BETWEEN:

(the "Company")

AND

(the "Brotherhood")

SOLE ARBITRATOR: Michel G. Picher

There appeared on behalf of the Company:

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

D. L. Brodie – System Labour Relations Officer, Mtl

D. T. Cooke – C.P. Observer

And on behalf of the Brotherhood:

R. A. Bowden – System Federation General Chairman

A hearing in this matter was held in Montreal on February 4, 1991.

This is the arbitration of a claim for the payment of overtime hours. The statement of the dispute and issue filed by the Brotherhood is as follows:

The material facts are not in dispute. In May of 1985 the Company, together with Canadian Pacific Limited, purchased the Canada Southern Railway Company from the Consolidated Rail Corporation (Conrail). A Special Agreement was then negotiated among the Company, CP Rail and the Brotherhood. The Special Agreement determined conditions and benefits that were to apply to employees adversely affected by the purchase of the Canada Southern Railway Company, and to provide for the orderly integration of its employees into the service of the Company. The integration of the employees became effective on July 20, 1985, from which time they became covered by the collective agreement between the Brotherhood and the Company.

A central feature of the Special Agreement is article E which provides for the maintenance of employee earnings for persons whose earnings would otherwise be reduced by $2.00 or more per week by reason of their position having been abolished or their having been displaced by the purchase of the Canada Southern Railway. It provides, in part, as follows:

The payment for overtime hours is governed by the provisions of article 8 of the collective agreement which reads, in part, as follows:

The issue in the instant case is relatively straight-forward. The Brotherhood claims that the overtime hours worked by the grievor should be paid at the rate of time and a half calculated on the grievor’s protected rate of pay, which at the time of the grievance was $13.11 per hour, or $19.665 for each hour of overtime worked. The Company maintains that the grievor is entitled to the payment of overtime calculated on the rate established in the collective agreement for the position of assistant track maintenance foreman, which is $12.56 per hour, resulting in an overtime hourly payment of $18.84.

From a purposive standpoint there is a compelling aspect to the Brotherhood’s position. If an employee is to enjoy the maintenance of earnings in the sense contemplated by the Special Agreement, it is arguable that the protection should extend to all hours worked, including overtime hours. There is, however, one substantial difficulty with the Brotherhood’s position, namely that there is no language in the Special Agreement, or in the collective agreement, which specifically confers the privilege of overtime premium rates being calculated on an incumbency rate. From a standpoint of literal interpretation the language of the Special Agreement, read together with the overtime provisions of article 8, tend to support the position of the Company. For example, article E.3(i) of the Special Agreement makes a distinction between the "value of the incumbency" and the "basic rate of the position (the employee) is holding". The latter phrase appears to be close to the concept of "the basic straight time rate" which appears in the language of articles 8.2 and 8.3 of the collective agreement, and which is established as the basis for the calculation of time and a half for overtime.

As a matter of principle overtime is a form of premium, the payment of which must be clearly identified in some part of the collective agreement or, as in this case, in the supplementary provisions of a Special Agreement (See Chrysler Canada Ltd. (1985), 22 L.A.C. (3d) 342 O’Shea; and Niagara College (1977), 15 L.A.C. (2 d) 344 Weatherill). From the literal interpretation standpoint, therefore, it can be argued that neither the collective agreement nor the Special Agreement make any provision for the calculation of overtime on the basis of an employee’s protected rate of earnings established by the collective agreement.

In the Arbitrator’s view, however, that argument can only be taken so far. It is equally arguable that the excepting phrase, "Except as otherwise provided" appearing in articles 8.2 and 8.3 of the collective agreement could be interpreted as a recognition by the parties that incumbency rates provided in the Special Agreement are to be taken into account in the calculation of overtime. In the Arbitrator’s view what this suggests is that, at best, the position of both the Brotherhood and of the Company can be supported on the language of the Special Agreement and the collective agreement read together.

How then is the dilemma to be resolved ? In the Arbitrator’s view in the instant case there is evidence which conclusively resolves the uncertainty between these two positions. The material before me establishes beyond substantial controversy that the incumbency protections provided in the Special Agreement are similar, if not identical, to incumbency protections negotiated within the Employment Security Income Maintenance Plan of the Company governing employees who are members of the Brotherhood, as well as a number of other special agreements, without substantial change since 1970. The practice of the Company since that date has been overwhelmingly to pay overtime to employees on the same basis as has been applied to Mr. White in the instant case. In other words, the preponderant practice of many years is that overtime is calculated at the rate of one and one half times the basic straight time rate for the position in which an employee works, and not on the basis of his or her wage protection or incumbency rate. That practice has continued without apparent objection by the Union to the present time.

While the Union’s representative seeks to characterize this grievance as an assertion of the Union’s right to correct an error in interpretation, I find that view of the matter difficult to accept. In my view the more compelling inference to be drawn from the fact that the Company has applied the language of the Special Agreement, and the overtime provision of the collective agreement, in the manner which it has without protest from the Brotherhood for some 20 years is that the practice of the Employer has reflected the original mutual understanding and intention of the parties as regards the treatment of employees who are rate protected. In that context, I am persuaded that the intention which operated as at the execution of the Special Agreement on June 13, 1985 remained the same. Given 15 years of preponderant practice, it would require clear and unequivocal language within the terms of the Special Agreement itself to establish that the parties intended to effect a change in the payment of overtime rates to employees covered by the Special Agreement, as compared with other employees with the same protections.

For the foregoing reasons the Arbitrator is compelled to conclude that the intention of the parties with respect to the payment of overtime to rate protected employees is reflected in the position adopted by the Company in its treatment of Mr. White. For the foregoing reasons the grievance must be dismissed.

DATED AT TORONTO, this 8th day of February, 1991.