AD HOC 261

AWARD

This is an arbitration in relation to a number of grievances brought on behalf of employees of the Company’s former truck transport subsidiary, Transport Route Canada Inc. The nine employees who are the subject of this grievance claim entitlement to the benefits of a special agreement negotiated between the Company and the Union in anticipation of a reduction in operations following the sale of the Company’s trucking business to a third party. The general background to these grievances is outlined in the following excerpt from the Statement of Facts tendered by the Union:

STATEMENT OF FACTS TEAMSTERS UNION LOCAL 938:

1. Transport Route Canada Inc. and Teamsters Union Local 938 were bound to a collective agreement effective October 1, 1985 to September 30, 1988 (a modified form of the MTIRB Master Agreement).

2. By agreement dated April 4, 1986, Transport Route Canada Inc., and its CN parent, Canadian National Transportation Limited, agreed to sell Transport Route Canada Inc. to a Third Party Purchaser.

3. In anticipation of this sale, the Canadian National Railway Company and Transport Route Canada Inc. entered into a Special Agreement with, inter alia, Teamsters Union Local 938 applicable to employees of Transport Route Canada Inc. adversely affected by the sale.

The Special Agreement was executed September 3, 1986. It provided that “This Special Agreement shall remain in effect until March 1, 1987”. This date was later amended to June 1, 1987.

4. The Special Agreement provided for certain benefits to be paid to employees of Transport Route Canada Inc. depending on the position of the employee and the adverse affect on him. Article 8 of the Special Agreement provides for arbitration of disputes respecting the interpretation, application or alleged violation of the Agreement.

5. There are presently twelve grievances outstanding by persons who claim benefits under the Special Agreement. The position of the Employers is that none of the twelve qualifies for benefits under the terms of this Agreement.

6. The grievances may be grouped conveniently into three groups.

7. The First Group is composed of employees who have been denied benefits by the Employers. They have taken the position “because all of the named employees are on Workmen’s {sic} Compensation, in receipt of WCB payments, and therefore not eligible for the terms of the Special Agreement”.

8. The three grievances before {the arbitrator} are those of Mr. Anthony Clark, Mr. Syed Hussain, and Mr. Peter Edward. There are three other grievors, Mr. Joseph Tierney, Mr. Winston Baker and Douglas Leighton, whose grievances were denied for similar reasons. By letters dated June 25, 1987 and January 7, 1988 the parties agreed to follow the award with respect to the first three grievances in dealing with the latter three.

…

15. The Second Group of grievances were filed by Herman Beich, Winston, Moore Rupert Neil and Jonathon Corion. The Employers have denied these grievances on the grounds that “all of these employees were laid-off prior to January 1, 1986 and therefore not eligible for the terms of the Special Agreement”.

…

17. The Third Group of grievors includes Mr. Hank Vandenberg and Mr. Joseph Maito. Essentially, both grievors were laid-off prior to June 1, 1987. They requested benefits under the Special Agreement and were denied them on the grounds that their lay-off was temporary. (They were in fact recalled and laid-off several times before their final lay-off in 1988. { The Union alleges that these grievors} were further advised by Manager of Personnel and Labour Relations for the parent, Transport Route Canada Inc., Mr. Linder, that they need not be concerned about the issue because the Special Agreement was effective until 2500 employees had been laid-off, and that their seniority dictated that they would be in that group if the lay-offs progressed to that extent.

18. Both grievors filed grievances on August 10, 1987 upon discovering that another employee, a Mr. William Davis, had been permitted to elect to claim severance benefits.

GROUP ONE

The first category of grievances to be dealt with are those of employees who were absent from work by virtue of a work related compensable injury, for which they were in receipt of Workers’ Compensation benefits, for the entire period from January 1, 1986 to June 1, 1987, the effective dates of the commencement and termination of the Special Agreement. It is common ground that employees who were actively at work during that period and who received notice of lay-off with no prospect of recall to work were entitled to claim the benefits of the Special Agreement. These include a number of options including alternative employment opportunities with the Canadian National Railway Company, early retirement coupled with a separation payment, severance payments, and relocation benefits. The general purpose of the Agreement is reflected in the preamble which provides, in part, as follows:

WHEREAS due to significant ongoing financial losses sustained by Transport Route Canada Inc., Canadian National Railway Company has determined that the Corporation can no longer support such financial losses, and

WHEREAS the Canadian National Railway Company has agreed to the sale of Transport Route Canada Inc. to another party, and

WHEREAS the uncertainty surrounding the future of Transport Route Canada Inc. has created anxieties in the minds of the employees of Transport Route Canada., and

WHEREAS the implementation of the sale will have a major adverse impact on employment within Transport Route Canada Inc. and

WHEREAS Canadian National Railway Company, Transport Route Canada Inc., and the Teamsters have jointly discussed the effects of the sale of Transport Route Canada Inc., and have in the circumstances deemed it appropriate to conclude a Special Agreement to provide assistance to employees adversely affected.

THEREFORE:

(i) This Special Agreement shall provide the terms, conditions and benefits for employees of Transport Route Canada Inc. represented by the Teamsters and who came within the scope of the collective agreements identified in Appendix “A” to this Special Agreement and who are adversely affected by the sale.

The issue to be resolved in respect to the first group of employees is whether persons who are not at work, or physically capable of being at work, during the entire term of the Special Agreement by reason of their status as employees on leave of absence due to a compensable injury who are in receipt of Workers’ Compensation benefits are entitled to elect to receive the benefits of the Special Agreement.

The submission of the Union is based, in part, on the terms of article 9.8 of the collective agreement which covered the parties prior to the sale and which, it is not disputed, continued in effect under the successor employer. It provides as follows:

Section 9.8 – Provisions for Retention of Employee’s Seniority During Sickness or Injury

Absence due to bona fide illness or injury shall not be cause for discharge or loss of seniority providing the Company is notified of such illness or injury. The employee shall notify the Company when he is able to return to work. However, an employee off work as set out above shall not by virtue of his absence, retain seniority over a senior employee who has been laid off.

Counsel for the Union submits that since employees senior to the grievors who were on Workers’ Compensation benefits were laid off, the grievors must themselves be deemed to have been laid off for the purposes of the Special Agreement. Noting that under the terms of what was previously section 61.4 of the Canada Labour Code (now section 239) an employee cannot be terminated or laid off because of absence due to an injury for which the employee is undergoing treatment and rehabilitation under the auspices of a Workers’ Compensation authority, counsel submits that the realities are that the employees who are absent on Workers’ Compensation benefits were adversely affected to the extent that the seniority rights which they held were effectively devalued. He maintains that to the extent that operations were reduced with employees senior to themselves being laid off, some of whom elected to resign with the benefit of the terms of the Special Agreement, the residual rights of the employees on Workers’ Compensation benefits were diminished, in consequence of which they should be entitled to the protections of the Special Agreement.

With that argument the Arbitrator has substantial difficulty. Firstly, it must be appreciated that at the time of these events it was not known that the purchaser of the business of Transport Route Canada Inc. would eventually go into bankruptcy, resulting in the entire cessation of its business. While it was known that there would be adverse employment affects resulting from an anticipated downsizing in operations after the sale of the business, the terms of the Special Agreement contemplated a certain number of employees, generally those with the greatest seniority, remaining in the service of the purchaser company indefinitely. Viewed in that context, it is difficult to accept the Union’s assertion that the seniority rights of all employees on leave of absence were necessarily devalued at that time.

It is well established in Canadian arbitral jurisprudence that, absent specific provisions to the contrary in a collective agreement, employees who are on a leave of absence due to illness or injury cannot be deemed to be on a lay-off which overlaps in time with their leave of absence, when leave of absence commences first (see UAW Local 112 and Dehaviland Aircraft of Canada Ltd. (1970), 21 L.A.C. 236 (Weatherill) Re City of Toronto and CUPE Local 43 (1974), 7 L.A.C. (2d) 160 (Adams); Herb Fraser & Associates Ltd. and United Steelworkers Local 7022 (1979), 23 L.A.C. (2d) 311 (O’Shea). Also, subject to the terms of the collective agreement in question, an employer cannot generally force employees who are on a medical leave of absence to exercise their seniority rights (Re Canadian Broadcasting Corporation and Canadian Union of Public Employees, Broadcast Bargaining Units Council (1985), 18 L.A.C. (3d) 317 (M.G. Picher).

In the instant case the core issue is whether the terms of the Special Agreement were intended to apply to employees who were not at work during the entire period of the Agreement’s currency by virtue of their being on an extended leave of absence due to a compensable work-related injury. By its own terms the Agreement is intended to apply to persons “who are adversely affected by the sale” of the Company’s business. In construing those words with intellectual honesty it is essential to disregard the unfortunate consequence of the bankruptcy of the purchaser’s operation which occurred in the summer of 1988, well after the June 1, 1987 expiry date of the Special Agreement. In other words, in considering whether persons on medical leaves of absence are adversely affected by the sale of the business, their status in that regard must be assessed as at the time of the operation of the Agreement. During all of that time the Company’s business was being operated as a going concern, in contemplation of remaining so, albeit on a reduced scale. For the reasons reflected in the arbitral awards noted above, the employees who were then on medical leaves of absence could not be laid off by reason of a downsizing of the Company’s operations. They then retained their seniority, with such rights as their seniority would obtain for them if and when they were fit to return to work. The circumstances in the case at hand are markedly different from those disclosed in Re National Drug and Chemical Company of Canada Ltd. and Retail Wholesale and Department Store Union (1977), 14 L.A.C. (2d) 422 (Hope) where it was held that employees on sick leave were entitled to severance pay when there was an entire closing of their employer’s operations. In the case at hand, the employees who were absent from work and in receipt of Workers’ Compensation benefits during the entire period of the Special Agreement stood in a relatively well defined position. They were not laid off and, it would appear, could not be laid off by their employer. While others were being laid off with no likelihood of recall, the grievors retained their seniority, with such rights as would be available to them if and when they were fit to return to work. With the reduction of the seniority list through the decision of senior employees to resign and elect the benefits of the Special Agreement, the chances of the grievors for continued employment after the expiry of the Special Agreement may indeed have been enhanced. As speculative as that conclusion might be, the most that can be concluded is that their position was uncertain.

In the Arbitrator’s view that status did not cause the grievors to be “adversely affected by the sale” within the contemplation of the terms of the Special Agreement. The parties’ intention with respect to the meaning of that phrase is, to some extent, amplified by the language provided in relation to certain of the specific benefits provided. Article A relating to employment opportunities provides specified benefits to “an affected employee whose position is abolished or an employee who is unable to hold work”. It is common ground that with respect to the grievors, it cannot be said that their jobs were abolished. For the reasons noted above, it is speculative at best to say whether they could or could not hold work, on the hypothetical assumption that they were fit to return to work.

Perhaps the most significant observation to be made in respect of the operation of the Special Agreement is that it was not intended to confer benefits in the hypothetical. The purpose of the Agreement is clearly to provide a range of benefits to cushion the impact of the dislocation of permanent layoff visited upon active employees whose jobs were abolished or who could not hold work because they were bumped by more senior employees who had themselves been displaced as a consequence of the sale. By its own terms the Agreement is meant to protect employees who are so affected during the terms of its operation. The Arbitrator has substantial difficulty with the assertion of the Union that the grievors, who could not be laid off as long as they were on a leave of absence caused by compensable injury, were in fact constructively laid off because of the downgrading resulting from the sale of the Company’s business. As employees absent with the protection of Workers’ Compensation benefits, the grievors cannot be said, during the term of the Special Agreement, to have been adversely affected in any way by the sale of the Company’s business. Any negative effect which they might experience thereafter is no greater than that of senior employees who were able to hold work beyond the expiry of the Special Agreement.

For the foregoing reasons the grievances of Mr. Clarke, Mr. Hussain and Mr. Edward must be dismissed.

GROUP TWO

With the exception of Mr. Corion, the claims of the four employees falling within this group must be judged on the same merits. All of them were laid off prior to January 1, 1986. On that basis the Company maintains that they were not eligible to the benefits of the terms of the Special Agreement.

Article E(4) of the Special Agreement provides as follows:

E.4 Employees laid off subsequent to January 1, 1986 for any reason and who do not exercise their statutory rights under the Canada Labour Code will be covered by the terms and conditions of this Special Agreement.

Counsel for the Union argues that the foregoing provision does not preclude the payment of benefits under the Special Agreement to the grievors, even though their layoff commenced prior to January 1, 1986. With the exception of the case of Mr. Corion, related below, the Arbitrator cannot accept that submission. It is dear that the parties to the Special Agreement bargained in a state of some uncertainty with respect to the impact of the sale and subsequent downsizing of the Company’s operations. For reasons best known to themselves they expressly circumscribed the application of their Agreement to employees “laid off subsequent to January 1, 1986”. Put at its highest, the argument made on behalf of the Union is that although the grievors may have been laid off prior to January 1, 1986 for reasons unrelated to the sale, the negative effect of the sale sharply reduced the likelihood of their ever being recalled, in consequence of which it is argued they were “adversely affected by the sale”. As true as that assertion may be, the fundamental question for the Arbitrator to resolve is whether the employees in that circumstance were intended to be protected by the parties’ Special Agreement. As reflected in the preamble, the entire premise of the Agreement is to provide protection for that class of employees who lose their jobs as a direct consequence of the sale of the Company’s business. It does not extend to persons who were already laid off, as evidenced by the express agreement to a January 1, 1986 cut-off date. To allow this aspect of the Union’s claim would, in the Arbitrator’s view, be tantamount to amending the clear terms of the parties’ agreement in a manner inconsistent with the requirements of article F.8 which limits the Arbitrator’s jurisdiction. For these reasons the grievances of Mr. Beich, Mr. Moore and Mr. Neil must be dismissed.

I turn to consider the specific circumstances of the grievor Jonathan Corion. The Union submits that he falls within the special provisions of article E.3 of the Agreement which is as follows:

E.3 Employees who were formally full-time employees and who are protecting part-time work are to be included in the provisions of this Special Agreement.

It is common ground that Mr. Corion was laid off prior to January 1, 1986. If matters had ended there he would not, for the reasons related above, have been entitled to the protection of the Special Agreement. Mr. Corion maintains, however, that he was recalled to work on several Friday afternoons in the period January through March of 1987. In support of that claim, apart from his own sworn testimony, and that of a fellow employee, he has tendered in evidence a T4 slip which reflects earnings of some $343.00 paid to him by the Company during 1986. In the Arbitrator’s view standing alone that evidence constitutes a prima facie case in support of Mr. Corion’s claim.

The Company’s evidence in rebuttal consists of a single document in the nature of a staff form which states that the payment made to Mr. Corion was in respect of his return to payroll “for vacation purposes only”, crediting fifteen days from May 5 to 23, 1986, following which he was to be returned to laid-off status. On that basis the Company argues that in fact Mr. Corion performed no work for the Company in 1986, and that if he received a T4 slip it must have been in relation to the payment of vacation pay. No further documentary support is provided, however, to establish that the monetary amount paid to him in 1986 would correspond to the vacation pay owing on his earnings over 1985. Nor does it appear that the Company obtained the direct payroll records which would be in the custody of the Trustee in Bankruptcy of the successor employer and which would better confirm its position. In all of the circumstances I am inclined to prefer the direct testimony of Mr. Corion which I judge to have been given in a candid and straightforward manner. The single document tendered by the Company is hearsay in nature and was not susceptible to any serious challenge by way of cross-examination by the Union.

For these reasons the claim of Mr. Corion must be allowed. The Arbitrator retains jurisdiction in respect of any dispute that may arise concerning the quantum of compensation payable to him.

GROUP THREE

The last grievances to be considered are those of employees Hank Vandenberg and Joseph Maito. It is common ground that both of these employees were finally laid off only after the expiry of the Special Agreement well into 1988. They were, however, laid off for brief periods several times during the currency of the Special Agreement. A preliminary issue with respect to the timeliness of their claim arises. The Company submits that if they had a claim to make, it should have been made during April of 1987, when they were temporarily laid off prior to the expiry of the Special Agreement. The Union maintains that they were then misled with respect to their rights by a statement made by a Company representative with whom they sought to file a claim for severance benefits. It is alleged that the Company officer told them they need not make the claim at that time, and that they would be able to do so later. The Arbitrator has substantial doubts about the Union’s claim based on the evidence of the witnesses heard. If required to do so, I would conclude that there was nothing said by the Company’s representative to mislead or induce the grievors to sleep on their rights and ultimately miss the opportunity to make a claim during the currency of the Special Agreement. In any event, given the conclusion reached with respect to the merits of the grievor’s claim, quite apart from the issue of timeliness, I find it unnecessary to resolve that issue.

The question raised by the third group of grievances is whether employees who were given notice that they were temporarily laid off, but not that they were laid off with no prospect of recall, were entitled to elect the protections of the Special Agreement on the occasion of their temporary layoff. By way of example, Mr. Vandenberg was laid off for eight days between March 9 and March 17, and for a further two days between April 8 and April 10, 1987. Mr. Maito was laid off for only two days in April 1987. Both of the grievors continued in their employment, however, well past the June 1, 1987 deadline of the Special Agreement and into 1988.

Can it be said that the grievors were, in the circumstance of their brief and temporary layoffs “adversely affected by the sale” within the contemplation of the Special Agreement? The Arbitrator has substantial difficulty in concluding that they were. Neither Mr. Vandenberg nor Mr. Maito were, in the terms of Article A of the Special Agreement, employees whose positions were abolished or who were unable to hold work. On the contrary, they were clearly told on the occasion of their layoffs in April 1987 that they were not being laid off without recall, an assertion which subsequently proved true as they returned to work for a substantial period of time extending beyond the expiry of the Special Agreement. It cannot be denied that both of these grievors were ultimately impacted by the bankruptcy of the purchaser of the Company’s business in the summer of 1988. As with the employees considered above, however, the status of Mr. Vandenberg and Mr. Maito must be judged as it appeared during the currency of the Special Agreement. They were clearly among those employees who, it was believed, would be able to hold indefinite employment notwithstanding the downsizing of the Company’s operation subsequent to the sale.

The intention of the parties is reflected in the language of article E.4. It contemplates that employees who are to have access to the rights of the Special Agreement must be laid off subsequent to January 1, 1986 and have declined to exercise their statutory rights under the Canada Labour Code. It is common ground that the reference in regard to the Code is to section 30 of the Canada Labour Standards Regulations which provides, among other things, that for the purposes of the regulations a layoff is not deemed to be a termination if it is for a term of three months or less. Seen in that light, the provision of article E.4 of the Special Agreement must be construed as contemplating, at a minimum, that to be entitled to the protections of that document an employee must be laid off after January 1, 1986, during the term of the operation of the Agreement for a period of not less than three months, in respect of which he or she waives such rights as may be available under the Canada Labour Code. That conclusion is, moreover, consistent with a reasonable and purposive interpretation of the entirety of the Special Agreement. It was, in the Arbitrator’s view, intended to protect persons who were in effect facing a loss of employment during the operation of the Special Agreement. That is plainly not what confronted Mr. Vandenberg and Mr. Maito in April of 1987. For these reasons their grievances must be dismissed.

In summary, with the exception of Mr. Corion’s grievance, all of the grievances comprising the three groups submitted for arbitration must be dismissed. I retain jurisdiction in respect of the successful claim of Mr. Corion.

DATED at Toronto this 4th day of July, 1989.

(signed) MICHEL G. PICHER

ARBITRATOR