AH - 213













(the ”Union”)








(the “Company”)






Sole Arbitrator:            J. Mrs. Frances Bairstow    Director, Industrial Relations Center

 McGill University



There appeared on behalf of the Company:

                                A. H. Neville         Manager, Industrial Relations

                                H, D. McTavish   Regional Manager



There appeared on behalf of the Union:

                                D. J. Dunlop          System General Chairman,

C. H. De Laroche    Regional General Chairman




A hearing in this matter was held at Montreal, Quebec, on the 13th day of July, 1971.

Report of Arbitrator


RE: Disputes affecting Walking and Bicycle Messenger Classification Rates of Pay and Rates of Pay for Former and Present Morse Operators




1)            Application of a negotiated 8% increase - whether it be used to increase the base rates or the previously negotiated rates on Walking and Bicycle messenger classification.


2)            The appropriate rate to be paid Morse Operators whose work has been reclassified to that of Teleprint Operators.




                Although an Arbitrator’s Report is being issued in the instant case in order to resolve the aforementioned issues, this procedures is unusual in that the Arbitrator’s Award occurs during the period that negotiations have taken place between the two parties and only a few issues remain unsolved. In an effort to facilitate the completion of these negotiations, the parties have agreed to submit two of the outstanding issues to arbitration. The arbitrator was requested “to assist the parties to reach agreement on two of the outstanding issues”.


                Mrs. Frances Bairstow, Director, Industrial Relations Centre, McGill University, was asked to act as Arbitrator. Since conciliation efforts between the two parties present at the Hearing failed, the following is her Arbitration Report and Award.


                Formal Hearing was held on Tuesday, July 13, 1971 in Montreal. Data and arguments were heard. Appearing for the company were:

A.H. Neville, Manager, Industrial Relations, CP Telecommunications

H. D. McTavish, Regional Manager, CP Telecommunications


Appearing for the Union were:

D .J. Dunlop, System General Chairman, Canadian Telecommunications Union

C. H. De Laroche, Regional General Chairman, Canadian Telecommunications Union


                Both parties stressed the need throughout the Hearing for speed in resolving the outstanding issues so that final negotiations on other related issues could be concluded. Issues other than those affecting the Messengers and the Morse Operators were not discussed at the Hearing.


                For purposes of clarity, the two issues before this Arbitrator will be treated separately as were the issues at the Hearing. Separate briefs and documents were submitted as well as argumentation at the Hearing. Separate Arbitration Awards will be given.


                Issue 1 - Walking and Bicycle Messenger Rates


Question - Should the general wage award specified in Article 1(i) of the May 14, 1971 Master Agreement have been applied to the Federal Minimum Wage Rate established by Bill C-214 and not to the negotiated rates?




(All matters in the instant dispute relate to Messengers 17 years of age and older.)


                According to the written submissions and facts presented at the Hearing, full time Bicycle and Walking Telegraph Messengers were included in the Collective Agreement as of March 1, 1968. The negotiated basic rates were then:

                Walking Messengers                           $1.28 per hour

                Bicycle Messengers                             $1.33 per hour


                After the application of negotiated general wage awards effective January 1, 1969 and January 1, 1970 these rates were increased to:

                Effective January 1, 1970

                Walking Messengers                           $1.451 per hour

                Bicycle Messengers                             $1.508 per hour


Effective July 1, 1970, Bill c-124 amending the Canada Labour (Standards) Code, established a minimum hourly wage of $1.65 for employees 17 or over, and this higher rate was paid to Walking and Bicycle Messengers aged 17 or over, while those under 17 years of age continued to receive the negotiated rates.


                The May 14, 1971 Master Agreement provided as follows:

                “ Article 1 - Wage Increases

                All basic hourly, daily, weekly and mileage rates of pay will be increased as follows:

(i)            Effective January 1, 1971, an increase of 8% calculated on basic rates of pay in effect at December 31, 1970 and;

(ii)           Effective January 1, 1972, an increase of 7% calculated on the basic rates of pay in effect at December 31, 1971.”


As a result of this award, the negotiated rates in effect as of December 31, 1970 were increased to:

Walking Messengers                           $1.567 per hour

Bicycle Messengers                             $1.629 per hour

These rates are applicable to Messengers under 17 years of age, but as they are lower than the minimum hourly wages provided for in Bill C-214 for employees 17 years of age or older such Messengers were paid the rates established by Bill C-214.


                Effective July 1, 1971, Bill C-228 amending the Canada Labour (Standards) Code, established a minimum hourly wage of $1.75 for employees aged 17 years of age or older, and this rate is now being paid by the Company to such employees. There was no change in the Federal Minimum Rate for employees under 17 years of age, and such employees are being paid the negotiated rates.


                There are approximately 60 Messengers employed in these classifications across Canada..


Union Position


                The Union contends that the general wage award specified in Article 1 (I) of the May 4, 1971 Master Agreement should have been applied to the Federal Minimum Wage Rate established by Bill C-214 and not to the negotiated rates.


                The union points to the language contained in both (i) and (ii) of Article 1 of the Master Agreement. In that Article dealing with Wage increases, both clauses use the words “IN EFFECT”. “Effective January 1, 1971 an increase of 8% calculated on the basic rates of pay in effect (italics mine) at December 31, 1970, and then ‘7% calculated on the basic rates of pay in effect at December 31, 1971’”.


                The Union maintains that the words “in effect” mean, the actual wages paid on December 31, 1970. The Union further argues that the word “Basic” used in the same context is quite clear and should be interpreted to mean “apart from bonuses, shift premium, overtime, etc…”


                The Union also contends that the Company, in a letter under the signature of Mr. J. W. Thorndyke, Regional Manager of Canadian Pacific Telecommunications, dated September 14th 1970, confirms in the second paragraph:

“The new bicycle hourly rate for full time Messengers over age 17 will be $1.707 per hour, and for Walking Messengers over 17 years age, the rate will remain at $1.65.”


Furthermore, no mention of “Special Typed of incumbency rate” is mentioned in this letter, the above are current basic rates shown on the Company monthly seniority lists, and that overtime rates of $2.475 and $2.561 have been calculated and paid by the Company on the basic rates of pay of $1.650 and $1.707.


                In addition to its request that its interpretation of the General Wage Award should be implemented - that the rates used for calculation of the increases should be applied to the December, 1970 seniority lists, the Union requests that the increases should be applied retroactively to January 1, 1971.


Company Position


                The major contention of the company is that the 8% increase should be applied to the negotiated basic rates for positions in the messenger category. In support of this contention, the Company maintains that Bill C-214 did not have the effect of creating new basic rates for Walking and Bicycle messengers but only established a special type of incumbency rate.


                The Company points out that the language in the Master Agreement, Article 1 - Wage Increases, is specific. It states “All hourly, daily and monthly rates of pay for employees covered by this agreement will be increased by these amounts:…” In their view, this means rates apart from bonuses, shift differentials, etc. It is the rates in the collective agreement which are being amended through negotiations not rates established externally by law. Master agreements apply to the basic rates. The Company alleges, furthermore, that the law and the collective agreement are separate entities and there is no way that the law can interfere with the collective agreement.


                The Company discounts the Union’s argument that the seniority list should form the basis of computation for the negotiated wage increase. The seniority list is used only to compute length-of-service for promotion or demotion purposes. It is not a valid source document to determine amounts of wage increases, since it includes bonuses.


                The Company states that in its view it is improper to use the Thorndyke letter (September 14, 1970 - see p.6 of this Award). This letter does not refer to the rate as the “basic” rate.


                So far as the Company is concerned, the basic rate is the negotiated rate. Finally, the Company bolstered its argument by pointing out that the previous retroactive payments were computed and paid back on the basis of the basic rate.


Arbitrator’s Reasoning


                To this arbitrator, the argument between the parties over the application of a negotiated 8% wage increase has several facets. There is first of all, the expectation or intent in the minds of the parties when they negotiated the rates for the Messenger classification in the first instance.


                Secondly, there is the matter of the language itself and what specific meanings can be attributed to words which are used in the collective agreement.


                Thirdly, there is the question of the intent of the legislation, particularly, the Minimum Wage portion of the Canada Labour Code.


                Fourth, where interpretations differ between parties, standard industrial relations practice must be taken into account by the Arbitrator in arriving at a rational decision.


                On the first point, a difficulty presents itself since, the main negotiator on the union side no longer is available for discussion and was not a party to the arbitration proceedings. In argument presented at the Hearing, the Company spokesman insisted that the correct interpretation could only be that the base rates should be used as the standard for wage increases since the Master Agreement refers specifically to “basic rates” for increase purposes in Article 1.


                The Arbitrator is persuaded that the language means and intends precisely what it says when it uses the term “basic rates”. According to the Concise Oxford Dictionary, (p. 1002 - 1954 edition) rate it defined as “standard or way of reckoning, a measure of value, such as the rate of interest, wages, etc., the estimated worth or value of, value for purpose of assessing rates on.” In other words, a rate is an acceptable standard of measuring or on which to base adjustments. In labour relations terms the adjustments added on to the rates may be over-time payments, bonuses, et., but there has to be a mutually acceptable standard for these adjustments. In the case of this collective agreement, the Master Agreement clearly states “basic rates of pay”. This is the acceptable interpretation to the Arbitrator.


                The Minimum Wage portion of the Canada Labour Standards Act (July 1, 1971) refers to “a rate of not less than &1.75 an hour”. The history of Minimum Wage legislation reveals that the intent of such legislation is to raise the level of the rates earned by employees to certain minimum acceptable standards. Legislation concerns itself with the minimum possibilities no the maximum possibilities. There is a certain element of choice for most workers in the determination of whether they take on additional responsibilities which earn them increased earnings or whether they agree to work overtime to enhance their take home pay. The upper limits are not the concern of such legislation. Making sure that workers earn a subsistence level to maintain acceptable social levels of health and decency is the objective of such legislation. The Arbitrator is confident that this is how the law should be applied in this case.


                Arbitration decisions for the past fifteen years were studied carefully by the Arbitrator in an effort to determine whether similar cases had been presented to Arbitration in Canada. The research was not revelatory in this regard. After pursuing L. A. C. reports and C. C. H. reports and those published by the Quebec Department of Labour for the past fifteen year, there was no indication that Canadian arbitral opinion touched on these matters in the way these issues were presented in the instant case.


                A collective agreement is bound by limitations, the limitations of what is bargainable at any given moment in time. The power of the Arbitrator is limited to an interpretation of what has been bargained. Industrial relations practice indicates that any agreement is what parties wish it to be and make it to be. If it turns out that certain terms of the argument meet with the dissatisfaction of one of the parties, the opportunity for change is at the bargaining table.


                Standard practice in industrial relations indicates that a basis for change or measurement of wages in the negotiation of collective agreements is always the basic rate or base rate, unless otherwise specified.

Since it has not been specified otherwise in this agreement, the Arbitrator is of the opinion that the negotiated wage increase should be applied to the basic or negotiated rates in the Master Agreement between the two parties. To decide otherwise would create a precedent which could conceivable lead to endless complications for the parties in the future.




                The Union position as related to the Walking and Bicycle Messenger classification is rejected.


                                                                                                                                Mrs. Frances Bairstow



Issue II - Removal of Article 8, clause 7, re Morse Telegraphers from the Collective Agreement.


The Company wishes to have this clause deleted; the Union objects vigorously to such a deletion.

The clause reads:

“A Morse Telegrapher when not required to work as such, shall, if competent, have the right to operate any automatic device for the purpose of transmitting or receiving telegraph matter at the rate he was receiving as Morse Telegrapher in the office affected. Seniority shall govern”.




                The issue of the Morse operators differs from that of the Messengers in that the matter of the Messengers involved a question of interpretation of previous negotiations as well as the application of Federal law. In the instant case, the matter is one of a conflict or impasse on a straight collective bargaining issue which arose during negotiations. The Company wishes to have a clause removed from the present Master Agreement and the Union is objecting to its removal, since its removal would directly or indirectly affect the earnings of thirty-one employees who are currently earning Morse Operators rates.


                Article II of the March 14, 1967 Master Agreement is labeled “STANDARDIZATION OF CLASSIFICATIONS AND ADJUSTMENTS OF JOB RATES”. This Article calls for study and classification of various jobs which fall within the purview of the CP Telecommunications Department of the Canadian Pacific Railway Company and the Canadian Telecommunications Union. The method adopted by the parties in arriving at mutually acceptable rates is known in the currently negotiated master agreement as the “Significant Differences Method”.

                Article II, section (h) states:

“In the event the parties are unable to agree upon any reclassification of a job, or jobs, or change

in a job rate, or job rates, the matters in dispute under Clause (a) shall be submitted to a referee for final determination but in no event shall final settlement of all matters involved in these studies, either by mutual agreement or by third party determination, be later than June 30th, 1968.”


It is under the authority of this Article that the Arbitrator in this case is authorized to make an Award.


                The Company and the Union prior to the Arbitration Hearing on July 13th had agreed to the job rates (grades) of Morse Operators and Teleprint Operators. There is no dispute between them as to the classifying of Teleprint Operators. The category of classification of Teleprint Operators represents an advance in technology over that of the Morse Operators and it is expected that eventually there will no longer be a need for Morse Operators. The Morse Operators will be phased out as they reach retirement age.

The present breakdown is as follows:

Of 31 employees earning Morse Operators rates, seven are currently functioning as Morse Operators. The remaining 24 are receiving Morse rates and functioning as Teleprint Operators. Of the 24:

                ten are 60 years of age or over

                nine are 50 years of age or over

                four are 40 years of age or over

                six are 30 years of age or over

                One of the six in the youngest group is thirty years of age.


                If all of the above employees were allowed to carry the Morse Operators Rates throughout their years of service until their normal retirement age, it is estimated that the Company would be paying the highest rate for thirty-five years hence to at least one employee.


                There is no dispute between the two parties as to the fact that Teleprinter Operators should be paid at Grade “T” and Morse Operators at Grade “W”. The question is rather one of whether the Morse Operators rates are to be maintained and carried over as long as an employee originally classified as Morse Operator remains on the payroll of the Company.


Union Position


                At the outset of the presentation of facts and arguments at the Hearing, the Union claimed that one of the reasons this difficulty over Article 8, clause 7 arose was that their particular union, namely, the Canadian Telecommunications Union, Division1, was not represented at the negotiations for the Master Agreement, dated May 14, 1971, between the Non-Operating Employees unions and the railway companies. They were represented by Mr. R. A. Tomlinson, Vice-President of the United Telegraph Workers. Mr. Tomlinson is from the Canadian National and did not properly take into account the problems of the CP Telecommunications employees. The Union spokesman at the Arbitration Hearing, maintained that if his group had been present, his group would have objected to the deletion of such a clause from the Agreement.


                The situation was further complicated by the departure overseas of the chief negotiator for the Telecommunications group during the month of May.


                The Union is emphasizing its position that it could not agree to the removal of Article 8, clause 7 as long as there were Morse positions in existence, reiterated that that there was no authority, explicit or implied, contained in Article II of the Master Agreement other than by mutual consent or brought about directly by the introduction of or implementation of the new wage rates.


                The Union claimed that the Company’s insistence on deletion of Article 8, clause 7 from the Agreement constituted a unilateral action which contravened the intent and spirit of a previously negotiated clause, namely Article II. Therefore, in its view, Article 8, clause 7 should remain in the Agreement.


Company Position


                The Company, on its behalf, stated that is was not, in any sense, attempting to act unilaterally. Article 8, clause 7 is in the Collective Agreement and is not deleted. There is no question of removal of the clause until this problem is solved.


                However, the Company does reject the position taken by the Union that they were not properly represented at the negotiations. They claimed that it was naïve to assume Mr. Tomlinson of the United Telegraph Workers had no communication or consultation with representatives of the Telecommunications Union. The Company should not be held responsible for the failure of the Union to discuss its position with representatives at the negotiations.


                To continue the higher rate formerly paid to Morse Operators for Teleprint Operators in effect acts as discrimination or undue favorable treatment given to Teleprint Operators by creating a special kind of incumbency rated for them.


                In his letter of June 25, 1971 to the Union, Mr. Neville, Manager, Industrial Relations of CP Telecommunications, maintained that clause (g) of Article II cannot be applied to employees working  as Teleprint Operators. Clause (g) reads as follows:

“If as a result of the process provided in this Article II, a job is re-evaluated at a lower rate, (italics theirs), the employee on that job shall continue to receive the job rate in effect prior to completion of the study until such time as the newly evaluated job rate reaches or exceeds the former rate or until an employee declines subsequent to the completion of the study in his union, to exercise his seniority rights at his home terminal to a higher rated position for which he is qualified…”


                In a previous letter, (June 11, 1971), addressed to Mr. Dunlop, System Assistant General Chairman, Mr. Neville argues:

“This, of course, is a more or less standard ‘incumbency’ clause, designed to mitigate the effects of the transition to lower job rates on the respective incumbent employees. As all Teleprinter Operator and More Operator positions were included in the study, and as such positions were re-evaluated and assigned new job rates (italics theirs) (grades), it seems obvious to me that all employees in those positions who are receiving wages in excess of the re-evaluated job rates are subject to the provisions of this clause”.


                In conclusion - “I cannot accept the Union’s contention that the deletion of Article 8 clause 7 from the Collective Agreement represents a “unilateral” action by the Company. The deletion of Article 8 clause 7 from the Collective Agreement is an amendment thereto, made necessary by and flowing from the implementation of Article II of the March 14, 1967 Master Agreement. As you know, many other amendments to the Collective Agreement will also be required as a result of this job study, and a provisional list of these amendments (including the deletion of Article 8 in its entirety) was provided to you under cover of my letter of June 9th. These amendments are subject to negotiation , of course, and we will have to reach an agreement before the job study is completed”.


                Arbitrator’s Reasoning and Opinion


                As stated at the outset of this Report, the Arbitrator views this dispute as a question of conflict or impasse on a straight collective bargaining issue. Although it is true that the impasse has occurred over the intent or meaning of one of the clauses in the current agreement, the nature of the dispute demands that the matter be resolved through the process of collective bargaining.


                There is no ambiguity here as to the positions of the parties. The Company’s position in wishing to have the clause perpetuating a rate for a declining category be eliminated in a new agreement, i.e. the Morse Operators, is understandable. The Union’s position in wishing to protect the interests of its members whose job has changed through no fault of their own is also understandable.


                There is certainly ample evidence in both industrial relations practice as well as past practice of this particular company and affiliated unions that incumbency rates in other classifications have been maintained following job evaluation or job classification restructuring. This is one of the basic facts of industrial life that all companies and unions must live with. Not to accept the principle of incumbency rates as such would result in building up resistance and hostility on the part of unions toward entering into future negotiations and re-classification of particular grades or rates.


                A central issue which the Arbitrator faced at the outset of the Arbitration Hearing was whether to shortcut the adjustment process and proceed directly to arbitration.


                An attempt was made by the Arbitrator to find a common ground for compromise between the two parties. This effort did not produce successful results and a consensus was not achieved. The negotiating positions of the two parties did not yield themselves amenable to a compromise. It was left to the Arbitrator then to render a judgement.


                The prospect was tempting to the Arbitrator to find that the incumbency rates for Morse Operators should be continued only until a specifically assigned future date, such as 1976. This would cover the period of incumbency of the ten employees who are sixty years of age or over. That temptation was resisted, since in the mind of the Arbitrator it would beg the central question.


                That question is that the particular clause in dispute, Article 8, Section 7 was negotiated as part of the Master Agreement; its inclusion or deletion is a matter for the parties to deal with in the normal processes of collective bargaining. It is the understanding of the Arbitrator that the parties did not mutually agree to have the Arbitrator rule on the case for continuing the incumbency rates as such but the Arbitrator was to rule on whether the clause should remain or be continued in the Master Agreement.


                The expressions of the Union at the Hearing and in Correspondence that the Canadian Telecommunications union, District 1, never did at any time, countenance the removal of this clause from the Master Agreement were never contradicted. In fact, the opposite was stressed.


                On balance, it is difficult to avoid the conclusion that until such time, as Article 8, Section 7 of the Agreement is deleted through the normal course of collective bargaining, it should remain in the Collective Agreement, which became effective, May 14, 1971.




                The Company position re the deletion of Article 8 clause 7 is rejected.


                                                                                                                Mrs. Frances Bairstow