AD HOC 354

AWARD

This arbitration concerns a dispute in respect of the application of the material change provisions of the collective agreement governing locomotive engineers (BLE) and conductors and trainmen (UTU). On September 7, 1994, the Company issued a notice of material change to the Council under article 32 of the BLE collective agreement and article 45 of the UTU collective agreement, advising of its intention to operate conductor-only freight trains from Smith Falls, Ontario to Ste.-Thérèse, Quebec. As the change would involve the elimination of two Montreal-based assignments, the Company was compelled to give notice under the articles in question, and to seek to negotiate with the Council measures to minimize the adverse effects of the proposed change on the employees affected. The process of negotiation contemplated within the collective agreements was unsuccessful, and the parties have now proceeded to arbitration in accordance with the collective agreement provisions in question.

The notice provided to the member unions of the Council, dated September 7, 1994, reads, in part, as follows:

Dear Sirs:

Pursuant to Article 45 of the United Transportation Union Collective Agreement (East) and Article 32 of the Brotherhood of Locomotive Engineers Collective Agreement (East), please accept this letter as notice of a material change in working conditions with respect to extending the present run between Smiths Falls and Montreal.

It is the desire of the Company to extend the run for trains between Smiths Falls and Ste.-Therese, in order to reduce transit time in the highly time sensitive automotive parts market, and to reduce any unnecessary cost in changing crews only for the purpose of running 11.5 miles from the Montreal terminal area extremities (at OMT’S point Lachute Sub) to Ste-Thérèse.

The present run between Smiths Falls and Montreal is comprised of:

Winchester Sub (Smiths Falls - Dorion) 104.9 miles

Vaudreuil Sub (Dorion - Ballantyne) 16.7 miles

121.6 miles

The present run therefore consists of 121.6 miles between Smiths Falls and Ballantyne. Additionally, the crew has the ability to operate anywhere within the limits of the Montreal Terminal. Therefore, the actual additional mileage that the Company proposes Smiths Falls crews will be operating is between the Montreal Terminal limit at Jacques-Cartier Jct. (Mile 8.4) and Ste-Thérèse Yard (Mile 19.9), a distance of 11.5 miles over the Lachute Subdivision.

This notice will affect trains operated, as required, between Smiths Falls and Ste-Thérèse. As required by this notice, it is the intent of the Company to negotiate measures to minimize the significant adverse effects, if any, to Montreal based train or yard crews who may be affected by the proposed change in operating Smiths Falls to Ste-Thérèse bound traffic. As a result of this change, crews ordered at Smiths Falls will be required to operate their trains through to Ste-Thérèse without a crew change at St. Luc. This may result in certain adverse affects on employees at St. Luc, including the abolishment of assignments, which may be examined during discussions on this subject.

The facts pertinent to the dispute are not contested. Traditionally, Smiths Falls, Ontario crews have operated between Smiths Falls and the Montreal Terminal area, and return. To do so, they have generally travelled on the Winchester and Vaudreuil subdivisions, yarding their trains either in Smiths Falls or the Montreal terminal, as the case may be.

One of the Company’s major customers, General Motors, operates a plant in Ste-Thérèse, Quebec, north of Montreal. The operation of the General Motors is extremely time-sensitive as regards the receipt of parts and materials by rail. Presently, Smiths Falls crews operate Ste-Thérèse bound trains from Smith Falls to the Montreal Terminal, with Montreal-based crews handling the balance of the trip from the Montreal Terminal to Ste-Thérèse, some 1l.5 miles. It is common ground that the flow of freight between Smiths Falls and Ste-Thérèse normally generates between two to three trains per day. The change proposed by the Company would bring greater efficiency to its operations by allowing the Smiths Falls crews to run through the Montreal Terminal, travelling the additional 11.5 miles over the Lachute subdivision to Ste-Thérèse and return.

The change proposed by the Company would involve the transfer of work from the employees of one seniority district to the employees of another seniority district. At present, the automotive parts trains are operated from Smiths Falls to the Montreal Terminal by Smiths Falls crews who are part of Seniority District 3. Their travel involves operating over the Winchester subdivision to Dorion, the Vaudreuil subdivision to Ballantyne, on the St. Luc branch to St. Luc Junction and on the Adirondack subdivision to the change-off point at mile 46.3, described as the Old Hempstead Tower. From the Old Hempstead Tower, the autoparts train is operated by the Montreal crew on the Adirondack subdivision to Outremont and thereafter on the Lachute subdivision to Ste-Thérèse.

According to the table of mileage presented by the Council, the Montreal crews would operate the train a distance of some 19 miles. The Montreal to Ste-Thérèse link is operated by two road switcher assignments utilizing three-person crews, seven days a week. The Montreal crews are said to operate two westward trains and two eastward trains, on average, with the road switchers being paid on an hourly rate converted to miles, subsidized by a guarantee. The Smith Falls to Montreal trains are operated by assigned crews, also seven days a week. They normally operate two westward trains and one eastward trains daily, on a through-freight basis running conductor-only.

At the hearing, although a number of prior positions and proposals have been exchanged by the parties, the issues remaining in dispute were the following: mileage equalization; maintenance of basic rates; and layoff benefits. Although during the course of negotiations there had been some issue as to the Council consenting to the conductor-only operation over previously non-declared territory, at the hearing its representatives indicated their assent to that change.

The Council stresses the importance of mileage equalization to the members of the Council and their respective locals. Its representatives note that mileage equalization is contemplated within article 45 of the UTU collective agreement and has also been implemented previously under article 32 of the BLE collective agreement. Examples provided are the Belleville run-through of 1972 and the mileage equalization agreement made with the UTU in respect of VIA trains 185 and 186, in December of 1992. The Council submits that a mileage equalization formula can be established to allow the Company to gain productivity benefits from its material change while fairly mitigating the adverse effects of the change on employees without incurring undue additional costs to the employer.

The mileage equalization proposal of the Council is based on the relative percentages of the Smiths Falls-Ste-Thérèse mileage previously serviced by the two seniority districts. It notes that the Smiths Falls and Old Hempstead Tower change-off point is 86.4% of the total distance between Smith Falls and Ste-Thérèse, while the balance of 13.6% represents the work handled by the Montreal road switcher crews. Given that the run operates virtually seven days a week, the Council submits that a distribution of the entire run as between the two employee groups would involve Smiths Falls-based crews handling the work 316 days per year, with Montreal-based crews handling it for the remaining 49 days of each year.

The Council submits that the formula which it proposes achieves a fair distribution of the work as among the two employee groups, without imposing any significant financial burden on the Company.

With respect to the maintenance of basic rates, the Council submits that it is in general agreement with the Company’s final offer of a three-year MBR for employees affected by the material change, on the assumption that the Company’s proposal is based on the 1/52nd formula whereby an employee’s incumbency is based on his or her actual earnings. Its representatives note that the employees in question are, for the most part, already covered by MBR protection resulting from previous material changes, and that this measure may, in the end, not represent any additional cost to the Company.

In respect of layoff benefits, the Council proposes that a three year layoff benefit in the form of a Supplemental Benefit Plan (SUB). The “three and five” formula it advances would involve 156 weeks of protection over a five-year period of eligibility, with 80% of basic pay calculated in accordance with an employee’s prior actual earnings. As with the MBR, the Council notes that all of the employees in question appear to be already covered by a SUB, with the result that this proposal may also involve no additional cost to the employer.

The Company submits that its final proposal, as communicated to the General Chairman on January 18, 1995, included the following:

The abolishment of assignments 206 and 213; a three years MBR for affected employees; three years of layoff benefits for affected employees; consideration by the Company of any proposed mileage equalization advanced by the Council which does not involve extra cost and is operationally feasible.

At the hearing, the Company’s representatives submitted that they had not previously received any details from the Council in respect of a proposed mileage equalization formula. In the result, with the agreement of the parties, the arbitrator accorded the Company a reasonable period of time to consider the formula advanced by the Council, and to make a written submission in respect of its response, with the opportunity of reply being afforded to the Council.

The arbitrator has since received the written submissions of the parties with respect to the Union’s proposal for mileage equalization. The Company takes the position that mileage equalization should not be awarded, arguing that it has the potential of being costly and inefficient by giving rise to substantial additional costs in respect of deadheading, as well as training and familiarization. Alternatively, the Company suggests that if equalization is deemed appropriate, a different formula should be adopted. In that regard, it would propose one of two possibilities. The first would involve the transfer of the ownership of a Smiths Falls assignment to Montreal. The second would allow a Montreal-based employee from each bargaining unit to bid into the Smiths Falls unassigned freight pool for the purpose of working to a mileage limit of 12,593 miles, being the equivalent of the annual mileage on the three assignments being abolished.

Counsel for the Council counters that the proposals advanced by the Company are not appropriate, and that its concerns can be accommodated by a reasonable formula for mileage equalization. He submits that the position of the Council is to maintain the status quo as regards the operating mileage presently shared as between Seniority District 2 and Seniority District 3. Further, the Council submits that it is prepared to allow the flexibility necessary to The abolishment of assignments 206 and 213; a three years MBR for affected employees; three years of layoff benefits for affected employees; consideration by the Company of any proposed mileage equalization advanced by the Council which does not involve extra cost and is operationally feasible. avoid excessive cost to the Company. For example, to address the concern of deadheading cost, the Council submits that when Montreal-based crews are operating trains between Ste-Thérèse and Smiths Falls they could be assigned to operate one assignment daily on a return basis, thereby eliminating the need to deadhead. Counsel explains that a Montreal-based crew, so assigned, could operate on a return basis for 49 days worth of assignments, and that the assignments could be scheduled either consecutively or otherwise, as best suits the Company’s needs, and in such a way as to avoid deadheading. Additionally, the Council submits that the costs of training envisioned by the Company can be substantially reduced by ensuring that training is confined only to the two employees who successfully bid the mileage equalization assignment. Finally, the Council questions the assignment swapping proposal advanced by the Company, noting that the Dorion Turn being suggested by the Company is an assignment which already belongs to Montreal crews. It also questions the advisability of the Company’s alternative proposal of putting a Montreal-based employee to the relative hardship of effectively transferring to the Smiths Falls unassigned freight pool.

In the arbitrator’s view, the proposal advanced by the Council, subject to the qualifications contained in its reply submissions of March 13, 1995, is a more compelling basis upon which to resolve the instant dispute in respect of the equalization of miles. The prospect of work previously belonging to Montreal crews being placed in the hands of Smiths Falls crews from a separate seniority district is obviously problematic, as is the abolishment of three Montreal assignments. It appears to the arbitrator that the concept of mileage equalization, which is itself contained in collective agreements and has long been recognized within the industry, is an appropriate instrument to balance the equities as between the two groups, and that coupled with the protection of maintenance of basic rates and layoff benefits as proposed by the Company, is a fair compromise for the minimizing of adverse impacts to employees affected by the material change which the Company initiated. I am satisfied, on the basis of the submissions before me, that the Company need not incur undue expense in the administration of a mileage equalization formula and that, for example, assignment Montreal-based crews to the Smiths Falls-Ste-Thérèse assignment on a return basis alleviates much of the concern raised by the Employer with respect to the potential deadheading costs that could be involved. So long as the Company retains full flexibility with respect to the scheduling and structuring of the 49 assignments to be performed by Montreal crews, it would appear that it has the fullest ability to protect itself In the instant case, that arises because of the fact that there are two trains daily from Ste-Thérèse to Smiths Falls, and only one train from Smiths Falls to Ste-Thérèse.

For all of the foregoing reasons, the arbitrator awards the mileage equalization formula proposed by the Council, as qualified in its letter of reply of March 13, 1995, with full discretion in respect of the scheduling of assignments retained by the Company. I further award the standard MBR and layoff benefits proposed by the Company, and consistent with the prior award between these parties in respect of the sale of the Dominion Atlantic Railway, dated August 8, 1994.

The arbitrator retains jurisdiction in respect of this matter should the parties be in disagreement as to any aspect of the interpretation or implementation of this award.

DATED at Toronto this 4th day of April, 1995.

(signed) MICHEL G. PICHER

ARBITRATOR