B E T W E E N:


(the "Corporation")


- and -




(the "Union")






ARBITRATOR: Michel G. Picher





THE COMPANY: D. Fisher - Senior Negotiator/Advisor

D. Wolk - Manager of Customer Services

B. Woods - Director of Labour Relations

C. Pollack - Senior Officer of Labour Relations



THE UNION: Gary Fane - National Representative

Andy Wepruk - Representative





A hearing in this matter was held in Montreal on January 31, 1996.




This grievance concerns the claim of two employees to an early departure incentive. The grievors are husband and wife, and count their seniority from September of 1980. From that time to the present, they have occupied work under collective agreement #1 in a number of positions, including Baggage Handler, General Operations Clerk and Ticket Agent. The instant grievance arises by reason of their treatment at the hands of the Corporation in the implementation of the terms of a Memorandum of Agreement dated August 24, 1995, following on the report of the Mediation-Arbitration Commission of the Honourable Mr. Justice Mackenzie as implemented effective September 21, 1995. The dispute and joint statement of issue filed at the hearing, read as follows:


The alleged entitlement of Ms. K. Pilidis and Mr. K. Pilidis to receive an Early Departure Incentive under the terms of the Memorandum of Agreement, dated August 24, 1995, pursuant to the award of the Mackenzie Mediation-Arbitration Commission.


On September 21, 1995, the Corporation implemented Article P, paragraphs 1(b), and 9 of the award of the Mackenzie Mediation-Arbitration Commission for Collective Agreement No. 1.

The Union alleges that the Corporation has violated the terms of the Memorandum of Agreement, dated August 24, 1995, concerning the implementation of Article P of the Mackenzie Commission award. The Union claims that the 2 grievors should have been allowed to participate in the job selection and that they should have been granted Early Departure Incentives as they had requested. The Union seeks that the grievors be permitted to exercise their seniority to displace junior employees holding regular part-time assignments on their region and receive the Early Departure Incentives, in accordance with the Memorandum of Agreement.

The Corporation disagrees. The Corporation argues that the award of the Mediation-Arbitration Commission did not contemplate the granting of Early Departure Incentives to employees who had not been holding year-round part-time assignments. The Corporation argues that to accede to the grievor's request would result in a windfall of benefits not provided for in the Memorandum of Agreement or in the award of the Mackenzie Commission.


It is common ground that in the proceedings before Mr. Justice Mackenzie the Corporation requested relief from the maintenance of earnings burden which it was carrying as a result of prior operational and organizational changes, and the previously-existing employment security and job security provisions by which it was bound. Judge Mackenzie's award, made pursuant to Section 53 of the Maintenance of Railway Operations Act, 1995 was handed down on June 13, 1995. Within the collective agreement language provided by that award, Article P provided enhanced retirement opportunities and early departure incentives (EDI). Article P reads, in part, as follows:




1. The Corporation, between September 1, 1995 and December 31, 1997, may abolish positions equal in number to the total of the following:


b) All part-time positions with maintenance of earnings, maintenance of basic rates or employment security protection pursuant to the Supplemental Agreement (known as "regular part-time positions") where employees work less than 32 hours a week and are paid for a 40-hour week;


9. Regular part-time employees who accept an Early Departure Incentive package will be offered their former part-time work as part-time employees except that these employees will be paid their regular hourly rate for the part-time hours. They will retain their seniority for the limited purpose of protecting their previous work and they will receive the same benefits that they previously received.

10. Except as expressly modified hereby for the positions to be abolished as provided in section 1, the provisions of the Supplemental Agreement will remain in full force and effect.



It is common ground that the effect of the foregoing provisions of the Mackenzie award was to permit the Corporation to abolish some 75 regular part-time assignments, being assignments of less than 40 hours per week but for which the employees were compensated, on a maintenance of earnings basis, to the rate of 40 hours weekly. The object of the exercise was to allow the Corporation to stop paying the maintenance of earnings burden in respect of employees who held year-round, part-time assignments paid at the 40 hours per week rate. In negotiations following the award the parties sought to identify those whose regular part-time assignments would be abolished, and who would therefore have the option of the early departure incentive. It is common ground that employees so entitled would be paid the departure incentive, and would thereafter revert to true part-time positions, with their seniority adjusted to the positions of persons newly-hired effective September 21, 1995. That is reflected in the foregoing provisions of the Memorandum of Agreement of August 24, 1995.

2. Those employees identified on the attached Appendix A, who had Employment Security money protection or Maintenance of Earnings/Maintenance of Basic Rate protection, will be given the following options prior to or concurrent with the implementation date:

a) As mutually arranged, the employee may displace, in accordance with the provisions of Article 13, a junior employee within his own region (i.e., the region where he is presently holding a regular part-time assignment), from a position for which the displacing employee is qualified. If that displacements (sic) necessitates a change in residence, then Article 27.5 (revised) shall apply.


3. Those employees as identified in Appendix A who do not displace in accordance with paragraph 2 (a) above, shall, upon the implementation date and thereafter, be paid at the classification rate of the regular part-time assignment for actual hours worked, or in accordance with Article 4. If the employee identified in Appendix A desires an Early Departure Incentive, his seniority shall be forfeited, except for the sole purpose of protecting the specific regular part-time assignment held immediately prior to the implementation date.




The material before the arbitrator establishes, beyond dispute, that in fashioning the list of employees appearing on Appendix A, a list which does not include the names of either Ms. or Mr. Pilidis, the parties intended to identify employees who held regular, part-time positions on a year-round basis, as a general rule, and who were in receipt of maintenance of earnings benefits.

It is not disputed that at the time of the Memorandum of Agreement the Corporation had consistently paid maintenance of earnings (MOE) benefits to the grievors. It submits, however, that it did so in error. According to the Corporation's representative, system-wide, employees who elected layoff and were thereafter returned to part-time assignments on a seasonal basis were not entitled to MOE protection. In fact, however, the grievors continued to receive MOE protection after they elected to take layoff in 1991, being recalled regularly to part-time assignments in accordance with seasonal availability. It does not appear disputed that only the grievors and three other employees in Winnipeg were maintained on MOE protection when they were recalled from layoff to part-time work. In the result, the Corporation submits that the grievors should not be seen as entitled to the EDI buy-out as they were not, in fact, properly in receipt of maintenance of earnings payments and, secondly, they did not hold year-round, regular part-time positions.

The arbitrator accepts the Corporation's characterization of the grievor's circumstances as accurate, and cannot take issue with the general principles underlying the entitlement of employees to the EDI payment, in accordance with the intention of Mr. Justice Mackenzie and the negotiated terms of the Memorandum of Agreement. However, there is a further dimension to be examined in the instant case. A review of the employment history of the grievors reflects that in October of 1992 the grievors were faced with a layoff in Edmonton. It is common ground that they could then have held year-round, regular part-time positions by bumping to Jasper. In fact, the Corporation's officers then advised the grievors that if they should not opt to move to work in Jasper, their Maintenance of Earnings protection would nevertheless be maintained. In other words, when they returned to work on recall, they would have the advantage of being paid on a 40-hour basis, even though they might hold part-time assignments. In those circumstances, and annually thereafter, Mr. and Ms. Pilidis opted to take layoff rather than protect year-round, regular work at Jasper. It is clear that the grievors had the seniority to hold year-round, regular part-time assignments, as such assignments were, in fact, held by persons junior to themselves. In reliance on the information given to them by the Corporation, however, they chose not to use their seniority to hold such positions. Now, as noted above, the Corporation stresses that its information and advice to them was in error, and they cannot claim an EDI because they did not hold year round positions in regular part-time assignments.

What, then, does the unfolding of these events disclose? It appears clear to the arbitrator, as argued by the Union's representative that, in fact, but for the advice given to the grievors by the Corporation's officers, they could and would have followed a course of action which would have maintained their status as persons holding year-round, regular, part-time positions.

In these circumstances, the arbitrator has some difficulty with the argument of the Corporation to the effect that to grant the EDI payments to the grievors would be to afford them an unintended pyramiding of benefits. As is clear from the material before me, it was the intention of Mr. Justice Mackenzie and, indeed, of the parties, to relieve the Corporation of the obligation of the burden of maintenance of earnings payments. In exchange for that relief, the minimizing effect of the early departure incentive was to be made available to employees impacted by that change. In the result, effective September 21, 1995, Mr. and Ms. Pilidis lost their MOE incumbency. They did not, however, have access to the EDI payment, notwithstanding that employees junior to themselves were given that opportunity. The arbitrator would not disagree, for the purposes of this grievance, with the Corporation's position to the effect that the Pilidises were not entitled to MOE payments. However, the fact is that MOE payments were consistently provided to them from 1991 onwards. Most importantly, the knowledge that they would continue to receive MOE payments even though they declined to protect year-round, regular part-time work, and opted for layoff, induced the Pilidises into a course of action which led to the very disqualification which the Corporation now asserts. In other words, but for the Corporation's own error, there is little doubt, on the balance of probabilities, Ms. and Mr. Pilidis would have maintained themselves in a protected position, using their seniority to hold year-round, regular part-time positions. Very simply, but for the Corporation's own erroneous actions, the grievors would have been among those employees identified for protection, and listed on Appendix 'A'.

In these circumstances, by reference to principles of estoppel, if necessary, the arbitrator is satisfied that the grievance must succeed. It is inequitable, in my view, for the Corporation, which held out consistently and over a period of years to the grievors that they were employees entitled to MOE protection, as a result of which they opted not to protect year-round, regular part-time positions, to now assert that they are outside the spirit and letter of the protections intended by the Memorandum of Agreement of August 24, 1995. Nor can the result be said to be unfair to the Corporation, insofar as its expectation emerging from the Mackenzie award. It is common ground that, in fact, a substantially smaller number of the 75 positions identified by Mr. Justice Mackenzie were ultimately identified for compensation, largely by reason of the employment contingencies experienced by certain of the employees identified on the Appendix 'A' list. This is not, therefore, a circumstance in which the Corporation can say that the result of the grievance succeeding would bring it outside its general cost expectations based on the Mackenzie award.

In the result, therefore, the grievance is allowed. The arbitrator directs that the grievors be afforded the opportunity to receive the EDI payment extended to employees listed on Appendix 'A' of the Memorandum of Agreement of August 24, 1995. I retain jurisdiction in the event of any dispute between the parties with respect to the interpretation or implementation of this award.

DATED at Toronto this 7th day of February, 1996.


Michel G. Picher - Arbitrator