B E T W E E N:



(the "Company")


- and -



(the "Union")








ARBITRATOR:                    Michel G. Picher




THE COMPANY:                  A.E. Heft                      -           Manager Labour Relations, Toronto

                                                D.W. Coughlin -           Manager Labour Relations, Montreal

                                                D.K. House                  -           Superintendent, Northern Ontario District, Toronto

                                                R.D. Kelly                    -           Superintendent, MacMillan Yard, Toronto

                                                R.A. Haggart    -           Project Officer, MacMillan Yard, Toronto




THE UNION:             W.G. Scarrow  -           General Chairperson

                                                Keith Taylor    

                                                R. Lebel

                                                J. Steeves





A hearing in this matter was held in Montreal on June 7, 1993.





                        The facts giving rise to the dispute and the issues are summarized in a joint statement of issue filed at the hearing, which reads as follows:


Joint Statement of Issue

On January 13, 1993 the Company served notice to the Union pursuant to Article 79.1 of Agreement 4.16 of our intention to implement Process Control System (PCS) at the MacMillan Hump yard effective June 28, 1993.


The implementation of PCS will result in the abolishment of 8 Car Retarder Operator (CRO's) positions and, including relief assignments, 14 Yardmen positions at the hump. Concurrently with these reductions 8 Yard Operations employees (YOE) positions will be established.


Meetings and discussions between the parties to negotiate a settlement regarding the issue of benefits to be provided those employees adversely affected resulted in no agreement being reached and the Company's offer of settlement had been rejected by the Union. Following the cessation of negotiations, the issues in dispute were referred to a Board of Review for mediation. Subsequently, the Board of Review was unable to arrive at a joint recommendation for settlement.


The parties have submitted the following issues as remaining in dispute:


1.         Twenty two (22) retirement credits plus five (5) for the spareboard.


2.         Early Retirement to be calculated and include:


i)          the VIA 80% formula.


ii)         Those who elect will have their life insurance continued fully paid by the Company until age 65.


iii)         Extended Health Care and Dental Plan benefits continued fully paid up by the Company until age 65.


3.         Deferred Separation Opportunities.


i)          Qualifying age reduced to age forty-five (45).


ii)         Those who elect will have their life insurance continued fully paid by the Company until age 65.


iii)         Extended Health Care and Dental Plan benefits continued fully paid up by the Company until age 65.


iv)        Upon qualifying for pension the employee be given a lump sum equal to the amount of vacation entitlement for each year of service until age 65.


4.         Severance Payments equal to 78 weeks at the basic weekly rate of pay (1/52 formula).


5.         Clothing allowance for Car Retarder Operators.


6.         Consideration for purchase of vehicle and/or transportation allowance.


7.         Consideration of babysitting and childcare costs.


8.         Relocation or consideration for transportation allowance.




In lieu of the above listed items, $80,000.00 for each position lost. (22 + 5 = 27 positions = $2.16 M.)


9.         Maintenance of Earnings including the spareboard for employees affected and displaced (1/52 formula).


10.       Increase the Spareboard Guarantee to $138.00 per day x 28 days equal to $3640.00 per 28 day period.


11.       Increase the Dual Control Yardmaster's rate of pay.




Training Document

12.       The time in training will count towards a 40 hour work week.


13.       Increase rates of pay for YOE training.


14.       Filling of training position.



Operating Document

15.       Parameters - definition of duties.


16.       Capability of YOE to book rest after 8 hours on duty.


17.       Payment for inspection time.


18.       Increase rates of pay of YOE.


It is recognized that a mutual agreement could not be reached between the parties and it was agreed that the issues outstanding would be referred to Arbitration as contemplated by clause (c) of Article 79 of Agreement 4.16.




                        The facts giving rise to the dispute concern the implementation of the process control system at the MacMillan Hump Yard. Under that system hump switching previously performed by locomotive engineer, a yard foreman, and a yard helper will be done by a single employee, from the bargaining unit of the United Transportation Union, in the newly-classified position of Yard Operation Employee (YOE). The YOE will, among other things, control the yard locomotive by means of an automated belt pack. In the result, seven yard assignments are abolished, including fourteen assignments which would otherwise have been performed by employees in the bargaining unit. Eight Car Retarder positions are also abolished, although they are offset by the creation of eight new yard operations employee positions.

                        The parties are disagreed as to the precise number of employees adversely affected by the change. The Company submits that the impact is limited to 14 employees, while the Union estimates 29 positions being affected. The Union's figure is influenced in part by the inclusion of the seven locomotive engineer positions being abolished, which may cause employees from the locomotive engineers' bargaining unit to displace back into the Union's bargaining unit. For the purposes of the dispute at hand, the arbitrator finds it unnecessary to place a precise number on the employees who will be adversely affected. I accept, as a matter of principle, that in the event a material change notice is served upon the Brotherhood of Locomotive Engineers, with displacement impacts on the bargaining unit of the United Transportation Union, the Company will be under an obligation to provide to the Union and its members the full protections of article 79.1 of the collective agreement. Similarly, any employees in the bargaining unit who, quite apart from the treatment of the locomotive engineers, are adversely impacted by the material change implemented by the Company are entitled to the protections of article 79.1. Given that it is not yet clear which employees will occupy the new positions of YOE, and which displacements may ultimately flow from the changes, it is not in my view instructive or necessary at this time to attempt to place a precise number on the employees who will be adversely affected. It is sufficient, I think, to note that a minimum of 14 yard positions are lost to the bargaining unit in circumstances which appear to adversely affect a number of employees, a fact which is effectively acknowledged by the Company's own decision to serve notice to the Union pursuant to the procedures provided for under the terms of article 79.1 of the collective agreement.

                        Secondly, the parties are in apparent disagreement about the scope of the issues to be negotiated, or arbitrated, under the terms of article 79.1. It appears that during the course of their negotiations, the Company took the position that the Union was not entitled to submit demands outside the ambit of the list of items appearing in paragraph (b) of article 79.1.


                        The arbitrator has some difficulty with the issue as it is characterized by the Union. There is nothing in the Company's brief before the arbitrator, save certain references to wage rates, dealt with in greater detail below, which would appear to limit the range of factors and measures which can be addressed under the provisions of article 79.1, with a view to minimizing adverse impacts on employees. At its highest, the Company's position appears to state that the Union's demands "... in some cases are in areas which are not contemplated by the Material Change provisions of the Collective Agreement". However, with the exception of wage rates, the Company has not identified any issue raised by the demands of the Union which it maintains would be beyond the arbitrator's jurisdiction. Whatever may have been said in negotiations, for the purposes of this arbitration I do not take the employer as asserting that measures such as early retirement opportunities, deferred separation, severance payments or lump sum payments are prohibited from discussion or consideration under the terms of article 79.1 of the collective agreement, in a jurisdictional sense. Indeed, it would be difficult for the Company to take such a position, in light of the language of article 79.1 which specifically contemplates that the parties may negotiate measures other than those covered by paragraphs 79.2 (relocation expenses) and 79.3 (early retirement allowance). The list of measures negotiable to minimize adverse effects is not, in any event, limited to those items listed in article 79.1 (b) of the collective agreement. As prior decisions and negotiated agreements demonstrate, a wide range of mitigating measures have been considered and implemented in other cases in the past. The nature of the measures which are appropriate to any given circumstance, including the financial circumstances of the Company and the cost to it of any given demand, is a matter which may be negotiated and, if necessary, arbitrated in the circumstances of each particular case arising under the terms of article 79.1.




Retirement Credits, Early Retirement,

Deferred Separation and Severance Payments


                        I turn to consider the merits of the dispute. The first four demands of the Union cause the arbitrator substantial difficulty. The Union's request for a total of 27 retirement credits, early retirement benefits, deferred separation opportunities, and severance payments are made largely on its belief that the circumstance of this case are analogous to those of the crew consist reduction, and the arbitration award which issued in that case. The crew consist arbitration arose in the context of the widespread implementation of reduced crews in certain defined forms of service, across Canada. The changes contemplated in that case were substantial, from the standpoint of productivity gains for the Company, and involved a substantial reduction in manpower which had clear adverse impacts on the Union's membership, both in respect of work opportunities and earnings.

                        The same cannot be said in the case at hand. The undisputed representations of the Company establish that there are, at present, a substantial number of job opportunities available to employees in Toronto who are adversely affected by the material change at MacMillan Yard. It is not disputed that there are at present a number of employees forced onto positions in Toronto from other regions, and that those employees would be returned to furlough board protection in their original location in the event of displacement by employees affected by the job abolishments at MacMillan Yard. On the evidence, therefore, there is no shortage of work opportunities for employees adversely affected by the implementation of the process control system at the MacMillan Hump Yard. In these circumstances the arbitrator can see no rationale for establishing retirement credits, early retirement opportunities, deferred separation opportunities or severance payments, as requested by the Union. I cannot accept the argument advanced by the Union's representative, which effectively suggests that the employees who may be displaced from MacMillan Yard into other positions in Toronto should be guaranteed protection against possible future loss of work opportunities in the event that the Company should later encounter a reduction in traffic and a decline in its business activities.  Operations at McMillan Yard are vulnerable to fluctuations in traffic. The collective agreement contains protections negotiated for employees whether they work at MacMillan Yard or elsewhere, with respect to the impact of reduced traffic. I do not see upon what basis those protections should be augmented for a defined group of employees, and not for others, merely because those employees have experienced the effects of a material change in working conditions in respect of which they have had the protections of article 79.1 of the collective agreement, and has been compelled to exercise their seniority to another location or operation.


                        Most importantly, the evidence before me does not suggest that members of employees, or indeed any employee, will be deprived of employment by the impact of the material change. While there will be displacements, dislocation of that kind is protected against by maintenance of earnings safeguards. The circumstances do not, however, suggest the need or justification for retirement or severance incentives.


                        For these reasons the first four demands of the Union listed in the joint statement of issue are denied.



Clothing Allowance for Car Retarder Operators

                        The arbitrator is in agreement with the Union that it is appropriate to provide a clothing allowance for car retarder operators who are compelled, by the change in working conditions, to buy clothing and equipment which requires them to work outside. The arbitrator retains jurisdiction in the event the parties are unable to agree upon the appropriate formula or amount for the clothing allowance.




Consideration for Purchase of Vehicle and/or Transportation Allowance

                        The arbitrator is not persuaded that this is an appropriate case for any order in respect of payments for the purchase of vehicles or the payment of a transportation allowance. To the extent that employees work within a given municipal area, they must reasonably expect to be required to displace themselves within the boundaries of that area as a normal consequence of employment within the operations of an employer which operates at a number of locations within a metropolitan area. Other than those employees who may be required to locate outside the Toronto area dealt with below, there is no basis for an award under this heading.



Consideration of Babysitting and Childcare Costs

                        Babysitting and childcare costs are, and always have been, an item of concern to working single parents, as well as to households where both spouses are gainfully employed. That contemporary reality is, in some part, an element of the wages and benefits which are regularly bargained on behalf of employees represented by a trade union. Obviously the impacts of a material change on employees may vary unevenly, having regard to their marital status, the number and ages of children they may have, their access to secondary family support, and a myriad of other factors. Employees may also be inconvenienced in the case of an invalid parent or spouse, or in a number of other ways particular to their own circumstances.  If one examines the list of factors contained in article 79.1(b), it is apparent that they generally relate to immediate working conditions, and more traditional forms of wages and benefits. A board of interest arbitration should not, I think, initiate a head of protection which is so difficult to analogize to those which appear within the article whose costs are difficult to predict and may well be a component of negotiated wages. The Union's request is therefore denied.



Relocation or Consideration for Transportation Allowance

                        The arbitrator is satisfied that the provisions of article 79.2 of the collective agreement offer sufficient protection to any employee who may be adversely affected by the material changes implemented at the MacMillan Hump Yard, and who may be eligible under the terms of that provision.



Lump Sum Payment

                        The arbitrator sees no basis, in the case at hand, for ordering an $80,000.00 lump sum payment, or indeed any other cash payment in the circumstances of the case at hand where, it appears agreed, no individual has been forced into unemployment.



Maintenance of Earnings

                        Initially the position of the Company was to restrict its offer of maintenance of earnings to those employees whose positions are abolished. However, at the hearing it agreed to extend maintenance of earnings protection to those who are impacted by the operation of the "ripple effect", so that any employee displaced as a result of the material change in working conditions at the MacMillan Hump Yard would be entitled to the maintenance of earnings. The arbitrator considers the position tabled by the Company at the hearing to be reasonable and adopts the formula for maintenance of earnings provided as Appendix 3 to the Company's brief as part of this award. The formula tabled by the Company has been agreed to in other circumstances by the Union, and offers a reasonable degree of protection to the employees affected.


                        However, there appears to the arbitrator to be room for adjusting the computation of basic weekly pay for the purposes of the maintenance of earnings formula which should apply to Car Retarder Operators. The evidence establishes that because of the nature of their duties, on each tour of duty, in lieu of a lunch break, Car Retarder Operators at MacMillan Yard are paid 20 minutes overtime or 30 minutes at straight time. That non-discretionary overtime is, to that extent, built into the regular earnings of Car Retarder Operators. In the arbitrator's view, because of its regular and non-discretionary nature, it should be included in the calculation of the basic weekly salary of Car Retarder Operators for maintenance of earnings purposes. However, because the amount in question is overtime, there should be a rateable reduction of the  ??????? of any former Car Retarder Operator who, in his or her new position, declines to accept an opportunity to work overtime. This aspect of the award is remitted back to the parties so that they may agree on a formula appropriate to achieve the foregoing result. Should they be unable to agree on such a formula, the arbitrator retains jurisdiction.


                        The arbitrator agrees with the Company that this is not a case where it is appropriate to order the maintenance of earnings payment to employees in spareboard service. It does not appear disputed that the great majority of spareboard employees in Toronto who may be affected by the material change have in fact been forced to Toronto from other regions. If displaced, they will return to their regions, and to the furlough board protection which they already hold.


                        A concern of the Company, which the arbitrator considers understandable, is that measures be provided to minimize the number of displacements which might be occasioned by the implementation of the material change. Obviously displacements will be reduced if the eight Car Retarder Operators whose positions have been abolished should become trained for and accept the eight YOE positions being newly established. While the arbitrator would agree with the Union that the employees in question should not be forced to accept such training and positions, I deem it appropriate to order as part of this award that the Car Retarder Operators, who are all long-service employees, shall have the first opportunity to accept training and appointment to the newly-established YOE positions. They are, of course, under no obligation to do so, and may choose to exercise their seniority to protect other positions, if that is their preference.


Spareboard Guarantee

                        Apart from the fact that the Union's request under this heading may be beyond the arbitrator's jurisdiction, as affecting rates of pay, I can see no basis for ordering an increase in the spareboard guarantee for employees in yard service. The request is therefore denied.



Dual Control Yardmaster's Rate of Pay

                        The arbitrator accepts the position of the Company that any change in the rate of pay of yardmasters is beyond the contemplation of article 79.1, and is clearly not within the arbitrator's jurisdiction.



Training Document

                        In the arbitrator's view the position on training expressed in paragraph 22 of the Company's brief is reasonable, and is adopted as part of this award. The Company's offer of the highest classification rate of pay while in training for employees training for YOE service, as provided for in the collective agreement, is fair and in keeping with the intention of the parties already reflected within that document. Also, subject to the preferential right of Car Retarder Operators dealt with above, the arbitrator deems it appropriate that the Company should first train the successful applicants, and thereafter ensure the flexibility of its relief complement by training spareboard employees. Thereafter, the Company may train other employees as it deems necessary. In the result, the arbitrator adopts the position of the Company contained in tab 4 of its brief presented at the arbitration as part of this award with respect to issue of training.  This is subject only to the condition that initial training be offered to those who held positions as Car Retarder Operators.



Parameters - Definition of Duties

                        It was agreed by the parties at the hearing that they should be given the opportunity to discuss and establish, by agreement, the areas of work which may be performed by a YOE, as apparently has been done under other agreements. The arbitrator therefore directs the parties to meet to establish and clarify the working rules for the new classification. Should they be unable to agree upon such working rules, duties and responsibilities within 60 days of the date of this award, the matter may be referred back to the arbitrator for final resolution. The parties' discussions may include the Union's concern with respect to the ability of the YOE to book rest after eight hours on duty. Should that matter remain outstanding it may likewise be returned to the arbitrator.


Payment for Inspection Time and Increase in Rates of Pay of YOE

                        The Company has tabled a document, in the form of appendix 5 to its brief, which is a full proposal in respect of a number of items, including rates of pay payable for the position of YOE. The arbitrator accepts the submission of the Company that inspection time is appropriately incorporated within the rates of pay established within that document. I am further satisfied, given the fact that the document reflects rates of pay already in effect for similar positions established at Symington Yard and Taschereau Yard, that it does represent an appropriate level of remuneration for the duties and responsibilities in question. The arbitrator therefore adopts the material tabled in tab 5 of the Company's brief as part of the award.


                        I retain jurisdiction in the event of any dispute between the parties with respect to the interpretation or implementation of this award.


                        DATED at Toronto this          day of June, 1993.




                                                                        Michel G. Picher - Arbitrator