AH – 253




(the “Company”)



(the “Union”)




SOLE ARBITRATOR:                Michel G. Picher



There appeared on behalf of the Company:

G. C. Blundell                            System Labour Relations Officer

Jose Luciani                              – Counsel

And on behalf of the Union:

Michael Gottheil                         – Counsel



A hearing in this matter was held at Montreal on March 7, 1989.




Appeal of the All-Inclusive Expense Allowance Agreement which the Company has failed to apply to the Extra Gang Labourers from Gangs 110 - 111, as well as for all other Extra Gang Labourers affected by same.


The Company proposed an All-Inclusive Expense Allowance Agreement, dated 5 April, 1984, which was signed and accepted by the Brotherhood. The Company requested that this agreement be implemented due to a greater number of Extra Gangs and because of the double track projects on the B.C. North Line, etc., which resulted in a shortage of White Fleet accommodation.

The Company has since decreased the number of White Fleet accommodation even though the shortage no longer exists.

It is the contention of the Brotherhood that in lieu of White Fleet accommodation, in accordance with the 5 April, 1984 agreement, the Extra Gang Labourers so affected must be allowed the all-inclusive expense allowance.

The Company disagrees with the Brotherhood’s contention.

The grievance relates to the entitlement of Extra Gang Labourers working away from home to receive payment of an all-inclusive expense allowance which was the subject of an agreement between the parties dated April 5, 1984. A preliminary issue arose at the hearing with respect to the scope of the grievance. The Company’s representative maintains that at Step IV of the grievance procedure the Union’s representative restricted the claim to some sixteen employees listed in an attachment to a letter sent from the System Federation General Chairman to the Assistant Vice President, Labour Relations of the Company. The initial grievance, commenced at step 2 of the grievance procedure was stated in a letter dated July 3, 1987 from the General Chairman of the Union to be, “… a Step II grievance on behalf of all Extra Gang Labourers on Gangs 110 and 111, in accordance with Article 18.6 of Agreement 10.1.” It appears that during the course of the grievance procedure the Company expressed some concern to know the identity of the employees who would be the subject of the grievance. This would be a reasonable concern, since it is common ground that Extra Gang Labourers working in Gangs 110 and 111 who had permanent residence at or near the location of their work assignment would not be entitled to claim the expense allowance. In his reply to the Company System Federation General Chairman, G. Schneider stated simply: “As requested, please find enclosed a list of the members of these gangs.” Enclosed was a list of sixteen names of employees whom Mr. Schneider apparently understood to have been among the employees in gangs 110 and 111, which are the subject of the grievance.

The Company argues that the list of employees provided by the System Federation General Chairman must be seen as limiting the scope of the grievance to the sixteen individuals named. Counsel for the Union submits that the Brotherhood neither had not expressed any intention to limit the generality of its initial grievance, and that at most Mr. Schneider was attempting to provide the Company with such knowledge as he was able to assemble with respect to the employees who were part of Extra Gangs 110 and 111. On a close review of the material filed, the Arbitrator finds the position of the Union more compelling. Firstly, it should be noted that at the arbitration hearing counsel for the Brotherhood confirmed that the claim being arbitrated is limited to those employees within Extra Gangs 110 and 111 for whom actual entitlement to the payment of the expense allowance can be proved. There is, in other words, no issue here of monies payable by way of remedy to the employees of other Extra Gangs should the grievance succeed.

As with any grievance the document initiating the complaint must be given paramount importance in assessing the scope of the claim. While it may be open to a Union to unilaterally reduce the claim being made at any stage of the grievance or arbitration proceedings, it should not be held to have done so absent clear and convincing evidence in that regard. In the instant case the grievance was begun by a letter, dated July 3, 1987 which expressly characterizes the grievance as filed on behalf of all Extra Gang Labourers on Gangs 110 and 111. That characterization of the employees affected did not prejudice the Company, since its own records are the best evidence of the identify and number of the employees affected. Similarly, as the Employer also maintains records of the home address of employees hired onto Extra Gangs, the wording of the initial grievance in no way limits its ability to identify employees who would be entitled to the expense allowance should the Union’s interpretation of the Agreement of April 5, 1984 ultimately prevail.

Nor does the wording of the letter of July 28, 1988 disclose any intention or agreement to confine the scope of the grievance to any group of named employees. In the Arbitrator’s view the letter sent to the Company by Mr. Schneider can be construed as no more than a good faith attempt on his part to respond to a query by the Company with respect to the identity of employees who might be affected. The material evidences neither any prejudice to the Company from the initial framing of the grievance, nor any clear intention on the part of the Union to reduce its scope. In the absence of any specific reference within Mr. Schneider’s letter to an amendment of the initial grievance or a reduction of its scope, the Arbitrator is unable to sustain the Company’s preliminary objection. For these reasons the preliminary objection must be dismissed.

I turn to the merits of the grievance. The evidence establishes that for many years the Company has employed Extra Gangs to perform production maintenance during the months of the spring, summer and fall on the Mountain Region. The Extra Gangs were generally employed to perform heavy construction and maintenance tasks to the roads throughout the region. As they frequently worked in remote areas, the general practice was to house and feed the employees on the Extra Gangs in bunk cars, generally referred to as “white fleet accommodation”. Historically, prior to 1984 the white fleet facilities were sufficient to house most Extra Gangs at or near their place of work. It is common ground that occasionally, as an alternative, employees might be housed in bunk cars with kitchen facilities to do their own cooking (“Batch” accommodation) with a food allowance or in hotel or motel accommodations in a nearby town. In the latter circumstance they were generally paid the expenses incurred for meals and accommodation, based on the submitting of receipts.

The Extra Gangs were composed of what may be termed skilled and unskilled employees. Gangs 110 and 111, described as “Sledding Gangs” were responsible for lifting track and ties, removing track ballast, re-levelling and restoring the track on a new ballast bed. The evidence establishes that some fifty to sixty employees might be involved, including a foreman, two or three assistant foremen, two mechanics, ten to fifteen machine operators and approximately thirty Extra Gang Labourers in the operations of Gang 110, while Gang 111 would utilized the same number of foremen and mechanics, ten operators and some fifteen labourers.

In the summer seasons of 1984 and 1985 the Company found itself with a substantially increased construction and maintenance burden on the Mountain Region, due in substantial part to the greater number of Extra Gangs needed because of double track projects in the area. It is common ground that the increase in Extra Gang employees at that time could not be accommodated in the white fleet facilities then available to the Company. In anticipation of that problem the Company and the Brotherhood entered into an agreement on April 5, 1984 which is, in part, as follows:

The parties to this Letter of Understanding recognize that there are exceptional circumstances existing on the Mountain Region where it is not possible to provide accommodation units for certain Production Extra Gangs. Because of these exceptional circumstances the parties agree that it is appropriate to provide a special form of an expense allowance.

Notwithstanding any provision of Agreement 18.1 to the contrary, a Production Extra Gang employee on the Mountain Region who would be provided with meals and accommodation under normal circumstances and is not, will be paid an all inclusive weekly living allowance as follows:

1.             $235 per work week of 7 calendar days to Production Extra Gang employees assigned to work on the Mountain Region except as provided in item (2) below.

2.             $275 per work week of 7 calendar days to Production Extra Gang employees assigned to work on all lines in the B.C. North Division west of and including, Taverna, B.C.

3.             In the application of items (1) and (2) above, for any day on which an employee is required to work and is unavailable for work the all inclusive expense allowance will be reduced by 16.5 percent.

This penalty represents a reduction of 1/6th, for each working day and reflects the 17 and 4 work cycle.

This agreement shall not be viewed as establishing a precedent for other areas of the Company where the Company in its sole discretion has determined that conditions do not warrant such an allowance.

It is understood that this Letter of Understanding, while in effect, suspends any form of living, meals and transportation expenses which are provided by the Company either through the provisions of Agreement 10.1 or Company letter(s) and is subject to cancellation on thirty days written notice by either party to the other.

(emphasis added)

The grievance arises out of the treatment of Extra Gang Labourers assigned to Gangs 110 and 111 in the summer of 1987. The Extra Gang Labourers so assigned were notified that they would be located at Lloydminster, Saskatchewan. The first notice to the employees came to them through the Mountain Region Bulletin issued on December 15, 1986. While the Gang information contained in the Bulletin described the two gangs as covered by “living allowance”, the second page of the Bulletin contained the following:


The Union asserts that it is that directive which is in contravention of the second paragraph of the Memorandum of Agreement reproduced above. Simply put, its position is that prior to April 5, 1984 Extra Gang Labourers on the Mountain Region would also, under normal circumstances, have been provided either white fleet accommodation or, alternatively, would have received payment for expenses incurred for meals and motel or hotel accommodations. Its counsel submits that since that is what the employees would have been entitled to under normal circumstances at the time the Memorandum was entered into, they are entitled to the alternative of the all-inclusive weekly living allowance which it provides to Extra Gang employees.

The issue becomes what the parties intended by the reference to a Production Extra Gang employee on the Mountain Region who would be provided with meals and accommodation “under normal circumstances.” The Company maintains that it would not have been normal for Extra Gang Labourers working in the circumstances of the employees on Gangs 110 and 111 in Lloydminster to receive living expenses prior to 1984. It submits that, as a practical matter, Extra Gang Labourers were generally recruited on a local basis, and assigned to work at or near their normal place of residence. It further argues that as a general matter Extra Gang employees who were engaged in work at or near major urban areas were not supplied with accommodation or meals.

The Arbitrator has substantial difficulty with much of the evidence relied upon by the Company. For example it refers to a number of gangs which were not provided with accommodation or boarding facilities during the 1984 work season, notably at the Edmonton Terminal, Prince George, Kamloops and Port Mann, B.C. Similarly it refers to similar arrangements during the 1985 work season at Terrace, Smithers and Prince George, B.C. as well as at Edmonton and Edson in Alberta. By way of support for its position, the Company points to the 1985 Bulletin respecting the double track gangs, including Gang 151 at Edson. The Bulletin states, in part:

No white fleet accommodation. An allowance of $235 per week will be paid to all out-of-town foremen, assistant foremen, machine operators and time keepers (i.e. those who do not live in the Town of Edson).

All Labourers will be hired locally. No allowance.

Similarly, the Company points to the like treatment of Extra Gang Labourers during the 1986 work season at Edmonton, Terrace, Prince George and Vancouver. In the Arbitrator’s view the foregoing examples are of little or no value in understanding the meaning and intention of the reference to “normal circumstances” as understood in the Memorandum of April 5, 1984 at the time that document was executed. Clearly, it is that date which must be looked to for the purposes of understanding the meaning of those words. The pattern of not providing either white fleet accommodation or a living allowance which developed afterwards, between 1984 and 1987 is, to a substantial extent, a self-fulfilling rationalization of the Company’s own position insofar as it unilaterally decided to withhold the allowance, the very practice that is the subject of this grievance.

The core question to be resolved is whether Extra Gang Labourers employed in the situation which obtained in relation to Extra Gangs 110 and 111 at Lloydminster in 1987 would, under normal circumstances as they existed in 1984, have been provided either with white fleet accommodation, “batch” bunking or the payment of living expenses incurred for out-of-town employees. The evidence in that regard favours the Union’s position. The testimony of Mr. Larry Hurrell, Manager of the Production Group on the Mountain Region since 1975, confirms that in the years between 1980 and 1984 white fleet accommodations, or alternatively the payment of living expenses, were provided to Extra Gang Labourers in all cases, with the sole exception of production work performed at or out of the Edmonton Terminal. Edmonton appears to have been the only location where it could be said that Extra Gang Labourers were all locally hired, and where Extra Gang employees were provided with white fleet accommodation or living allowance because they resided at home. Significantly, it is not disputed that at that time Extra Gang employees at Edmonton were treated as being on a separate seniority list from other employees on the Mountain Region, an anomaly which was apparently corrected in 1985. In other words, when the Mountain Region is viewed as a whole, according to the evidence of Mr. Hurrell, which the Arbitrator accepts as candid, there was no “normal circumstance” which involved the denial of either white fleet accommodation or a living allowance to any Extra Gang Labourer anywhere on the Mountain Region where the employee did not in fact live at home. The evidence discloses that at that time it was also normal for Labourers to receive the same treatment in respect of meals and accommodation as other Extra Gang Employees such as foremen and operators.

A further dimension of the evidence that is not supportive of the Company’s position is the system of recall of Extra Gang employees. It is common ground that Extra Gang Labourers are recalled to service seasonally in their seniority order, pursuant to the terms of article 5.4 of Agreement 10.13 which provides:

Laid-off employees shall be recalled to service in order of seniority when staff is increased or when vacancies occur.

The material establishes that there are no bulletin and bidding procedures for Extra Gang Labourers, and traditionally they are recalled in the spring, in order of seniority. Their choice of assignment is not absolute, although it does not appear disputed that they are provided the opportunity to turn down the initial assignment proposed in favour of a second assignment which commences within a limited period of time. It appears agreed that although there is in fact a substantial turnover in the ranks of Extra Gang Labourers from season to season, and indeed within a single season, there are Extra Gang Labourers who continue in employment from year to year and are entitled to choose assignment across the Mountain Region on the basis of their seniority. On that basis it is difficult for the Arbitrator to appreciate how the Company can assert, as was done in the Edson Bulletin, that all Extra Gang Labourers are to be hired locally, in consequence of which no living allowance is payable to them. That may be a valid statement insofar as it relates to labourers who are newly hired in a time of expanding employment, such as existed in 1984 and 1985. However, it does not speak accurately to the right of an Extra Gang Labourer who holds seniority on the Region, in conformity with Article 4.1 of Agreement 10.13, which defines seniority for Extra Gang Labourers, and Article 5.4 which stipulates its application for the purposes of recall to service. While the right of an Extra Gang Labourer to choose or decline a particular assignment is not found within the terms of the collective agreement, it is not disputed that that practice has been honoured by a long-standing arrangement between the parties and that it has worked to their mutual convenience in that it has given past-service labourers some choice in assignment and has promoted, to the Company’s advantage, the retention of a more experienced body of employees.

Can it be said that prior to 1984 there was a practice of not providing either white fleet accommodation or the alternative of living expenses to out of town Extra Gang Labourers assigned at or near urban areas on the Mountain Region? On the basis of the evidence before the Arbitrator that question must be answered in the negative. As noted above, there were two separate seniority lists operating at that time, one in Edmonton and one for the rest of the Region. While work was presumably performed at or near such locations as Kamloops, Prince George, Vancouver, Edson and other similar centres, the evidence establishes that in all such instances white fleet accommodation or living allowance for out-of-town labourers was provided, just as it was for other Extra Gang employees. The only departure from the norm was Edmonton which, until 1985, operated as a discrete entity with its own seniority list. There is no evidence before the Arbitrator to suggest that, with the exception of Edmonton, Extra Gang Labourers employed across the region, including those working in the vicinity of Lloydminster, Saskatchewan were housed in white fleet accommodation or, alternatively, were provided with the payment of all expenses incurred in relation to meals and hotel or motel facilities which they might be required to use. The fact that circumstances changed in 1984 and 1985, with the volume of work resulting in a shortage of white fleet accommodation and relatively heavy hiring of new Extra Gang Labourers on a local basis, is of no material consequence to the meaning and intention of the Memorandum of Agreement of April 5, 1984.

One final element further supports the position advanced by the Brotherhood. Prior to the Memorandum of Agreement of April 5, 1984, there is no case of which the Arbitrator has been made aware in which the labourers employed on an Extra Gang were treated any differently from other employees on the same gang for the purposes of accommodation or living allowance. Both skilled employees and labourers who lived near the work location did not receive accommodation for expenses, while those who were a sufficient distance from home did, regardless of their classification. While it is true that, as a practical matter, Extra Gang Labourers were frequently hired on a local basis when the ranks of recalled labourers did not fulfil the Company’s needs, nowhere on the Region did a labourer who was living away from home to fulfil his work assignment not have either white fleet accommodation, “batch” facilities, or expenses in lieu. That practice is, moreover, consistent with the language of the Memorandum of Agreement of April 5, 1987 which speaks in terms of the entitlement of a “Production Extra Gang Employee”, without making any distinction between labourers and other employees. Apart from the issue of what was a normal circumstance at the time of that Agreement, the language utilized is more in keeping with the interpretation argued by the Brotherhood.

For all of the foregoing reasons the Arbitrator cannot sustain the position advanced by the Company with respect to the application of the terms of the Memorandum of Agreement dated April 5, 1984 as it relates to the Extra Gang Labourers employed at Lloydminster in 1987 on Gangs 110 and 111. I am satisfied, on the balance of probabilities, that “under normal circumstances” within the meaning of the Memorandum, those employees would have been provided with meals and accommodation insofar as they might be living away from home, and are to that extent entitled to the payment of the all-inclusive weekly living allowance provided within the terms of the Memorandum.

The issue then becomes what, if any, remedy are they entitled to in the circumstances. The Company submits that the Union should be estopped from claiming any relief for the employees concerned, based on its failure to have filed any grievance between 1984 and 1986, notwithstanding what the Company maintains are several circumstances in which the living allowance was not paid to Extra Gang Labourers. The Company’s representative maintains that the Union’s failure to take any steps by way of objection to the employer’s practice over some three years amounted to a representation by conduct upon which the Employer was entitled to rely. Counsel for the Brotherhood takes a different view. Firstly, he submits that there is no evidence to establish that in those locations where no allowance was paid to Extra Gang Labourers, such as Prince George, Edson and Kamloops, the Labourers utilized did not come from those localities so that they would not, in any event, have been entitled to such payments. Secondly, he maintains that there is no evidence that the Company changed its course of action or relied on anything done or said by the Brotherhood, but rather that it merely adopted and continued a practice contrary to the Memorandum of Agreement of April 5, 1984.

The Arbitrator is inclined to agree with counsel for the Brotherhood with respect to the strict application of the doctrine of estoppel in the circumstances of this case. That does not end the matter, however, as there does appear to be some basis in the evidence for concluding that there was a degree of acquiescence on the part of the Union with respect to the Company’s application of the Memorandum of Agreement. The material establishes that in 1984, 1985 and 1986 the Bulletins issuing with respect to Extra Gang assignments on the Mountain Region, copies of which were sent to the Brotherhood, expressly noted, as reflected in the Edson Bulletin reproduced above, that no living allowance would be payable to Extra Gang Labourers. In light of that evidence the Arbitrator has substantial difficulty with the Union’s argument that it did not have knowledge, or at least imputed knowledge, of the employer’s practice during that period of time. In my view it is fair to conclude that the Company had reason to believe that the Union was aware of its treatment of Extra Gang Labourers, at least up to the point at which the grievance was filed in respect of Extra Gangs 110 and 111 at Lloydminster on July 3, 1987. Whatever acquiescence may to then have been inferred from the Union’s conduct, it must be taken to have ended at that date when the Company was put on notice that its treatment of Extra Gang Labourers in respect of the living allowance was under challenge. In these circumstances I am satisfied that it would be inequitable to make an order of compensation against the Company for the period of time prior to the filing of the grievance.

For the foregoing reasons the grievance is allowed, in part. The Arbitrator finds and declares that all Extra Gang Labourers employed in Extra Gangs 110 and 111 at Lloydminster in 1987 are entitled to the payment of the living allowance established within the terms of the Memorandum of Agreement of April 5, 1987. Because of the acquiescence of the Union, during a period of time which it knew or reasonably should have known of the Company’s practice, the employees so defined, obviously excluding employees who were in fact living at home, shall be compensated for all monies which should have been paid to them from and after July 3, 1987.

I retain jurisdiction with respect to the identification of the employees entitled to compensation, the quantum of monies payable and any other aspect of the interpretation or implementation of this Award.

DATED at Toronto this 13th day of March, 1989.