AH 299








(the “Company”)







(the “Union”)





DATED APRIL 21, 1989



ARBITRATOR:                                            Michel G. Picher




                        M. Shannon                          Solicitor, Legal Services, Winnipeg

                        R.M. Smith                            Solicitor, Legal Services, Montreal

                        J.J. Waddell                          Manager, Labour Relations, Montreal

                        L.G. Winslow                                    Labour Relations Officer, Montreal

                        J.S. McLean                          Manager, Labour Relations, IFS, Toronto




                        S.G. Soronow                       Counsel

                        D.H. Arnold                           National President

                        J.E. Ruddick                         Officer at Large, National Executive Board

                        D.G. Talbot                            Local Chairman, Schreiber

                        M. Trepanier                          Local Chairman CP Quebec Division



A hearing in this matter was held in Montreal on April 13, 1992







This arbitration concerns the demand of the Union for the negotiation, and failing agreement, the arbitration of terms designed to minimize the impact of certain job abolishments on employees at Sudbury and Schreiber who are required to relocate to Toronto.  The Company raises a preliminary objection with respect to the arbitrability of the terms which the Union seeks to obtain.  The dispute and joint statement of issue filed at the hearing are as follows:




Article 8.4 Job Security Notice issued by RCTC, consequent upon an Article 8.1 Job Security Abolishment Notice issued by CP Rail.




1.         On December 5th, 1991, CP Rail issued an Article 8.1 Notice under the Job Security Agreement (replacing a Notice dated November 29th, 1991) abolishing:


a)         all Sudbury Dispatching Office positions, effective 23:59, June 15, 1992; and


b)         all Schreiber Dispatching Office positions, in two phases, the last of which being effective at 23:59, August 17, 1992.


2.         the Article 8.1 Notice was issued in connection with the Railway’s intention to consolidate the Sudbury and Schreiber Dispatching Offices with the Toronto Dispatching Office, in Union Station, located in downtown Toronto.


3.         Pursuant to Article 8.4 of the Job Security Agreement (to which the Railway and the Union are parties) RCTC gave notice (the “Article 8.4 Notice”) of its items to be negotiated, as reflected in the attached document (altered to take into account those items which have been withdrawn by RCTC and those that have been settled by the parties).


4.         The Union contends that all items remaining unresolved by the parties are proper items for negotiation and ultimately adjudication upon by the Arbitrator.


5.         The Union further contends that the remaining items are, in their substance and nature, necessary in order to further minimize the adverse effects on affected employees.


6.         The Railway disagrees with the Union contentions.


            The Railway contends that items numbered 1,2,3 a) b) d) and e) and 21 in the attached union Demands, being matters already dealt with in the Job Security Agreement, are, pursuant to Article 8.6, not items on which the Railway is compelled to negotiate, and are beyond the Arbitrator’s scope and so are not arbitrable.


            The Railway further contends that item number 5 is not a matter related to the subject Job Abolishment Notice and so is beyond the scope of the Arbitrator and is not arbitrable.


            It is the position of the Railway that all other items in the attached list are resolved or adequately dealt with.


            It is the position of the Railway that if any of the unresolved items are found to be arbitrable, such items are satisfactorily dealt with in the Job Security Agreement and the Railway’s proposals.



The following provisions of the Job Security Agreement are pertinent to the resolution of this grievance.


3.3    a) Notwithstanding the provisions of Article 3.1 the following types of cases not specifically covered by this Agreement may be submitted by the committee for adjudication and payment of benefits, but such cases shall not be subject to arbitration:


            (i) and special case(s) involving extenuating circumstances.


            NOTE: In the event of employee relocation, the appropriate Systems Union Officer may meet with the Manager, Labour Relations, to discuss whether or not there are extenuating circumstances to warrant that a special relocation allowance is required.  In the event that such discussions do not result in mutual agreement, the appropriate Union Officer may; with 30 calendar days, refer the outstanding issue to the committee.




8.1       The Company will not put into effect any Technological, Operational or Organizational change of a permanent nature 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 aversely affected.


8.4       Upon request the parties shall negotiate on items, other than those specifically dealt with in this Agreement with a view to further minimizing the adverse effects on employees.  Such measures, for example, may be related to exercise of seniority rights, or such other matters as may be appropriate in the circumstances, but shall not include any item already provided for in this Agreement.


8.5       If the above negotiations do not result in mutual agreement within thirty calendar days of the commencement of such negotiations, or such other period of time as may be agreed upon by the parties, the matters in dispute may be referred for mediation to a Board of Review composed of an equal number of senior officers of the company and the Union.


8.6       If the Board of Review is unable to resolve the differences within a fixed period of time to be determined at the commencement of its meetings, or some mutually agreed extension thereof, the matters in dispute may be referred for final and binding settlement to arbitration in the manner provided in Article 2.10 and 2.11, as the case may be.  The matters to be decided by the arbitrator shall not include any question as to the right of the Company to make the change, which right the Unions acknowledge and shall be confined to items not otherwise dealt with in this Agreement.


[emphasis added]



The facts material to the dispute are not in contention.  On December 5, 1991 the Company issued a notice under article 8.1 of the Job Security Agreement, advising the Union that the Sudbury and Schreiber Dispatching Offices would be consolidated into the dispatching offices located in Toronto, effective June 15, 1992 for the Sudbury operation and July 13, and 27, 1992 for Schreiber.  Thereafter, on December 20, 1991, the Union gave notice, pursuant to article 8.4 of the agreement, serving its demands to minimize the adverse effects on employees.


            In its response, made on January 13, 1992, the company took the position that a number of the demands being made by the Union did not fall within the scope of article 8.4 of the agreement.  From the outset, it maintained that such demands were neither negotiable under the terms of article 8.4, nor arbitrable should any subsequent dispute proceed to adjudication pursuant to article 8.6.  Following unsuccessful discussion on  January 21, 1992, the Union sought to move the matter directly to arbitration, notwithstanding the position of the Company that the issues should first be referred to a Board of Review under article 8.5 of the Job Security Agreement.  Without prejudice to its position, the Company ultimately agreed with the Union’s request to expedite the matter to arbitration, although a meeting for the purposes of the article 3.3 (a)(i) Note was scheduled for February 13, 1992.  The Union subsequently indicated its wish that the meeting of February 13, 1992 be treated as a Board or Review meeting for the purposes of article 8.5 and 8.6 of the agreement, a position which was not opposed by the Company.


In the result, the Board of Review convened on February 13, 1992.  The principal issue of contention at that meeting was the substantial increase in the cost of housing in Toronto which would be borne by the employees required to relocate from Sudbury and Schreiber.  It appears that during the discussions of February 13th the Company indicated agreement that there was a justification for a special relocation allowance for employees moving from Schreiber, although it did not agree that the differential in housing costs as between Sudbury and Toronto justified such treatment.  Nevertheless, taking the position that its offer was being made pursuant to the article 3.3(a)(i) Note, the Company responded to the Union’s request for an allowance of $500.00 per month for a period of five years for each employee relocating by offering a special relocation allowance of $150,000 to be divided, in a manner mutually acceptable, among the 30 employees expected to relocate. This, in the Company’s view represented a discretionary allowance of $5,000 to each relocating employee.  The Company took the position that the move to the higher housing market of Toronto did constitute extenuating circumstances, as applied to the Schreiber employees, and without abandoning its position in respect of Sudbury, indicated that it was  prepared to allow the Union to decide upon the distribution of the special allowance among employees from both locations.  Agreement was reached on some items discussed between the parties, others were withdrawn by the Union and the issues now before the arbitrator remained unresolved at the conclusion of the meeting of February 13, 1992.


At arbitration the demands presented for resolution by the Union were the following:


1.    Implement a Home Price Differential Plan (“HPDP”) whereby the Company pays the difference in the value of similar homes between the employee’s present location and the new location.  Under the HPDP the Company is to pay all income taxes associated with this benefit.


2.    To provide a Guarantee that when an RTC purchases a new home in Toronto based on the date of the Article 8 notice of abolishment of positions at the present location, the Company shall be obligated to pay all costs (mortgage, taxes, etc.) associated with the purchase of the new home in Toronto during any such period of time that the abolishment becomes delayed.  The Company to pay all taxes associated with this benefit.


3.    Provide a guarantee that should an RTC sell his/her home at the present location based on the present article 8 notice the temporary living accommodation and expenses be fully paid by the Company during any such time that the abolishment is delayed for any reason.  The Company to pay all taxes associated with this benefit.


4.    Company to provide a rental subsidy to any renters for a period of 10 years based on the difference between rental costs at the present location and rental costs in Toronto for similar rental accommodation.  The Company to pay all taxes associated with this benefit.


5.    The Company to provide for an interest free loan for current renters to purchase a home in Toronto.  This interest free loan can be taken at any time during the 10 year rental subsidy provision.  The interest free loan is to be based on the average home cost at the present locale compared with the average home cost in Toronto, the dollar difference to be the interest free loan amount.  The Company to pay all taxes associated with this benefit.


6.    The Company to provide a compensation package for spouses moving to Toronto.


7.    The Company to provide for RTC’s and their spouses to be flown to Toronto, prior to the date under the Article 8 notice of abolishment, to be shown the City (that is communities, transit locations, schools, etc.).  The Company to pay for all lost wages and expenses associated with this demand.


8.    Should the abolishment date under the notice become delayed, the Company shall pay for all temporary accommodation and expenses resulting from such delay if the RTC has sold his/her home at the present location or has vacated his/her rental accommodation at the present location.  The Company to pay any taxes associated with this benefit.


9.    The Company to pay all temporary accommodation and expenses during the time an RTC is waiting to occupy the new home or rental accommodation in Toronto.  The Company to pay income taxes associated with this benefit.


10. Company to provide GO Passes and/or commuting allowance to all RTC’s working in the new Toronto centre.


11. The Company to provide for a lump sum payment of $50,000.00 to all RTC’s  (regular, unassigned or spare) relocating to the new Toronto Centre in order to address changes in the cost of living as a result of the Company’s consolidation.  Company to pay all taxes associated with this benefit.


The Union submits that all of the foregoing demands are negotiable and arbitrable within the terms of the Job Security Agreement.  Its counsel submits that the agreement does not seek to identify or define each and every circumstance of adversity which might be minimized by the application of the agreement.  Counsel submits, that although there is provision within the Job Security Agreement for certain identified relocation and moving expenses, there is nothing which specifically deals with the impact of housing market differentials when employees move from one location to another.  In his submission, therefore, it remains open to negotiate terms to minimize such impacts, as they would fall within the contemplation of the phrase “ …and such other matters as may be appropriate in the circumstances” which appear in article 8.4.  In counsel’s submission, unless there is a specific item addressing that issue within the present terms of the Job Security Agreement, it must be viewed as a matter which can be dealt with under the general terms of article 8.4.  He maintains that, absent any allowances for housing and related living costs differentials, including such items as cost of transportation in the new location, those issues remain open to be negotiated and arbitrated.


The Company takes a different view.  It submits that the issue of the costs of relocation has been addressed within the terms of the Job Security Agreement.  In this regard it points to the extensive provisions of article 6 of the agreement, entitled “Relocation Expenses” including the subtitle “Relocation Benefits” appearing at pages 49 and 50, respectively, of the collective agreement.  The company’s counsel argues that those provisions, which provide extensive protections to employees in respect of the costs of relocation, support the conclusion that the greater issue of the financial impact upon employees occasioned by a move from one municipality to another, where they are required to purchase a home, acquire rental accommodation, or move a mobile home, all fall within the category of “any item already provided for in this agreement” as contemplated within article 8.4.  On that basis, he submits that any consideration of the demands of the Union in respect of relocation and housing costs are not arbitrable.  In that category, counsel for the Company includes the demand for a home price differential plan, the demand for a guarantee against delay in the implementation of the abolishment, the demands for rental subsidies and interest-free loans for renters for home purchases, the request for a compensation package for spouses, for paid trips to Toronto to be shown the City, for the cost of temporary accommodation and expenses in the event of delay, and the lump sum payment of $50,000.  The Company further submits that the Union’s request for GO passes and commuting allowances for employees transferred to Toronto is not arbitrable as it does not relate to the relocation itself, or alternatively, is dealt with in the terms of article 6.10 of the Job Security Agreement which provides for a monthly commuting allowance for employees who choose to keep their household in their old location.


The Company further points to the benefits enjoyed by employees under Appendices C-9 and C-17 of the collective agreement.  Under the terms of Appendix  C-17, where dispatching offices are consolidated, the benefits described in appendix C-9 are to apply.  That Appendix includes provision for additional relocation benefits, including reimbursement for loss on the sale of relocating an employee’s private home, including real estate agent and legal fees and the land transfer tax payable in respect of the purchase of a home at the new location.  It also provides for a lump sum payment for employees who opt not to transfer their household to the new location.  According to its own recitals, Appendix C-9 is negotiated pursuant to article 3.3(a) of the Job Security Agreement.


I turn to consider the issue of arbitrability of the items advanced for consideration by the Union.  On the whole, I find the submissions of the company to be more compelling.  While the arbitrator can readily sympathize with the concerns which motivate the Union’s demands, and appreciates the substantial financial impact upon an employee and his or her family when they are required to move to an area which places upon them the burden of a higher cost of living, I cannot disregard the terms of the Job Security Agreement.  It is a document of some sophistication and complexity which has evolved over the decades to reflect the agreement of the parties with respect to the kinds of protections to be made available to employees who are adversely affected by an article 8.1 notice.


The principal issue in dispute is whether the significant demands of the Union which relate to the costs attendant upon moving to a higher cost of living area fall within the ambit of items already provided for within the terms of the Job Security Agreement.  If they do, they are neither negotiable or arbitrable under the terms of article 8.4 and 8.6 of the parties’ understanding.


A review of the terms of the Job Security Agreement, as well as those of Appendices C-9 and C-17 of the collective agreement, gives substantial support to the position of the Company that the parties intended to address the issue of the costs which would be faced by an employee required to move from one location to another, and that they did so exhaustively.  Nine pages of text within the Job Security Agreement are devoted to the provisions of article 6, dealing with expenses and benefits granted in respect of relocation.  These include door-to-door moving expenses, incidental expense allowances, transportation expenses, paid time off to seek accommodation in the new location, sale of home provisions, an allowance for the movement of mobile homes, a commuting allowance and, lastly, assistance to terminate a lease.  Nor can it be said that the parties have not, to some degree contemplated the cost attendant upon purchasing a home in the new location.  As noted above, the protections of Appendix C-9, negotiated pursuant to article 3.3(a) of the Job Security Agreement, expressly take into account the land transfer tax payable on the purchase of a home at the new location.  Generally, that amount will vary in direct relation to the cost of the newly purchased home.  To that extent, therefore, the parties did address themselves to the issue of the cost of acquiring  a new home, albeit within the framework of the loss sustained on the sale of the employee’s former residence.  More significantly, the scope and complexity of the relocation benefits leave the arbitrator in little doubt that the parties gave the fullest consideration to the extent of protection which they were willing to accord to employees required to relocate from one location to another within Canada.


That conclusion is also supported by a purposive approach to the provisions of the Job Security Agreement.  The many factors which contribute to an employee’s quality of life and standard of living are difficult to define and quantify.  Moves from a large city to a smaller community may bring gains in respect of the relative purchase cost of a home, or rents to be paid.  The converse may be true when the move is in the opposite direction, as is plainly evident in the case at hand.  Where, however, does the inquiry stop if, as the Union maintains, employees are to be saved whole from all negative impacts?  Should an employee be required to relocate from one province to another, and face different rates of income tax, provincial sales tax or municipal assessments and school taxes, are those differences to be factored in?  Conversely, when an employee moves to an area with a lower cost of living, do any capital gains realized by the employee on the sale of his or her home come to bear in a reduction of the amounts to which he or she would otherwise be entitled by way of protections against adverse impacts under the terms of the Job Security Agreement?  In the arbitrator’s view the mere articulation of these questions gives some insight into the nature of the bargain made between the parties, and their overall intention with respect to relocation costs as reflected within the terms of article 6 of their Job Security Agreement.  I am satisfied, on the balance of probabilities, that the parties sought to identify and limit those costs attendant upon a move from one location to another which they view as appropriate heads of compensation for employees adversely impacted by the need to relocate following the abolishment of their position pursuant to an article 8.1 notice.


That conclusion is, moreover, fortified by the language, added to the Job Security Agreement of April 21, 1989, in the form of the Note appended to article 3(3)(a)(i).  It is trite to say that the provisions of an agreement of this kind must be read together.  When the language of the Note is read in the context of the larger agreement, and having particular regard to the extensive relocation benefits established within article 6, it appears clear, on the balance of probabilities, that by the Note the parties intended to address all other costs which could arise as a result of a requirement to relocate.  That, in my view, is what is intended by the provision for additional compensation where  “…there are extenuating circumstances to warrant that a special relocation allowance is required.”  On the whole, having careful regard to the scheme of protections established within the Job Security Agreement, confirmed within Appendices C-9 and C-17 of the collective agreement, the arbitrator is compelled to the conclusion that the parties expressly contemplated the fact that unforeseeable expenses and hardships could arise in the circumstances of a relocation, and that under the terms of article 3(3)(a) each case must depend on its own particular circumstances.  Where the factors are such as to constitute extenuating circumstances which would justify the payment of a special relocation allowance, provision is made for the parties to enter into discussions to that end.  In my view, housing market differentials would plainly fall into that category, as would discrepancies in rental costs from one area to another.  I am satisfied, however, that the parties have agreed that cases involving such extenuating circumstances are not to be subject to arbitration.


Regional differences in the costs of housing are not a new phenomenon, although the last fifteen to twenty years have seen the emergence of some dramatic regional differences particularly where certain large cities in Canada are concerned.  Bearing in mind, however, that the Job Security Agreement has evolved since 1964, it is not unreasonable to expect that if the parties intended to provide specific protections in that regard they would have done so expressly within the framework of the elaborate scheme for the relocation expenses and benefits which they have fashioned and included within the Job Security Agreement, as well as within Appendices C-9 and C-17 of the collective agreement.  They have not done so, however, and in the face of the text of those documents the arbitrator is persuaded that their mutual intention was to deal with all costs attendant on relocation from one municipality to another within the framework of article 6 of the Job Security Agreement, as well as the appendices, and that any additional costs falling outside the areas agreed upon are, as the company maintains, to be dealt with by way of the provision for  extenuating circumstances negotiated within the Note to article 3.3(a)(i) of the Job Security Agreement.


The arbitrator readily accepts the able and thorough submissions made by counsel for the Union with respect to the impacts which can be brought to bear on an employee and his or her family when they may be required to relocate to a city such as Toronto from a smaller centre with a lower cost of living.  Those considerations should not be minimized or trivialized.  Indeed, they received a degree of acknowledgment from the Company in the form of its offer made at the meeting of February 13, 1992 for the payment of a lump sum to be distributed among all of the employees affected, pursuant to article 3.3(a)(i) of the Job Security Agreement.  The arbitrator remains constrained, however, by the agreement made by the parties themselves, and by the limitations upon arbitrability which they, for reasons which they best appreciate, have placed within the Job Security Agreement.


For the foregoing reasons the arbitrator is satisfied that all of the requests for protections advanced by the Union, including the spousal allowances and commuting allowances in the form of GO passes are, in essence, costs attendant upon relocation which, for the reasons related above, are items otherwise dealt with within article 6 of the Job Security Agreement and, therefore, not negotiable within the terms of article 8.4, or arbitrable pursuant to article 8;.6 of the Job Security Agreement.  The position of the Company with respect to arbitrability is therefore sustained and the matter is referred back to the parties for such further discussion and action as may be appropriate.





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                                                                        Michel G. Picher - Arbitrator