AH – 320




(the “Company”)



(the “Union”)




SOLE ARBITRATOR:                Michel G. Picher



There appeared on behalf of the Company:

M. W. Becker                - Labour Relations Officer, Edmonton

G. C. Blundell                - Manager, Labour Relations, Edmonton

M. E. Healey                 - Director, Labour Relations, Montreal

B. Laidlaw                     - Labour Relations Officer, Edmonton

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


And on behalf of the Union:

M.G. Eldridge                - Vice-General Chairperson, Edmonton

W. Armstrong                - General Chairperson, Edmonton

L. H. Olson                    - Vice-President, Edmonton

C. S. Lewis                   - Local Chairperson, Vancouver


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



On June 1, 1992, the Company gave notice to the Union, pursuant to article 139.1 of collective agreement 4.3, that it intended to implement the Vancouver Intermodal Terminal with the resulting abolition of a number of yard assignments at Vancouver. That initiated negotiations between the parties to establish measures to minimize the adverse effects on employees impacted by the change. They were unable to agree, and the matter has progressed for determination in accordance with the arbitration provisions contained in article 139.1.

The dispute and joint statement of issue filed at the hearing reads as follows:


Failure to reach an agreement on measures to minimize the adverse effects in connection with the Company’s notice dated June 1, 1992 and the Company’s revised notice dated September 30, 1992, issued pursuant to the provisions of Article 139 of Agreement 4.3.


The parties were unable to agree as to the issues outstanding. Below is each parties list of outstanding issues not resolved.

The outstanding issues, as seen by the Parties are:

1.             Relocation credits

2.             Severance and/or Retirement opportunities

3.             Maintenance of Earnings

4.             Guarantee Payments

5.             Transfers (loss of work)

It is common ground that the parties reached an interim agreement whereby the way was cleared for the Company to implement the operations of the Vancouver Intermodal Terminal effective October 3, 1992. That agreement was reached on September 30, 1992. Further, it does not appear disputed that the changes implemented by the Company occasioned the abolishment of five yard foreman assignments, three yard helpers, and the establishment of one yard foreman and one yard helper assignment at the Vancouver Intermodal Terminal. A revised notice issued on September 30,1992 identifying four main yard jobs to be abolished and two positions to be established at the Intermodal Terminal.

On January 11 and 12, 1993, the parties met in Vancouver and reached a tentative agreement on terms and conditions to minimize the adverse effects of the material change implemented by the Company. Among others, these include an agreed determination as to terminal limits and switching limits, a determination of final terminal time in certain specified circumstances, maintenance of basic rates, relocation expenses and a provision for compensatory payment in the event of a reduction to less than two transfers per day operating from Thorton Yard to Vancouver handling container and Intermodal traffic from trains 201 and 203. The relocation credits provided for in the interim agreement are limited to employees relocating to Saskatoon, Prince Albert and Gillam, Manitoba. The maintenance of basic rates is provided, in accordance with the formula described in Appendix 1 and Appendix 2 of the tentative agreement, and extends over a period of three years.

On January 19, 1993, the Company was advised by the Union that the members of Local 701 declined to ratify the tentative agreement. As a result, the matter continued to be progressed in accordance with article 139 of the collective agreement. It proceeded to a board of review on February 5, 1993, without resolution, following which it has duly proceeded for determination by arbitration.

The Company questions the degree of adverse impact of the material change, in light of the facts as they have evolved. It notes that three main yard assignments have been abolished, eliminating six positions, one position has been eliminated as a result of the abolishment of one Thorton Yard transfer assignment which was reduced and an estimated two positions have been lost to the spare board. On that basis, it reckons that there were nine positions eliminated. It further submits that four new positions have been created, however. These include the creation of two positions in the Vancouver Intermodal Terminal Yard, the operation of a main yard transfer every Friday and the regular assignment of either the 1400 North Lead or the 0759 East Lead assignments to facilitate the operations at the Intermodal Terminal three days out of five per week. This the Company equates to the establishment of no less than two yard assignments. In the result, the Company submits that there have been a total of nine positions abolished and four positions established, for a net loss of five positions.

With respect to the issue of relocation credits, the Union submits that the locations to which employees may relocate should not be restricted. Further, it seeks the payment of a lump sum of $5,000 to employees who elect to relocate. This, it submits, is consistent with prior agreements negotiated in similar circumstances.

The Company opposes both suggestions of the Union. Firstly, it submits that where there have been lump sum payments agreed to in circumstances of transfer, these have related in some realistic way to differential costs in real estate and were paid in lieu of relocation benefits. It submits that there are no circumstances in the case at hand which would justify such treatment.

The Company also cites the fact that three employees have already relocated to Saskatoon. It notes that, in fact, work opportunities for engine service brakepersons at Vancouver are increasing as a result of the early retirement of eight locomotive engineers at Vancouver, and the severance of two others as a result of the conductor only agreement negotiated with the Brotherhood of Locomotive Engineers. It submits that, in the result, there is no mathematical consequence which would force the Union members remaining at Vancouver to displace to other locations. In response, the Union’s spokesperson notes that not all of its members qualify as engine service brakepersons and, to the extent that they cannot avail themselves of locomotive engineers positions, the agreement should remain undisturbed as it might protect their ability to relocate.

The Union further seeks severance and early retirement opportunities for employees adversely impacted at Vancouver. It cites, as precedent, severance opportunities provided for in the freight crew consist conductor only agreement of January 15, 1992, and a similar provision reached in an agreement with CP Rail. Although there are no employees who can immediately retire, the Union also seeks the banking of a certain number of early retirement opportunities. It notes that early retirement opportunities have been provided on that basis in other circumstances, including the Dauphin Yard Assignment Agreement and the Yard Productivity Memorandum of Agreement at Vancouver, dated March 7, 1990.

The Company opposes the position of the Union on both the severance payments and early retirement opportunities. It argues that with ten locomotive engineers retiring or severing their employment, and three members of the Union relocating, there are no adverse effects to individual employees at Vancouver which would justify those extraordinary measures. In essence, it argues that the granting of deferred separations or severances would, in fact, do nothing to minimize adverse effects, as the employees who might take advantage of those benefits are not negatively impacted by the changes implemented.

On the issue of maintenance of earnings, the Union seeks to eliminate the three year limitation on that benefit contained within the tentative agreement. It submits that employees should be entitled to maintain their basic weekly payments indefinitely. The Union also stresses that the employees should not be required to exercise seniority to road service to protect their basic weekly payments. It should be noted that during the course of the presentation before the Arbitrator, the Company agreed that under the terms of the tentative agreement negotiated, employees would not be required to exercise their seniority to protect road service, and need only protect yard service, to retain their incumbency. More fundamentally, however, in light of the evolution of events at Vancouver, the Company submits that the maintenance of earnings protection are, in fact, not necessary. Alternatively, it submits that a three year period of maintenance of earnings, consistent with traditional applications in the railway industry is appropriate in the circumstances. This, it stresses, is appropriate to the extent that normal salary increases over a three year period, generally, will erode any loss of earnings experienced by employees.

The Union further seeks improvement in the guaranteed payments provided under the agreement of January 15, 1992. The Union seeks to enhance the guaranteed payments for unprotected members for a minimum of six years. In the Company’s view the protection is sufficient as it extends to January 14, 1966 and need not be enhanced. The Company stresses, however, that any employee who loses work as a result of a personal injury (Worker’s Compensation or National Life) would maintain their previous years’ guarantee.

The last issue addressed is transfers, or loss of work. The Union submits that the impact of the reduction of positions, and the possibility of locomotive engineers returning to the UTU ranks, causing the displacement of members, is not clearly resolved. The Company notes that during the meetings held on January 11 and 12, 1993 the Company agreed with the Union’s position that there was a loss of one position to the spare board resulting from the consolidation of transfers between Thorton Yard and Vancouver. The Company submits that its agreement with the Union in that regard adequately addressed its concerns, and that transfers and loss of work should not be any further issue before the arbitrator.

I turn to consider the merits of the dispute. Firstly, it should be stressed that this case is unusual to the extent that the parties reached a tentative agreement, which was subsequently rejected by the Union membership. It is a well established principle of interest arbitration that the party which seeks to depart from the terms of a tentative agreement, where that agreement has subsequently not been ratified, bears a burden to justify why the agreement should not be viewed as reasonable on its face. {See the following unreported awards: Queen in Right of Ontario and Ontario Provincial Police Association, Dec. 22, 1992 (M.G. Picher); Guelph Police Services Board and Guelph Police Association, Oct. 6, 1992 (Burkett); Canadian Union of Public Employees and Participating Hospitals, Dec. 22,1978 (Burkett); and Toronto Transit Commission and Amalgamated Transit Union, Local 113, CUPE Local 2 and IAM, Lodge 235, Jan. 22, 1985 (Weiler)}.

In the case at hand, the officers of the Union tentatively agreed to terms which, on their face, appear to provide a reasonable degree of protection to employees adversely affected by the implementation of the Vancouver Intermodal Terminal operations. Provision is made for assistance for employees who might transfer to locations where their services are needed, and maintenance of earning protections consistent with those provided in similar agreements within the railway industry are provided for. There is, moreover, provision for local negotiation and agreement, as well as compensation, in the event of adverse impacts to the spare board and, in particular, where the number of transfers from Thorton Yard to Vancouver should decline below a set number.

When the whole of the material is examined, the arbitrator sees little reason to doubt the submissions of the Company with respect to the actual adverse impacts of the change, particularly in light of the attrition of the locomotive engineers which will, to some extent, free up the job opportunities within the UTU ranks. While I accept the concerns of the Union with respect to the fate of employees who are not qualified as locomotive engineers, there appears to be little doubt that they will, according to their seniority, be in a position to retain work to the extent that positions are vacated by qualified train-persons. Moreover, they will retain the important protection of maintenance of earnings over a three-year period.

The Arbitrator has difficulty understanding the position of the Union with respect to the justification for separation allowances and early retirement opportunities in the case at hand. For the reasons related above, it is questionable whether any employees have indeed lost work opportunities at Vancouver, particularly in light of the fact that three members have already transferred to Saskatoon. While the providing of severance payments and early retirement opportunities may be justified where it can be shown that a material change occasions a wholesale reduction in work opportunities in a way that substantially impacts employees, that is not disclosed on the facts of the case at hand. This case is to be distinguished, for example, from the circumstances disclosed in the crew consist agreement negotiated between these same parties where substantial work opportunities otherwise available to protected employees were eliminated.

On the whole, the Arbitrator can see no basis to depart from the terms of the tentative agreement reached between the parties, as contained in the memorandum dated January 12, 1993 and its two appendices. I, therefore, adopt the terms of that as my award herein. In so awarding, I would note, for the purposes of clarity, the agreement of the Company that employees need not exercise their seniority to road service assignments to protect the payment of an employee’s incumbency.


DATED at Toronto this 8th day of March, 1993.