SHP – 322




(the "Company")



(the "Union")






There appeared on behalf of the Company:

J. R.Hnatiuk – Regional Manager, Human Resources, Moncton

B. W. Morrisey – Crew Supervisor, Moncton

D. W. Coughlin – Manager Labour Relations, Montreal

L. F. Caron – System Labour Relations Officer, Montreal

D. L. Brodie – System Labour Relations Officer, Montreal


And on behalf of the Union:

R. Lebel – – General Chairperson

J. Steeves

G. Bourque



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


This is the arbitration of a dispute under article 79 of Collective Agreement 4.16, concerning material change implemented by the Company in its operations at Gordon Yard in Moncton, New Brunswick. The joint statement of issue filed at the hearing as well as the statement of dispute, reads as follows:


Failure to reach mutual agreement on measures intended to minimize adverse effects as provided by Article 79 of the. Agreement 4.16.


The Company served an Article 79 Notice On the Union, dated 19 August, 1992 (subsequently revised on 19 January 1993) indicating its intentions to abolish four positions of Switchtender at Gordon Yard, Moncton N.B. and establish two positions of Assistant Yardmaster.

In accordance with the provisions of Article 79, negotiations intended to minimize the adverse effects on employees were held. Two issues remained unresolved and these were brought before a Board of Review as provided by Article 79.1(c). The Board of review was unable to resolve these issues and the matter has now been progressed to the Arbitrator for final and binding settlement as provided by Article 79.1(d).

The two issues remaining in dispute are:

1. Maintenance of Earnings Protection;

2. Lump Sum Payment

The facts are not in dispute. On August 19, 1992 the Company gave notice to the Union of its intention to implement changes in the assignment of Yardmasters and Flat Switchtenders at Gordon Hump Yard in Moncton. The initial plan was to abolish four Flat Switchtender positions at the main tower, to relocate a flat switch console to the upper level of the main tower and to reclassify four Yardmaster positions to positions of Assistant Yardmaster at the west tower. Negotiations commenced between the parties in October of 1992, but were delayed as both the Company and the Union sought to obtain further information. The passage of time caused the Company to revise its view of staff adjustments which could be made. This resulted in a revised material change notice issuing on January 19, 1993, which is the subject of this arbitration. That notice provides for abolishing four Flat Switchtender positions at the main tower, transferring four four Yardmaster positions from the west tower to the main tower and establishing two Assistant Yardmaster positions at the west tower.

The parties continued negotiations in respect of the revised notice in March of 1993 and were unable to come to an agreement. All outstanding issues were then submitted for mediation by a Board of Review as contemplated in Article 79.1(c) of the collective agreement. On April 21, 1993 the Board convened and issued a report advising that it was unable to resolve the issues in dispute. It is common ground that the only two issues in dispute, as reflected in the statement of issue above, are the maintenance of earnings and the lump sum payment.

Before the arbitrator it became apparent that there is no further issue with respect to maintenance of earnings. The Company acknowledges its readiness to provide maintenance of earnings protection to the four incumbents who hold the positions of Switchtender, at the 1993 Yard Foreman’s rate of pay. It further undertakes that the maintenance of earnings protection will apply to any other employees who may be affected by displacement through the exercise of the exercise of the incumbent’s seniority rights.

For the purposes of clarity, as reflected in the brief presented by the Company, for maintenance of earnings purposes the basic salary in yard service is to be to limited to the equivalent of 40 hours per week at the applicable yard service rate of pay of the position occupied on a permanent basis at the time of change. In respect of road service employees "basic weekly pay" Is to be defined as one fifty second (1/52) of the earnings of a road service employee during the 26 full pay periods prior to the effective date of the abolishment of the four Switchtenders’ position. It is understood that the amount of basic weekly pay for road service employees is not to exceed the equivalent of 4,300 miles per month at Brakeman’s through-freight rates times 12 months divided by 52 weeks. Maintenance of earnings protection will be maintained for three years following the material change, with earnings thereafter subject to the impact of general wage awards.

The only issue of substance before the arbitrator is the Union’s request for a lump sum payment for each job lost. Its request is prompted, principally, by a concern for non-protected junior employees, hired subsequent to January 1, 1988. Employees with service only after that date do not have the full protections of the conductor-only agreement signed between the parties on March 2, 1992. The protections provided to those junior employees under the conductor-only agreement are only of four years duration, calculated from 1992. The gist of the Union’s concern is that the reduction of regular positions in the yard at Moncton reduces the likelihood that those employees can some day secure a regular assignment, as the overall pool of regular assignments is reduced. This, the Union argues, is particularly so in light of the substantial number of protected surplus employees in the region.

The arbitrator understands the concern which motivates the Union’s request. However it is difficult to accept its position that the circumstances of the non-protected employees can be said to be an adverse effect of the kind contemplated in Article 79 of the collective agreement. Article 79.1 provides as follows:

79.1 The Company will not initiate any material change in working conditions which will have material adverse effects on employees without giving as much advance notice as possible to the General Chairman concerned, along with a full description thereof and with appropriate details as to the contemplated effects upon the employees concerned. No material change will be made until agreement is reached or a decision rendered in accordance with this paragraph.

The foregoing provision speaks in terms of employees who suffer "materially adverse effects" resulting from a change in working conditions initiated by the Company. The provision in question has been applied and interpreted by the parties, and by arbitrators, over many years. It is, i think, well established that remote and indirect impacts, or potential impacts or potential impacts, are not the kind of consequence contemplated by the language of article 79.1. Arguably, every time a position is eliminated from the operations of the railway the potential for mobility and advancement of employees in the system is, to some degree, affected. If a conductor’s position is eliminated, for example, it can be argued that all persons working as brakeman have suffered a reduction in their chances for advancement. as true as that may be, potential and remote consequences of that kind are not not "material adverse impacts" of the kind contemplated in article 79 of the collective agreement.

The terms of article 79,, and both the negotiated and arbitrated settlements which have been made under that provision, contemplate that employees who suffer materially adverse effects are those who are directly impacted, in that earnings or work opportunities are immediately affected through the operation of the abolishments and ensuing chain of job displacements. Impacts such as demotion, a reduction in working hours, relocation and the like are those which are intended to be addressed by protective provisions of article 79. Its provisions are not intended to extend so far as to cover persons whose working circumstances do not change, and who may or may not be affected in their long term career advancement. It would, in the arbitrator’s view, require clear and unequivocal language in the terms of the collective agreement to suggest that the parties would have intended such a broad and open-minded form of protection, or such a counter- intuitive definition of "materially adverse effects" within the meaning of article 79.1 of the collective agreement. No such language is to be found in article 79.1

For all the foregoing reasons the arbitrator declines to award the lump sum payments sought by the Union on behalf of non-protected employees who are not directly impacted by the material change. For the purposes of clarity, however, the arbitrator adopts the position of the company with respect to maintenance of earnings, as reflected in its brief presented to the arbitrator, as forming part of this award.

DATED at Toronto this 22nd day of June, 1993.