AH - 216













(the ”Union”)








(the “Company”)




D. C. Stanhope and D. L. Reymolds




Sole Arbitrator:            Innis Christie


There appeared on behalf of the Company:

                                                A. H. Neville                         Manager, Industrial Relations

                                                J. W. Thorndyke                  Regional Manager, Atlantic Region

                                                H. J. Vinette                          Maintenance, Atlantic Region



There appeared on behalf of the Union:

                                                E. G. Abbot                           System General Chairman

                                                C. H. De Laroche                 Regional General Chairman




A hearing in this matter was held on the 7th day of December , 1970.

                Employee grievance alleging breach of the collective agreement between the parties signed December 18, 1968 in that the Company failed to allow reasonable expenses to employees when they were called upon to perform duties at other than their regular place of employment. The Company alleges that the grievors’ claims were settled prior to the arbitration hearing and that therefore no arbitrable issue remains. The Union alleges failure on the part of the Company to provide a statement of facts in accordance with the terms of the collective agreement, which, it alleges, constitutes a concession that anything in the Union’s statement of facts submitted in accordance with the collective agreement is true.



The Facts:

                On June 10, 1970, in accordance with Article 26 of the collective agreement, the Union advised the Company of four grievances by the three grievors. In accordance with the practice between the parties this was done in the following letter:

Mr. R. A. Mountford,

Assistant to the General Manager,

Canadian Pacific Telecommunications,

Suite 518 Place du Canada,




Dear Mr. Mountford:

                Atlantic Region T & R Technicians, Mr. N. T. Czepiela, Mr. D.C. Stanhope and Mr. D. L. Reynolds, submitted expense accounts on Canadian Pacific Railway Company from 140 - personal expenses.

                Mr. Czepiela’s account for April and May 1970 and Mr. Reynold’s for April 1970 were returned as being unreasonable. The employees maintained that their accounts were not unreasonable and reflected actual amounts spent. The matter ahs been discussed on a number of occasions by the employees with various Atlantic Region Company Officers. The Company position has remained constant being that the expenses are unreasonable, the employees insisting that their respective submissions are actual and reasonable amounts. The employees then advised their immediate Supervisor that they would file a grievance with the Union, this they did, in compliance with Article 26 of the collective agreement. The Atlantic Region General Chairman pursued the grievances in accordance with Article 26, terminating with Regional Manager Mr. J. W. Thorndyke, who maintained the Region’s position, that the expense accounts unreasonable.

                The Union’s position is that the expense accounts reflect actual amounts spent by the employees concerned, on meals while on Company business, in accordance with Article 13 clause 2 of the collective agreement. The amounts charged are reasonable and should be reimbursed.

                Please rule on this grievance.

Yours Truly,

E. G. Abbot

System General Chairman


By letter of July 22, 1970 Mr. R. A. Mountford, Assistant to the General Manager, rejected the grievance. Mr. Mountford quoted Article 13, clause 2, which states (in part):

“Employees when called upon to perform duties at other than their regular

places of employment shall be allowed all actual reasonable expenses and …”

and concluded his letter with the statement, “The maximum meal cost guidelines issued by Mr. Vinette are, in my opinion, generous by any reasonable standards and I can see no justification for the Union’s position on this matter.”


                By letter of August 3rd, Mr. Abbot, on behalf of the Union, advised Mr. Mountford that the matter would go to arbitration, stating that “the only point at issue is whether or not the expense accounts submitted by these employees, are reasonable or not. The Union contends that the amounts are reasonable and should be paid by the Company.”

                A letter from Mr. Neville, Manager, Industrial Relations of the Company, to Mr. Abbot dated September 21, 1970 indicates that by that date my appointment as arbitrator was confirmed. With a covering letter dated September 15th Mr. Abbot sent me the Union’s statement of facts, in compliance with Article 27, clause 3 of the collective agreement. In this “statement of facts” the final paragraphs are the following:

(4)   The Union and the grievors contend, that the actual amounts incurred as submitted on expense form 140 are for a reasonable expense (meals) and are amounts actually incurred and should be reimbursed in full. The Union argues and alleges, that by not reimbursing the actual amounts incurred, the Company is in violation of Article 13, clause 2 of the Collective Agreement.

(5)   The Union further argues, that the actual amounts incurred by the grievors, for the meals in question, are in fact reasonable amounts, when all relevant factors are considered.


The Union respectfully requests, that the actual reasonable expenses incurred for meals, by the grievors, Messrs. N. T. Czepiela, D.C. Stanhope and D. Reynolds, Testing and Regulating Technicians, Montreal, Quebec, for the months of April, 1970 to date, be honoured as submitted and reimbursed, in accordance with Article 13, clause 2 of the Collective Agreement between the parties.


December 7th was agreed upon by all concerned as the date for the hearing in this matter. There followed considerable negotiation between the parties with regard to the subject matter of the grievances and on November 23rd Mr. Neville wrote to Mr. Abbot advising him that the Company had decided to “settle” with the grievors. The relevant part of this letter is the following:

Following a detailed review of this file for the purpose of preparing the Company’s brief, I have concluded that, because of the uneven amounts by which the meal claims on the April expense accounts were reduce, the associated grievances should be settled on the basis of the Company paying, in full, the original amounts claimed.


As this would leave only Mr. N. T. Czepiela’s May expense accounts grievance outstanding on the docket for arbitration, I have discussed the matter with Mr. J. W. Thorndyke and we have decided to settle this grievance in the same way. Accordingly, Mr. Thorndyke is arranging for the following amounts to be paid to the employee in question, and will advise them accordingly.

Mr. Neville went on to set out the exact amounts to be paid to each of the grievors. Cheques in these amounts were mailed to the grievors but have not been cashed. It should be noted that the amounts paid were exactly the amounts that the employees had claimed in the spring.


                Upon receipt of the letter just quoted Mr. Abbot wrote a letter to me in which he took the positions that this settlement did not resolve the dispute “nor correctly settled the grievances in question”. He went on to argue that the same grievors had filed more grievances on expense account submissions, that the Company was aware of these subsequent grievances and that the Company could not now preclude the issue involved from being determined by arbitration.


                Mr. Abbot further contended, in his letter to me, that the Company had failed to submit a “statement of facts” as required by Article 27, clause 3 of the collective agreement that this constituted “an evidentiary indication on the face of the record of the Company’s acquiescence” to the “fact” that the broad issue involved in denying the grievors’ expense accounts is to be settled when dealing with these grievances.


                Under the date of the following day, November 26, and before he had received a copy of Mr. Abbot’s letter to me, Mr. Neville, without prejudice to the Company’s preliminary objections, sent me the Company’s statements of facts, with a copy to the Union. Thus the Union had the Company’s statement of facts some ten days before the date of the hearing in this matter. Furthermore, I am satisfied that the Company’s delay in submitting its statement of facts was not intended to prejudice the Union, but resulted from the fact that from day to day the Company was under the impression that the whole dispute would be settled.


                At the hearing each of the parties submitted objections to the way that the other had proceeded and it was agreed that argument on the merits should await determination of these preliminary objections.


The Issues:

                The first issue is whether the Company’s offer to settle the employees’ grievances by paying them the amounts claimed precludes the union from pursuing the grievances to arbitration on behalf of the grievors. Only if I conclude that it does will I go on to determine whether, as contended by Mr. Abbot, the Company is estopped from taking this position by its delay in offering settlement when it was aware that other grievances raising the same or similar issues were in process. In deciding whether the individual grievances in question are still arbitrable I must deal with the Company’s contention that the Union is illegitimately attempting to convert four personal grievances into a policy grievance which has not been properly progressed to arbitration as provided for in Articles 26 and 27 of the collective agreement.


                The second issue with which I must deal is the correctness of Mr. Abbot’s contention that failure by the Company to adhere to the time limits in the collective agreement for the submission of a “statement of facts” amounted to a concession. It is, of course, part of that issue whether or not the Company in fact did fail to comply with the collective agreement. It is unnecessary for me to deal with arguments relating to whether of not he Company should have been required to proceed at the hearing to consideration of the merits because it was agreed that preliminary objections should be settled first.



                It is clear from the correspondence set out above that the issue in the grievances filed by the grievors was whether, by refusing to reimburse the grievors for the claims submitted, the Company failed to allow “all actual reasonable expenses incurred” by the grievors when they were called upon to perform duties at other than their regular place of employment. The Company did not question that the expenses were “actual” but did question whether they were “reasonable”. In order to determine whether an expense is “reasonable” the Company in the first instance, and an arbitrator if the matter goes that far, must erect some standard against which expense claims can be judged which takes sufficient account of all factors involved. It is clear from Mr. Mountford’s letter of July 22nd to Mr. Abbot that the Company has in fact issued “maximum meal cost guidelines” against which they judge claims submitted. Thus is would seem likely that in determining the merits of these grievances the arbitrator will be asked by the Union to hold that the standards against which the Company judges expense account submissions were not reasonable in the particular instance grieved. The arbitrator will have to make some difficult findings of facts about the costs of meals and the expectations of the parties and , even more difficult, he will have to give meaning to the nebulous word “reasonable”. In the result, however, the arbitrator will have to find either that the amount allowed for expenses was reasonable in the instances grieved upon and dismiss the grievance, or that the expenses allowed were not reasonable in these instances and order payment up to what he has determined is a reasonable amount.


                I have felt it necessary to consider the nature of the determination that the arbitrator will have to make in dealing with the merits of this case to demonstrate why, in my opinion, the grievors have a legitimate interest in proceeding to arbitration even though the Company is prepared to pay their claims. As indicated by Mr. Neville’s letter to Mr. Abbot of November 23rd, quoted above, the Company offered settlement in this case not because the amounts claimed were “reasonable” but because the claims had been reduced b “uneven amount”. Such a “settlement” would not settle the difference between the Company and these grievors over whether the specific claims in question were “reasonable”.


                Article 26 of the collective agreement provides that “all grievances” shall be dealt with in the manner there established and Article 27, clause1, further provides that “any dispute of grievance arising between the parties relating to the interpretation, application or administration of the agreement” may be taken to arbitration. (emphasis added) There is no indication that individual grievors have nay less right than the Union has to grieve over matters of interpretation of the collective agreement. Indeed, it would seem that if individual grievors were precluded by this collective agreement from settling through arbitration any such “differences” they might have with the Company the agreement would not comply with the Federal Industrial Relations and Disputes Investigations Act, R. S. C. 1952, c.152, s.19.  The relevant parts of the statute are the following:

18.A collective agreement entered into by a certified bargaining agent is subject to and for the purpose of this Act binding upon

(a)    the bargaining agent and every employee in the he unit of employees for which the bargaining agent has been certified and

(b)    the employer who has entered into the agreement, on whose behalf the agreement has been entered into.

18.   19. (1) Every collective agreement entered into after the 1st day of September, 1948, shall contain the provision for final settlement without stoppage of work by arbitration or otherwise of all differences between the parties to or persons bound by the agreement or on whose behalf it was entered into, concerning its meaning or violation (emphasis added).

Since this collective agreement can readily be interpreted as allowing the grievors an opportunity to settle the differences between them and the Company with regard to whether the expense accounts which gave rise to their grievances were reasonable it should be given that interpretation. The grievors, acting through the Union, have every right to proceed to arbitration for settlement of that difference, which had clearly been left unresolved by the Company’s offer to pay the amounts claimed.


                The Company relies on a number of arbitration awards in which it was held that the Union could not proceed by way of policy grievance in a matter which was properly the subject of grievance by an individual employee affected. Even if that proposition is valid the reverse is not necessarily so , since those awards appear to have turned on the notion that the individual should not be denied the right to veto the arbitrating of his grievances. The Union always has the power to determine that a grievance should not be progressed to arbitration, whether it is a policy grievance or an individual grievance, so, in the absences of clear words in the collective agreement, there is no basis for saying that individuals cannot grieve over differences that may be characterized as “policy” questions. The situation may be different where the collective agreement distinguishes not only between who may initiate a grievance but also between types of grievances. There is nothing in this collective agreement to the effect that differences of policy may only be grieved upon by the Union and that the interests of individual employees extend only to obtaining money payments.


                The Company cited International Nickel Company (1961) 12 L. A. C. 146 (Bigelow, chairman) in which the majority of the Board held that a dispute involving statutory holiday pay was strictly a matter for individual grievances and could not be initiated by the Union as a policy grievance. On certiorari the decision was reversed and the matter sent back for arbitration by Gale, J., who said in part

                As already indicated it is my view that the Board ought to have held that the processing of this difference through arbitration could be initiated by the Union under Article 7.09. I do not accept the proposition that the agreement contemplates two types of differences which are mutually exclusive and must be processed in separate ways. On the contrary, I believe that all differences may be disputed and carried to arbitration, subject to the specific terms of (the agreement) as to procedures, by either the Union or an individual employee.

I would place a similar interpretation on Articles 26 and 27 of the collective agreement before me, noting that the Company is here arguing the reverse of the position taken by the International Nickel Company. The  certiorari order of Gale J. (as he then was) was subsequently reversed by the Court of Appeal but this id not involve a finding that his interpretation of the language of the collective agreement was wrong. The Court of Appeal simply found that the language of the collective agreement could reasonably bear the interpretation given to it by the majority of the arbitrators and therefore denied certiorari, in accordance with RE Canadian Westinghouse Company and Local 164 Draftsmans Association of Ontario. (1962), 30 D. L. R. 92d) 673 at p.676. The ratio of that case was stated by Jessup, J. A. in R. v. Barber, ex parte Warehousemens and Miscellaneous Drivers Union (1968) 68 D.L.R. (2d) 682 (On. C.A.) at p.687:


                In my opinion the ratio of those cases (including the Canadian Westinghouse case) is simply that where a matter of law referred to an arbitration board for determination is one of construction, error of law will not be found simply because the Court considers some other interpretation more apt if the interpretation of the language is one it will reasonable bear.


In short, none of the awards of cases cited by the Company indicate that, in the absence of a clear distinction in the collective agreement itself, an individual employee is precluded from initiating a grievance for the purpose of settling a “policy” difference with the Company. Thus, despite the Company’s offer to settle the grievances here in question by paying the full amounts claimed by the grievors there is still an arbitrable “difference” between them as to whether the Company refused to allow “reasonable” expenses on the occasions which are the subjects of these grievances.


Turning now to the second issue: Mr. Abbot suggested that the Company failed to live up to the requirement of Article 27, clause 3 in that it failed to submit a statement of facts in time, and that that failure should be held to constitute a concession by the Company of the correctness of the Union’s views. .Article 27, clause 3 provides;

A statement of Facts containing the facts of the dispute and reference to the specific provision or provisions of the collective agreement which it is alleged has of have been violated shall be submitted either jointly or separated to the Arbitrator within five (5) days of the appointment of the Arbitrator.


There is nothing in the collective agreement to indicate what the effect of a failure to comply with this provision is to be. Thus, to adopt a language of the many arbitration awards concerned with failure to adhere to procedural time limits in collective agreements, this is not a “mandatory” provision and will be given effect only if the Union has been prejudiced by the Company’s procedural failure. The purpose of a requirement that a statement of facts be submitted is to ensure that neither party is taken by surprise by the other’s allegations of fat and will be able to bring all necessary witnesses to the hearing. It also enable the arbitrator to determine the extent of factual disagreement between the parties and to run the hearing accordingly. On either of these grounds I am unable so see how the Union has been prejudiced in this case. While it is unnecessary for me to decide the matter, it seems apparent that even if the Union had been prejudiced to some degree the proper course would not be to forfeit the case to the Union but rather to allow them an adjournment, perhaps with some provision for costs.


Having decided that even if the Company was in breach of the requirements of Article 27, clause 3 the Union was not prejudiced thereby, it is unnecessary for me to decide whether, in fact, the Company was in breach and I will not deal with the arguments presented by the Company in that respect.


The result of the determinations that I have made in these preliminary matters is that the four grievances are arbitrable. The question to be determined in each case is whether in refusing to pay the expenses claimed the Company failed to allow all actual “reasonable” expenses claimed. To the extent necessary to determine that question in each of those grievances the award on the merits will deal with the way in which the collective agreement has been interpreted by the Company , but the Company could not be ordered to make any payments other than those specifically in dispute.


The Union would appear to have open to it the alternative of dropping the grievances here in question and filing a policy grievance which would have to be processed anew from the start in accordance with the provisions of Article 27, but that question is not issue before me.


                The Company’s preliminary objection to arbitration is denied.


Dated at Kingston, Ontario, this 2nd day of February, 1971.

                                                                                                                Innis Christie, Arbitrator