IN THE MATTER OF AN ARBITRATION
BETWEEN
ONTARIO NORTHLAND RAILWAY
(the “Company”)
and
ONTARIO NORTHLAND EMPLOYEES INDEPENDENT UNION
(the “Union”)
RE: GRIEVANCE OF J. ROSSETER
Arbitrator:
Michel G. Picher
Appearing for the Company:
Michael Restoule Manager, Labour Relations
Brian Rogers Manager, AAR Procedures & Systems
Mike Brown Director, Freight Marketing & Administration
Ken Duquette Labour Relations Officer
Appearing for the Union:
Brian Stevens Consultant
Debbie Graham President – ONEIU
A hearing in this matter was held in Toronto on June 27, 2000.
This grievance concerns the assessment of 40 demerits and the demotion of the grievor, Mr. J. Rosseter, for the alleged disregard of the Company’s instructions concerning the alteration of data on billing repair cards. The nature of the dispute is outlined in the Dispute and Joint Statement of Fact and Issue which reads as follows:
An appeal of discipline assessed against Clerk, J. Rosseter.
An investigation was conducted with Clerk J. Rosseter on June 7, 1999 and following which, he was assessed forty (40) demerit marks and placed on conditional employment status for a period of two (2) years from June 24, 1999 with the following conditions: You are not to engage in any insubordinate conduct, you will be removed from the position of AAR Billing Clerk and demoted to a position of Rate 1 Clerk and for a two year period, you will be restricted from bidding for a higher rated position. The reasons given were for alleged insubordination by his failure to follow the instructions of his supervisor regarding the alteration of wheel finger gauge readings and/or related “Why Made” codes on billing repair cards.
The Union initiated a grievance on Mr. Rosseter’s behalf contending that the investigation was not fair and impartial as contemplated by the collective agreement, that there was not clear and cogent evidence presented that would support any alleged wrongdoing by Mr. Rosseter and that, in any event, the discipline assessed by the Company was both excessive and outside the Company’s jurisdiction to remove and/or restrict contractual seniority provisions or impose conditions of employment outside the collective agreement. The Union requested that all records of the incident be removed from Mr. Rosseter’s file including the discipline that was assessed on June 22, 1999 and the Mr. Rosseter be made whole.
The Company denied the Union’s contentions and denied the appeal.
By way of background, it should be explained that the Company, like other railways, inspects and repairs rail equipment belonging to other companies. Such repairs include the replacement of wheels on railcars. Repairs so performed are billed to the company which owns the car in question, with the invoicing and repair information contained on a billing repair card (BRC) being sent to the railway which owns the car. The inter-company billing practice is overseen by the Association of American Railroads (AAR) and must be in conformity with the AAR billing regulations.
It does not appear disputed that in his capacity of AAR billing clerk Mr. Rosseter developed an interpretation of the AAR rules which resulted in the Company adopting a new procedure which brought considerable savings to itself. The changes in practice, however, resulted in letters of complaint from railroads. That resulted in the AAR addressing a corrective letter to the Company dated March 10, 1998.
Following that warning, the Company instructed Mr. Rosseter to stop utilizing the procedure which he had developed, and directed that he was not to make any further alterations to the gauge readings for damaged or worn wheels. That was expressly related to Mr. Rosseter in a letter from the Manager, AAR Procedures and Systems, Brian E. Rogers, dated July 3, 1998. The grievor’s apparent failure to abide by that instruction resulted in the assessment of 30 merits against him effective December 3, 1997, later reduced to 15 demerits by agreement with his predecessor bargaining agent, as recorded in a letter by the Company’s Director of Human Resources dated December 18, 1998. It appears that that discipline is the subject of a complaint by the grievor presently pending before the Canadian Industrial Relations Board.
The material before the Arbitrator confirms that in the latter part of 1998, Mr. Bob Coxford, Supervisor of Car Maintenance and AAR Procedures, found continued alterations, including incorrect wheel gauge readings, being sent to car owners. As a result of that information Mr. Rogers reviewed the procedures with the grievor on November 24, 1998, and reaffirmed in a e-mail dated December 1, 1998:
I must stress again that under no circumstances will you alter any of the gauge readings as it pertains to wheels.
The grievor responded by e-mail of the same date that the instructions given to him would be followed. In fact, however, the practice did not cease and the Company ultimately convened a disciplinary investigation on June 7, 1999. In that investigation Mr. Rosseter admitted that he did continue to alter finger gauge readings on billing repair cards notwithstanding having received a contrary instruction. He was in fact presented with examples of four altered billing repair cards dated from and after December 15, 1998, three of which contained alterations to finger readings. For reasons he best appreciates, the grievor declined to give any elaboration as to those alterations stating: “ I am not going to answer until I have had an opportunity to review all the evidence.” . Faced with that response the Company effectively closed the investigation and concluded that the grievor had, in fact, altered finger readings contrary to the explicit instructions given to him on two prior occasions, and notwithstanding his earlier discipline for the same infraction. On that basis it assessed 40 demerits against the grievor’s record and, after some apparent consultation with the Union, demoted him to the lowest classification within the bargaining unit for a period not less than two years.
The Union alleges that the Company failed to conduct a fair and impartial investigation. The Arbitrator cannot sustain that allegation. The material reveals that the investigation was conducted by Mr. M.J. Brown, Director, Freight Marketing and Administration, and not by the grievor’s direct supervisor, Mr. Rogers. The assignment of Mr. Brown to conduct the investigation in the circumstances is in keeping with normal practice, and there is nothing which would suggest any meaningful indication of bias or the likelihood of perceived bias in Mr. Brown’s conduct of the investigation. Nor can I accept the suggestion of the Union that there was undue delay on the part of the Company.
On the review of the material before me, I am satisfied, on the balance of probabilities, that the grievor did knowingly and deliberately fail to follow the instructions given to him by Mr. Rogers with respect to not altering wheel finger gauge readings on billing repair cards. His actions in that regard must be viewed as serious, as the Company was placed in a position of considerable jeopardy with respect to its AAR accreditation.
In the Arbitrator’s view, the issue of substance in this grievance is the appropriate disciplinary penalty. I must agree with the well articulated submission of the Union’s consultant to the effect that the consequences visited upon Mr. Rosseter by the Company’s imposition of both a demotion and a substantial amount of demerits is unduly harsh in all of the circumstances. Mr. Rosseter, who commenced his employment with the Company in 1973, is a long service employee whose disciplinary record prior to the assessment of 15 demerits on December 3, 1997 reflects only relatively minor discipline. As argued by the Union, the demotion of Mr. Rosseter in the manner imposed reduced him for a period of two years to the lowest job category in the bargaining unit, meaning an effective wage loss of some $23,000 over that time period. In fact the monetary penalty may be substantially more, as thereafter the grievor may only bid upward into such positions as may become vacant. There is, in other words, no guarantee as to when Mr. Rosseter may be able to move from Rate Group 1 back to a Rate Group 6 position.
While the purpose of discipline is rehabilitative, a disciplinary demotion may be appropriate in some circumstances, as it can have the effect of protecting the Company against the risk of a further infraction by the employee in question. In the instant case, however, it is common ground that the grievor’s prior position of billing clerk has now been abolished. The information recording function which he was involved in has now been transferred into the hands of carmen who perform the inspection of freight cars. In the Arbitrator’s view that is a factor to be considered in balancing the interests of the parties with respect to the appropriate discipline in the case at hand.
It may also be noted that the method of demotion is unusual, in this Arbitrator’s experience. Normally an employee may be demoted to the next lowest position, into a job where he or she may not be in a position to put the employer at risk of the same mistake being committed. In this case, however, an employee of close to 30 years’ service was demoted to the entry level position, for what in fact may be a period that considerably exceeds the two years imposed, depending upon the availability of future vacancies. I am inclined to agree with the suggestion of the Union’s representatives that it would have been more responsive to the grievor’s circumstances, and fully protective of the Company’s interests, to remove Mr. Rosseter from his position, and allow him to bid upon the position of the individual who might successfully bid to replace him. In practical terms that might have involved less of a demotion and a substantially less drastic loss of income to the grievor. In my view there is also reason to question the relatively heavy assessment of demerits, along with the obviously painful consequences of demotion to the entry level (see, e.g. CROA 2876).
In all of the circumstances, the Arbitrator is satisfied that this is an appropriate case for substitution of penalty. The Arbitrator directs that the grievor’s disciplinary record be amended to 20 demerits for the failure to follow his supervisor’s instructions in the filling out of BRC’s. The grievor further shall be reinstated into the position which he would have held by reason of his seniority and qualifications but for the demotion, without compensation for wages and benefits lost, forthwith. The time from his demotion to his reinstatement shall be recorded as a disciplinary demotion against his record. I retain jurisdiction with respect to this matter in the event of any dispute between the parties concerning the interpretation or implementation of this award.
Dated at Toronto this 30th day of June 2000.
________________________________
Michel G. Picher
Arbitrator