CP Hotels.


The evidence for the Employer is ended.





The Union representative argues that passes are a benefit and not a privilege.


“The pass is described as a privilege, but it has monetary value which is a benefit given to the employee.  As far as we are concerned, it represents an implicit obligation on the part of the Company, because the employees were given one pass after one year of service, three passes after five years of service, and a permanent pass, renewable every two years, after ten years of service.  During negotiations, passes had become an agreement between the parties.”


He tells us that Canadian National has never had a problem of passes with Via Rail, and that it is a case of an insult to the employees of Canadian Pacific.


As regards pensioners, they were given passes.


He affirms that the pensioners have given part of their lives for the Company, and that they receive a pension of about $200 a month.  The Company, he says, has neither the right nor the power to take away that benefit, unless it negotiates the consequences.


Regarding arbitrability, the Union representative argues that the Court is competent to act as arbitrator.  Every grievance must be submitted to arbitration according to the collective agreement, he explains.


He alleges that the Company should have mentioned its objection in its first letters, and he refers to Articles 17, 18 and 23 of the said collective agreement.


He emphasizes that the word “employee” includes pensioners in Articles 23.1 and 23.2.


He refers to C.L. ARBITRATION, BROWN AND BEATTY (1977), pages 41 and 43, and he insists on the duty of the arbitrator, considering that injustice has been done to the employees and pensioners of the Chateau Frontenac.





The solicitor for the Employer refers to the collective agreement, which constitutes the law between the parties.  He alleges that the Union represents the employees and not the pensioners (Article 1.3), and that the Union represents current employees, the pensioners not participating in elections.


He adds that the passes were issued by Canadian Pacific Railway, and that the employees are engaged by Canadian Pacific Hotels.


Since 1978, the company Canadian Pacific Railway has ceased operations, says the solicitor; it is now another company, Via Rail.


The solicitor adds that there is no mention of passes in the collective agreement, and that in 1966 Canadian Pacific Railway continued to extend privileges to employees.  No longer having trains, it cannot continue to privilege its employees, says the solicitor, adding that the words “revocable at any time” do indeed appear on the back of the pass, and that the contract is conditional in this case.


In May, 1979, Mr. Rondeau put up a notice to all current employees, informing them that the pass was canceled.  He referred to the Railway Act (R.S.C. 1970, chapter R-2), in which sections 291 to 293 prevent Via Rail from granting passes.


The solicitor continues that it is impossible for Canadian Pacific to privilege retired employees, since they are not classed as persons who have been laid off.  The collective agreement, he adds, speaks only of employees.


The Union replies that the Brotherhood participates on the railways’ pension committees, and can therefore represent the pensioners.  This means, says the Union, that the word “employee” includes pensioners.


How can one envisage the application of the collective agreement to former employees or persons who no longer work at the Hotel, unless there is a special clause in this respect or a law establishing statutory rights and privileges, notwithstanding the collective agreement?  The Union refers to specific case precedents.  The arbitrator, it says must consider General Order No. T-27, entitled Free and Reduced Rate Transportation - Railway.  Paragraph (a) of subsection (3), section 1 of that Order reads as follows:


“Such retired, pensioned, furloughed or superannuated officers and employees of the company as are carried on its official records of such retired, pensioned, furloughed or superannuated officers and employees, and dependent members of their families.”


According to the Union, it follows that these persons, though not mentioned in the collective agreement, benefit from General Order T-27.


The Union claims that employees and retirees must be considered on the same basis as regards the cancellation of passes.


The question, then, is to determine whether the passes could or could not be canceled by a notice from Via Rail.


The facts may be summed up as follows:


The employees of the Chateau Frontenac held passes which allowed them to travel on the trains of Canadian Pacific Railway.  A pass was issued to each employee who worked either on the railway or at the Chateau Frontenac.


On November 1, 1978, the said employees signed a collective agreement with the Chateau Frontenac, CP Hotels, which was effective until December 31, 1979.


On May 11, 1979, a memorandum from the personnel Department was sent to all vice-presidents, general managers, managers and personnel managers which was to be transmitted to Canadian Pacific employees and pensioners of the CP Hotels Ltd. Would become null and void on June 15, 1979.  This notice was issued before that date, on May 11, 1979, and according to Personnel Supervisor, Claude Rondeau, it was posted on the employees’ special bulletin board.  Hence, as from June 15, 1979, all the passes issued to Chateau Frontenac employees were canceled.




At the hearing, the Employer made an objection concerning the arbitrability of the grievance.  Since this objection was submitted at the hearing, the Arbitrator must proceed with it first.


Is this grievance arbitrable?


One of the first conditions for the arbitrability of a grievance is that is must concern the interpretation of articles of the collective agreement.


The arbitrator’s mandate consists in clarifying certain clauses of the labour contract between the employer and the employee, if there is a misunderstanding regarding one or more of the clauses of the agreement.


Article 25 of the collective agreement reads as follows:


25.1 “If an employee wishes to file a complaint or question arising from an interpretation, application, mechanism or violation of this agreement, or if he believes that he has been unjustly dealt with under the terms of this agreement or wishes to know whether a question he would like to discuss with his employer is arbitral, the grievance procedure must be as follows:



The aggrieved employee may present his grievance verbally or in writing to the head of the department in which  he is working.  If he wishes, he may be accompanied by the local grievance chairman.



If the grievance is not settled to the satisfaction of the employee and the department head in the two (2) clear days following its presentation in accordance with Phase One, the employee or the local grievance chairman or both may appeal in writing to the Director of Personnel.



If the grievance is not settled to the satisfaction of the employee and the Director of Personnel in the five (5) clear days following the appeal provided for in Phase two, the grievance may be submitted for consideration to the accredited representative.



Failing settlement by the accredited representative, the dispute is submitted to arbitration, either by the manager of the hotel or by the divisional vice-president of the union, for a final and irrevocable decision without stoppage of work in accordance with Article 26.  This is to be done within the sixty (60) days following the date on which the dispute is submitted  to the accredited representative.


25.6 If the grievance does not advance through the various phases of the grievance procedure within the prescribed time limits, it will be deemed to be settled.


25.7 The above provisions apply equally to grievances emanating from the management of the hotel.”


The parties acknowledge that the grievance procedure was followed.


The arbitrator must ask himself whether the cancellation of passes must be interpreted as a conflict within the collective agreement, considering that these passes were issued by the railway company Canadian Pacific, and  this occurred before January 1, 1966.


After that date, considering the change in the structure of the chateau Frontenac, which now belongs to CP Hotels Ltd., there was no longer any question of employees receiving or benefiting from railway passes.


About one hundred (100) Chateau Frontenac employees enjoyed the privilege of free or reduced rate transportation on CP Rail trains before June 15, 1979.  Under the special agreements signed July 7, 1978, CP Rail transferred all its employees to Via Rail, which was incorporated as a crown corporation in 1977 to provide passenger services in Canada.  After April 1, 1979, via Rail Canada Inc. took over the management of all the inner-city passenger hitherto provided by CP Rail.


Consequently, on May 11, 1979, the employees of the Chateau Frontenac were informed that, commencing June 15, 1979, the passes previously issued to them for transportation on Canadian Pacific passenger trains would no longer entitle them to the privileges on Via Rail passenger trains.


The Employer has submitted case-law in support of its objection, and the cases it cites determine the scope of the arbitrator’s jurisdiction as follows:


MADELEINE MINES LIMITED - vs - UNITED STEELWORKERS OF AMERICA, LOCAL 7381 (1975), S.A.G.* 1085.  Arbitrator Roland Tremblay declined jurisdiction because the memorandum of understanding between the parties made no reference to the collective agreement.  It was, he decided, an inanimate contract entered into between the parties with respect to a particular question.  In addition, this contract contained no arbitration clause allowing either of the parties to submit a misunderstanding to an arbitrator.  He concluded that this memorandum of understanding did not change the collective agreement because it neither added to nor subtracted from its contents.


In the arbitration case of THE CARTIER WHITE LEAD COMPANY OF CANADA, LIMITED - vs - THE UNITED STEELWORKERS OF AMERICA, LOCAL 7625, S.A.G. 15706, page 541, Arbitrator Claude Lauzon expressed his opinion that:


“the grievance arbitrator derives his jurisdiction solely from the collective agreement in effect between the parties.  They could have made the protocol of October 28, 1977 an integral part of it, even if the protocol came first.”




*S.A.G. means “sentence arbitral des griefs” (Quebec) = Quebec Grievance Arbitration Award

In SNO JET - vs - THE UNITED STEELWORKERS OF AMERIAC, LOCAL 7354 and 7604, with Me Roland Tremblay acting as arbitrator and the employer objecting about arbitrability, Me Tremblay noted that:


“For the company’s solicitor, this article encompasses all the arbitrator’s powers of arbitration, and the grievance or question submitted to the arbitrator must deal with the interpretation, application or administration of the collective agreement.”


“Since the subject of this dispute was not covered by the collective agreement, the arbitrator is wholly lacking in jurisdiction, and to hear the grievance would for him be to amend the agreement by changing its terms and adding others, which he cannot do because of it’s Article 6.11.”


The arbitrator declined jurisdiction in that case.


In ST. LAWRENCE FERTILIZERS LIMITED and THE ST. LAWRENCE FERTILIZERS NATIONAL UNION OF VALLEYFIELD (CNTU), S.A.G. 6971, page 2153, Arbitrator Pierre-Andre Lachapelle rejected the grievance after examining the dossier, explaining that a misunderstanding had been submitted to him which he lacked the competence to settle, since the collective agreement did not include a letter of understanding that had been incorporated therein.


The collective agreement reserves arbitration only for grievances or misunderstanding dealing with its application or interpretation.


In this case, the Union opposes the objection, arguing that the company cannot deny the arbitrability of the case because it did not notify the union of its objection before the hearing was held.


It also refers to several letters received from the company in which it proposed the name of an arbitrator and thereby accepted the grievance as submitted.


In support of its argument, it refers to sections 291 to 293 of the Railway Act, General Order T-27, section 88 of the Labour Code, and to case-law.


In U.E.W. AND ALGAMATED ELECTRIC CORP. LTD. (1949), I.L.A.C. 376 (LASKIN), Professor Laskin writes on page 377 that:


“The Board is of the opinion that the fact of submitting contested issues to the grievance arbitration procedure is the same as submitting them to all the mechanisms of such procedure, including arbitration.”




“…I cannot conceive by any stretch of the imagination that it is possible for a Parliamentary statute to be amended by the parties signing an agreement to the detriment of those for whom the statute was enacted and intended to benefit.”


Before taking up the grounds of the grievance, the arbitrator must decide whether he is competent to make a decision on its merits.


The Company sent the Union representative a letter dated December 5, 1979 and signed by the General Manager of the Chateau Frontenac which proposed an arbitrator, Toronto lawyer Mr. J.F. Wheatherill, to settle the grievance in question.  This letter contained the words, “subject to any reserve concerning the grounds for arbitration in this case” (Exhibit P-7).


So the company warned the Union that it might file a preliminary objection which, in fact, it did.


There is no evidence that the collective agreement was referring to passes that Canadian Pacific Railway had issued before the change from the Canadian Pacific Railway had issued before the change from the Canadian Pacific company to CP Hotels Ltd.


Is it possible for the collective agreement, which is a labour contract between the employees of the Chateau Frontenac, CP Hotels Ltd., and the Canadian Brotherhood of Railway, Transport and General Workers, local 277, to extend beyond what is written in it and establishes labour relations between its signers?


An analysis of the case-law already cited clearly establishes that a collective agreement cannot go beyond what is in it, for an arbitrator would exceed his powers if he tried to judge a misunderstanding that was not due to the implicit interpretation of an article of the agreement.


Not even section 90 of the Labour code can give the arbitrator jurisdiction in the case before him.


In the Quebec Labour Code, page 279, paragraph (c), Philip Cutler explains with regard to section 90 that, without being formalistic, the Labour code nevertheless requires a grievance to be presented in accordance with the provisions of the collective agreement, if it provides for the grievance.


Subparagraph (f) indicates that the grievance must be based on one or more articles of the collective agreement and concern the interpretation or application thereof, since otherwise the dispute is not a grievance and cannot be submitted to arbitration without the consent of the parties.


Also, in the case GAS METROPOLITAIN INC. - vs - THE EMPLOYEES’ UNION OF GAS METROPOLITAIN INC., S.A.G. (1979), P. 954, arbitrator Viateur Larouche decided that he was not competent to hear a grievance which, in reality, was a misunderstanding as in the case cited above, and considering that the collective agreement was silent on past customs.


CONSIDERING the preliminary objection of the solicitors of CP Hotels Ltd. and Canadian Pacific Railways;


CONSIDERING that the collective agreement says nothing about and makes no allusion to passes and past customs;


CONSIDERING that it is not a case of a misunderstanding concerning the interpretation or application of the collective agreement, the arbitrator is obliged to decline all jurisdiction and declare himself not competent to decide on the validity or non-validity of the misunderstanding concerning the abolition of passes for employees and pensioners of the Chateau Frontenac, and each party must assume half the costs, fees and disbursements of the arbitrator.


Quebec, June 2, 1980