IN THE MATTER OF AN ARBITRATION

BETWEEN :

VIA RAIL CANADA INC.

(the "Corporation")

- and -

BROTHERHOOD OF LOCOMOTIVE ENGINEERS

(the "Union")

GRIEVANCE RE APPLICATION OF SPECIAL AGREEMENT

ARBITRATOR: Michel G. Picher

APPEARING FOR

THE COMPANY: Robert Skelly - Counsel

Ken Taylor - Senior Advisor and Negotiator,

Labour Relations.

Phil Thivierge - Witness

W. Radcliffe - Observer

APPEARING FOR

THE UNION: Jim Shield - Counsel

Wayne Wright - General Chairman

Ray Lussier - Local Chairman, Div. 583

A Hearing in this matter was held in Wnnipeg on December 5, 1994.

AWARD

This matter arises for arbitration by reason of the disagreeent between the parties with respect to the application by the corporation of rights which the Union alleges were agreed pursuant to the Special Agreement made in accordance with the Railway Passenger Services Adjustment Assistance Regulations, and a notice under Article "J" of the Special Agreement of June 4, 1987. The Article "J" notice was given to the Union on October 11, 1989, and concerned substantial reduction in the Corporationís passenger service which would adversely impact members of the Union effective January 15, 1990. The claim before the Arbitrator is for the payment of "equalization of miles" under what the Union maintains was an understanding between the parties or, alternatively, which it claims by estoppel.

The background to the dispute is reflected in the ex parte Statement of Dispute and Issue filed at the hearing by the brotherhood which reads as follows:

The dispute

The equalization of miles to 7th Seniority District Locomotive Engineers as a result of 6th Seniority District Locomotive Engineers operating over recognized 7th Seniority District Territoty between Sioux Lookout and Armstrong, Ontario.

Brotherhoodís Statement of Issue

There 252 rail miles, or 282 hight miles, as the case may be, between Winnipeg and Sioux Lookout, (REDDITT Subdivision). Since January 15, 1990, Locomotive Engineers home stationed in Winnipeg have operated and continue to operate the trains over this territory.

There are 139 miles between Sioux Lookout and Armstrong (Allanwater Subdivision), which is recognized as 7th Seniority District Territory and over which the operatio of trains belongs to 7th Seniority District home stationed Locomotive Engineers.

Prior to the January 15,1990, 7th Seniority District Locomotive Engineers home stationed at Sioux Lookout operated the trains over this Seniority. As a result of operational changes affective January 15, 1990, the Locomotive Engineers at Sioux Lookout were offered the benefits of the Special Agreement and Sioux Lookout was closed as a home station.

Since January 15, 1990, 6th Seniority District Locomotive Engineers home stationed in Hornepayne operate over three (3) Subdivisions, including the Allanwater Subdivision between Sioux Lookout and Armstrong and which is 7th Seniority District Territory, to Sioux Lookout.

To equalize the loss of miles to 7th Seniority District Locomotive Engineers over the Allanwater Subdivision, it was agreed the Corporation would compensate the Locomotive Engineers home stationed at Winnipeg and oprating to Sioux Lookout, 139 miles each direction, on each and every trip, whether working or deadheading.

Therefore, the Winnipeg Locomotive Engineers have been compensated 252 miles, plus an additional 139 miles (total 391 miles) or 282 miles plus an additional 139 miles (total 421 miles) if deadheaded by highway, between Winnipeg and Sioux Lookout, since January 15, 1990.

Effective February 11, 1994, the Corporation chose to no longer equalize the &th Seniority District Locomotive Engineers the 139 miles operated over their Territory by 6th Seniority District Locomotive Engineers.

It is the Brotherhoodís position that the 7th Seniority District Locomotive Engineers are entitled to the equalization of miles worked by 6th Seniority District Locomotive Engineers on the Allanwater Subdivision between Armstrong and Sioux Lookout.

The corporation does not agree with the Brotherhood.

The facts material to the grievance are not in substantial dispute. Locomotive engineers employed by the Corporation on Western Lines were, at the times material to the origins of dispute, governed by the terms of Collective Agreement 1.2 between the Canadian National Railway and the Brotherhood. Article 57 of the Collective greement makes provisions for the designation of home stations and provides, in part, for work jurisdiction for home stationed locomotive engineers over defined territories. It does not appear disputed that the establishment of home stations and the equitable distribution of work territories for locomotive engineers was developed in furtherance of an agreement between the Canadian National Raiilway and the Brotherhood of Locomotive Engineers and Brotherhood of Locomotive Firemen and Enginemen executed in May of 1926. Among other things, that agreement established the Seniority Districts, including the Sixth and Seventh seniority districts referred to above.

Before January 15, 1990, trains operating between Sioux Lookout and Armstrong were operated by Locomotive engineers home stationed at Sioux Lookout, whitin the Seventh Seniority District. Locomotive Engineers home stationed at Winnipeg, also part of the Sevent Seniority District, operated from Winnipeg to Sioux Lookout. Engineers out of Hornpayne, on the Sixth Seniority District, then operated between Hornpayne and Armstrong. With the advent of the change in operations on January 15, 1990 and the closing of Sioux Lookout as a home station, the Corporation assigned engineers from the Sixth Seniority District, home terminalled at Honpayne, to operate over the entire territory between Hornpayne and Sioux Lookout, which included the Allanwater Subdivision. In other words, from that date forward, trains operating between Armstrong and Sioux Lookout, previously operated by locomotive engineers from the Seventh Seniority District, have been operated by locomotive engineers from the Sixth Seniority District. Lines belonging to the Seventh Seniority District are defined in Article 56.2 of Collective Agreement 1.2, which provides as follows:

56.2 Seventh Seniority District, all line, branches and terminals on the Canadian National Railwas (exept the Duluth, Winnipeg and Pacific) between Thunder Bay, Armstrong, Churchill, Vermilion, Wainwright, Hemaruka, Kindersley, and Eatonia, including the Yards at Thunder Bay, Churchill, Kindersley and Eatonia, but excluding the Yards at Armsrong, Vermilion and Wainwright.

As a result of the change in operations, having regard to the language of article 56.2 of Collective Agreement 1.2, locomotive engineers of the Sixth Seniority District were assigned to work over territory defined as part of the lines belonging to the Seventh Seniority District. It is also common ground that the closing of the Sioux Lookout Terminal caused the elimination of two permanent locomotive engineers positions. It appears that one of the individuals in question transferred to CN while the other took retirement benefits, and it is not disputed that the minimizeing of membersí adverse impacts as regards those individuals was provided for in the VIA Special Agreement.

The Article "J" triggered a process of consultation and negotiation between the Corporation and the representatives of the running trades unions in the various regions. It appears that system-wide the Corporation obtained agreement from representatives of the United Transportation Union, representing conductors and brakepersons, and that it also reached agreement with representatives of the Brotherhood of Locomotive Engineers on all regions save save the Western Lines. The General Chairman for that region took the position that, although the Article "J" notice under the terms of the Special Agreement was appropriate as the changes were government initiated, to the extent that the Corporationís planned changes involved changes in home stations and the introduction of run-throughs, the Corporation was also under the obligation to provide notice under the material change provisions of Article 89.1 of the collective agreement. That matter was referred to this arbitrator, by the agreement of the parties. The position of the Brotherhood was rejected in an award dated December 21, 1989.

Prior to the arbitration of that issue in late 1989, the Corporation and the Unionís General Chairman sought to negotiate terms to minimize the adverse impact of changes being implemented, including the closure of Sioux Lookout as a home terminal for locomotive engineers. It is common ground that one of the offers made by the Company to the Union, as reflected in written proposals dated November 29, 1989, was the offer to pay additional mileage to Armstrong for Winnipeg crews operating between Winnipeg and Sioux Lookout. The propased payment, characterized by the Corporation as "mileage equalization" was to compensate the Winnipeg crews the road miles from Winnipeg to Armstrong, although their run would terminate at Sioux Lookout. The excerpt from the Corporationís proposal faxed to the Union reads, in part, as follow:

Hornpayne Crews to Sioux Lookout:

Closure of Sioux as Home Terminal

2 jobs lost.

To minimize the adverse effect (mileage equalization) Via is prepare (sic) to pay the road miles Winnipeg to Armstrong but the crew will get off at Sioux.

There is no indication in the material before the Arbitrator that that aspect of the Corporationís offer was unacceptable to the Brotherhood or that it was ever specifically rejected or made the subject of a counter proposal on mileage equalization. Correspondence between the parties at the time, however, reflects that there were other issues upon which they could not agree, one of which involved the payment of a lump sum amount to employees as part of the terms of a final settlement. It appears that the Corporation was offering a $20,000 payment to the employees in question while the Unionís General Chairman sought a $25,000 payment. In the result, there was no overall agreement between the parties when they proceded before the Arbitrator on the issue of the Unionís claim that notice was also due to the Union under the material change provision of Article 89 of the collective agreement. As noted above, on December 21, 1989, the Corporation executed a letter of understanding with the Union agreeing, in part, to pay the UTU crew members rail miles between Winnipeg and Armstrong for runs between Winnipeg and Sioux Lookout. However, no agreement in the form of an equivalent letter of understanding was ever executed with the Brotherhood.

At the 1989 arbitration, the Corporationís brief to the arbitrator contained an addendum dated December 15, 1989 which indicated that agreement had been reached with the UTU as well as with the General Chairmen of the Brotherhood Locomotive Engineers, save on the Western Lines. Included is the following statement:

Attached is an up-date summary of the changes in operations to be implemented January 15, 1990. These changes came about as a result of a number of discussions between Corporation representative (sic) and Union representatives.

Attached to the Addendum is a breakdown of services no longer to operate and those which would operate following the implementation of changes effective January 15, 1990. With respect to crewing, the Addendum states, in part:

WINNIPEG - 14 LOCOMOTIVE ENGINEERS TO OPERATE:

Winnipeg - Sioux Lookout - Monday, Wednesday, Saturday

(Paid Road Miles to Armstrong) - Deadhead Wednesday

The material before the arbitrator confifms that, from the time of the introduction of the changes in its operations on January 15, 1990, the Corporation implemented the changes outlined before the arbitrator, including the compensation of locomotive engineers operating from Winnipeg to Sioux Lookout on the basis of mileage to Armstrong. That practice continued, without apparent incident, for some four years until February 8, 1994.

The communications between the parties in respect of the unravelling of the arrangement for the payment of meleage to Armstrong is itself instructive to the merits of this dispute. It appears that in or about Octobre of 1993 the Union grieved the method of calculating deadhead miles between Winnipeg and Sioux Lookout. Although the detail of the grievance is not before the arbitrator, it appears that there was some dispute as to whether miles should be paid on the basis of rail distance or highway miles between Winnipeg and Sioux Lookout. On January 31, 1994, the Corporationís Director of Labour Relations addressed the following communication to the Unionís General Chairman:

Dear Mr. Wright:

This is further to your letter dated October 27, 1993, concerning the payment for employees from Winnipeg to Armstrong.

We have investigated this matter and determined the following.

The original intent of the arrangement concerning compensation to Winnipeg based employees working to Sioux Lookout, was to continue paying these employees as if they were still working Winnipeg to Armstrong, when in fact the Eastern Lines employees are now working over this recognized Western territory.

The rail miles from Winnipeg to Armstrong total 391 . The rail miles froom Winnipeg to Sioux Lookout total 252. For some time, employees have been deadheading from Winnipeg to Dryden by bus, and from Dryden to Sioux Lookout by VIA van. The road miles add up to approximately 30 miles more than the rail distance from Winnipeg to Sioux Lookout.

As a result, these employees were erroneously paid all road miles from Winnipeg to Sioux Lookout, plus rail miles from Sioux Lookout to Armstrong, which totalled 421.

However, this was contrary to the original intent of the arrangement, in which the Corporation had agreed that it would consider Armstrong as an Away From Home Terminal and continue to pay rail miles from Winnipeg to Armstrong, even though the employees only worked to Sioux Lookout.

There were occasions as described above, where due to local arrangements, the road miles from Winnipeg to Sioux Lookout were greater than the rail miles from Winnipeg to Sioux Lookout and these excess miles were paid when they should not have been. The rail miles from Winnipeg to Armstrong weresignificantly greater than the road miles when deadheading from Winnipeg to Sioux Lookout.

 

When we discovered our mistake and realized the employees were being over paid and thus not paid as originally intended, we simply corrected this error. The Corporation did not make retroactive deductions, although it would have been within our rights to do so. Instead, we chose not to penalize the employees for the error, and simply made the change effective the date of our discovery.

Furthermore, it should be noted that the agreement the Corporation has for this particular arrangement is with the UTU, and not with the BLE. For the Locomotive Engineers there exists no such agreement, we are only required to pay rail miles from Winnipeg to Sioux Lookout when employees work the run, and road miles Winnipeg to Sioux Lookout when employees deadhead, as provided as provided in the Collective Agreement.

As a consequence of our recent discoveries, we are presently conducting an internal investigation to determine what our intentions should be.

In light of the foregoing, we must respectfully decline this grievance.

Your truly,

"C.C. Muggeridge"

Department Director,

Labour Relations and

Human Resources Services

(emphasis added)

 

Shortly thereafter, on February 8, 1994, the Corporation issued the following communication to the Unionís Local Chairman at Winnipeg:

Dear Sir:

RE: PAY MILES TO SIOUX LOOKOUT

During recent examinations of the road miles payed to Locomotive Engineers operating between Winnipeg and Sioux Lookout, we have discovered that there is no contractual basis on which to claim any payment in excess of the miles worked.

Please be advised that we are undertaking to corect this error.

Effective immediatly, payment for trips between Sioux Lookout and Winnipeg will be based on the actual rail miles when working (252) and actual miles travelled when deadheading (282 under current operation).

Notices are being prepared and posted for the information of the crews.

"L.G. Iles"

Transportation Officer

Western Services

As reflected in the Brotherhoodís Statement of Issue above, the adjustment implemented by the Corporation in the reversal of its practice, affective February 8, 1994, had a substantial impact on the locomotive engineers home terminalled at Winnipeg and assigned to operate to Sioux Lookout, occasioning as it did, a substantial reduction in their wages.

Counsel for the Union advances a two-fold position. Firstly, he submits that the communication between the Union and the Corporation at the time immediately prior to the implementation of the reduction in service on January 15, 1990 constitutes an understanding or agreement between them with respect to the equalization of miles issue, and the corresponding compensation of locomotive engineers of the Seventh Seniority District home terminalled at Winnipeg. He submits that the understanding between the parties was reached pursuant to the negotiations which followed the Article "J" notice under the Special Agreement and that the decision of the Corporation to terminate the practice of paying mileage between Winnipeg and Armstrong on February 8, 1994 constitutes a violation of the partiesí agreement under the Special Agreement. Counsel for the Union submits that there is ample evidence, in writing, of the understanding between the parties. In this regard, he points primarily to the addendum presented to the arbitrator by the Corporation at the arbitration hearing held in Montreal on December 18, 1989. While he acknowledges that the parties never executed a formal Memorandum of Agreement as, for example, was done with the United Transportation Union, he submits that is so merely because the Brotherhoodís General Chairman refused to accept the monetary affer of lump sum compensation for employees adversely affected then being made by the Corporation, in favour of a higher amount being proposed by the Union. Counsel submits that the issue of equalization of miles was, at all times, agreed both in principle and in practice, as evidenced by the statements and actions of the Corporation over a period of four years.

In support of his position, counsel refers the arbitrator to a letter from the Corporationís Director of Labour Relations to the Unionís General Chairman Kipp dated January 13, 1992, which reflects, in part, mileage payments between Winnipeg and Sioux Lookout to include the payment of mileage to Armstrong. He further points to correspondence from the Corporation in relation to a proposed Mile Chart System of pay introduced in 1993 on a trial basis, which preserved the equalization formula, as reflected in letters from the Corporationís Manager of Transportation to the Unionís General Chairman dated July 16 and October 12, 1993. Finally, counsel points to a letter dated October 13, 1993 to the Unionís General Chairman from Mr. D.D. Davidson, the Regional Director of Transportation for the Corporation, concerning the issue of whether the equalization payment to Armstrong should be on the basis of rail miles or highway miles.

That reads, in part:

When the present assignments were established, it was agreed that the Corporation would pay Winnipeg-based employees the mileage between Winnipeg and Armstrong so as to compensate the Western Lines employees for mileage Eastern Lines employees are operating over their recognized territory. This is, in fact, done as the employees operating between Winnipeg and Sioux Lookout are paid 391 road miles, plus applicable preparatory and final allowances, even though the actual road miles between the two points is only 252. Consequently, each trip an Eastern Lines employee operates over the Western Line territory, the Winnipeg employees are compensated for the additional mileage between Sioux Lookout and Armstrong.

Winnipeg employees are deadheaded between Winnipeg and Sioux Lookout by bus and taxi, which distance is 282 highway miles. In recognizing the commitment to pay the miles between Winnipeg and Armstrong, the commitment is, in fact, 391 miles and not 421.

The original commitment was to compensate the Western Lines employees for mileage worked by Eastern Lines employees. This is done for the working trips. As a result, the preparatory time Notices being issued effective 1 November 1993 will reflect the proper applicable mileage.

(emphasis added)

Counsel for the Union submits that the above documentation reflects an understanding between the Corporation and the Union, dating from late 1989, to the effect that the assignment of road work on the Seventh Seniority District to locomotive engineers of the Sixth Seniority District would be compensated by an equalization of miles formula, whereby locomotive engineers home terminalled at Winnipeg would be paid mileage to Armstrong on runs to Sioux Lookout.

 

In the alternative, counsel for the Union submits that the doctrine of estoppel applies in the case at hand. He submits that if the arbitrator should find that the evidence does not disclose an agreement between the Corporation and the Union, that the Employer is nevertheless estopped from asserting the technical absence of a written Memorandum of Agreement, in light of its undertaking to the Brotherhood with respect to the mileage equalization formula. Pointing to the correspondence reviewed above, and emphasizing the statement made by the Corporation to the arbitrator in the form of the Addendum appended to its presentation at the hearing in December of 1989, counsel submits that there can be no doubt that the Corporation held out to the Union, and indeed to the arbitrator, that Winnipeg based locomotive engineers would be paid mileage to Armstrong on runs to Sioux Lookout as a form of compensation for the transfer of work from Seventh Seniority District Engineers to Engineers of the Sixth Seniority District. He submits that the Brotherhood proceeded in reliance on that undertaking, and on the practice pursued for some four years in furtherance of it, and did not seek to incorporate the employerís undertaking into the form of a written document, notwithstanding the renewal of the collective agreement over several renegotiations since 1989. Counsel submits that in the circumstances the elements of estoppel are made out: there was a clear representation advanced by the Corporation, for the purpose of influencing the legal relations of the parties, including the outcome of the arbitration in December of 1989, and the Brotherhood has continually renewed its collective agreement with the Corporation wihout seeking to amend the agreement to reflect the mileage equalization for Winnipeg engineers, in reliance on its understanding that the mileage equalization would be paid in consideration of the transfer of work to the Sixth Seniority District.

Counsel for the Company assert a substantially different view. He stresses that there are no provisions within the four corners of the Special Agreement upon which the Union can rely to base its submission that the parties had an agreement with respect to the equalization of miles pursuant to the special agreement. He submit that the circumstances of the locomotive engineers are to be contrasted with the situation of the members of the United Transportation Union.Counsel notes that the conductors and brakepersons represented by that bargaining agent were given the benefit of a written Memorandum of Agreement, as reflected in a letter of December 21, 1989, whereby trains running between Winnipeg and Sioux Lookout are to be Winnipeg crews compensated rail miles to and from Armstrong. Counsel submits that the terms of the letter of December 21, 1989, signed by both parties, are an enforceable agreement of the kind which does not exist in the case of the locomotive engineers. Further, he draws a factual distinction between the UTU members and the members of the Union, noting that in fact prior to the change implemented on January 15, 1990 the UTU crew members who became the beneficiaries of the agreement actually worked the miles between Sioux Lookout and Armstrong, whereas the locomotive engineers who are the subject of the dispute never did so, such work being performed by engineers previously home terminalled at Sioux Lookout. On that basis, counsel for the Corporation submits that the compensation of Winnipeg based locomotive engineers for miles between Sioux Lookout and Armstrong goes beyond minimizing the adverse impact of the change implemented, and was in the nature of a mistake from the outset, subsequently detected during the course of the October, 1993 grievance over highway miles and rail miles as a basis for payment. Counsel submits that upon becoming aware of the previous mistake, in the absence of any binding agreement, the Corporation was entitled to correct the error and cease the payment of the extra miles to the Winnipeg based locomotive engineers. In support of the assertion of its ability to correct an error, the Employer refers the arbitrator to the awards: Re Canadian General Electric Company Ltd. (Peterborough) (1949), L.A.C. (285) (Laskin); Re United Packing House Food and Allied Workers, Local 452 and Maple Leaf Mills Ltd. (1967), 19 L.A.C. 37 (Hanrahan); Re Borden Chemical Company (Canada Ltd.) and Allied and Technical Workwers, Local 13491 (1973) 3 L.A.C. (2d) 383 (Weatherill): Re ESB Canada Ltd. and International Union of Electrical Workers, Local 512 (1975) 9 L.A.C. (2d) (Weatherill); Re Northern College of Applied Arts and Technology and O.P.S.E.U. (1991), 21 L.A.C. (4d) 82 (Burkett); and the decisions of this Arbitrator in CROA 1809 and CROA 2438.

Counsel for theCorporation stresses that in the case at hand, the employer does not seek to recover what he characterizes as the overpayment of wages made to the locomotive engineers in question. He subits, however, that the Employer is entitled to revert to its legal right, which is to pay the employees concernedin accordance with the mileage provisions of their collective agreement, and no more. Counsel submits that the payment of the additional miles between Sioux Lookout and Armstrong, made in error by the Corporation pursuant to a misunderstanding of administrative staff, as exemplified in the letter of October 13, 1993 signed by Mr. Davidson, is a practice which it was entitled to terminate, as it did, upon proper notice to the Union and the employees concerned.

Counsel further submits that the Doctrine of estoppel should not apply in the case at hand. In his submission, there was no representation made by the Employer intended to be relied upon as a legally binding agreement, and that by failing to execute a written agreement with the Corporation, similar to that executed with the United Transportation Union, the Brotherhoodís Chairman knew, or reasonably should have known, that the Employer was incurring no binding obligation to pay the mileage equalization to locomotive engineers home terminalled at Winnipeg. Further, he submits, that the Union cannot assert the doctrine of estoppel in respect of subject matter which does itself appear within the terms of the agreement upon which its grievance is based. Counsel stresses that while there is reference to the equalization of miles under the terms of article 89 of the collective agreement, there is no such provision to be found in the Special Agreement, and therefore no estoppel can be asserted in these circumstances. In this regard, counsel relies on the following arbitration award: Civic Employees Union, Local 43 and City of Toronto (1968), 18 L.A.C. 273 (Arthurs); Brewers Warehousing Company Ltd. and United Brewery Workers Warehousing Workers Provincial Board and United Brewery Workers (1976),L.A.C. (2d) 384 Palmer; and Re Dehavillan Aircraft of canada Ltd. and Canadian Automobile Workers, Locall 112 (1987); L.A.C. (3d) 97 (Foisy) .

In the alternative, counsel submits that if the arbitrator should conclude that the doctrine of estoppel does apply, the Corporation was entitled to bring the estoppel to an end, as it did in its notice to the Union on February 11, 1994. Counsel stresses that the notice to the Union was given at a time when the term of the collective agreement had expired and the parties were in the process of renegotiation.

I turn to consider the merits of the dispute. In doing so, it is important, I tink, to have reference to first principlles in respect of the formal requirements for establishing an agreement between an employer and a trade union, particularly as that issue may bear on the first position of the Union asserting that the parties did have an agreement for the payment of a mileage equalization formula made in furtherance of the Article "j" notice under the Special Agreement. Firstly, it must be appreciated that the generic term "collective agreement" as understood in Canadian labour law can generally refer to any agreement made between an employer and a trade union on behalf of all or some of the employees in a bargaining unit represented by the Union. While it is common for parties to have a single document governing the terms and conditions of employment of persons covered by their agreement, which they generally refer to as their "collective agreement", collateral documents in the nature of letters of understanding, memoranda of agreement and other forms of documentation may also constitute part of a collective agreement for the purposes of a governing statue such as the Canada Labour Code.

In Canada Lbour Law (1985), Aurora, Former arbitrator and now justice G.W. Adams makes the following observations with respect to the formal requirements of a collective agreement at pp. 670-73:

All Canadian jurisdictions set out three essential requirements for a valid collective agreement: it must be a written agreement, entered into between an employer or employerís organizition and a trade union or council of trade unions, containing provisions respecting terms and conditions of employment. There are slight variations in the statutory language between jurisdictions, but the essence of all the provisions if the same.

. . .

 

All Collective agreements must be written documents. Mere oral understandings are not collective agreements and will not be enforced as such. However, parties to collective bargaining do not normally execute a formal document until some time after the bargaining process has been completed. rather, the agreement of the parties is usually reduce to a memorandum of settlement subject to ratification by the respective principals which is then followed by the drafting and execution of the formal document. Amemorandum of settlement can be an effective collective agreement once the conditions set out in it are satified. The particular form of the memorandum is not important; there can be several documents or an exchange of documents, so long as there is a written element and agreement by the parties on a set of identifiable terms. The identifiable terms must, of course, be in respect of terms and conditions of employment, or it may be held the purported agreement is in fact not collective agreement. However, the actual terms do not have to be detailled in scope to satisfy the requirements of the statutory definitions.

There are several issues presented by the element of agreement: how the parties must signify their agreement, the need for ratification, and the problem of mistake. Both oral and written extrinsic evidence are admissible to verify the existence of an agreement; in fact, if it is impossible to flesh out the "Memorandum of agreement" through extrinsic evidence then it must be said the parties have reached an agreement that falls short of legal requirements for a collective agreement. The Ontario Labour Relations Board has said that the parties must signify their agreement in the following way:

The only way that an individual can evidence his agreement in writing is by signing his name or perhaps by signing his initials to document which contains or identifies the provisions agreed to in such a manner that his intent to consummate the agreement is clear. In order that a company or a union may be said to have executed an agreement in writing, it is necessary that the provisions of the agreement be documented and the fact that such provisions have been agreed to must be evidenced by the execution of the document in the manner prescribed by the organizationís by-laws or constitution or be signed on behalf of the organization by the proper officers or officials of the organization.

further, the Ontario board has consistently held that a document can only be held to be a collective agreement where all parties to it have indicated their assent by affixing their signatures. This requirement would appear to apply in other jurisdictions as well.

A somewhat different opinion is advanced by James E. Dorsey in Canada Labour Relations Board: Federal Law and Practice, Toronto (1983) where the following is asserted at p134:

A collective agreement is a written document representing agreement between an employer and bargaining agent (section 107(1)). The written requirement is essential. It can be several documents and need not be signed, but must represent an agreement between the parties.

Mr. Justice Adams notes the above passage from dorsey, at n.11 and takes issue with the suggestion that an agreement need not be signed by both parties stating, in part:

The authority he cites does not appear to substantiate his proposition.

Long standing practice in the railway industry would, for reasons elaborated below, tend to support the view expressed by Mr. Dorsey, at least insofar as the adoption into a collective agreement of addenda in the form of letters of undertaking signed by an employer, are concerned. It is important to bear in mind, I think, that the approach expressed by the Ontario Labour Relations Board issue from cases dealing with the question of whether any collective agreement whatsoever can be said to exist, and does not involve consideration of the status of special agreements and adjustments agreed by parties during the term of their collective agreement (see, e.g. Municipality of Casimir, Jennings & Appleby, [1978] OLRB Rep. June 507).

In the case at hand, there is no dispute that the parties had a collective agreement at all material times, and that their agreement is embodied in a complex of documents including the printed form of the 1988 version of collective agreement 1.2 between CN and the Brotherhood, as well as Special Agreements and other letters of understanding and documents. The issue is whether they can be said to have made a specific agreement respecting the equalization of mileage from the Seventh Seniority District following the Article "J" notice issued under the Special agreement by the Corporation on October 11, 1989. In approaching that question, it is primary, I believe, to consider whether what went between the parties would constitute the elements of an agreement in light of their own protocols and expectations.

Along tradition in the railway industry reflects an understanding that when an employer and a trade union negotiate special terms, in the face of operational change or the circumstances of an article "J" notice, any agreement which results from such negotiations is reduced into writing on a document which is normally signed by both parties. That, for example, is the procedure which was followed in reaching the mileage equalization agreement with the United Transportation Union. However, the practice of both parties signing a memorandum of agreement or letter of understanding is not universal in the history of collective agreement 1.2. The agreement incorporates a number of addenda which take the form of unilateral letters of commitment from the Company to the general chairman of the Brotherhood. By way of example, Addendum No. 58 of the collective agreement governing the use of yard crews outside switching limits, takes the form of a letter dated February 5, 1988 signed by the former Assitant Vice President of Labour Relations of the Canadian National Railway Company. There is, in that circumstance, no joint signature. Further, the cover page of section 6 of collective agreement 1.2 bears the following heading under the title "Addenda":

( MEMORANDA OF AGREEMENT, LETTERS OF

UNDERSTANDING, AND COMPANY LETTERS )

In the result, bearing in mind that for a substantial period of time VIA Rail and the Brotherhood have treated the 1988 version of CN-BLE collective agreement 1,2, coupled with other documents, as governing their own relatioship, it is fair to conclude that in some circumstances a letter of commitment by the employer, even thoughnot signed by the Union, can be taken as forming part of the terms of the partiesí collective agreement . As regards the CN-BLE Collective Agreement 1.2, it would appear that there has never been any doubt as to the enforceability of a "Company Letter", to the extent that it is evidenced in writing and finds it s way between the covers of the collective agreement document, as a specifically numbered addendum. That conclusion is, moreover, not inconsistent with the definition of a collective agreement found in section 3 of the Canada Labour Code which is as follows:

"collective agreement" means an agreement in writing entered into between an employer and a bargaining agent containing provisions respecting terms and conditions of employment and related matters;

While, for obvious policy reasons as old as the Statute of Frauds, the code requires that a collective agreement be evidenced in writing, it does not stipulate any formal requirement in respect of the initialling or signing of any document, although such a course is obviously advisable if disputes are to be minimized.

Determining the elements of the instant partiesí collective agreement, in the broadest sense of that term, is complicated by the transfer of terms from the CN collective agreement which occured after VIA Rail ceased using CN running crews and hired its own. As noted above, to this date, the parties do not have their own specific collective agreement document. They continue to be generally governed by the terms of the 1988 version of Collective Agreement 1.2 between the Canadian National Railway Company and the Brotherhood of Locomotive Engineers, augmented by certain amendments which they have agreed to over the years, as well as Special Agreements. It is in that context that the arbitrator must weigh the evidence respecting the Companyís commitment to the equalization of miles formula made in the context of the Article "J" notice.

What does the evidence disclose ? Firstly, as reflected above, the Corporation faxed a proposal for a mileage equalization formula to the Union on November 29, 1989. If that were the extent of the evidence, absent formal acceptance by the Union evidenced in writing, it might be arguable that no agreement is proved. However, there is more. The Addendum dated December 15, 1989, appended to the Corporationís brief to the arbitrator, reflects a number of confirmen changes in operations, including the staffing of runs between Winnipeg and Sioux Lookout, with the express notation: "(paid road miles to Armstrong)". The covering note states, in part, "These changes came about as a result of a number of discussions between Corporation representative (sic) and Union representatives".

There can be little doubt that the representation made by the Corporation to the arbitrator was intended, at least in part, to support the position of the Corporation that the locomotive engineers affected by the Article "j" notice were being adequately protected pursuant to the Special Agreement, in furtherance of its submission that the material change provisions of Article 89 of the collective agreement did not apply. In the particular circumstanced of this case, I am prepared to conclude that the Corporation and the Union were then ad idem on the issue of the mileage equalization formula. I am satisfied that the addendum advanced, without qualification, by the Corporation in support of its position at the arbitration in December of 1989 should be taken, at a minimum, as the equivalent of a "Company Letter" or a letter of commitment upon whose terms the Brotherhood could rely. There was, in the result, an agreement between the parties on the merits of the mileage equalization formula, the terms of which are evidenced in writing both in the original offer of the Corporation and its stetement of commitment made in writing before the arbitrator in December of 1989. On that basis, the mileage equalization adopted by the Corporation after discussion with the Union became part of the partiesí broader collective ageement within the maening of the Canada Labour Code.

That conclusion is, moreover, supported by further documentation before the arbitrator, notably the letter of the Corporationís Regional Director of Transportation of October 13, 1993 which, at a minimum indicates that the Company and the Union reached an agreement in principle that the Corporation would paymileqge to Armstrong to locomotive engineers home terminalled at Winnipeg. In addition, the language of "commitment" found in that letter is further echoed in the terms of the letter of January 31, 1994 sent to the Union by the Corporationís Director of Labour Relations. In that communication, reference is made to: "...the original intent of the arrangement, in which the Corporation had ageed that it would consider Armstrong as an Away From Home Terminal and continue to pay rail miles from Winnipeg to Armstrong...". Arrangements and agreements normally require two or more parties. In the arbitratorís view, the correspondence adduced in evidence reflects the understanding of members of the Corporationís management that the mileage equalization formula was not a unilateral initiative but, rather, a payment made to an agreement between the Employer and the Unionís General Chairman.

Further evidence of that belief can be found in the consistent practice followed by the Corporation over the period of four years. For all of that time, commencing January 15, 1989, mileage equalization payments were paid to the Winnipeg based engineers precisely as outlined in the Corporationís statement made to the arbitrator in December of 1989. With respect, the arbitrator cannot accept the suggestion of counsel for the Corporation that those payments were made pursuant to a mistake, or that the rights of locomotive engineers were confused in the minds of field managers with those of the conductors and brakepersons represented by the Union. The evidence does not disclose an error of administration made at lower echelons of management. Rather, it reveals a consistent course of practice made pursuant to an operational arrangement initially propased and later described by corporate officer responsible for implementing the Article "J" notice, before the Arbitrator in December of 1989. As noted above, the changes were then described to the arbitrator as resulting from "...discussions between Corporation representative (sic) and Union representatives". Whether the Corporation should have commited or agreed to such changes is not for the arbitrator to determine. Clearly, however, there was no administrative error or mistake in the subsequent implementation, to the letter, of the changes so described, for a period of some four years thereafter.

In the result, the arbitrator is satisfied that there was an understanding between the Union and the Corporation, as reflected in the planned changes tabled before the arbitrator in December of 1989, and evidenced in the practice followed by the Corporation from January 15, 1990 to February 11, 1994. The evidence discloses an agreement between the parties, sufficiently evidenced in writing, made pursuant to the Article "J" notice under the Special Agreement. That agreement must, at a minimum, remain in force through the term of the recent collective agreement the parties, including the statutory freeze of its provisions, until such time as the parties reach the "open period" of their current negociations. The Unionís claim must, therefore, succed. Consequently, the employees affected are entitled to a payment of the mileage equalization for all runs between Winnipeg and Sioux Lookout from February 11, 1994 until the commencement of the open period, at which point the Corporation shall be entitled to implement such unilateral changes as it may deem appropriate, or as may be agreed with the Union.

If I am incorrect in my conclusion with respect to the existence of an agreement between the parties, I would nevertheless come to the same conclusion with respect to the merits of the grievance on the basis of the application of the principles of estoppel. The evidence discloses, at a minimum, a clear representation by the Corporation made not only to the Union but also to this arbitrator, in December of 1989. The Corporation represented that it would pay equalization of miles to the Winnipeg based locomotive engineers in consideration of the loss of work between Sioux Lookout and Armstrong from Seniority District Seven to Seniority District six. That representation was meant at least, in part, not only as an inducement to the Union with respect to the protections ostensibly available to its members under the terms of the Article "J" notice, but as an argument to sway the arbitrator in support of the Corporationís position in that dispute. Given the number of renewals of the collective agreement over which the equalization of mileage has been paid, during which the Union has relied on the original undertaking and the continued practice of the Corporation without attempting to reduce it further into writing, the elements of representation and injurious reliance must be found to be made out, for purposes of the application of the doctrine of escoppel.

The Corporationís unilateral declaration that it would not longer pay the equalization wages, coming as it did in October of 1994, left the Union without the ability to protect itself in respect of that change. Although it is true that the parties were then in negotiationfor the renewal of the terms of their collective agreement, they had not yet reached the open period, as indeed they have still not, under the terms of the Canada Labour Code, whereby the employer can change the terms and conditions of employment and both parties can resort to the economic sanctions of strike and lockout. Given the nature of the commitment and undertaking made by the Corporation, both in its original representations before the arbitrator and in the consistent practice followed since that time, relied upon by the Union over the course of several collective agreements, it would be clearly inequitable for the Corporation to withdraw those wages so long as the Union and its members are locked into a collective agreement whose terms remain in force under the statutory freeze mandated by the Canada Labour Code.

Estoppel is, of course, not indefinite and the Corporation will be in a position to assert a termination of the equalization payments once the statutory freeze if lifted. At that point, whether the matter is viewed as expiry of the partiesí agreement or the termination of an estoppel, both parties can resort to their bargaining rights and leverage to determine whether the equalization of miles should be continued, modified or entirely eliminated. Until such time as the statutory freeze is needed, however, the Corporation remains bound, on the alternative basis of the application of the doctrine of estoppel, to honour its undertaking to pay the mileage equalization to the locomotive engineers home terminalled at Winnipeg.

The arbitrator therefore directs that all locomotive engineers affected by the decision of the Corporation communicated on October 8, 1994 be compensated, forthwith, for miles between Sioux Lookout and Armstrong for all runs between Winnipeg and Sioux Lookout, until such time as the statutory freeze under the Canada Labour Code preserving the terms of the partiesí collective agrement should cease to be in effect. I retain jurisdiction in the event of any dispute between the parties having regard to the interpretation or implementation of this award.

DATED at Toronto this 9th day of December, 1994.

 

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Michel G. Picher - Arbitrator