BETWEEN:

(the "Company")

AND

(the "Union")

SOLE ARBITRATOR: Michel G. Picher

There appeared on behalf of the Company:

D. C. St. Cyr – Manager, Labour Relations, Montreal

M. M. Boyle – Manager, Labour Relations, Montreal

Normand Dionne – Labour Relations Officer, Montreal

And on behalf of the Union:

John E. Platt – National President

A hearing in this matter was held at Montreal on January 8, 1990.

The issue in this grievance is the interpretation and application of Definition "G" of the Employment Security and Income Maintenance Agreement, as it relates to the calculation of Cumulative Compensated Service (C.C.S.) for the purposes of the plan. The issue is one of some importance to the parties, as the calculation of C.C.S. has a direct bearing on the entitlement of employees to, among other things, separation allowances, weekly layoff benefits and severance payments under the terms of the Employment Security and Income Maintenance Agreement (E.S.I.M.A).

The position of the Union is straightforward. It argues that the language of subparagraph (ii) of Definition "G" stands on its own, and must be applied on a year-by-year basis. According to its interpretation, in any calendar year that an employee works for six or more months of Cumulative Compensated Service, he or she is to be credited for the full calendar year. In other words, for the purposes of applying C.C.S. under the E.S.I.M.A, an employee who has seven months of C.C.S. in six successive years would be entitled to six years of Cumulative Compensated Service.

The Company’s position is that C.C.S. is to be calculated on a running monthly basis, without regard to the calendar year. By its interpretation an employee with seven months’ C.C.S. in six consecutive years would have a total of forty-two months of C.C.S. This would then be divided by twelve to produce three years of Cumulative Compensated Service, with a leftover credit of six months. In the Company’s submission, by the terms of paragraph (ii) of Definition "G" the additional partial year credit of six months of C.C.S. is to be counted as an additional year of credit, resulting in a total computation of four years of C.C.S. for the purposes of severance or layoff benefits.

To the extent that the language of Definition "G" could, on a literal basis, be said to support either interpretation, and the provision gives no elucidation as to whether C.C.S. is to be calculated on a yearly calendar basis, or otherwise, I am satisfied that it is fair to conclude that there is a latent ambiguity in the terms of this provision. This justifies recourse to extrinsic evidence, including the history of the article and the past practice of the parties with respect to its application, as an aid to interpretation.

When those elements are examined, the arbitrator is left in substantial doubt as to the merit of the Union’s claim. It appears that the first job security provision negotiated into the railway industry in Canada is found in Article II of the Master Agreement of the parties dated November 2, 1962 which provided, in part, as follows:

In 1965 the parties made their first agreement, within the framework of the job security provisions, governing the effects of technological, operational or organizational change adversely affecting employees. By late 1968 that agreement was improved by providing benefits to employees affected by such changes, as well as benefits for employees eligible for supplemental unemployment benefit payments. The Job Security Agreement was amended in a number of ways in the period 1971 through 1982, although its essential ingredients remained the same. Finally, in 1985 the Job Security Agreement matured to the present Employment Security and Income Maintenance Agreement where, for the first time, the concept of employment security was introduced whereby eligible employees are no longer subject to layoff in certain circumstances. It should be noted that the E.S.I.M.A- is a single agreement binding the Company and five non-operating unions, including the Union in the instant case.

It is common ground that the language of Definition "G" had its roots in the Job Security Agreement dated January 29, 1969 which provided, in part:

It may be noted that under the foregoing formula there was no provision for the partial credit of anything less than a full twelve months of cumulative compensated service. In other words, while something less than a month of cumulative compensated service in a given month, i.e. twenty-six days or twenty-one days, could establish a month of C.C.S. under the Agreement, a year of C.C.S. required a full twelve months of cumulative compensated service. Under that formula an employee with three years and seven months of C.C.S. would only be credited with three years of cumulative compensated service. The notion of credit for partial years of C.C.S. was introduced effective April 26, 1979 when the above provision of the Agreement was amended to read:

It is not disputed that the foregoing amendment substantially enhanced the entitlement of the employee. As the Company points out, a person who has accumulated seven months of C.C.S. over a three-year employment period would, under that formulation, be deemed to benefits under the E.S.I.M.A. on the basis of having a full year, or twelve months of C.C.S.

The history of the provision so viewed does confirm that from its inception the concept of job security and, later, employment security was predicated on the accumulation of months of credited service, starting with the monthly funding of the Job Security Agreement which first appeared in 1962. There is no reference in any of these provisions to calendar years as recurring units of calculation for the purposes of establishing either months or years of C.C.S. Moreover, the language of subparagraph (ii) of Definition "G" itself suggests otherwise. The first sentence of that provision provides that one year of C.C.S. is the equivalent of twelve months of C.C.S. "calculated from the last date of entry into the company’s service as a new employee". The only identified reference point therefore, is the date of hire and not any turn of the calendar year.

The past practice of the parties in the administration of this provision is equally persuasive. It is not disputed before me that for something in excess of twenty years, in all of its regions, the Company has consistently applied the interpretation of Definition "G" that it asserts in the instant case. In other words, for years non-operating employees in the instant bargaining unit, as well as in other bargaining units subject to the E.S.I.M.A., have been credited with benefits under that agreement on the basis of a cumulative monthly calculation, without reference to separate calendar years. Its interpretation in that regard has never been challenged prior to this grievance. I find that evidence to be overwhelmingly persuasive that the interpretation adopted by the Company reflects the intention of the parties with regard to the administration of the concept of cumulative compensated service under Definition "G" of the Employment Security and Income Maintenance Plan.

There is, moreover, a purposive analysis which lends support to the Employer’s position. If the Union’s interpretation were accepted, an employee performing six months of service in each of eight calendar years would become eligible for Employment Security and become impervious to layoff because of a technological, operational or organizational change. A second employee, with five months of service per year during the same eight year period would, however, not even be entitled to weekly layoff benefits, as he or she would not have six or more months of C.C.S. in any single calendar year. Bearing in mind that the E.S.I.M.A. applies to other bargaining units, some of whose members do work shorter periods on a seasonal basis, I find it impossible to conclude that the common intention of the parties to this agreement would have contemplated so arbitrary a result. The interpretation advanced by the Union would produce anomalies contrary to the very purpose of the Plan, which is to provide protection to all employees based on the total months of service to the Company since their date of hire.

For all of the foregoing reasons the Arbitrator is satisfied that the interpretation of Definition "G" under the E.S.I.M.A. applied and administered by the Company in respect of the grievors is correct, and that the calculation of cumulative compensated service is not to be made on the basis of separate calendar years, as the Union claims. For these reasons the grievance must be dismissed.

DATED AT TORONTO, this 17th day of January, 1990.