BETWEEN:

(the "Company")

AND

(the "Union")

SOLE ARBITRATOR: Michel G. Picher

There appeared on behalf of the Company:

D. T. Cooke – Labour Relations Officer, Montreal

M. Senecal-Tremblay – Counsel, Montreal

S. J. Samosinski – Manager, Labour Relations, Montreal

And on behalf of the Union:

P. Davidson – Counsel, Ottawa

D. W. Brown – Counsel, Ottawa

G. D. Housch – Vice-President, Ottawa

K. Deptuk – Vice-President, Ottawa

A hearing in this matter was held in Montreal on July 28, 1993.

This matter comes on for hearing, on an expedited basis, in respect of the exercise of seniority rights by employees in the context of a major staff reduction. The parties are disagreed as to the manner in which an employee is compelled to exercise his or her consolidated seniority as a condition to preserving employment security under the terms of the Job Security Agreement.

The facts material to the grievance are not in dispute. On April 2, 1993, the Company served notice upon the Brotherhood, pursuant to article 8.1 of the Job Security Agreement, of a major organizational and operational change in the Company’s track department across Canada. The change, to be implemented commencing in the Pacific Region on August 16, 1993, involves a net loss of approximately 600 bargaining unit jobs, system-wide. To facilitate the change, all positions in the track department are abolished, and the new positions are to be bulletined and filled by a bidding process. In the result, a number of employees will be compelled to comply with the conditions of the Job Security Agreement to protect their employment security status.

The dispute between the parties concerns the application of Appendix "E" of the Job Security Agreement. The provisions of Appendix "E" which are material to this grievance are as follows:

As is evident from the preamble to Appendix "E", the concept of consolidated seniority, meaning the seniority of an employee from the date of his or her first employment in any part of the Maintenance of Way bargaining unit, was a product of the award of arbitrator Dalton Larson dated April 11, 1988, as amplified by his supplementary award of June 8, 1988. It is common ground that before exercising consolidated seniority, an employee who wishes to protect his or her employment security status must fulfil a sequence of obligations referred to as Article XII(D) of the Master Agreement and, in fact, described in Article 7.3A of the Job Security Agreement. The exercise is accurately reflected in the following excerpt of the brief submitted by the Brotherhood:

The dispute between the parties concerns whether consolidated seniority may be exercised by an employee, upon the exhaustion of the steps under article 7.3A, to claim a position in the employee’s classification of origin. In other words, can an employee who, for example, does not have sufficient unit seniority as a Track Maintainer to bump another employee in his or her classification of Track Maintainer, and cannot obtain a position by the exercise of seniority rights under Articles 7.3A(a) and 7.3A(b), ultimately exercise consolidated seniority to displace a Track Maintainer who may have greater unit seniority as a Track Maintainer, but less consolidated seniority by virtue of his or her original date of hire into the Maintenance of Way Service?

The Company maintains that Appendix "E" contemplates an employee exercising consolidated seniority in all classifications covered by Agreement 41 and the Supplemental Agreements to it. In other words, as the Company’s interpretation would have it, a Track Maintainer who was unable to exercise unit seniority to hold a Track Maintainers’ position because other Track Maintainers have greater seniority in that classification may, nevertheless, upon the exhaustion of his or her seniority rights under Article 7.3A, use his or her consolidated seniority to displaced back into a Track Maintainer’s position, in priority to a Track Maintainer who may have greater Track Maintainer seniority, but is junior in respect of consolidated seniority.

The Brotherhood takes a contrary view. It submits that the intent of Appendix "E" is that an employee who is unsuccessful in exercising unit seniority within his or her classification of origin cannot, thereafter, use consolidated seniority to displace into that same classification.

Both parties argue that the interpretation which they favour is most consistent with the overall intention of the Job Security Agreement, as reflected in its language. The Company maintains that there will be an overall reduction of displacements by the application of its interpretation, and that the view which it advances is more consistent with the preservation of work to senior employees and the liability of junior employees to becoming inactive or being laid off first. The Brotherhood, on the other hand, submits that its interpretation is consistent with a respect for the integrity of the seniority systems established within Collective Agreement 41 and the Supplemental Agreements. It further submits that the application of consolidated seniority which it urges is more consistent with its use as an extraordinary right which should normally apply on a temporary basis, as reflected in paragraphs 6 and 7 of Appendix "E". It argues that the agreement of the parties contemplates that employees exercising consolidated seniority rights do so outside their own classification or origin, with the expressed obligation to return to that classification when permanent work is available, and the option to so return when only temporary work is available. Its representative stresses that in the circumstance of an employee returning to his or her classification of origin, the way is cleared for the recall of employees who were displaced by the exercise of consolidated seniority, in a manner which he characterizes as a "return to normalcy".

In support of its position, the Brotherhood further points to the fact that the Canadian National Railway (CN) interprets the substantially identical terms of Appendix "G" of its Employment Security and Income Maintenance Agreement with the Brotherhood in the manner which is advanced by the Brotherhood in the case at hand. Further, the Union stresses the settlement of a prior grievance with the instant Company, in a manner consistent with the Brotherhood’s interpretation. It notes that in April of 1993 a bargaining unit employee in British Columbia sought to exercise his consolidated seniority to displace into a position in his classification of origin. Local management of the Company asserted, in its Step 3 response to the grievance dated April 30, 1993, that it is not open to an employee to apply Appendix "E" of the Job Security Agreement to increase his or her seniority in a class where seniority is already held. The grievance was declined and the national office of the Brotherhood elected not to pursue it further, as its own interpretation coincided with that advanced by the Company’s officers in that case.

On a review of the totality of the material presented, the arbitrator has some difficulty with the position of the Company. There is, to be sure, a logic to the Company’s interpretation of the application of Appendix "E" of the Job Security Agreement. However, in the arbitrator’s view, the scheme reflected within the Job Security Agreement, read in conjunction with the seniority systems established within the Collective Agreement, more compellingly supports the interpretation advanced by the Brotherhood. Similarly, the comments of arbitrator Larson, explaining the rationale for the establishment of consolidated seniority are, I think, more supportive of the interpretation of the Brotherhood. Consolidated seniority was first dealt with in the award of arbitrator Larson of April 11, 1988 at pp.68-70:

The parties subsequently sought clarification from arbitrator Larson with respect to the consolidation of seniority units. In a supplement to his award, dated June 17, 1988, arbitrator Larson made the following comments:

Subsequently, on July 29, 1988, the parties executed a letter of understanding which is now Appendix "E" to the Job Security Agreement. What, then, is to be made of the observations of arbitrator Larson and the text of Appendix "E" for the purposes of resolving the instant grievance? Firstly, it seems to me that arbitrator Larson was extremely careful to acknowledge in the final paragraph of his ruling of June 17, 1988 reproduced above, that consolidated seniority should, wherever possible, be applied in a manner which accommodates various kinds of special seniority that may be found within a collective agreement. I take that, at a minimum, as a signal of caution before concluding that all seniority provisions in a collective agreement are necessarily abrogated by the concept of consolidated seniority. Secondly, and perhaps more significantly, the parties did not execute an agreement which simply provides that for the purposes of preserving employment security employees are to exercise consolidated seniority to protect work in their own classification, on their own basic seniority territory, in their own region or in another seniority group under the same or another collective agreement. It seems to the arbitrator that it would have been relatively simple, either for arbitrator Larson or the parties, to provide that in the event of an operational or organizational change, for the purposes of protecting employment security, employees must, from the outset, exercise consolidated seniority to protect work, firstly within their’ classification and then outwards as contemplated in Article 7.3A of the Job Security Agreement. The parties did not, however, choose such wording. Rather, they agreed upon a scheme of application by which employees do not contemplate the exercise of consolidated seniority until they have first exhausted their unit or collective agreement seniority in conformity with Article 7.3 of the Job Security Agreement. It is, I think, counter-intuitive to conclude that the parties would have intended that an employee adversely impacted by an operational or organizational change would first exercise unit seniority within his classification and, failing the ability to protect work through the various stages of displacement contemplated in Article 7.3, then return to his classification to apply consolidated seniority. While such a convoluted process of displacement might be agreed to by the parties, I have difficulty accepting that it was intended by the language and scheme of Appendix "E", particularly when it is read in conjunction with the comments of arbitrator Larson with respect to respecting collective agreement provisions which establish special kinds of seniority. The collective agreement of the parties is particular in its provision of multiple seniority units or classifications. Those seniority systems were established by the parties, upon agreement, for reasons which they best appreciate. They should not, I think, be lightly ignored or overridden by the application of Appendix "E" to the collective agreement. Additionally, I am inclined to give some weight to the position of the Union that paragraphs 6 and 7 of Appendix "E" tend to reflect the expectation of the parties that an employee who has exercised consolidated seniority does so into another seniority list, and that the thrust of the provision is to compel such an employee to return to his or her seniority list when work becomes available. Moreover, the provisions of article 4 of Appendix "E" do not unequivocally support the interpretation of the Company. The fact that an employee may be "deemed" to have a consolidated seniority date in all classifications may be understood as a means of giving access to positions outside the employee’s own seniority classification and, as the Union argues, to give the employee consolidated seniority to defend his or her own position as against the consolidated seniority of others who would exercise it within the employee’s own seniority classification. The language of Article 4 does not, on its face, speak instructively to the manner in which consolidated seniority rights are to be applied for the purposes of displacement.

Nor is it apparent to the arbitrator that the interpretation advanced by the Brotherhood is necessarily inefficient or unduly burdensome from the standpoint of administration. The concept of consolidated seniority remains available to ensure that senior employees are compelled to protect work on a much broader basis than would otherwise be the case. Moreover, even if, in particular cases, employees who are junior in consolidated seniority should be shielded from displacement by senior employees who are junior within their own classification, they are nevertheless vulnerable to displacement by others through the exercise of consolidated seniority. On the whole, while the system may yield some minor anomalies, it should generally operate to preserve jobs generally for senior employees, causing downward pressure on junior employees to face job inactivity or layoff.

In summary, there are a number of factors which conduce to the conclusion that the interpretation advanced by the Brotherhood is preferable to that of the Company. While the arbitrator accepts that the interpretation applied to very similar language in Appendix "G" to the CN collective agreement is not directly pertinent, and that the interpretation advanced in British Columbia by the Company’s local officers in the grievance referred to above may be an explainable exception, nevertheless, those events do little to undermine the plausibility of the Union’s understanding of the original intention of arbitrator Larson and the subsequent agreement of the parties with respect to the operation of Appendix "E". In particular, it is significant that the terms of Appendix "G" to the Employment Security and Income Maintenance Agreement negotiated between CN and the Brotherhood flow from a common arbitration process in which CN, CP and the Brotherhood were all parties before Mr. Larson. It is also significant that the initial proposal of the Company before Mr. Larson was to effectively eliminate seniority barriers by allowing employees to take their full seniority with them, in the protection of employment security, in displacing to any bargaining unit represented by their union or any other union. That approach was expressly rejected by arbitrator Larson. At p.63 of his award of April 11, 1988 the following appears:

For the reasons reflected in the above passage, as well as those reviewed above, the arbitrator is compelled to conclude that the agreement of the parties which led to the drafting and execution of Appendix "E" of the Job Security Agreement is predicated on an understanding that the integrity of seniority units from which employees are initially displaced by an operational or organizational change is to be respected, and that consolidated seniority is intended to be applied exclusively for the purpose of giving employees entry into other seniority units which would otherwise have been foreclosed to them. In the arbitrator’s view, at the risk of repetition, had the parties intended otherwise, they could simply have provided for the immediate exercise of full consolidated seniority within an employee’s seniority unit at the commencement of the displacement process.

For the reasons noted above, the observations of arbitrator Larson are also consistent with the application of consolidated seniority in such a way as not to undermine the integrity of collective agreement seniority systems. Additionally, the fact that the parties fashioned a sequential process whereby classification seniority is to be applied first by an employee, with consolidated seniority to apply only where the employee is unable to hold work upon the exhaustion of the alternatives under Article 7.3A of the Job Security Agreement further support the position of the Brotherhood that consolidated seniority was intended to apply outside the employee’s classification of origin. In the arbitrator’s view, the position of the Company would be far more compelling if Appendix "E" had been drafted in such a way as to permit the application of consolidated seniority for any displacement further to the protection of Employment Security. The fact that employees are first required, under the terms of paragraph 5 of Appendix "E", to exhaust their seniority pursuant to article 7.3A(b) of the agreement is, when read together with paragraphs 6 and 7, indicative of an understanding that the use of consolidated seniority is exceptional, intended to be temporary and, most significantly, that it is intended as a passport to job opportunities outside the employee’s classification of origin. While logic may be marshalled in support of either interpretation, it is the intention of the authors of the document, as reflected in the comments of arbitrator Larson and the language and structure of Appendix "E", which must govern in the end.

For all of the foregoing reasons the grievance is allowed. The arbitrator finds and declares that the interpretation of the application of Appendix "E" advanced by the Brotherhood is correct. Consolidated seniority is not to be exercised so as to permit an employee to displace back into his or her classification or seniority unit of origin. The arbitrator retains jurisdiction in the event of any dispute between the parties with respect to the interpretation or implementation of this award.

DATED at Toronto this 29th day of July, 1993.