BETWEEN:

(the "Company")

AND

(the "Brotherhood")

SOLE ARBITRATOR: Harvey Frumkin

There appeared on behalf of the Company:

A. E. Heft – Manager, Labour Relations, Toronto

D. W. Coughlin – Manager, Labour Relations, Montreal

J. Glower – Acting Senior Operations Officer, Crew Management, Toronto

B. Maskerine – District Superintendent, Toronto

And on behalf of the Union:

Cliff Hamilton – General Chairman, Toronto

Dale Corfield – Local Chairman, Toronto

Ted Chodkiewicz – Vice Local Chairman, Toronto

A hearing in this matter was held at Montreal on August 29, l994.

This is a grievance which seeks an order requiring the Company to implement measures designed to minimize the adverse effects on locomotive engineers associated with introduction of a new Process Control System at the MacMillan Hump Yard in Toronto which resulted in the direct abolition of eight locomotive engineer positions. The provisions of the Collective Agreement invoked in support of the request are to be found in Articles 78.l and 78.4(g) of Collective Agreement 1.1, which read as follows:

The parties have been unable to agree upon the Joint Statement of Issue, so that the proper approach for the Arbitrator will be to outline the background facts out of which the grievance arises and from there to set out the various measures sought by the Brotherhood and then to deal with each of these in their turn.

On July 30, l993, the Company served notice to the Brotherhood, pursuant to Article 78.l of Agreement 1.1, of its intention to implement the Process Control System at the MacMillan Hump Yard, with effect as and from January 30, l994. The Process Control System is an automated system for movement of locomotives in the Hump Yard by remote control. Through the technology duties and functions previously performed by a locomotive engineer, a yard foreman and a yard helper can now be performed by a single employee utilizing a locomotive control system referred to at the hearing as a "belt pack".

In addition to the eight positions of locomotive engineer that would be abolished as a result of introduction of the Process Control System, approximately twenty-four other positions falling under the jurisdiction of the United Transportation Union would suffer a similar fate. As part of the process eight new positions of Yard Operation Employee to be assigned to members of the United Transportation Union would be created but, in all events, the loss to the Brotherhood of eight locomotive engineer positions at the MacMillan Hump Yard subject to abolition would remain to be addressed.

Thus, in keeping with the exigencies of Article 78.l of Agreement 1.1, the Company on July 30, l993, forwarded to the Brotherhood the following letter:

Article 78.l of Agreement 1.1, in addition to requiring the Company to provide the Brotherhood with l80 days of advance notice of introduction of new technology having a significantly adverse effect on locomotive engineers, also requires it to negotiate and adopt measures designed to minimize such adverse effects. Where agreement is not possible, Agreement 1.1 goes on to confer upon an arbitrator jurisdiction to consider and impose measures designed to minimize the adverse effects of the proposed changes upon locomotive engineers affected. In this latter regard the only limitation is that the jurisdiction of the arbitrator will be confined to the issues placed before him and shall not include an authority to impose changes in rates of pay. The one further directive confining the arbitrator's jurisdiction is contained in Addendum 56B of Agreement 1.1, which provides that benefits to locomotive engineers affected by technology changes will not be less than the levels provided for in the VIA Special Agreements where early retirement or other special benefits are adopted as appropriate measures to deal with any particular situation.

It would appear to the Arbitrator that subject to these limitations the range of measures which he can consider and impose to minimize adverse impacts on employees will be all encompassing, extending even to measures such as retirement opportunities, deferred separation, severance or lump sum payments, retirement credits, as well as the host of factors that make up an employee's compensation and benefit package and of which he may be deprived to a greater or lesser extent by reason of the introduction of the changes. The Arbitrator would cite as authority for the correctness of this observation a passage taken from the decision of Canadian National Railway Company and United Transportation Union, June 22, l993, Michael G. Picher, Arbitrator, where in response to a Company argument that the range of issues to be arbitrated under the provision was limited to matters of wages and benefits associated with the abolished position, the arbitrator had this to say:

With due regard to this latitude extended him under the provisions of Article 78 of Agreement 1.1, it will now be for the Arbitrator to consider the various demands of the Brotherhood in light of the adverse impact upon affected locomotive engineers resulting from implementation of the Process Control System at the MacMillan Hump Yard. These demands are set out in the Brotherhood's Statement of Issue, as follows:

There is no evidence before the Arbitrator that the abolition of eight positions of locomotive engineers will result in lack of work opportunities for these employees. The affected employees will be assigned to Spareboards in the Toronto area. There is every indication that there are manpower shortages across this region. All that can be said is that there will be displacements as a result of the movement of personnel which will inevitably result from the abolitions and the exercise by the locomotive engineers affected of their rights. But, dislocations of this nature can be protected against by measures other than retirement or severance incentives.

Retirement or severance incentives will, and should, be resorted to to offset adverse effects upon employees due to introduction of technological change where such adverse effects take the form of wholesale reduction of personnel resulting in chronic employee surpluses and diminished work opportunities for these employees. The mechanism of retirement and severance incentives to address adverse effects must be viewed as an extreme measure and should not be resorted to where other measures are available to address the adverse effects upon an employee brought upon through change. On this point the Arbitrator would agree fully with the view expressed by Arbitrator Picher in a number of his decisions where he refused to impose upon the Company a requirement that it grant early retirement or a severance incentive to employees whose positions had been abolished through implementation of changes in the nature of those envisaged in Article 78 of Agreement 1.1, but who would not thereby suffer from decreased work opportunities that might operate to render them, for the most part, inactive. Thus, in his decision of Canadian National Railway Company and United Transportation Union, decision of March 8, l993, Arbitrator Picher reasons:

And again, in Canadian National Railway Company and United Transportation Union, decision of June 22, l993 (supra):

It is no answer for the Brotherhood to say that there is no shortage of locomotive engineers in the Greater Toronto area because there exists no "deemed" shortage in terms of Article 58.2 of Agreement 1.1 since all available locomotive engineers assigned in that area have not been promoted to the locomotive engineers working list. The issue, rather, is work opportunities and whether the locomotive engineers affected will, on a chronic basis, be without work. The evidence strongly suggests that they will not.

Nor is it any answer for the Brotherhood to say that the shortages of employees to which the Company is referring are within another bargaining unit, the United Transportation Union, or that such shortages have resulted from the fact that the Company's hiring practices have changed dramatically in the last several years in that there has been a significant decrease in the numbers of employees hired. Again, the issue is availability of work opportunities for the locomotive engineers affected.

The task of the Arbitrator is to identify measures necessary to minimize adverse effects of proposed changes and it is upon such adverse effects and such employees that the Arbitrator must focus. That work opportunities that are available and will provide work for the affected employees result from shortages of employees in other bargaining units, attrition or reduction in the amount of hirings, would matter little. The all important consideration is whether the affected locomotive engineers will remain without work. As Arbitrator Picher explains in his decision of Canadian National Railway and Brotherhood of Locomotive Engineers, March 8, l993:

On the whole, therefore, the Arbitrator can see no basis for imposing measures under the heading of retirement or severance incentives in the nature of those requested under Item #l of the Brotherhood's claim.

The Company has offered to maintain the basic rates of eligible locomotive engineers affected. While the proposal offered by the Company establishes very precise eligibility requirements, these do not appear to be an issue in the present case.

As for the Brotherhood demand, it must be noted that the affected employees are yard employees and as such enjoy established basic weekly rates of pay. This basic weekly rate is calculated using a standard formula based on the individual's daily rate of pay, including any applicable shift differential.

The only variation to which the affected employees will be subject is that, whereas presently there is incorporated within their eight hour daily work shift two ten minute periods for preparation and inspection, the affected employees who will be assigned to positions within the United Transportation Union will only benefit from corresponding periods of ten minutes and five minutes respectively. The adverse effect identified, therefore, is the five minute differential each day.

The Company, however, at the hearing indicated its preparedness to accede to the Brotherhood's demand to the extent of five minutes of paid time per work shift in the case of employees so affected. The Company's offer in this regard, which the Arbitrator considers appropriate in the circumstances, is therefore adopted as part of the award.

So too does the Arbitrator consider the position put forward by the Company in paragraph 33 of its Brief to deal with the possibility of the so-called "ripple effect" to be reasonable, where it states:

The Arbitrator accordingly adopts the proposal for maintenance of earnings presented by the Company in Appendix "7" of its Brief as part of the award. There is nothing unusual in the proposal which has been applied in the past in similar situations involving the same bargaining unit. In the final analysis, affected employees, including those affected as a result of the "ripple effect" will see their basic weekly rates maintained, a factor which will go a long way to addressing and compensating for the concerns raised by the Brotherhood.

Those concerns of the Brotherhood which the Company's proposal may not adequately address are difficult, if not impossible, to quantify. While it may be true that the proposal does not take into account the realities of scheduling on the railway or the intricacies and consequences of bidding on runs based on seniority, it is difficult to imagine how concerns of such a nature might be adequately addressed. For one thing, the rights and priorities that may be compromised are, to an extent, subjective and depend very much upon unpredictable choices and situations that will present themselves from time to time. Wherever there is movement of personnel there will be consequences, some good and some bad. But where these are not susceptible of precise definition, they can hardly be addressed with any degree of precision. Article 78.l of Agreement 1.1 would seem to acknowledge as much when it describes its design as being intended to minimize significantly adverse effects.

The Company's proposal is set out in paragraph 36 of its Brief, as follows:

The request of the Brotherhood, on the other hand, is imprecise so that the Arbitrator cannot say that the Company's proposal is unreasonable or that it does not go a long way toward satisfying the Brotherhood's demand under this heading. In point of fact, it was the Company's contention that its proposal satisfies such demand. It will accordingly be adopted as part of the award.

The Company's proposal is contained in paragraph 37 of its Brief, which is to the following effect:

In effect, the Company is offering to provide relocation benefits to all affected employees who must relocate. In such cases Agreement 1.1, for its part, does provide for the modalities that will find application in cases of relocation. There is nothing to suggest that these provisions do not adequately address adverse effects of material changes implemented at the MacMillan Hump Yard that may result from relocation of affected employees. The Company's proposal, therefore, is adopted as part of the award under this heading.

DISPUTE PROCEDURE

The Company's proposal upon the matter of Dispute Procedure is contained in paragraph 40 of its Brief, which reads as follows:

The Brotherhood does not seem to take issue with the proposal which provides for access to a grievance and arbitration procedure to resolve disputes in relation to implementation and application of the award, as has been requested by the Brotherhood. The Company's proposal, therefore, is adopted as part of the award.

LETTER OF COMMITMENT

The Company's proposal is set out in paragraph 39 of its Brief, as follows:

In effect, the Brotherhood is insisting that in the case of belt pack failure, that is, where the Process Control System is rendered inoperative, that manual operation of a locomotive that may be required as a consequence be assigned to locomotive engineers, members of the Brotherhood. The Company's proposal accedes to such a request, so that the Brotherhood demand under this heading would appear to have been satisfied and the proposal of the Company is accordingly adopted as part of the award.

The Arbitrator believes that it has addressed above all of the items of claim set out in the Brotherhood's Statement of Issue. It will, nonetheless, be appropriate to comment upon a further item raised by the Brotherhood in its Brief wherein it claims a right to share in productivity gains brought on by introduction of the Process Control System at the MacMillan Hump Yard.

It may well be, as the Brotherhood pretends, that there will be productivity gains as a result of the implementation of the Process Control System and that these gains may even be substantial. The Arbitrator, however, would have no jurisdiction to require that these gains be shared. As the Arbitrator has stated, his task is to address and impose measures to offset adverse effects that will result from the change to the extent that there are adverse effects and that such effects require addressing. The productivity gains resulting from technological change will be of assistance to the Company in meeting its obligations to make provision in the manner envisaged in Article 78.l of Agreement 1.1. But to say that such productivity gains are to be shared or to be taken into account beyond what Agreement 1.1 at Article 78.l requires, is quite another thing. To be sure, savings, as the Brotherhood contends, should go toward protecting employees directly affected by technological changes introduced, but only to the extent that the Company under the applicable Collective Agreement is required to provide such protection.

The Arbitrator retains jurisdiction for purposes of adjudicating upon any dispute which may arise between the parties with respect to the interpretation or implementation of the present award.

MONTREAL, September 23rd, 1994

HARVEY FRUMKIN, Arbitrator

DATED AT TORONTO, this 29th day of May, 1981.