SHP – 301-S




(the "Company")



(The "Union")






There appeared on behalf of the Company:

Barbara Mittleman – Counsel

M. E. Keiran – Assistant Manager, Labour Relations, Vancouver

B. P. Scott – Labour Relations Officer, Montreal

R A Colquhoun – Manager, Labour Relations, Montreal

And on behalf of the Union:

M. A. Church – Counsel

W. M. Jessop – General Chairperson, General Committee of Adjustment, Calgary

B. Marcolini – Vice-President, UTU, Ottawa

Larry Olson – Vice-President, Edmonton

R. A. Bennett – Canadian Legislative Director

J. R. Austin – General Chairperson, General Committee of Adjustment, Canadian Pacific Lines East, Toronto

J. M. Hone – Research Director, U.T.U.- Ottawa


A hearing in this matter was held in Toronto on June 26, 1990.


This is the completion of an arbitration award herein dated May 1, 1990. On December 7, 1988 the Company gave notice to the Union under article 15 of the collective agreement, to the effect that it was implementing a material change in working conditions by reason of which yardmasters would no longer be required in Winnipeg effective March 10, 1989. The Union grieved that an article 15 notice was not appropriate and that the Company had wrongfully assigned bargaining unit work belonging to yardmasters to supervisory personnel. For the reasons related in the Award of May 1, 1990 the grievance was dismissed. The Arbitrator retained jurisdiction, however, with respect to the resolution of all issues outstanding under article 15, including the implementation of, "… measures … to minimize such adverse effects of the material change on employees who are affected thereby", as provided in article 15.1(b). No specific exception is taken to the jurisdiction of the Arbitrator to deal with the issues in dispute, save that counsel for the Union indicated at the hearing that the Union reserves such rights as it may have in that regard.

Two issues arose as a preliminary matter at the hearing. The first concerned a number of time claims and wage claims of yardmaster L. Cook, and it appears of some others, which are outstanding. It is common ground that the Company began to implement the changes relating to its article 15 notice in May of 1989. While yardmasters were maintained on payroll, the work which they previously performed was gradually phased into the hands of assistant general yardmasters (AGYMs). Article 15 of the collective agreement provides that no material change is to be made until the parties have reached an agreement or an arbitration decision has been rendered in accordance with the article. The position of the Union is that the implementation of changes as undertaken by the Company deprived yardmasters such as Mr. Cook of work opportunities over the course of the ensuing year. It is common ground that those claims are, however, the subject of specific grievances presently being progressed to arbitration in the Canadian Railway Office of Arbitration. Before the Arbitrator, in pre-hearing submissions, the Company objected to these claims being dealt with as part of the article 15 process. Counsel for the Union asserted, on the other hand, that the consequences of the Company’s actions in respect of work opportunities are, in a general sense, "adverse impacts" which may be dealt with in this forum. After hearing the submissions the Arbitrator ruled in favour of the Company’s position.

Article 15, like any article of the collective agreement, is one which may be observed or contravened. Should it be violated, the grievance and arbitration provisions of the collective agreement, the CROA memorandum and the Canada Labour Code are fully available to make whole any employee whose rights have been denied. The purpose of the remedial provisions specifically contained within article 15, however, are different. Article 15.1 of the collective agreement contemplates the negotiation, or arbitration, of terms of general application intended to benefit a class of employees who are adversely affected in their employment security by the implementation of material changes. In other words, the remedial provisions of the article are predicated on a compliance with the material change provisions by the employer, and not on any violation of the collective agreement. Where the company has exercised its right to implement a material change the employees are entitled to negotiate, and failing agreement, to arbitrate measures which mitigate the impact of those changes on employees adversely affected. That is a form of interest arbitration, and is qualitatively different from adjudicating the claims of employees in respect of an alleged violation of the collective agreement by the Company. Claims of that kind are intended to be dealt with in the grievance and arbitration process, and not under the provisions of article 15. Any claims which the yardmasters may have in respect of the alleged premature implementation of material changes by the company in derogation of article 15 are to be dealt with as rights disputes through the normal process of the grievance and arbitration provisions of the collective agreement and the CROA memorandum.

Secondly, the Union and the Company were disagreed on whether the adverse impact of the installation of surveillance cameras in the Winnipeg Yard could be the subject of adjudication under the terms of article 15 of the collective agreement. Specifically, the Union raises concerns that the cameras, which it is agreed were installed to facilitate the movement and marshalling of trains in the yard, can also be used as a source of evidence for the purposes of issuing discipline to employees working in the yard. On this issue the Arbitrator agreed with the Union. Without commenting on the merits of its position, I ruled that the Union should be allowed the opportunity to make such submissions as it deems appropriate with respect to the possible adverse effects of the camera surveillance system on the yardmasters who are the subject of the article 15 notice. In the instant case it is common ground that a number of employees affected will be required to return to yard service, where their work and activities will be subject to camera surveillance. Bearing in mind that a provision such as article 15 should be given a broad and liberal reading insofar as it may bear on the employees protected, I am satisfied that it is within the rights of the Union, and the jurisdiction of the Arbitrator, to deal with all adverse impacts arising from the implementation of a material change, and the measures appropriate to minimizing those impacts on the employees who are affected. In my view a general reading of article 15 supports the conclusion that the parties did not intend to limit the meaning of adverse impacts to wages and benefits alone.

I turn to consider the merits of the matters in dispute. There are five issues to be resolved. They are:

1. Maintenance of earnings;

2. Whether yardmen must exercise their seniority to road service;

3. Separation payments;

4. Use of electronic surveillance equipment for purposes of discipline; and

5. The application of article 15 and this Award to yardmaster Cook.

I deal initially with the issue of the status of Mr. Cook. The Company maintains that Mr. Cook is primarily a clerical employee who holds seniority as a relief yardmaster. It submits that his protection in the circumstances of the termination of the yardmaster’s positions is simply to revert to his clerical position, within a bargaining unit represented by a separate union. The Union asserts that the preponderance of Mr. Cook’s work has been as a yardmaster, and that in the circumstances he is entitled to the protections of article 15 as an employee adversely affected by the material change implemented by the Company.

The Company’s position is argued principally on the basis of the language contained in precedent agreements respecting maintenance of basic rate provisions negotiated in relation to the abolishment of positions. It cites, by way of example, the Memorandum of Agreement negotiated with the Brotherhood of Locomotive Engineers in relation to the abolishment of the Princeton subdivision wayfreight assignments. That Agreement provides, in part, for maintenance of basic rates to be paid to, "an eligible engineer who was regularly employed as such … on the day immediately preceding the date of the change … The Company proposes similar language in respect of yardmasters at Winnipeg. It argues that Mr. Cook, who was a relief yardmaster would not fall into the category of persons regularly employed as a yardmaster.

In my view there is some legitimate foundation to the approach taken by the Company, as a general matter. A reading of article 15 of the collective agreement would, on its face, suggest that the parties intended its protections to apply to those employees who are directly affected in their employment by the material change proposed. However, I am not persuaded, as the Company would have it, that persons who work in a relief capacity can never fall within that category. That is a matter to be determined on the facts, having regard to the circumstances of each particular case. Significantly, the parties did not circumscribe the definition of "… employees who are affected …" by a material change. In my view what the article must be taken to contemplate is employees who are directly and substantially affected by virtue of the impact of a material change on what would otherwise be their normal work opportunities.

What were the normal work opportunities of Mr. Cook, and what was the impact on him? That is the question which must be addressed to determine whether he falls within the class of employees adversely affected as contemplated under article 15 of the collective agreement. When the evidence in this regard is weighed, the scales tip in favour of the Union’s position. The unchallenged representation of the Union is that for a good number of years the preponderance of service rendered to the Company by Mr. Cook has been in the capacity of a yardmaster, and not in his clerk’s position. Moreover, that condition appears to have obtained up to the date of the Company’s article 15 notice. It is common ground that between January 1, 1988 and the date of the notice Mr. Cook worked 106 tours of duty as a yardmaster, and 104 as a clerk. While it is not necessary to settle on precise mathematical formulas, the evidence does seem to confirm that as a general rule, albeit by a slim margin, Mr. Cook was preponderantly employed as a yardmaster. There is no dispute that his earnings in that capacity were substantially in excess of what might be available to him in a clerical position. In these circumstances, on balance, I am satisfied that Mr. Cook falls within the category of adversely affected employees intended to be covered by the language of article 15 of the collective agreement. I therefore find that he is entitled to its protections in the same manner and to the same degree as the other yardmen.

I turn next to the issue of whether yardmasters should be required to exercise their seniority to road service to qualify for incumbency and the maintenance of basic rates. The Company proposes that as a condition for receiving maintenance of basic rate protection the employee must be compelled to exercise his or her seniority to the position with the highest earnings available at the home terminal or outpost terminal, on the basis of seniority. The Employer points to the fact that a similar provision was negotiated in respect of the article 15 agreement concerning the abolishment of yardmasters’ positions at St. Boniface Yard, and emphasizes that in no other yardmasters’ agreement has such a condition been excluded.

The Union argues that two agreements, admittedly not affecting yardmasters, may be looked to as precedent for its position. It cites the Memoranda of Agreement negotiated in respect of the Pusher Assignments at Rogers, B.C. and the Nelson Subdivision Agreement which both concerned the abolition of trainmen’s and yardmen’s positions. With respect, however, the Arbitrator cannot fully agree with the characterization of the Rogers and Nelson Agreements suggested by counsel for the Union. While those agreements do not force an employee out of his or her home terminal, they do require as a first condition that the trainmen or yardmen affected to exercise seniority "… to the position with the highest earnings available to him at his home terminal or outpost terminal to his home terminal in accordance with seniority provisions". What the Company proposes is, in essence, no different.

The Arbitrator appreciates that there may be a significant adjustment to an employee who is required to move from a sedentary position with relatively regular hours, such as the yardmen’s, to one that involves a degree of personal displacement and less regular working hours. However, the trade-offs involved in such a circumstance must be kept in perspective. The job security protections enjoyed by the yardmasters represent rights and benefits unknown in many other industries. These protections, which may fairly be characterized as an earned right, obviously come at some cost to the Employer. In the circumstances I do not deem it unreasonable for an employee, in exchange for the benefit of wage protection, to be compelled to work in the highest level of service for which he or she has become trained and qualified by the Employer over the years. This does not, of course, remove the ability of an employee to exercise seniority into a lesser position. I am not persuaded, however, that one who does so should nevertheless be entitled to the fullest protections of the maintenance of basic rates. The forfeiture of protection in that case is in keeping with a well-established industry formula. For the foregoing reasons the Union’s request with respect to the requirement to exercise seniority to road service is declined.

I consider next the issue of the formula which shall apply to the maintenance of basic rates. An initial difference between the parties on this aspect of the dispute was whether the maintenance of basic rates should operate on a "lifetime" basis. The initial proposal of the Company is that yardmasters who will be required to assume lower paid positions will be entitled to continue to receive the yardmaster’s rate of wage for a period of three years. The rate would be that which was in effect at the time of the material change, and would remain payable, without increase, over three years, at which time it would expire. The employee would then revert to the wage of the position which he or she then occupies. The Union takes exception to the three year limitation of the protection, as well as to its straight-line application without any allowance for annual increases to the basic yardmaster’s rate. It maintains that the incumbency should apply to an employee on a "lifetime" basis. Its counsel notes, as well, that the formula for "lifetime" or indefinite incumbency has been adopted by the parties in material change agreements involving yardmaster’s positions at both Swift Current and St. Boniface.

With respect to the incumbency agreement, counsel for the Union points further to the precedent of the VIA Special Agreement negotiated between CP Rail and the Union, along with CN. He argues that as the yardmaster jobs at Winnipeg are virtually abolished forever, the rationale underlying the incumbency provisions of the VIA Special Agreement is particularly apposite. He submits that the permanent disappearance of an entire class of positions, or in this case of an entire bargaining unit at a given location, justifies the more generous formula found in the VIA Special Agreement, and also reflected in the agreement between the Canadian National Railway Company and the Union with respect to the closing of that company’s railway operations in Newfoundland.

Counsel further argues that precedent agreements, including the VIA and Newfoundland Agreements, reflect an understanding in the industry that incumbency rates should be subject to general wage adjustments for periods of three to five years immediately following the job abolishment or displacement in question. Again, counsel cites the VIA and Newfoundland Agreements and, additionally, a more recent agreement between the Canadian National Railway Company and the Union in respect of the abolishment of trainmen and yardmen positions at Fort Erie. The Union further points to the comparable provisions of the Symington Hump Yard Improvement Project, which affected the Union and CN (Award dated May 2, 1989). In that case, the Arbitrator awarded an incumbency rate calculated on a three-year period of increases. At the hearing, however, the Company’s representatives indicated to the Arbitrator that they were prepared to accept a three year adjusted wage formula.

I am inclined to agree with the Union that the instant case tends to be exceptional, and one which may fairly be compared to the facts giving rise to the implementation of the VIA Special Agreement. That Agreement involved the once and for all abolition of a great number of work opportunities within a given bargaining unit at a number of specific locations. This case is similar to the extent that all yardmaster’s positions at Winnipeg are abolished, without any plausible likelihood of their re-establishment in the foreseeable future. In the instant case, however, the material change is not forced upon the Company by external circumstances or government initiatives, but by its own choice to institute certain technological and manpower adjustments to maximize productivity. This, of course, it is entitled to do. However, without necessarily accepting the Union’s argument that what it involved is the beginning of the abolition of the yardmaster’s craft, the fact remains that a class of generally long-service employees with specialized skills are being permanently displaced as a result of an initiative designed to bring significant productivity gains to the Employer’s operations. In the exceptional circumstances of this case, it appears to the Arbitrator that compensation commensurate to the impact on the employees affected is not inappropriate. Bearing in mind that the Company was a voluntary signatory of the VIA Special Agreement, the Arbitrator has difficulty rejecting the position of the Union that incumbencies based on that standard should be the basis of the maintenance of the Basic Rates Incumbency Formula established in the instant case. I therefore determine that the incumbencies of the affected employees shall be on a "lifetime" basis, with rates to reflect increases to the Yardmasters’ rate for a five-year period.

The next issue to be considered is the early retirement separation allowance. The Company advises the Arbitrator that this is the first occasion when it has offered a form of early retirement allowance as a means of minimizing adverse effects in respect of a material change. It notes that its motivation is triggered in substantial part by the fact that two of the yardmasters directly affected have sufficient pensionable service to elect to take early retirement under the rules of the Company’s pension plan. Should they do so, the displacement impact on other employees would be substantially reduced. On that basis, the Company submits that it has, exceptionally in this case, decided to offer an early retirement allowance for the yardmasters eligible to elect it. The proposal of the Company is based on the Job Security Agreement of non-operating employees. It provides for the payment of a separation allowance to employees who elect early retirement, provided that such an election will prevent the relocation or permanent separation of employees of two or more years of service, which would otherwise be unavoidable. A lump sum payment is paid to the employee so electing, and is based on a formula which takes into account the employee’s length of service and the number of years pending until normal retirement. The Union submits that affected yardmasters should have the more generous separation allowances offered in the Reduced Crew Agreement, the agreement in respect of cabooseless trains and the VIA Special Agreement. The Company responds that those arrangements were agreed to in very different circumstances citing, for example, the need to promote attrition in respect of reduced crew operations.

On this issue the Arbitrator views the Employer’s position as more compelling. The pattern in the industry has been generally not to include separation allowance options in the terms of material change agreements. The fact that the Company has, in the exceptional circumstances of this case, made such an offer should not be taken as a justification for simply applying the highest industry standard derived in very different circumstances. Moreover, the early retirement allowance remains optional to the employee. Should the Company’s offer not be sufficiently generous to promote voluntary retirements among those eligible, it will pay the price in the cost of the resulting incumbencies. In the Arbitrator’s view the Employer should be left to be the best judge of what is most appropriate in that circumstance. For these reasons the Arbitrator declines the Union’s request for an early retirement allowance payable on a scale other than the Non-operating Employees’ Job Security Agreement, as proposed by the Company.

A subsidiary issue is the Union’s request with respect to the "ripple" effects on other employees as a result of the abolition of the yardmaster’s positions. In the Arbitrator’s view no order should be made in respect of that issue. The dispute before me is in respect of yardmasters under the specific terms of their separate collective agreement. Apart from the doubtful issue of my jurisdiction to make orders affecting employees of other bargaining units, and indeed employees represented by other unions, it appears to me sufficient to observe that those employees retain such rights as they may have in respect of the impact of material changes as may be found within their own collective agreements.

The last issue to be addressed concerns the adverse impacts of the automated camera surveillance system as it may apply in the assessment of discipline against yardmasters who are returned to yard or road service. It is common ground that the camera surveillance system established in the Winnipeg Yard was introduced as a means of facilitating the observation of switching movements and marshalling operations within the yard, to provide faster and more direct information to assistant general yardmasters and others supervising such operations. The essential position of the Union is that the surveillance system should not be available to the Company for use as a source of information to discipline employees. By was of precedent it cites collective agreement provisions which limit the use of camera surveillance for purposes of discipline among employees represented by the Canadian Union of Postal Workers in respect of their jobs within the facilities of Canada Post.

In the Arbitrator’s view this issue was not ripe for full consideration at the hearing. As noted above, the parties were in preliminary dispute about whether it could be dealt with under the terms of article 15 of the collective agreement and were made aware of the Arbitrator’s ruling that it could, only at the time of hearing. The collective agreements generally governing these parties make relatively elaborate provision for the protection of employees in respect of information and material to be relied on by the Company in any disciplinary investigation which must take place prior to the assessment of discipline. In particular, employees are generally entitled to see any statements, documents or other evidence which may be used against them, and have an opportunity of rebuttal thereto. Without commenting definitively on this issue, it may be that present protections are sufficient. In any event, it is clear to me that the parties are best able to appreciate what, if any, limitation should govern the use of information derived from surveillance cameras for the purposes of discipline and that they should have a reasonable opportunity to do so together. That issue is therefore remitted to the parties for further discussion. Should the parties be unable to arrive at any agreement in that regard, this issue may be returned to the Arbitrator for further submissions and a final resolution, upon notice in writing from either party.

As agreed at the hearing, I do not propose to put forward specific language in respect of the items in dispute determined by this Award, but remit the matter to the parties for them to agree upon the appropriate wording. I retain jurisdiction, however, in the event of their inability to agree upon the necessary language, or in the event of any dispute with respect to the interpretation or implementation of any aspect of this Award.

DATED at Toronto this 19th day of July, 1990.