AH – 319




(the “Company”)



(the “Union”)




SOLE ARBITRATOR:                Michel G. Picher



There appeared on behalf of the Company:

B. Laidlaw                     Labour Relations Officer, Edmonton

G. C. Blundell                Manager, Labour Relations, Edmonton

M. E. Healey                 Director, Labour Relations, Montreal

M. W. Becker                Labour Relations Officer, Edmonton

E. C. Bruzzese              District Superintendent Transportation, BC South District


And on behalf of the Union:

Wayne Wright               General Chairman, Saskatoon

M. W. Simpson             Sr. Vice-Chairman, Saskatoon



A hearing in this matter was held at Calgary on February 26, 1993.



This is an arbitration in respect of the implementation of a material change under article 89 of collective agreement 1.2. The issue to be resolved is stated as follows in the material filed by the Brotherhood:

The outstanding issue is minimizing adverse effects to locomotive engineers at Vancouver, B.C. as a result of the Company’s notice dated June 17, 1992, pursuant to paragraph 89.1(b) of Article 89 of Agreement 1.2 with respect to the implementation of Vancouver Intermodal Terminal and the abolishment of five locomotive engineers’ positions.

The material facts are not in dispute. Prior to October 3, 1992, the loading, unloading and marshalling of intermodal freight was performed at the Company’s Main Yard in Vancouver. Effective that date, the Company implemented operations at a new intermodal terminal in Whalley, B.C. at a point easterly of the limits of the Greater Vancouver Terminal.

On June 1, 1992, the Company served notice on the Union, advising of its intention to implement operations at the new terminal, effective September 30, 1992. The net result of the Company’s action was the loss to the Brotherhood of nine shifts of work per week. Following an objection by the Brotherhood with respect to the timeliness of the notice, the Company issued a new notice, with the effective date of the job abolishments to be December 17, 1992. Under the terms of article 89 of the collective agreement, the parties are to negotiate terms and conditions which would minimize the impact of the material change on the employees adversely affected.

It is common ground that the parties reached an interim agreement, aside from the strict requirements of article 89, whereby the Company would be permitted to implement the start-up of the Vancouver Intermodal Terming’ on October 3, 1992. They continued negotiations with respect to the minimizing of adverse effects, with meetings being held in Vancouver on November 2 & 3, 1992. Those negotiations did not result in an agreement, and the parties sought to schedule a board of review to meet in Saskatoon on December 10 and 11, 1992. In fact, negotiations resumed on January 15, 1993, at which point final positions were exchanged. Matters were not resolved at that point, and the matter was presented to a board of review in Saskatoon on February 4, 1993, again without any ultimate agreement.

It is common ground a single issue is presented for resolution in this arbitration. That issue is separation allowances. The Union proposes two alternatives for what it submits is the appropriate measure in respect of separation allowances to compensate for the loss of work opportunities. It proposes the following:

A.            For each Locomotive Engineers’ position abolished or work opportunity lost, a separation allowance be banked, based on the 80% formula, including extended health care, dental plan, and current life insurance policy to age 65. These separation allowances be banked until claimed by Locomotive Engineers who are eligible for early retirement under the Company’s Pension Plan(s), and who has 85 points, as defined by the Pension Plan(s) Rules. These separation allowances would only be available to Locomotive Engineers, who are working in Vancouver, on the date the Locomotive Engineers were adversely affected.


B.            For each Locomotive Engineers’ position abolished, or work opportunity lost, a lump sum payment of $34,400.00, payable to the Brotherhood for the purpose of providing future separation allowances to Locomotive Engineers at Vancouver. These separation allowances would only be available to Locomotive Engineers, who are working in Vancouver, on the date the Locomotive Engineers were adversely affected.

The Company submits that there is no justification for deferred separation allowances, or lump sum payments in the circumstances at hand. Its position is that any adverse effects in the form of reduced working opportunities for individual engineers at Vancouver have been fully offset by attrition. It draws to the arbitrator’s attention the fact that a number of early retirement separation opportunities were made available to locomotive engineers under a separate agreement, a memorandum of agreement dated November 10, 1992. Its representative notes that since the implementation of that agreement, some ten locomotive engineers have left their positions in the Vancouver terminal. The Company stresses that, as a result, none of the locomotive engineers who would otherwise be adversely impacted by the implementation of the Vancouver Intermodal Terminal and the abolishment of positions in the main yard have, in fact, lost any work opportunities.

There is, in other words, no loss of earnings, or opportunity to maintain earnings, visited upon any individual locomotive engineer, because of the contemporaneous effect of attrition resulting from the memorandum of agreement of November 20, 1992. The Company submits that the purpose of article 89 of the collective agreement is to protect individual employees against adverse effects on them, and not to place a liability upon the Company in circumstances where the overall number of jobs is reduced, but in fact no individual suffers any adverse consequences.

In the arbitrator’s view, the position of the Company is more compelling, having regard to both the language and the purpose of article 89 of the collective agreement. It provides, in part, as follows:

89.1        Prior to the introduction of run-throughs or changes in home stations, or of material changes in working conditions, which are to be initiated solely by the Company and would have significantly adverse effects on locomotive engineers, the Company will:

(a)           negotiate with the Brotherhood measures to minimize any significantly adverse effects of the proposed change on locomotive engineers, but such measures shall not include changes on rates of pay, and

(b)           give at least six months advance notice to the Brotherhood of any such proposed change, with a her description thereof along with details as to the anticipated changes in working conditions.

While not necessarily limited thereto, in the case of run-throughs, and in the case of other changes where applicable, the matters considered negotiable will include the following:

(1)           Appropriate timing

(2)           Appropriate phasing

(3)           Hours on duty

(4)           Equalization of miles

(5)           Work distribution

(6)           Appropriate accommodation

(7)           Bulletining

8)            Seniority arrangements

(9)           Learning the road

(10)         Use of attrition

(emphasis added)

Upon a plain reading of the foregoing provisions, the arbitrator must agree with the Company that the purpose of the article is to provide notice and certain protections to locomotive engineers who may be adversely affected by a material change in working conditions initiated by the Company. Plainly, the purpose of the provision is not to bestow windfall benefits on employees who, in fact, have suffered no adverse consequences on the occasion of a material change.

In the case at hand, it is common ground that no locomotive engineers at Vancouver have in fact lost work as locomotive engineers, or the potential for earnings, as a result of the implementation of the Vancouver Intermodal Terminal. It is not disputed that that is a consequence of the fact that a substantial number of locomotive engineers at Vancouver simultaneously took advantage of early retirement opportunities under a separate and unrelated agreement. In other words, by the coincidence of events, attrition in the ranks of the locomotive engineers at Vancouver has provided ample alternative working opportunities to the employees who would otherwise be adversely affected by the reduction of positions in the Vancouver main yard.

Is attrition a factor which can be considered in assessing measures to minimize adverse effects? Clearly, it is. Article 89.l(b)(10) clearly reflects the agreement of the parties that the “use of attrition” is a factor to be considered within the negotiations to minimize the adverse effects of a material change. The inclusion of that factor in the parties’ own agreement, within the language of article 89.1, points the way to the resolution of this dispute. It would seem to the arbitrator that in a hypothetical circumstance where ten positions are abolished by virtue of a material change, while at the same time six locomotive engineers retire or quit, it might be appropriate to negotiate four early retirement opportunities as a measure to the adverse effects of the material change. In the case at hand, however, the rate of attrition at Vancouver has entirely overtaken the number of positions abolished by the implementation of the Vancouver Intermodal Terminal. There has, very clearly, been no negative impact on the job security of any locomotive engineer at that location. On what purposive basis, therefore, can it be suggested that the parties would have intended the conferring of gratuitous benefits on employees who are not in fact adversely impacted by a material change? I can see none, either in the language or in the spirit of article 89.1 of the collective agreement.

For the foregoing reasons the arbitrator endorses the position advanced by the Company, and declines the request of the Union for banked separation allowances or, in the alternative, the payment of lump sums.

The arbitrator retains jurisdiction.


DATED AT TORONTO, this 8th day of March, 1993.