AH – 326




(the "Company")



(the "Union")








There appeared on behalf of the Company:

B. E. Wood – General Chairman, BLE, Halifax

R. Lebel – General Chairperson, UTU, Quebec


And on behalf of the Union:

B. E. Wood – General Chairman, BLE, Halifax

R. Lebel – General Chairperson, UTU, Quebec


A hearing in this matter was held in Montreal on Monday, 13 September 1993.


This arbitration concerns a dispute between the parties with respect to measures to minimize the adverse impacts of the sale of a portion of the Company’s railway line. The Dispute and Joint Statement of Issue, filed at the hearing, as amended by agreement of the parties, read as follows :


The Company serviced notices as required by Article 79 of Agreement 4.16 and Article 34 of Agreement 4.2 on the United Transportation Union ; and notice as required by Article 78 of Agreement 1.1 on the Brotherhood of Locomotive Engineers on 30 March 1993 indicating its intentions to abolish all positions of all employees covered by Agreements 4.16, 4.2 and 1.1 on the Truro to Sydney rail line.


In accordance with the provisions of Article 79 of Agreement 4.16, Article 34 of Agreement 4.2 and Article 78 of Agreement 1.1, negotiations intended to minimize the adverse effects on employees were held in Moncton, N.B., from 18 to 21 May 1993 inclusive and from 22 to 25 June 1993 inclusive.

The parties were unable to reach agreement on measures intended to alleviate or eliminate the adverse effects. A great number of issues remained unresolved and these were brought before a Board of Review as provided by Article 79.1(c) of Agreement 4.16, Article 34.1(c) of Agreement 4.2 and Article 78.3 of Agreement 1.1. 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) of Agreement 4.16, Article 34.1(d) of Agreement 4.2 and Article 78.4 of Agreement 1.1.

The issues in dispute are :



for : Vice-President, Atlantic Region General Chairman


General Chairperson

The facts giving rise to this matter are not contentious. Under the terms of articles 79, 78 and 34 of collective agreements 4.16, 1.1 and 4.2 respectively, the parties are to negotiate measures intended to minimize adverse effects resulting from a material change in operations. On March 30, 1993, the Company served notices pursuant to the collective agreements on the Brotherhood of Locomotive Engineers and the United Transportation Union advising of its intention to sell the Hopewell and Sydney Subdivisions, and all branch lines attached to them. Negotiations for the sale were successfully completed and regulatory approval of the National Transportation Agency was obtained. In the result, the subdivisions, which extend between Truro and Sydney, Nova Scotia are being transferred to a private shortline carrier, effective October 2, 1993.

This change results in the loss of the positions of approximately 110 unionized employees represented by some eight trade unions, and the closing of the Company’s terminals and facilities at all points on the Truro to Sydney rail line, including Sydney, Port Hawkesbury and Stellarton. The Company successfully negotiated settlements will all unions but the two which are parties to these proceedings, under the terms of Article 8 of their Employment Security and Income Maintenance Agreement. As the parties before the Arbitrator were unable to negotiate their own terms, and referral to mediation before a board of review was unsuccessful, the issues in dispute, as described in the Joint Statement of Issue, have been progressed to arbitration under the terms of the respective collective agreements for final and binding determination.

During the course of the hearing it became apparent that certain of the issues which are listed in the Joint Statement of Issue have in fact been resolved by agreement of the parties. They are :

In addition, although it is not listed among the issues in dispute, the parties also reached agreement with respect to the access of employees to counselling through programs conducted by the Company. Additionally, at the hearing it became apparent that the position of the Council on flow-back provisions, which would involve the right of employees who undertake employment with the shortline private operator to return to work with the Company within a defined period, was operating as a disincentive to employment opportunities for the members of the two unions. From a practical standpoint, the new shortline operator indicated that it was not prepared to undertake the uncertainty and potential turnover that employees with flow back rights would represent. It is not prepared to hire former CN employees who worked on the Truro to Sydney line and who could invoke the right to return to employment with CN. In the result, to facilitate the access to employment for those employees who might wish to opt to work for the new company, the unions agreed to remove their demand with respect to flow back provisions from the table.

This dispute involves some fifty-four employees previously assigned as locomotive engineers, conductors and trainmen on the territory in question. By way of background it should be noted that the Truro to Sydney rail line constitutes two seniority districts in each of the unions. As a result of an agreement to consolidate all seniority districts in the Atlantic Region into the 19th District, all employees in the Region were assigned a seniority date of September 19, 1991, subject to homestead rights in their district of origin, in accordance with their original seniority. In the result, the employees displaced by the sale of the Truro to Sydney rail line will exercise rights elsewhere on the Atlantic Region as junior employees.

By way of further background it should be noted that none of the employees adversely affected by the transfer of the rail line is necessarily confronted with unemployment. All of the employees concerned have the right to continued full employment, as a result of the terms of the conductor-only agreement negotiated in respect of Atlantic Canada. Under that agreement, as long as they are willing to relocate to available work, the employees are guaranteed, at a minimum, to be kept on a furlough board with full maintenance of earnings.

An issue which separates the parties, and which does not appear as a discrete topic within the Joint Statement of Issue, but which, it is agreed is to be resolved by the Arbitrator, is the right of the Company to reassign employees who will be displaced by the sale of the territory. The Company proposes that ten employees should be reassigned to Saint John, six to Edmunston and the balance to be assigned to Halifax and Moncton on a two to one ratio, respectively. The Council questions the Company’s argument with respect to manpower shortages at Saint John and Edmunston, and stresses that relocation to Edmunston could be a hardship to employees who are not bilingual.

The Arbitrator is not persuaded by the argument of the Council on this issue. In my view it is appropriate for the Company to make a determination as to its manpower needs in the various locations in the Atlantic Region, and to assign employees to regular positions or to furlough boards accordingly. On this issue, therefore, the Arbitrator awards the position of the Company, subject to the condition that positions at any location should first be filled on a voluntary basis, and failing any volunteer, should be filled by forcing employees to the positions or furlough boards in reverse order of seniority.

With respect to the inclusion of a dental plan for employees opting for early retirement, the Council’s demand for a deferred separation plan, bridging to deferred separation, severance payment, dislocation allowance, layoff benefits and relocation benefits, the Arbitrator cannot sustain the positions advanced by the Council. Under the terms of the collective agreements the employees have generous protections in respect of each of these heads of compensation, with the possible exception of "dislocation allowance" which is a previously unknown concept. For employees who elect to retire on the sale of the rail line the Company has offered the negotiated optional lump sum severance payment found in article 78.12 of agreement 1.1, for employees eligible to retire under that ageement and collective agreements 4.16 and 4.2. It is not disputed that the provisions of that article provide a lump sum payment of up to $75,000.00, with continued life insurance and extended health care benefits to age 65. Having regard to the settlement accepted by the other unions, the Arbitrator can see no persuasive basis for adding dental benefits to the separation allowance package. In this regard I deem it significant that the relatively generous severance provisions of article 78.12 of agreement 1.1 were recently negotiated. I accept the suggestion of the Company that this is not the forum for making bargaining gains not achieved at the national table. Nor can I see any basis for a differential treatment of the running trades employees as compared with the non-operating and shopcraft employees who accepted the retirement allowance package extended by the Company.

The Arbitrator cannot see any compelling basis for the granting of a deferred separation plan, as was accorded under the freight crew consist agreement. In that case substantial productivity gains were made by the Company by the reduction of crew consists, with deferred separation offered as an incentive to reduce the complement of employees. The conditions in the case at hand are substantially different. Given that employees have the job security protection of the conductor-only agreement, the need for a deferred separation plan is far less obvious. The same, in my opinion, can be said of the Council’s request for "bridging" employees who are 45 years of age or over until they attain age 50 and become entitled to go on deferred separation. The Council’s requests in respect of both deferred separation and bridging are, therefore, declined.

With respect to severance payment, the Council seeks a lump sum severance payment of $120,000.00. The Company is willing to accord to employees opting to sever their service an optional lump sum severance payment which, based on cumulative compensated service, with the inclusion of a $15,000.00 lump sum for making application within a ninety day period, would range from $65,000.00 to $75,000.00. The optional lump sum already referred to as arising from the terms of article 78.12 is, in my opinion, well in excess of industrial norms and is appropriate in the circumstances. I can see no basis for the larger amount requested by the Council and their demand in that regard is therefore declined.

The Arbitrator also rejects the Council’s demand for a dislocation allowance, which would involve the payment of $75,000.00 per job eliminated. The rationale for that request is less than clear to the Arbitrator, particularly in light of the job security options available to the employees by virtue of the conductor-only agreement. As the Company points out, if this request were granted, an employee eligible to retire could receive $75,000.00 for a separation allowance, extended health care, life insurance as well as a $75,000.00 dislocation allowance for a total separation allowance of approximately $165,000.00. I know of no pattern within contemporary industrial relations norms which would justify such a settlement.

The Council further seeks the payment of layoff benefits, modeled on the layoff benefits provided for the Newfoundland Special Agreement. It appears that these consisted of 80% of an employee’s basic weekly rate of pay for a defined period of time. The Arbitrator fails to see the applicability of that provision to the particular circumstances of the employees on the Truro to Sydney line. Unlike the employees of the Company in Newfoundland, who had no other location in which they could exercise their seniority, the employees who are the subject of this dispute have access to alternate employment in the Atlantic Region, within a framework of substantial job security. It is, in my view, unrealistic and inappropriate to transfer the concept of layoff benefits to a group of employees who are not, in fact, compelled to take layoff.

The Arbitrator is also satisfied that the position of the Company is preferable with respect to the issue of relocation benefits. The collective agreements contain elaborate and relatively generous provision for items such as door to door moving expenses, reimbursement for a loss sustained on a sale of a home and the payment of real estate and legal fees for employees required to sell their home in furtherance of relocation. The Arbitrator can see no reason to make a lump sum available to all employees, as an option to the actual relocation expenses provided for in the collective agreement. If the purpose is to minimize the adverse effects upon employees, the provisions of the collective agreement would appear appropriate to do that. Again, it may be noted that the employees represented by the other unions affected by the sale of the line accepted to apply the relocation expenses found in their respective collective agreements, which are arguably less generous than those of the Unions in the case at hand.

With respect to maintenance of earnings, the Arbitrator is satisfied that the position offered by the Company, which is a maintenance of earnings formula similar to that contained in the conductor-only agreement, is amply generous for the purposes of the case at hand. In the practical result, the Company will bear increased cost over a longer period of time, beyond the deadlines anticipated as a result of VIA Rail changes in 1990, the reduced freight crew agreement in 1990 and the conductor-only agreement which came thereafter. In my view there is no compelling basis to pyramid maintenance of earnings protections beyond the extension which the Company has indicated it is willing to absorb.

With respect to the Council’s proposed window period for employees electing to relocate, the Arbitrator accepts that the alternative position advanced by the Company is prefereable. The Company agrees to a two month window period whereby employees are permitted a period of time after relocation to decide whether they wish to continue their employment with the Company at the new location or sever their services and elect to take the severance payment to which they would otherwise be entitled under this award. The point of difference between the parties is that in the event that an employee should elect to sever his or her employment at the expiry of the two month window period the Company maintains that it should retain the right to require another employee to relocate to fill the vacancy so created. Given the protection which the parties have agreed to with respect to a prohibition against future relocations for any individual, the Arbitrator does not see the potential for abuse or hardship in the position which the Company takes. As employees are not to be required to relocate twice within a one year period, the position advanced by the Company appears to the Arbitrator to be reasonable.

With respect to the issue of leave of absence to seek accommodations, the Arbitrator can see some justification to award more than is presently provided within the terms of the collective agreements. Given the number of employees who may be seeking relocation at the same time, and the difficulties of scheduling leaves to accommodate the employees affected, the Arbitrator awards that employees be entitled to an additional five days of leave to seek accommodation, such days to be treated in the same manner as the leave provided for under the terms of the respective collective agreements.

The Arbitrator is also satisfied that the demand of the Council with respect to recall rights to the former seniority districts or territories made by the Council is not inappropriate. What the bargaining agent seeks to gain for its members is a first right to return to work on the Truro to Sydney line in the event that the territory should, in the future, revert to the Company. This might occur, presumably, if the private short line operator should be unsuccessful in its operations. The Council’s request appears to the Arbitrator to place no significant cost upon the Company, and is a demand which can be reasonably accommodated without undue hardship. By the same token, the priority of recall rights to the former seniority district is in keeping with the homestead rights freely negotiated between the parties upon the reorganization of the seniority districts in Atlantic Canada. In this respect, therefore, the request of the Council is awarded.

One final aspect of the dispute concerns the imminent abandonment of the Oxford Subdivision. For the purposes of the instant award, having regard to the agreement of the parties expressed at the hearing, the Arbitrator directs that the employees who are retained to work on the Oxford Subdivision from Stellarton (apparently three in number) will be entitled to exercise all of the options to which they are entitled under this award, including any displacement options, on paper at the time of the transfer of the line. They are to execute their options at such time as the Oxford Subdivision is abandoned, in accordance with present plans. However, should the Oxford Subdivision not be abandoned by January 1, 1994 the employees in question shall not be treated as subject to this award, and shall revert to all rights which they enjoy under the collective agreements.

The Arbitrator retains jurisdiction in the event of any dispute between the parties regarding the interpretation or implementation of this award.

SIGNED at Toronto, this 23rd day of September 1993.