AD HOC – 263




(the "Company")



(the "Union")






There appeared on behalf of the Company:

M. Delgreco – Director, Labour Relations

Keith MacDonald – Manager, Labour Relations



And on behalf of the Union:

David S. Kipp – General Chairman




A hearing in this matter was held in Toronto on October 16, 1989.


At the hearing the parties submitted the following statement of dispute and joint statement of issue:


Failure to reach agreement on the maintenance of basic rate issue respecting material change notice issued 16 September 1988 concerning the change to Hostlers at Thornton Yard, Kamloops and Jasper.


On 16 September 1988, a material change notice, as provided by Article 123 of Agreement 2.3, was issued advising that because of operational changes, Hostlers at Thornton Yard (4), Kamloops (1) and Jasper (4) would no longer be required to leave the shop track area.

Several meetings were held on this matter without resolution on the maintenance of earnings issue. Consequently, a Board of Review was convened in Vancouver, B.C. on 10 April 1989, pursuant to Article 123, paragraph 123.1(c), Agreement 2.3.

The Board of Review could not arrive at a unanimous decision, therefore the matter is referred to final and binding arbitration pursuant to Article 123, paragraph 123.1(d), Agreement 2.3.

The facts material to the dispute are largely uncontroverted. The bargaining unit includes a number of employees classified as hostlers, whose duties include moving locomotive units within shop track areas, and occasionally from shop tracks to and over yard tracks. The collective agreement has for many years contained separate rates of remuneration for hostlers whose movements are restricted to within shop track areas, known as "inside hostlers", and "outside hostlers" who move locomotives outside shop track areas. The outside hostlers are paid at a higher rate. It does not appear disputed that for a number of years, and in the Union’s estimation since 1969, at several locations on the Mountain Region hostlers have consistently been paid at the outside hostler’s rate, even on those occasions where their work has involved movements entirely within shop track areas. According to the Union, at one point in time the Company contemplated gaining greater flexibility in moving motor power units from shops or ready tracks onto their trains in yard locations. Having that work performed by hostlers gave the Company greater flexibility and savings in terminal delay payments. Apparently subsequent developments, such as unit train operations and assigned motor power sets did away with plans to move power into the main yards. Nevertheless, the outside hostler rates of pay were maintained for the B.L.E. hostlers on the Mountain Region.

In mid 1988 the Company decided to discontinue the hostling of engines to and from the shop track area and the running yards at Edmonton, Jasper, Kamloops and Greater Vancouver Terminal. The practical impact was that all hostling personnel would generally be restricted to moving engines within the shop track areas only, which is to say performing work as "inside hostlers" as contemplated in the collective agreement. The hostlers represented by the Canadian Brotherhood of Railway Transport and General Workers were given notice by the Company on September 15, 1988, pursuant to article 8 of the Employment Security and Income Maintenance Plan. At the same time a material change notice under article 123 of collective agreement 2.3 was provided to the hostlers represented by the Brotherhood that is party to this arbitration. It is the first position of the Company that it was not necessary for it to provide the article 123 notice, but that it did so in a spirit of fairness and equity, given that the C.B.R.T. & G.W. hostlers were entitled to the benefit of an article 8 notice.

Article 123 of the collective agreement provides for the negotiation of protections for employees in contemplation of a material change in working conditions. It provides, in part, as follows :



The Company will not initiate any material change in working conditions which will have materially adverse effects on employees without giving as much advance notice as possible to the General Chairman concerned, along with a full description thereof and with appropriate details as to the contemplated effects upon employees concerned. No material change will be made until agreement is reached or a decision has been rendered in accordance with the provisions of paragraph 123.1 of this article.

(a) The Company will negotiate with the Union measures other than the benefits covered by paragraphs 123.2 and 123.3 of this article to minimize such adverse effects of the material change on employees who are affected thereby. Such measures shall not include changes in rates of pay. Relaxation in Agreement rules considered necessary for the implementation of a material change is also subject to negotiation.

(c) The negotiations referred to in sub-paragraph (a) above shall be conducted between the Regional Vice-President (or his delegate) and the General Chairman and shall commence within 20 days of the date of the notice specified in this paragraph 123.1. If the negotiations do not result in mutual agreement within 30 calendar days of their commencement, the issue, or issues, remaining in dispute shall, within seven days of the cessation of negotiations, be referred to the Assistant Vice-President - Labour Relations, of the Company and the Vice-President of the Union for mediation by a Board of Review composed of two senior officers from each party. Such referral shall be accompanied by a Joint Statement of Issue, or Issues, remaining in dispute together with a copy of the notices served by the Company on the Union under this paragraph 123.1 and a summary of the items agreed upon.

In the event neither party desires to submit the issue, or issues, remaining in dispute to a Board of Review, the dispute shall be referred to the Arbitrator as provided in sub-paragraph (d) below.

(d) The Board of Review shall, within 20 days from the date of reference of the dispute, make its findings and recommendations. If the Board is unable to arrive at a decision within the time limits specified herein or such extended time limits as provided for in sub-paragraph (e) hereof, or if its recommendations are not agreeable to either party, a Joint Statement of Issue, or Issues, remaining in dispute may be referred within seven days by either party to a single arbitrator who shall be the person from time to time occupying the position of Arbitrator for the Canadian Railway Office of Arbitration.

In the event that the parties do not agree upon a Joint Statement of Issue, or Issues, remaining in dispute, either or each may submit a separate statement to the Arbitrator in accordance with the procedure outlined above for the Joint Statement and the other party will be provided with a copy thereof.

The Arbitrator shall hear the dispute within 30 days from date of the request for arbitration and shall render his decision together with reasons therefor in writing within 15 days of the completion of the hearing.

At the hearing before the Arbitrator, argument may be presented orally or in writing and each party may call such witnesses as it deems necessary.

Following the notice provided to the Brotherhood by the Company on September 15, 1988 negotiations took place between the parties in October, November and December of the same year. During the course of the negotiations the Company offered to the Union the same maintenance of earning protections which are available to the C.B.R.T. and G.W. employees under the terms of their Employment Security Income Maintenance Plan. Essentially the offer of the Company is to provide for the maintenance of basic rates for a period of three years, and thereafter until such time as general wage increases applied on the basic rate erase the differential between the basic rate for inside hostlers and the incumbency level for outside hostlers.

The Union resisted that proposal at all stages of negotiations. Firstly, it submits that the Company should be estopped from changing the long-standing practice with respect to the treatment and payment of B.L.E. hostlers on the Mountain Region. Alternatively, it countered with a different proposal whereby a sum of 80 percent of the amount of monies that would be lost by the incumbents to age 65 be placed in a tax sheltered trust, annually, with the accumulated sum and accrued interest to be paid to the employee upon retirement or separation. In the event of the employee’s death the total sum due would be paid to his estate. The Company resists that proposal, noting that in some cases it could produce a lump sum payment as great as $70,000. More fundamentally it argues that the position of the Brotherhood fails to recognize the Company’s right to change its operations or revert to what it views as the appropriate application of the terms of the collective agreement. The dispute so joined proceeded through the Joint Board of Review without any change in the positions of the parties, as reflected in the separate reports of the management and union representatives dated April 20, 1989 and May 18, 1989 respectively.

In dealing with the merits of this dispute, the Arbitrator finds it unnecessary to determine whether what has transpired constitutes a material change within the meaning of article 23 of the collective agreement. Firstly, no exception is taken to the Arbitrator’s jurisdiction in this matter and, secondly, the Company has indicated its willingness for the purposes of settlement, of treating this matter under the terms of that article, given the benefits provided to the C.B.R.T. & G.W. employees who are subject to the same changes. Given that conclusion it is unnecessary to consider at length the analysis of the applicability of a provision such as article 123 as discussed in CROA 1167.

In the Arbitrator’s view the position advanced by the Company during negotiations is the more compelling. From an equitable standpoint, the collective agreement contemplates that the different rates of pay should attach to inside and outside hostler’s work. The collective agreement in no way limits the right of the Company to assign employees in the classes of service designated within it, and to make changes in assignments from time to time. The position of the Brotherhood is tantamount to asserting that the incumbents have a right of property in their established assignments and rates of pay. That is plainly not what is contemplated under the collective agreement. On the contrary, the agreement anticipates that changes may be made whereby employees are adversely affected. If it were otherwise article 123 would have no purpose.

In the Arbitrator’s view the interests of the Company and of the employees concerned are fairly accommodated in the proposal put forward during negotiations by the Company for effective red circling of the outside hostler’s rates until such time as they are overtaken by increases in the basic rate. This gives the Brotherhood the opportunity, without any prejudice to its interest, to attempt to renegotiate higher rates for the employee affected at the next round of bargaining. That is the most the Union could achieve even if its position on estoppel were accepted. For these reasons the Arbitrator awards the terms of the memorandum of agreement proposed by the Company, and appended as exhibit B to its brief before the Arbitrator as the terms of this Award. For the purposes of clarity the draft memorandum of agreement is attached hereto as Appendix "A" to this Award, with the only change being that rather than the effective date being the completion of the shift of 17th December 1988, it shall be effective upon the completion of the shift 30 days from the date of this Award.

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






MEMORANDUM OF AGREEMENT between the Brotherhood of Locomotive Engineers and the Canadian National Railway Company with respect to the Company notice dated 16 September, 1988 concerning the change of nine Hostler positions on the Mountain Region to reflect rate of pay of an Inside Hostler.


1. That effective upon completion of shift 17 December 1988 the nine Hostler positions designated in our notice 16 September 1988 shall be compensated at the rate of Inside Hostler as outlined in paragraph 43.1(a), Article 43, Agreement 2.3.

2. The incumbents of the positions designated in our notice 16 September 1988 and whose rate of pay is reduced shall have their basic daily rate of pay maintained subject to the limitations included in this agreement.

3. The maintenance of basic rates shall prevail for a period of (3) three years, and thereafter until general wage increases applied on the basic rate erase such differential.

4. An example of such maintenance of basic rates would be as follows :


Date : Basic Rate : Level :

Dec. 17, 1988 $109.86 $123.41

Jan. 1, 1989 4% incr. 114.25 127.80

Jan. 1, 1990 3% incr. 117.67 131.22

Jan. 1, 1991 3% incr. 121.20 134.75

Jan. 1, 1992 3% incr. 124.83 134.75

Jan. 1, 1993 3% incr. 128.57 134.75

Jan. 1, 1994 3% incr. 132.42 134.75

Jan. 1, 1995 3% incr. 136.39 Incumbency disappears

5. The maintenance of basic rates will cease should any of the incumbents move to a position not covered by this Memorandum of Agreement or if the employees’ services are terminated by discharge, resignation, death or retirement.

6. In the event an employee governed by the provisions of this Memorandum of Agreement should be required to go beyond the designated shop track area during a given shift, such employee will be compensated at the Outside Hostler rate of pay for the entire shift as prescribed by Article 44 of Agreement 2.3.

7. This Memorandum of Agreement represents full and final settlement of all issues arising from the Company notice dated 16 September 1988 served in accordance with the provisions of Article 123 of Agreement 2.3 as it relates to Hostlers employed on the Mountain Region.

8. This Agreement is not to be construed as establishing guidelines or precedents for other changes involving the applications of Article 123, Agreement 2.3.

Signed at Edmonton, Alberta this ________ day of ________________, 1988


________________________ ________________________

For : Senior Vice-President General Chairman


Asst. Vice-President

Labour Relations