AH – 256




(the “Company”)



(the “Corporation”)



(the “Brotherhood”)



SOLE ARBITRATOR:                J. F. W. Weatherill


There appeared on behalf of the Company:

S. McConville


There appeared on behalf of the Corporation:

M. St-Jules


And on behalf of the Brotherhood:

A. Cerilli



A hearing in this matter was held at Montreal on February 21, 1989.



There are two grievances before me, one between the union and Canadian National and the other between the union and VIA Rail. Although the grievances arise out of the same fact situation, they are distinct. They were heard together as a matter of convenience, and this award will deal with both cases.

In the dispute between Canadian National and the Brotherhood, a Joint Statement was signed, and while there appears to have been no Joint Statement in the VIA case (although its equivalent appears in the parties’ joint letter to the Minister of Labour), the one in the Canadian National case sufficiently sets out the principal issue to be determined. It is as follows:


Concerns the application of the VIA Special Agreement to the closure of the Winnipeg Steam Plant and the resultant abolishment of 14 positions.


On May 20, 1988, the Company issued an Article 8 notice, in compliance with the Employment Security and Income Maintenance Plan, notifying the Brotherhood that effective August 20, 1988, the Company was closing the Winnipeg Steam Plant as a result of the East Yard Development Project.

The Brotherhood contends that the closing of the Steam Plant stems from a government initiative with passenger train services in Canada and therefore, an Article J notice, in compliance with the VIA Special Agreement was required.

The Company disagrees with the Brotherhood maintaining that the closure of the steam plant is not VIA related but a Technological, Operational or Organizational change and is properly covered by the Employment Security and Income Maintenance Plan.

As far as the Canadian National case is concerned, there is certainly no doubt that the closure of the Winnipeg Steam Plant was an operational or organizational change of the sort for which notice is, in general, required to be given under Article 8 of the Job Security Agreement. Whether or not an Article J notice under the VIA Special Agreement was required is, however, a separate question, and is the one which arises in this case. Article J is as follows:

The Companies signatory hereto (being Canadian National, Canadian Pacific and VIA) will not put into effect any change in Railway Passenger Services made in accordance with Government initiatives introduced pursuant to the Railway Passenger Services Adjustment Assistance Regulations which will have adverse effects on employees without giving as much advance notice as possible to the General Chairman representing such employees or such other officer as may be named by the union concerned to receive such notices. In any event, not less than three months’ notice shall be given, with a full description thereof and with appropriate details as to the consequent changes in working conditions and the expected number of employees who would be adversely affected.

The “change” which occurred in the instant case has two principal aspects. One is the closing by Canadian National of its Winnipeg Steam Plant. The other is the construction by VIA of new steam plant facilities at the Winnipeg Station.

The CN Winnipeg Steam Plant plant, which began operation about 1950, in a location adjoining the Union station (replacing an earlier facility in the station) provided steam for a number of purposes and for a number of private commercial customers as well as for railway operations including the servicing of passenger cars. While there appears to be some debate as to the extent to which steam plant operations were related to passenger car operations, there is no doubt that that was one of the essential functions which the steam plant filled. I do not consider that the fact that the output of the steam plant was not entirely dedicated to railway operations has any bearing on this case.

Following the initial transfer of the “core” passenger service functions from CN to VIA (which involved transfers of employees, and in respect of which Article J notices were given), further transfers of operations and employees have been made from time to time, including transfers relating to the maintenance of the station complex, as in the case of Janitors for whom, again, an Article J notice was given.

Canadian National continued to operate the steam plant, and continued to supply its own needs as well as those of its commercial customers and VIA, until the summer of 1988. In 1987, CN had advised VIA that it would cease operation of the steam plant in 1988. This was not a development that VIA had sought, but was the result of an agreement between CN and the Forks Renewal Corporation, a corporation representing three levels of government and involved in the redevelopment of CN’s former East Yard located at the junction of the Red and Assiniboine Rivers in downtown Winnipeg. That agreement called for the demolition and removal of the Steam Plant prior to December 16, 1988. In September, 1988, the Forks Renewal Corporation advised CN that the steam plant was not to be cleared, as the Forks Renewal Corporation planned to occupy it for its own purposes, but that has no significance for this case. The steam plant had, it appears, ceased operation as such by that time.

On this first aspect of the matter, then, it will be seen that CN, as part of a land transfer arrangement with the Forks Development Corporation, went out of the business of providing steam, and turned the premises involved over to the Forks Development Corporation.

The second aspect of the matter is the response by VIA to the advice it received from CN that it would not longer be providing steam. VIA of course required steam for its operations, not merely its actual passenger train operations but also for other purposes in the station complex, in which CN was now the tenant of VIA. VIA proceeded to build new facilities which (once again) are located in the station complex. It has contracted out the operation of these facilities, that contracting-out being the subject of a separate grievance between the Brotherhood and VIA, which is not before me.

I think there is no doubt that what has occurred has had adverse effects on employees within the meaning of Article J of the Special Agreement. The question is whether or not what occurred is properly to be described as a “change in Railway Passenger Services made in accordance with Government initiatives introduced pursuant to the Railway Passenger Services Adjustment Assistance Regulations”. Only if there has been a “change” within the meaning of that provision does Article J apply.

The preamble to the Special Agreement provides, in clause (i), as follows:

The purpose of this Special Agreement shall be to provide the terms, conditions and benefits for employees adversely affected as intended by Regulations 4, Sub-section (a) through (i), 5(l)(a) and (b), 5(2), 6(a) and (b) and 7 of the Railway Passenger Service Adjustment Assistance Regulations.

Section 7 of the Regulations, which is material to the instant case, is as follows:

A special agreement shall not provide for benefits to employees other than those adversely affected by the implementation of changes.

“Changes” is defined as follows (or was at the material times; an amendment, immaterial to the present case, was made in July, 1988) in article 2(1) of the Regulations:

“changes” means changes in the Railway Passenger Services made in accordance with government initiatives introduced pursuant to the Department of Transport Vote 52d, Appropriation Act No. 1, 1977, (changements)

In the Canadian Pacific (Medicine Hat Train Crews) case (February 8, 1982), this language was considered, and while that case involved very different facts, what is said at pp. 4 and 5 of the award is of interest:

In my view the changes in passenger services in question are “in accordance with government initiatives” within the meaning of article J.1. The Railway Passenger Service Adjustment Assistance Regulations provide for assistance to railway companies and employees affected by changes in railway passenger services. The “initiatives” referred to are not necessarily embodied in legislation, order-in-council, ministerial directive, or direction of the Railway Transport Committee, although it may be that “Government initiatives” might be expressed in such forms. The Regulations, clearly I think, are in aid of a process of rationalization of passenger services, and provide for assistance to ameliorate certain of its effects. This assistance is available in respect not only of changes which might be “pursuant to” direct government “initiatives”, but is also available in respect of changes made “in accordance with” such initiatives, the term referring, in my view, to the broad thrust toward rationalization of passenger service. The change in question, made at the request of VIA Rail (and it is not for the arbitrator to deal with its efficacity or otherwise) must be said, I think, to be in aid of efficiency in passenger service and it is, in my view, one which is “in accordance with Government initiatives” thus understood.

I do not think that that case turned on the fact that the change there in question was made at the request of VIA Rail; what was important, as I think the excerpt quoted indicates, was that the change was in accordance with the rationalization of railway passenger services contemplated by the Regulations, and indeed that it was considered by the parties to be a part of that process.

In other circumstances, as I have noted, there have been transfers of activities such-as station maintenance, in which an article J notice has, quite properly in my view, been given. At some terminals, there has been a transfer of steam plant operations, and article J notices have been given, again (whether the transfer was at the request of VIA or not), quite properly. If, in such cases, CN had simply ceased operation of a steam plant, while allowing VIA coincidentally to take over the operation of that plant for the purposes of its passenger train operations, it would be natural to conclude that there had in fact been the sort of “change” contemplated by the Special Agreement, and that an article J notice should be given. The question is whether the instant case is, essentially, of that nature and can properly be described as a “change in Railway Passenger Services made in accordance with Government initiatives”.

In my view, the change in question was a “change” of the sort contemplated by the Special Agreement. It is true that there are two distinct aspects to what occurred: CN closed its steam plant and transferred the property on which it stood to the Forks Development Corporation; VIA constructed a new steam facility in the station which CN had previously transferred to it. There is, however, an obvious relationship between those two events: the requirement of VIA for steam. That requirement, essential to the operation of passenger services, which had been met by the activities of CN, now had to be met by VIA. Otherwise the “rationalized” passenger services contemplated by government initiatives would be adversely affected. That the particular occasion which led CN to close the steam plant came at the request of the Forks Development Corporation is, in my view, immaterial to the question before me, which is whether or not these were circumstances where the change which then occurred was one calling for the increased employee protection provided for under the Special Agreement.

Neither, I think, is it determinative of this case that the change did not involve VIA’s taking over the operation of the steam plant itself (in which case I think it would have been quite clear that the Special Agreement applied), but rather its construction of a new facility. Had CN remained in the passenger service business, and had it sold the old steam plant and constructed a new steam facility in the station, the rights of its qualified employees to move to available jobs in the new facility would (subject to the contracting-out question, which is extraneous to this case), be clear. One purpose of the Special Agreement, and of the Railway Passenger Services Adjustment Assistance Regulations, is to allow employees affected by such changes to retain such rights (to the extent provided for) with respect to the new-employer’s operations. The particular occasion for the change here the agreement made between CN and the Forks Development Corporation - is of no great concern to the employees. What matters to them is that their function, the provision of steam, has been taken up by another employer. The other employer, VIA, has taken up this function, whether or not it wanted to at that time, as a necessary incident of its provision of railway passenger services.

The change in question here is, I find, a “change” within the meaning of article J of the Special Agreement and of the Regulations. To put it very broadly, the interests of the adversely-affected employees in this case come, in these circumstances, within the class of interests for which the Regulation intends certain protection. These were circumstances in which an article J notice ought to have been issued. Whether or not CN employees who had worked at the steam plant should have been offered the work which was available at the new facility is not a question to which any definitive answer can be given at this time. As a general matter, I think it is clear that they would have such a right, but that is subject to the terms of the memorandum between the parties which would govern in cases where article J notice is given, to the staffing needs of VIA Rail and, as well, to the determination of the question of VIA’s right to contract out the operation of its facility. The arbitrator accordingly remains seized of the matter for the purpose of determining the relief available to affected employees if the parties should be unable to agree thereon. In this respect I would note that, in the event I am unable to act, none of the questions which would then arise have been dealt with on their merits, and it would be proper for the parties to agree on another arbitrator or for the Minister of Labour to appoint one.

For all of the foregoing reasons, the grievance is allowed. My award, subject to the foregoing, is to declare that notice under article J of the Job Security Agreement ought to have been given in this case.

DATED AT TORONTO, this 20th day of March, 1989.

(signed) J. F. W. Weatherill