AD HOC 424

AWARD

This is the arbitration of a grievance concerning the application of the parties’ Job Security Agreement. The Union claims that the Company failed to provide the proper notice, and consequent benefits to employees, when it implemented a reduction in assignments in the Port Coquitlam Terminal in September of 1991. The Union’s Ex-Parte Statement of the Dispute and Statement of Issue, filed at the hearing, are as follows:

DISPUTE:

The Company’s failure to provide the Union with an Article V Notice, under the terms and provisions of the Job Security Agreement when they cancelled all bulletin positions at the Port Coquitlam terminal.

JOINT STATEMENT OF ISSUE:

On or about September 30th, 1991, the Company notified the Terminal employees at Port Coquitlam, that they would be cancelling all Terminal bulletins.

The Union wrote to the Company on June 5th, 1991, with concerns that their information provided that the Local Management in Port Coquitlam proposed cancelling all Terminal bulletins. The Union, in this letter, did formally request that if this massive cancellation of Terminal bulletins occurred; that they were seeking the protections of the Job Security Agreement.

To date, the Company has failed to reply to the Union’s concerns raised in said letter.

The Union asserts that this form of massive terminal cancellations did not fall within the scope of the terms of the present Collective Agreement.

The Union contends that the terms of the Job Security Agreement should apply, and subsequently invoked to fully protect these employees under a Article V Notice.

The Union maintains that this form of massive terminal Bulletin cancellations falls within the scope of the Technological, Operational, Organizational change of the Job Security Agreement, and further, that Article 5.7 of said Agreement is not applicable under these circumstances given the numerous adverse effects that were experienced by these Terminal employees.

The facts material to the grievance are not in dispute. Prior to September 30, 1991 the Port Coquitlam Terminal, which serves the greater Vancouver area, employed some 56 linehaul tractor trailer drivers, 11 local pick-up and delivery drivers and 54 warehouse employees. The work week was organized into four 10-hour tours of duty, with three rest days, as provided in the bulletins.

The cancellation of the bulletins and the re-organization of the terminal did away with the 10-hour tours of duty. The employees were then placed on 8-hour tours of duty over a five day period, with two rest days weekly. The system, so introduced, did not, however, reduce the total hours worked by an employee, which remain constant at 40 per week. There was, however, a net reduction in the workforce. It is common ground that the number of tractor trailer drivers was increased by one, while the complement of pick-up and delivery drivers declined from 11 to 9 and the number of employees in the warehouse was reduced from 54 to 46. In the result, therefore, ten jobs were lost in the warehouse and among the pick-up and delivery drivers, although one was gained to the linehaul drivers. Ultimately, therefore, the bargaining unit suffered a net loss of nine jobs.

At issue is the application of Article V of the Job Security Agreement. It provides, in part, as follows:

5.1 The Company will not put into effect any technological, operational or organizational change of a permanent nature which will have adverse effects on employees without giving as much advance notice as possible to the General Chairman representing such employees or such other officer as may be named by the Union concerned to receive such notices. In any event, not less than three months’ notice shall be given, with a full description thereof and with appropriate details as to the consequent changes in working conditions and the expected number of employees who would be adversely affected.

…

5.4 Upon request the parties shall negotiate on items, other than those specifically dealt with in this Agreement with a view to further minimizing the adverse effects on employees. Such measures, for example, may be related to exercise of seniority rights, or such other matters as may be appropriate in the circumstances, but shall not include any item already provided for in this Agreement.

5.5 If the above negotiations do not result in mutual agreement within thirty calendar days of the commencement of such negotiations, or such other period of time as may be agreed upon by the parties, the matters in dispute may be referred for mediation to the Administrative Committee.

5.6 If the Administrative Committee is unable to resolve the differences within a fixed period of time to be determined at the commencement of its meetings, or some mutually agreed extension thereof, the matters in dispute may be referred for final and binding settlement to a referee selected by the parties or, failing that, appointed by the Ministry of Labour. The matters to be decided by the referee shall not include any question as to the right of the Company to make the change, which right the Unions acknowledge, and shall be confined to items not otherwise dealt with in this Agreement.

5.7 The terms operational and organizational change shall not include normal reassignment of duties arising out of the nature of the work in which the employees are engaged nor to changes brought about by fluctuation of traffic or normal seasonal staff adjustments.

The Union submits that what has transpired is a reorganization of the Company’s operation which has adversely impacted employees. The Union’s representative submits that the change in the hours of work experienced by the employees who were not laid off is itself an adverse effect of the change implemented by the Company in the cancelling of the bulletins at Port Coquitlam.

The Company takes a different view. Its spokesperson submits that the jobs were cancelled and reorganized to address the Company’s business requirements, having particular regard to a decline in business. He submits that the decrease in the volumes of traffic experienced by the Company required a reorganization of its workforce and a reassignment of duties in a way which gave the Company greater flexibility. In the circumstances, the Company’s spokesperson submits that the changes implemented fall within the proviso of Article 5.7 of the Job Security Agreement, in that they involve both a normal reassignment of duties, having regard to the nature of the work, and were triggered by fluctuations of traffic.

Upon the first day of hearing the Company did not tender in evidence the statistical data which would establish its claim with respect to reduced volumes of traffic. Notwithstanding the objection of the Union, the Company was given leave to adduce such evidence on the second day of hearing. The allowance so given to the Company is in keeping with the informal and expedited nature of the parties’ grievance and arbitration process. Many of the cases dealt with on an expedited basis are not presented by legal counsel, and generally neither the parties, nor the arbitrator, have expected a strict compliance with court-like procedures. A certain informality and flexibility is appropriate when the object of the exercise is to get to the truth and substance of a labour relations dispute, rather than to dispose of cases, which may be of significant importance to the parties, on a narrow legalistic or technical basis. Where, as in the instant case, matters are scheduled to be heard over a period of two days, and one party seeks leave to obtain and produce evidence upon the second day of hearing, absent any indicated prejudice to the other party, the Arbitrator can see no reason not to grant such leave.

The evidence adduced by the Company confirms that there was a dramatic reduction in the volumes of traffic at the Vancouver terminal during 1991. For example, in September of 1991 the total number of shipments handled in the terminal was 25,813, as compared with 29,194 in September of 1990. The monthly performance reports tabled in evidence disclosed that the Company had experienced similar declines in each month of 1991 prior to September. In the result, it faced a sustained drop in freight volumes, in excess of 15%, in the months prior to the cancellation of the bulletins at the Vancouver terminal.

The Union’s representative submits that what has transpired is an operational or organizational change which does not fall within the proviso of Article 5.7 of the Job Security Agreement. He further submits that employees are adversely affected in at least two ways: firstly, employees who were compelled to bid to different positions under the system of new bulletins would be adversely affected by a change in their situation; secondly, the change from a 10-hour day to an 8-hour day would in itself, he submits, be an adverse impact. In support of its position the Union refers the Arbitrator to CROA 1150, and to the decision of Arbitrator H. Allen Hope, an unreported award dated September 27, 1990 between B.C. Rail and the Transportation Communications International System Board 496, Lodge 1828, relating to the application of the similar provisions of a job security agreement.

In CROA 1150, Arbitrator David H. Kates concluded that the reduction of hours for a group of employees from 179.3 over a four week period to 160 hours, by means of the abolishment of bulletins, was an operational organizational change which adversely affected the employees concerned, and which triggered the obligation of the notice provisions of the job security agreement there under consideration. In the B.C. Rail case, Arbitrator Hope found that it was not necessary to establish loss of employment or substantial job dislocation to show that employees were adversely affected by an operational organizational change. This Arbitrator sees no reason to depart from the approaches taken by Arbitrators Kates and Hope in the cases noted. In the case at hand, in any event, where nine jobs have been lost by virtue of the Company’s actions, there could be little doubt that employees were adversely affected.

The fact that employees are adversely affected, however, does not of itself trigger the obligations contained in the Job Security Agreement. There may be many kinds of Company actions which adversely affect employees, including the implementation of layoffs which are not the result of operational or organizational change, as that term is contemplated within the meaning of Articles 5.1 and 5.7 of the Job Security Agreement. A number of cases in the Canadian Railway Office of Arbitration have considered whether company actions constitute operational/organizational change, or as in some collective agreements, material change, adversely affecting employees so as to give rise to certain obligations of notice and protective benefits (see e.g. CROA 221, 228, 271, 272, 286, 289, 316, 331, 423, 689,1150,1167,1635,1675,1739 and 2267).

A review of the jurisprudence would suggest that it is supportable to argue, as the Union does in this case, that a change such as the elimination of a rest day, whereby rest days are reduced from three in the week to two, is an adverse effect for the purposes of the Job Security Agreement. Thus, in CROA 221 Arbitrator Weatherill was able to conclude that the introduction of radios in yard operations, which could impact the size of yard crews, was a material change in working conditions with material adverse affects on employees. In that case he noted that “hours on duty” was one of the issues considered negotiable under the terms of the agreement which provided for the minimizing of adverse impacts.

The fundamental question in the instant case, however, is whether the impact experienced by the employees, whether through loss of employment or change of assignment, is the result of an operational or organizational change within the meaning of Article 5 of the Job Security Agreement. More particularly, the issue is whether the Company’s action cannot be so characterized by virtue of the operation of Article 5.7, because the abolishing of the bulletins was the result of a normal reassignment of duties arising out of the nature of the work, and was brought about by a fluctuation of traffic.

The Union’s representative submits, in part, that the data tabled by the Company does not show “fluctuations”, but rather a sustained, long-term decline. He suggests that such a circumstance is not contemplated within the language of article 5.7. With that I cannot agree. It is well established within the cases that a long-term reduction in ridership or freight will generally fall within the purview of the phrase “fluctuation of traffic” within a provision such as Article 5.7. This, among other things, was addressed by the Award in CROA 1634 which dealt with the reduction of track maintenance forces in the light of sustained declines in traffic on the Great Lakes Region. In finding that the changes implemented by the Company were the result of a fluctuation of traffic, the Arbitrator commented as follows:

There appears to be little doubt that the Company’s action, involving a reduction by approximately 3% of its unionized labour force, was taken as a response to the hard economic realities of the day. The Company’s representatives stated to the media at the time that the 6% decline in freight, without any apparent prospect for improvement, gave rise to its action, which was prompted chiefly by dramatic reductions in the shipment of wheat and other agricultural products.

The primary issue becomes whether the circumstances cited by the Company amount to “changes brought about by fluctuation of traffic” within the meaning of article 8.7 of the Employment Security and Income Maintenance Plan. If it does not, the employees laid off must be compensated for the Company’s failure to provide them with the three months notice contemplated in article 8.1 of the Plan.

It might be argued that the concept of fluctuations of traffic could refer to predictable short term changes of a relatively finite duration, such as the temporary condition resulting from a grain handlers strike. However, many years of interpretation of the Employment Security and Income Maintenance Plan by prior boards of arbitration within this office have led to a broader definition. In CROA 228 five clerical positions were abolished as a result of a curtailment of operations in passenger service between Edmonton and Calgary. The Arbitrator concluded that the actions of the Company were the result of a reduction in passenger traffic between those two points for a period of several years leading up to the Company’s decision. That virtually permanent decline in traffic was found to fall within the meaning of a ‘fluctuation of traffic’ then found in Clause 5 of article 8 of the Plan.

Similarly in CROA 272, this Office concluded that a general decline in business activity giving rise to a reduction in operations constitutes a fluctuation as contemplated in the Plan. In those circumstances, it was found that the Company was exempted from the obligation to serve a technological, operational or organizational change notice on the Union or the employees affected. Similar interpretations followed in CROA 423 and 689.

What does the evidence in the case at hand disclose? Clearly, in 1991 the Company’s operations at the Port Coquitlam terminal were faced with a sustained decline in traffic in freight volumes. While the year-to-year differences as between 1990 and 1991 varied somewhat from month to month in the period between January and September of 1991, the decline was generally in excess of 15% below previous levels of traffic. As indicated in the Statement of Issue, in the late spring of the year the Company began to consider its options, which naturally gave rise to concern on the part of the Union. Finally, it decided to eliminate nine positions from its complement at the Vancouver terminal and gain greater flexibility by reverting to a 40-hour week for employees based on five 8-hour days.

Upon a careful review of the entirety of the evidence, I am satisfied that the actions of the Company, which culminated in the notice of September 30, 1991 cancelling all terminal bulletins, was a change brought about by a fluctuation of traffic as contemplated within Article 5.7 of the Job Security Agreement. I am further of the view that the alteration of the tour of duty from 10 hours to 8 hours, to gain greater flexibility in servicing the needs of the Company’s clients, would qualify as a reassignment of duties arising out of the nature of the work in which the employees at the terminal are engaged within the meaning of that provision. The establishing and altering of routes as well as days and hours of assignment within a trucking terminal for valid business purposes is, in the Arbitrator’s view, within what is normally understood as the reassignment of duties in response to the nature of the work. In the result, while there can be no doubt that the downsizing of the workforce and the reorganizing of the tours of duty within the terminal adversely impacted employees, the circumstance is one which the parties have clearly agreed to exclude from the application of Article 5 of the Job Security Agreement. What transpired, very simply, is a layoff and reorganization occasioned by a decline in business. That is not an eventuality for which employees can invoke the protections of Article 5 of the Job Security Agreement.

For the foregoing reasons the grievance must be dismissed.

DATED at Toronto this 27th day of November, 1992.

(signed) MICHEL G. PICHER

ARBITRATOR