AH – 245




(the “Railway”)



(the “Union”)

GRIEVANCE RE Kennedy Grievance



SOLE ARBITRATOR:                H. Allan Hope, Q.C.



There appeared on behalf of the Railway:

Mary E. Saunders


And on behalf of the Union:

Robert Dhensaw



A hearing in this matter was held at Prince George on June 28, 1985.




In this dispute the Union alleges that the employer contracted out work which should have been assigned to the bargaining unit. The disputed assignment consisted of dispatching a heavy duty mechanic from a company called Union Tractor to assess the extent of repairs required for a diesel operated machine called a Isco Car Mover which had broken down in the field. The machine, as the name implies, is used to move individual rail cars on the railway operated by the Employer. The diesel motor of the machine quit while it was being operated by Leonard Pickell in the early morning hours of September 27, 1984. The Railway functions on a twenty-four hour clock and, for convenience, I will refer to times on that basis.

The machine ceased functioning at 0100 hours on September 27. At the time it was approximately one and one-half miles south of a location called Whitford Siding in the northern part of the province. When it quit the machine was blocking the line and, in the parlance of both of the parties, constituted an emergency. The operator, Mr. Pickell, succeeded in having the machine moved, first to Whitford Siding and then from the siding itself onto the “back track”. The result was that both the main line and the siding were clear and any emergency insofar as operations of other equipment were concerned had ceased to exist.

The machine was being used in support of a “bridge and building gang” engaged in the vicinity in the insulation of a tunnel. The work was taking place in a section which is under the supervision of Peter Rebagliati, the section roadmaster. The bridge and building gang was not normally under his supervision but the work was being co-ordinated by him and the priorities with respect to it were under his control. When the car mover broke down it was hauling a flat car loaded with insulation materials towards the tunnel. The evidence of Mr. Rebagliati was that the car mover was to be assigned the following morning to the bridge and building gang for use in moving a flat car upon which the equipment for installing the insulation was placed.

The Railway’s view was that the car mover was essential to the project. In the hearing a dispute arose between the parties as to whether the car mover was essential. Mr. Rebagliati said that the Railway expected it to be used that morning to assist the bridge and building gang. That gang was doing the preparation work required as a prelude to the installation of the insulation. Mr. Rebagliati said that the crew did not proceed as scheduled because of the breakdown of the car mover and that the time table for the installation of the insulation was thus delayed.

Mr. Rebagliati conceded that some of the preparatory work had been done by another machine but repeated his evidence that the work had been delayed by reason of the absence of the car mover. In the final result the first piece of insulation was installed on October 2. Mr. Rebagliati said he considered the breakdown of the car mover to be an emergency situation because of the impact it had on the capacity of the bridge and building gang to perform the insulation task. He said the task was completed on December 8, 1984. The Union position on the facts was that the breakdown of the machine had no effect on operations. I will come back to that issue later.

Returning to the sequence of events, I repeat that when Mr. Pickell found himself stranded by the failure of the car mover, he enlisted the use of the coal train engine to move him to the siding and then onto the back track. He then rode the coal train to a work location called Tacheeda camp, one of the maintenance camps servicing that section of line. His efforts in having the disabled machine removed occupied the remainder of the night. At approximately 0700 hours he telephoned from Tacheeda to Mr. Rebagliati at a location called Tumbler Ridge to report the breakdown.

The recollection of Mr. Rebagliati was somewhat different. He learned of the breakdown from other sources at 0630 hours on September 27. His first priority, having determined that the line was clear, was to reassign the work scheduled for the bridge and building gang that day. His sense of urgency was his understanding that the crew, without the car mover, would have no work it could perform on the tunnel insulation project and that a reassignment was necessary or the crew would remain idle. He reassigned the crew to other work and then telephoned to Tacheeda where he spoke with Mr. Pickell. Mr. Pickell advised him that he, Mr. Pickell, would contact the work equipment shop in Prince George to report the breakdown.

There was at Tumbler Ridge a maintenance camp which was the maintenance centre for the section adjacent to the section serviced by Tacheeda camp. The site of the disabled machine, being Whitford Siding, was between the two maintenance camps. Whitford Siding is accessible by road from Tacheeda camp, which is south of the siding, but is accessible only by rail from Tumbler Ridge camp, which is north of it. In the ordinary course there is a qualified mechanic employed by the Railway situated at both Tumbler Ridge camp and Tacheeda camp. on the day in question, however, both mechanics were at Tumbler Ridge. In addition, one mechanic was sick on the day of the breakdown and the other was assigned to the repair of equipment which was deemed of equal priority to the repair of the car mover.

The recollection of Mr. Pickell was that he had spoken with Bruce Anderson, the supervisor of the work equipment shop, when he telephoned from Tacheeda to Prince George on the morning following the breakdown. Mr. Anderson recalled receiving a telephone call from Mr. Pickell and passing a message to a field supervisor who has direct responsibility for the maintenance and repair of equipment in the field. Mr. Anderson supervises the shop itself. Both Mr. Anderson and the field supervisor reported the breakdown of the equipment to Arnold Hanson, manager of the work equipment shop, when he arrived at the shop that morning.

Mr. Hanson, upon learning that the breakdown occurred when the car mover’s engine had quit while it was in operation, thought it probable that its fuel lines had frozen. Mr. Hanson pointed out that the weather had turned suddenly cold and the Railway had experienced a number of circumstances in which summer diesel fuel coagulated because of the unexpected drop in temperatures. That condition was one which could be resolved by the operator, Mr. Pickell, in a relatively simple field operation involving the changing of the fuel supply to winter fuel and the changing of fuel filters.

On the basis of that analysis Mr. Hanson contacted Mr. Pickell in Tacheeda camp sometime between 0800 hours and 0900 hours. Mr. Pickell did not recall speaking with Mr. Hanson that day. His recollection was that he spoke only with Mr. Anderson, the supervisor of the work equipment shop. In any event, he did recall receiving instructions to check the condition of the fuel. Mr. Anderson said that when he first spoke with Mr. Pickell he remarked that it may be a fuel problem because of the rash of such incidents the work equipment shop had experienced, but he said he did not direct Mr. Pickell to explore that possibility.

In any event, Mr. Pickell acknowledged that he had been instructed to go from Tacheeda camp to Whitford Siding and check out the possibility of a frozen fuel line. He drove to Whitford Siding in a service van and determined that frozen fuel was not the problem. He reported that fact to the work equipment shop in Prince George by means of a two-way radio. His recollection was that he had that discussion at approximately 0930 hours and that he again spoke with Mr. Anderson. No one in the work equipment shop recalled receiving that communication from Mr. Pickell that morning.

Mr. Hanson, as stated, said that it was he who contacted Mr. Pickell at Tacheeda and instructed him to check out the fuel theory. He said he heard nothing further from Mr. Pickell or anyone on his behalf and that an attempt to contact him between 1400 hours and 1500 hours was not successful. At approximately 1600 hours he heard from the roadmaster, Mr. Rebagliati, who told him the breakdown was more serious than a mere fuel problem and that he needed a mechanic as soon as possible. On that basis Mr. Hanson, who was at his residence at the time he received the call from Mr. Rebagliati, decided to turn the matter over to Mr. Anderson to have a mechanic dispatched to Whitford Siding.

Mr. Hanson contacted Mr. Anderson who reported to him later in the evening that he had attempted to contact available mechanics from the work equipment shop to make the field trip and had not been successful. Mr. Anderson reported that there were three of the mechanics whom he had been unable to contact and he wanted to try again. Mr. Hanson instructed Mr. Anderson not to let the matter delay much longer. Mr. Hanson said in his evidence that Mr. Rebagliati had insisted that steps be taken to repair the machine immediately because it was needed on the tunnel insulation project. He told Mr. Anderson to engage the services of a contractor if he was not able to get a mechanic in reasonable time.

Mr. Anderson said that when he first received the instructions from Mr. Hanson to dispatch a mechanic he started telephoning to the homes of various work equipment mechanics, including the grievor, Don Kennedy. He telephoned the home of Mr. Kennedy on two occasions and was not able to raise a response. He said that the telephone rang with no answer. Evidence from Mr. Kennedy and his wife established that he was home that evening and that he was willing and desirous of performing the field assignment.

The difficulty in contacting Mr. Kennedy arose because he had moved into a house he had built several months prior to the incident and had changed his telephone number. Mr. Anderson said he had obtained the grievor’s telephone number by looking it up in the telephone directory. On the evidence it is clear that Mr. Anderson telephoned to the wrong number on the night in question.

I note by way of aside that the Union suggested that Mr. Anderson may have overlooked trying to reach Mr. Kennedy or may have simply concluded it was too much trouble to locate his proper telephone number. That supposition arose because Mr. Kennedy and various Union officials placed calls to Mr. Kennedy’s previous telephone number the morning after the incident and received a recorded message informing them that the number was no longer in service. The Union speculated that Mr. Anderson either received the same message and did not want to take the trouble to find the correct number, or simply failed to try to reach Mr. Kennedy at all. Adding fuel to that speculation was the admitted fact that Mr. Anderson had contacted the grievor at his new telephone number on a previous occasion several weeks before to give him a field assignment.

But, apart from the sworn evidence of Mr. Anderson that he did telephone and received no answer, the balance of probabilities favours his account of the night’s events. It was admitted that Mr. Anderson had been scrupulous as a supervisor in attempting to ensure that employees, as opposed to outside contractors, received as many field assignments as possible. In addition, the implication in the evidence is that using a work equipment mechanic rather than an outside contractor was less costly. There was also the uncontested evidence of Mr. Hanson that Mr. Anderson had delayed contacting an outside contractor while he went to considerable trouble and invested considerable time in trying to give the assignment to a work equipment shop mechanic.

Finally, the evidence made it clear that Mr. Anderson did succeed in contacting some mechanics who were not interested in accepting the assignment and there was simply no reason advanced for why he would not want to contact the grievor. Mr. Anderson knew from past experience that the grievor wanted overtime and field assignments and that he would probably have accepted the assignment if asked. I accept the evidence of Mr. Anderson that he did not recall the grievor’s change in telephone numbers and that his inability to contact him arose as a result of an honest mistake. I will return to that aspect of the issue later in this award.

Returning to the sequence of events, Mr. Anderson engaged the services of Union Tractor when he failed to obtain a volunteer from the work equipment shop. A mechanic was dispatched to the machine to ascertain the difficulty. At approximately 0230 hours the following morning, September 28, Mr. Anderson received a call at his home from the contract mechanic and was informed that the shaft of the blower on the diesel engine had stripped and would have to be replaced. Mr. Anderson instructed him to return to Prince George. The following morning a mechanic from the work equipment shop was dispatched to effect the necessary repairs.


The grievor, Mr. Kennedy, learned of the incident the following morning. When he was informed that a contract mechanic had been sent because there were no mechanics available from the shop, he asked why he had not been telephoned. He addressed his enquiry to Victor Greco, a senior officer of the Union who was, coincidentally, the shop steward in the work equipment shop. The concern of the grievor caused Mr. Greco to direct enquiries to Mr. Anderson who informed him that calls had been made to the grievor but that there was no answer at his home. Sufficient exchange took place for both parties to realize that Mr. Anderson had not called the right number.

As stated, the suspicions of the Union were raised when a telephone call was made to the old telephone number of the grievor and a recording was received advising callers that the number was out of service. Those suspicions were heightened when Mr. Kennedy was reminded in a conversation with his wife that Mr. Anderson had given him an overtime assignment at his new telephone number approximately three months previously, indicating that Mr. Anderson had the new telephone number. It was further discovered that the grievor had informed the employee records office of his change of telephone number and that the number on file with the employer was the right telephone number.

I have indicated that I accept the evidence of Mr. Anderson that he acted in good faith in his attempt to contact the grievor. That does not mean, however, that his explanation relieves the Railway of any obligation it has under the agreement to offer the field assignment to the grievor. If the grievor was entitled to be contacted, the fact that the employer made an error in seeking to contact him would not relieve it of the implications flowing from that failure. On the undisputed evidence the grievor had informed the Railway of his new telephone number and the error did not arise through any fault of his. The fact that Mr. Anderson acted in good faith does not relieve the Railway of any obligation owed to the grievor. Hence, the real question is whether the employer is obligated under the terms of the collective agreement to offer him the disputed assignment.


In alleging that the assignment to the contractor was a breach of the collective agreement, the Union relied on the following provision:

Article 23.3

Except in cases of emergency or temporary urgency, employees outside of the Maintenance of Way service shall not be assigned to do work which properly belongs to the Maintenance of Way Department, nor will Maintenance of Way employees be required to do any work except such as pertains to his division or department of Maintenance of Way service.

The position of the Railway is that the provision in question does not affect its rights to contract out work. The employer said that the provision is clearly limited to assignments of work made between employees. That would appear to be the clear implication of the language. The term “employees” is not ambiguous or unclear in its context in the collective agreement and it clearly does not encompass contractors or the employees of contractors.

But even if there were any doubt as to the use of the term “employees” and its application to contracting out, that ambiguity is resolved in a letter of understanding appended to the collective agreement. That letter, which is dated June 21, 1971, deals specifically with the rights of the parties with respect to contracting out. That letter of understanding makes it clear that there is no restriction on the right of the Railway in the contracting out of work. The letter reads as follows:

During the negotiations with the Association of Non-ops pertaining to their demand on restricting the right of the Railways to contract out work, the Union were informed that the Railway was not prepared to accede to their demand. In the course of the discussion the Railway agreed to issue instructions to all Company officers concerned to the effect that when the Railway decides to contract out work on a regular basis that is presently and normally performed by employees covered by a collective agreement, the Union would be advised when practicable as far in advance of the date contracting is contemplated as is possible. If the Union representative requests a meeting to discuss matters relating to the contracting, the Company shall promptly meet with him for that purpose. The purpose of this understanding is to provide that the Company advise the Unions of contracting whenever practicable and if the Union can demonstrate that the work could be performed just as efficiently and economically by Railway forces as by contract the matter of contracting out the particular work concerned would be reviewed. The foregoing (letter) shall not restrict the right of the Company to contract out work.

The submission of the Union is that the Railway had failed to prove that assigning the contractor to send out a mechanic to assess the state of repair of the machine was contracting out. In particular, the Union submitted that the Railway had failed to file any contract it had entered into for the provision of the disputed services. But the term, “contracting out”, does not require a formal contractual relationship. It is used in its industrial relations context as a term to distinguish between work assigned by the employer to its own employees and work performed by persons other than those in the employ of the employer, including individuals (excluding casual employees), corporations and unincorporated firms. The disputed work was not performed by an employee, either regular, casual or temporary. It was performed by the employee of an independent contractor.

Even in the absence of the explicit language of the letter of understanding, the authorities are clear and uniform that an employer cannot be restricted with respect to its right to contract out work unless any such restriction is set out expressly in the provisions of the collective agreement. That subject has been addressed on at least two occasions by the Labour Relations Board of British Columbia in reviews of arbitral decisions on the subject of contracting out. The most recent decision in that regard is British Columbia Systems Corporation and British Columbia Government Employees’ Union (1981) 3 Can. L.R.B.R. 231 (Kelleher). On p. 237 Mr. Kelleher cited the earlier decision of the board in Federated Cooperatives Limited (1980) 1 Can. L.R.B.R. 372 (Germaine) for the following proposition:

Since the seminal arbitration award in … Russelsteel … it is safe to say that in the absence of the kind of motivation which would render contracting out either a lockout or an unfair labour practice under the Labour Code of British Columbia, an employer is not prevented from contracting out unless there is an express prohibition contained in the collective agreement.

The letter of understanding, when measured against that test, makes it clear that, excluding bad faith, there is no restriction on this employer in the contracting out of work. The employer has agreed to discuss the matter with the Union but it is clear that the obligation to discuss the matter does not carry with it any contractual force restricting its rights. A letter of understanding which is incorporated into a collective agreement has the same force and effect as the agreement itself. To read the letter of understanding as restricting the right of the employer to contract out work would be contrary to the express agreement of the parties on that very issue. In the result, the grievance must be dismissed.

DATED at the City of Vancouver, in the Province of British Columbia, this 12th day of September, A.D., 1985.

(signed) H. ALLAN HOE, Q.C.