IN the MATTER OF AN ARBITRATION

BETWEEN

CANADIAN NATIONAL RAILWAY COMPANY

(the "Company")

AND

CANADIAN COUNCIL OF RAILWAY OPERATING UNIONS
(UNITED TRANSPORTATION UNION)

(the "Union")

re: MEASURES TO MINIMIZE THE ADVERSE EFFECTS ON EMPLOYEES PURSUANT TO MATERIAL CHANGE NOTICES AT TASCHEREAU YARD – CHANGE FROM HUMP SWITCHING TO FLAT SWITCHING

Sole Arbitrator: Michel G. Picher

Appearing For The Union:

Harold F. Caley – Counsel

Ronald J. Long – General Chairperson, UTU

Roger Doiron – Local Chairperson

Gilles Marcoux – Local Chairperson

Appearing For The Company:

Denis Laurendeau – Labour Relations Associate, Champlain District

Pierre Pronovost – Counsel

Sam Berrada – Operations Manager, Greater Montreal

Final submissions of the parties were received on December 19, 1998.

AWARD

This arbitration arises under the provisions of article 79 of collective agreement 4.16 and article 34 of collective agreement 4.2, in relation to a material change in the Company’s operations. The change in questions involves the implementation of flat switching at Taschereau Yard in Montreal. The Dispute and Statement of Issue, filed by the Union, fairly reflects the nature and history of the dispute and reads as follows:

DISPUTE:

The inability of the parties to achieve a ratified material change agreement in regard to the Company’s decision to implement flat switching at the Taschereau Yard, Montreal. Quebec.

STATEMENT OF ISSUE:

By way of notice dated August 13, 1998, the Company advised the Union, that pursuant to article 79 and article 34 of collective agreements 4.16 and 4.2 respectively, of its decision to perform flat switching rather than hump switching at the Taschereau Yard, Montreal, Quebec.

The parties commenced negotiations on measures to minimize significant adverse effects of the proposed change on employees. The parties were unable to obtain an agreement, and therefore the matter was referred to a Board of Review.

The Board of Review convened on October 28, 1998, and the eventual product was a memorandum of agreement which was subject to ratification. This agreement was not ratified by the affected employees.

Accordingly, the matter of an appropriate material change agreement in regard to this operational change is before the Arbitrator for final determination.

There does not appear to be any dispute as to the material facts. As noted above, on August 13, 1998 the Company gave notice to the Union that it would implement flat switching rather than hump switching at Taschereau Yard, effective December 11, 1998. In the Company’s estimation the change would result in a net reduction of eighteen positions in the ranks of yard foremen and assistant yard foremen under collective agreement 4.16. Additionally, nine positions of traffic coordinator (former yardmasters) would be abolished as a consequence of the change.

Article 79 of the collective agreement contemplates a process whereby the parties are to negotiate terms and conditions to minimize the adverse impact of the material change upon the employees affected. Failing agreement the parties proceed to a joint board of review. As a final recourse, should there not be agreement following the board of review process, the matter may be referred to arbitration for final and binding resolution. It is that process which has led to this arbitration.

The record before the Arbitrator confirms that negotiations between the parties commenced in Montreal on August 25, 1998. As the process unfolded the parties exchanged offers and tentatively agreed upon a number of provisions, with certain other matters remaining unagreed. Finally, they proceeded to the mediative step of the Board of Review, comprised of two senior officers from each party. The Board of Review met on October 28, 1998 in Montreal. As reflected in a letter dated November 6, 1998 the Board of Review emerged with a unanimous finding and recommendation for settlement. Certain modifications to the Board of Review document were subsequently agreed upon, save that the Union reserved the right to present the tentative agreement to its membership for ratification. Notwithstanding the agreement reached at the Board of Review level, and the recommendation of the Union’s officers, the membership declined to ratify the agreement. The matter has therefore proceeded to arbitration.

As the record before the Arbitrator confirms, following the material change notice the parties engaged in extensive negotiations concerning a substantial number of issues. Among the issues discussed were maintenance of earnings, particular benefits for medically restricted employees, the number of abolishments of yard coordinator positions to be considered part of this process, early retirement/severance and deferred separation opportunities, the banking of unused opportunities for a fixed period of time, compensation to the Union for the loss of dues as well as lay off benefits and the right of inactive employees to apply for benefit opportunities when returning to active service.

The parties to this dispute are well seasoned in the negotiation of material change agreements. The processes which were invoked under the provisions of articles 79 and 34 of the respective collective agreements are long-standing, and have been the subject of a great number of prior material change negotiations and arbitrations. Consequently, the formulas for agreed terms which are viewed as properly minimizing the adverse impacts of material changes on employees thereby affected have undergone considerable evolution and refinement over the years. In any given case there are, needless to say, fact specific variations which come to bear depending upon the nature of the change implemented and the circumstances which obtain within given classifications of employees at a particular location or locations. In the result, a board of arbitration must, absent some extraordinary circumstance, give substantial deference to an agreement reached in such circumstances after extensive negotiation and compromise between experienced officers of the Company and the Union. In the instant case the evidence before me reflects an extensive and painstaking exercise of give and take between the two parties, whereby the Union was successful in ultimately obtaining terms of tentative settlement which were superior to those initially proposed by the Company. As reflected above, unfortunately, the employees declined to ratify the agreement endorsed by their own representatives, presumably on the basis that they want more. As understandable as that desire may be, a board of arbitration must nevertheless resolve a dispute of this kind based on compelling arguments grounded in principle and precedent. It need scarcely be said that the mere fact that employees might want more, or in another case that the Company might to want to give less, is not of itself a compelling or persuasive argument. That is especially so where the representatives of both parties have themselves come to a tentative agreement on all issues outstanding.

For the foregoing reasons the Arbitrator can see no reason to depart from the terms of agreement reached between the representatives of the Company and the representatives of the Union at the Board of Review. Those terms, rejected by the employees, were incorporated into two letters dated November 20, 1998, addressed to General Chairperson Long from Company Officer D. Laurendeau and appended to this award as Appendices “A” and “B”. The Arbitrator hereby declares that the terms of those letters, which reflect the agreement reached between the parties at the Board of Review, are hereby adopted in full as the terms of this award.

I retain jurisdiction in the event of any dispute between the parties with respect to the interpretation or implementation of this decision.

Dated at Toronto, December 21, 1998 (signed) MICHEL G. PICHER

ARBITRATOR