AH - 161

IN THE MATTER OF AN ARBITRATION

BETWEEN:

CANADIAN PACIFIC AIR LINES, LIMITED

(the “Company”)

AND

INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS - CANADIAN AIRWAYS LODGE NO. 764

(the “Union”)

IN THE MATTER OF THE GRIEVANCE OF G. GILDER

ARBITRATORS:               J.C. Smith - Chairman

                                                A.C. Steele - Union Nominee

                                                G.H. Fenby - Company Nominee

There appeared on behalf of the Company:

                                Mr. R.W. Paisley

And on behalf on the Union:

                                Mr. R.K. McDonald

A hearing in this matter was held on the 8^th day of May, 1972.

DECISION

I

There is little dispute as to the facts which give rise to this case.  The Union represents those employees of the Company covered by a collective agreement known as Agreement no. 19.  Agreement No. 19 (hereinafter referred to as “the Agreement”) was in force at all times material to the grievance giving rise to this arbitration.

                As a result of the Air Traffic Controllers’ strike on January 17^th, 1972 a meeting was held attended by representatives of the Union and the Company in which the Company informed the Union that because the Air Controllers’ strike resulted in a temporary cessation of the Company’s operations some employees would be placed on “off-duty status” effective 2400 hours January 17^th, 1972.  The Union advised the Company at that time that it did not recognize the term “off-duty status” contending that the term was not contained in the Agreement.  The Union stated that it would recognize the terms “reduction in staff” or “lay-off” as contained in article 14 of the Agreement and maintained that all the terms and conditions of Article 14 must apply to any removal of employees from the payroll.  The Company asserted its position that Article 14 was not applicable to the circumstances and that affected employees would be given written notice of off-duty status.

                On January 25^th, 1972 Mr. G. Gilder, one of the employees affected by this decision of the Company reported for work, at which time he was informed by a written notice that he was placed on off-duty status.  There was work available for him to do at this time, in the form of an annual check on a D.C.8, and as well, there were turbine engines which required servicing.

                On January 26^th a telegram was sent by the Union to Mr. J.C. Gilmer, President, recommending a total recall of employees as the most equitable method of reinstitution of the work force at the Company.  At a meeting held on January 27^th, attended by representatives of both the union and the Company, the Union agreed that the intent of their recommendation was to urge to the Company that the immediate total recall of employees at the conclusion of the Air Traffic controllers’ strike was the fairest method of re-employing those employees then not working.

                The Air Traffic Controllers’ strike ended at approximately 1600 hours on January 28^th, 1972..  An announcement of the resumption of the company’s operations was transmitted over radio and television media.  Members of the Union were also contacted by telephone.  Mr. Gilder received such a telephone call from Mr. P.J. O’Grady, System General Chairman of Lodge No. 764 of the Union.  This notification was adequate in the sense that Mr. Gilder did not lose an opportunity to work which would have been available had any other form of notice been used.

                Mr. Gilder was given no severance pay nor did he receive money in lieu of vacations due to him, all of which are standard procedures when a person is laid off due to a staff reduction.

                Mr. Gilder submitted a grievance to Mr. F. Townsend claiming that he had been laid off contrary to the terms of the agreement and claimed that monies were due to him from January 24^th, 1972 to the date of his recall.  This grievance was processed to Mr. P.J. O’Grady, System General Chairman of the Union outlining the Company’s position and the reasons for adopting this position and concluded that Mr. Gilder’s grievance could not be sustained.

                Mr. Gilder’s grievance was thereafter duly referred to the appropriate officers of the Company pursuant to Article 17 of the Agreement.  The parties were unable to agree on a settlement of the dispute and the case was then referred to this Board for arbitration.

II

                This arbitration raises questions of interpretation in regard to the following two articles of the collective Agreement:

ARTICLE 14

Staff Reductions, Displacement Rights and Recall to Work

1. When there is to be a reduction in force at a base it will be accomplished in reverse order of trade classification or work group seniority.  Employees affected will be given as much advance notice as possible.

2. An employee laid off due to a reduction in forces shall when laid off, file his address with the Company informed of his current address.  An employee will only maintain his name on the seniority list by notifying the company at its Head Office by registered mail postmarked not later than November 15^th in each year that he is available to return to work if requested.  Failure to comply with this provision automatically closes out the employee’s record with the Company.

3. An employee shall forfeit his Company and classification seniority if he does not return to work within fourteen (14) days after notice to return to an assignment estimated to last six (6) or more months.  Notice shall be sent by registered mail or prepaid telegram to the last address filed with the Company, with a copy to the System General Chairman.

4. During a period of layoff an employee will continue to accrue seniority other than for pay purposes

5. An employee may only exercise his seniority to displace the most junior employee in the same trade classification or work group when he has been affected by a reduction in force or termination of his assignment.

6. An employee affected by a reduction in force at a base must exercise his seniority to displace the most junior employee at the same base in the same trade classification or work group providing he is qualified to fill the position.

7. If an employee cannot exercise seniority at his base he may, within fourteen (14) calendar days from the date of notification of layoff, elect to displace the most junior employee in his seniority entitles him to do so.  An employee’s intent to displace must be submitted in writing prior to expiration of the fourteen (14) day period.

If the employee does not elect to displace elsewhere on the system in the time limit required he will be placed on laid-off status at his base and will forfeit such displacement privileges.

8. In the event that his seniority does not entitle him to displace another employee on the system he must, within fourteen (14) days from the date of notification of layoff, signify in writing to the Company that he wishes to be considered for future positions on the system that his seniority will entitle him to hold.

9. when there is a qualified employee on laid-off status at a base, a vacancy at that base will not be bulletined but will be filled by recall to work of such employee or employees in seniority order.

ARTICLE 15

Severance Pay

                The application of this Article shall become effective the date of signing of Agreement No. 19.

1. A permanent employee covered by this agreement who has completed one (1) year of continuous service under this agreement immediately prior to being laid off through no fault or action of his own, including layoff resulting from merger or geographical relocation, shall receive severance pay as provided in Clause 2 of this article, subject to the limitations and conditions set forth herein, but he shall receive no severance pay if any one or more of the following conditions exist:…

(d) The layoff is caused by an act of God, a national war emergency, revocation of the company’s operating certificates or certificate, or grounding of a substantial number of company aircraft for reasons beyond the Company’s control.

(e) The layoff is caused by a strike, lockout or picketing of the Company’s premises.

The Union argues:

1. There is no provision for off-duty status in the collective agreement, and the recognition of such a relationship by the Board would be to write a new term into the Collective Agreement.

2. The circumstances likely to be created by the strike of the Canadian Air Traffic Controllers falls precisely under Article 15, section 1, sub-section (d) of the Collective Agreement, a layoff caused by the “grounding of a substantial number of company aircraft for reasons beyond the Company’s control.”

3. Since Mr. Gilder was not laid off, and as off-duty status is not relationship which falls within the terms of the Collective agreement, the employer-employee relationship was not terminated.  Mr. Gilder is therefore entitled to pay for those days which he lost as the result of being placed on off-duty status.

4. The Union further argues that the Company is estopped from now arguing that what took place was a layoff.

5. If, however, they are not so estopped, and the Board recognizes what took place as a lay-off, Mr. Gilder is entitled to severance pay on the grounds that as there was work valuable for him to do, the “grounding of a substantial number of Company aircraft, for reasons beyond the Company’s control,” was not the cause of the layoff in his case.  Consequently under Article 15 he is entitled to severance pay.

6. The Union further argues that Mr. Gilder would be entitled to damages as the standard procedures for layoff, as provided for in Article 14 of the Agreement, were not complied with.

                The Company submits that as certain provisions of Article 14, which provide the procedures for a layoff, would be impossible to apply to the kind of situation resulting from the Air Traffic Controller’s work stoppage, it must be concluded that it does not fall within the terms of the Collective Agreement.  The Company, therefore, has the power to deal with this situation under Article 2, section 6 which provides:

The direction of the working forces, including the right to hire, suspend, discharge for cause, promote, reduce to scheduled classification from supervisory positions or acting appointments, transfer or make layoff because of lack of work, or for any other legitimate reason, is vested in the Company subject to the terms of this Agreement.

                The Company further argues that, in the alternative, if the situation does fall within the scope of the Collective Agreement, its terms have been substantially complied with by the Company.

III

                It is the opinion of the Board that the situation caused by the work stoppage of the Air Traffic Controllers, fits precisely the situation described within Article 15, section 1, sub-section (d) of the Collective agreement as a “grounding of a substantial number of company aircraft for reasons beyond the Company’s control.”  The board therefore concluded that there is no provision within the agreement for a relationship termed “off-duty status”.

                The problem which this case presents does not, in opinion of the Board, arise because this type of situation does not fall under the term “layoff” in the Agreement but rather, because the agreement fails to expressly provide procedures for it.  The agreement expressly recognizes that a layoff may take place for a variety of reasons.  The Agreement mentions:

(a) Layoff for a reduction in the working force.

(b) Layoff caused by an act of God.

(c) Layoff caused by a national war emergency.

(d) Layoff caused by a revocation of the Company’s operating certificates.

(e) Layoff caused by a grounding of a substantial number of company aircraft for reasons beyond the company’s control.

(f) Layoff caused by a strike, lockout or picketing of the Company’s premises.

The Agreement, however, expressly provided procedure only for a layoff by way of staff reduction.  Some of these provisions would be not only inappropriate or impractical but impossible to apply to many of the other kinds of layoffs mentioned in the Agreement.

                In the absence of express provisions, we interpret the Agreement to mean that the procedures outlined in article 14 will apply where they are possible and reasonable, or have significance in terms of legitimate Union or Company interests.

                On the basis of this we reach the following conclusions in regard to the application of article 14 to the situation giving rise to this arbitration:

Sections 1 to 7 inclusive are applicable.

Section 8 is not applicable.

Section 9 is applicable.

Sections 10 to 12 inclusive are not applicable.

                If a layoff for other reasons than a staff reduction, is also accompanied by a layoff by way of staff reduction, all of Article 14 will, of course, apply to the latter.

                The Company relies on the following three cases; Canadian Air line Pilots Ass’n and Air Canada (unreported). Canadian Air Line Employees’ Ass’n and Air Canada (unreported), and International Ass’n of Machinists and Aerospace Workers of United Air Lines (unreported), all of which concern a situation similar to that before this Board.  All of these cases support the position taken by this Board that not all the procedures for layoff for staff reduction are possible or applicable to the kind of situation with which we are concerned.  Each case, however, must depend on the terms of the particular collective agreement.  Because of the express wording of article 15, section 1, sub-section (d) it is not open to us to hold that this situation does not fall within the term “layoff” as used in this Agreement.  We accept the general conception of what constitutes a layoff reflected in the two cases Re United Automobile Workers and Northern Electric (1971) 23 L.A.C., relied on by the union, as being more appropriate for the wording of the particular Collective Agreement which we are called on to here interpret.

IV

                We find as a matter of law that the company is not estopped from maintaining its alternative position that if the Board finds that the situation which arose as a result of the Air Controllers’ stoppage of work falls within the layoff provisions of the agreement, then the company has substantially complied with the terms of the agreement.  Estoppel is a technical legal doctrine.  It is defined in Mozley and Whiteley’s Law Dictionary as follows:

Estopel by conduct.  A person who, by his words or conduct willfully causes another person to believe in the existence of a certain state of things, and induces him to act on that belief, so as to alter his position for the worse, is estopped from setting up against the latter person a different sate of things as existing at the time in question.

                An estoppel does not apply here because the Union at no time accepted the Company’s assertion nor did they act on it or rely on it to their detriment.  Arguments in the alternative are common in both arbitration and legal proceedings, and only in very unusual circumstances would the doctrine of estoppel operate to prevent an argument in the alternative from being made.  The board therefore holds that the Company did layoff members of the Union including Mr. Gilder.

V

                The question which now faces the Board is whether the company is in breach of any of the procedures outlined in Article 14, which apply to this kind of layoff, and if do, what remedy shall be given.

1. We find that the company is not in breach of section 1 as to reduction of the work force in reverse order of trade classification or work group seniority, nor has the Union maintained that it was.

2. There is no evidence that Mr. Gilder suffered any damages because of inadequate notice of layoffs, therefore it is unnecessary for us to decide whether or not section 1 in regard to notice has been complied with by the Company.

3. Section 2 is optional on the part of the employee

4. There is no evidence that Mr. Gilder suffered any damage as a result of inadequate notice to return to work.  It is, therefore, unnecessary for us to decide whether or not section 3 has been complied with or whether there was a waiver on the part of the Union as to the standard procedure.

5. Section 4 has been complied with.

6. Section 5 has been complied with.

7. Section 6 has been complied with.

8. Section 9 has been complied with.

9. There is no breach as to sections 7, 8, 10, 11 and 12 as this procedure is not applicable to a layoff caused by the grounding of a substantial number of Company aircraft for reasons beyond the Company’s control.

VI

                The remaining question for the Board to decide is whether Mr. Gilder is entitled to severance pay having, as we find, been laid off by the Company.  Article 15, section 1, provides that an employee “shall receive no severance pay if…(d) The layoff is caused by…grounding of a substantial number of Company aircraft for reasons beyond the company’s control.”  We take this to mean, not just that the grounding of a substantial number of the Company’s aircraft is a cause, but it must be the primary severance pay.  We also interpret this section to mean not just that the grounding of a substantial number of company aircraft is the cause of a layoff in, or shut down of, other areas of the Company’s operations.  It must be the cause of the layoff of the bargaining unit who are a party to this Collective Agreement.

                “Cause” must be interpreted as cause in an economic sense.  The question of whether the reason for the layoff is economic cannot be determined in regard to each individual employee, but must be determined in regard to the bargaining unit as a whole, or at least a substantial part of it.  To hold otherwise would mean that any employee who, at the time of the Layoff, had a day’s work on his bench, would be entitled to severance pay while another employee who had finished his last assignment would not.  Such an interpretation would be unfair and unworkable, and could not possibly be the intent of the Agreement.

                Even if there is work available for the bargaining unit, or a substantial part of it, it must be in the company’s economic interest that it not be carried out, before the Company is entitled to layoff members of the Union without severance pay.  The Company is , however, the best judge of what is in its economic interest, and the fact that, in the opinion of others, the Company has erred in its judgment, is not relevant.  As well, this judgment must be made in the light of the Company’s operation as a whole.

                If it can be shown:

1. that the Company has laid off the members of the Union when there was work still available for the bargaining unit, or a substantial part of it, and

2. that the decision to layoff was made primarily for other than economic motives,

then it cannot be said that the grounding of a substantial number of the Company’s aircraft for reasons beyond the Company’s control is the cause of the layoff within the meaning of that term as used in article 15, section 1, sub-section (d) of the Collective Agreement.  In such a case the members of the Union so laid off would be entitled to severance pay.

The evidence which the Union introduced was insufficient to meet the onus of proof resting on them as claimants to establish that the position by the Company to layoff was made for other than economic reasons.

Richmond, B.C.,

May 17^th, 1972

______________________________

J.C. Smith,

Chairman.

______________________________

A.C. Steele,

Union Nominee.

______________________________

G.H. Fenby,

Company Nominee.