(hereinafter referred to as the “Employer”)




(hereinafter referred to as the “Union”)



(Beltpack Arbitration - Supplementary Award)


Arbitrator:                  H. Allan Hope, Q.C.


Counsel for the Railway:          Michael Keiran and Paul Straszak

Counsel for the Union:       Robert Samson


Place of Hearing:            Prince George, B.C.

Date of Hearing:             October 30, 2001



I – Dispute


          This award relates to proceedings convened between the parties in response to the jurisdiction reserved in the decision in BC Rail and Canadian Union of Transportation Employees, Local 1 (Beltpack Arbitration), March 27, 2000, unreported.  The parties posed four questions, the first three of which are based on hypothetical facts.  The fourth question addresses actual facts.  The questions read as follows:


1)              Do MBRs (Maintenance of Basic Rates) apply to protected October 25, 1999 employees while on lay-off?


2)              Are MBRs paid as per Item 4.2.2 on p. 19 of your award or are they capped as per Items & on p. 20?


3)              Is the 1.25 ratio which reflects the impact on the spareboard (Item 6.2 on p. 23) calculated by specific terminals or on the system?


4)              If a declared Beltpack operation reverts to a conventional yard assignment, and again becomes a Beltpack operation, must a new notice again be served and do new Material Change benefits flow from this subsequent beltpack operation?


          Before addressing those questions it is advisable to spell out the nature of the jurisdiction reserved in the award.  It is not a continuation of the jurisdiction that gave rise to the original Award.  It is jurisdiction reserved to address the application of the Award.  That jurisdiction is intended to address actual rather than hypothetical issues.  On p. 44 it is described in the following terms:


This award outlines the principles that govern the dispute and the category of measures that fall within the restricted jurisdiction available under the collective agreement.  However, issues relating to the possibility of layoffs, the status of engineers with restricted qualifications, and the application of the maintenance of basic rates formula are matters that may not have been fully anticipated.  The parties will be free to address those and other issues of application if the need arises. 


          What is contemplated in the Award is a jurisdiction in which questions arising with respect to its application will be addressed in a process in which the answer to a question is sought in the Award itself rather than this Arbitrator being invited to say what was intended.  In short, the process is one in which any arbitrator could be asked to interpret the language of the Award to find its application to particular facts.


          The jurisdiction reserved in the Award contemplates an issue of application arising with respect to specific facts.  Hence, the answers to the hypothetical questions contained in this Supplementary Award must be seen as explanatory only.  Either party may wish to revisit the questions raised if and when actual issues of application arise.  I note that the parties have withdrawn the fourth question for further review.  Subject to those disclaimers, I turn to the first three questions:

1.   Do MBRs apply to protected October 25, 1999 employees while on lay-off?


Without seeking to foreclose an application in specific circumstances, the indication in the Award and in the Memorandum it adopts on p. 18 ff. is that employees on lay-off would not be entitled to MBRs.  That conclusion is based in part on a reading of the Award and comparing the terms of the Memorandum with the proposals made by the Union in its submission in the original hearing.  In terms of layoff benefits, the Union made the following proposal on p. 15:


Layoff Benefits


(xii)                       Enhanced layoff benefits should be provided to engineers facing layoff as a result of the implementation of the technology.


          That proposal was rejected on p. 40 of the Award where the following extract appears:


Layoff Benefits


The claim for enhanced benefits for engineers facing layoff is not supported in the facts or authorities.  Leaving aside the question of whether layoffs will occur as a direct result of beltpack, the basis for such a claim was not established.  If layoffs occur, the program outlined by the Railway is appropriate in a consideration of the measures adopted in other arbitrations where layoffs are triggered by the introduction of a material change.


          That ruling did not deal expressly with the issue of entitlement to MBRs while on lay-off, but the implication is that engineers on lay-off would be limited to the benefits defined in the Memorandum and is at least inconsistent with the conclusion that they would apply in a layoff.  A further implication with respect to whether it was intended that MBRs should be paid to engineers on lay-off can be gleaned from a further comparison with the Union’s proposal with respect to MBRs.  On p. 13 the following proposal is recorded:


Maintenance of Basic Rates


(iv)                A maintenance of basic rates should apply to all engineers who are displaced or whose job is abolished due to the implementation of the technology.


          Section (iv) contemplates payment of MBRs to “all engineers who are displaced or whose job is abolished”.  The proposal does not, at least on its face, appear to contemplate the payment of MBRs to engineers on lay-off.  The question is not addressed expressly, but if the Union was seeking to have MBRs apply to engineers on layoff, it can be expected that its proposal would have been spelled out.


Further, the provisions in Section 4 of the Memorandum commencing on p. 19, do not appear to contemplate an entitlement to MBRs on the part of employees on lay-off.  For example, in Section 4.2.3, time spent on lay-off is excluded for purposes of computing basic weekly pay.  That method of calculation does not speak directly to entitlement to MBRs while on layoff but, once again, it is inconsistent with that finding.  Hence, I conclude in terms of the hypothetical question that the answer is, no.  However, as stated, this ruling is subject to review by either party in terms of any specific application that may arise in the future.


2.   Are MBRs paid as per Item 4.2.2 on p. 19 of your award or are they capped as per Items & on p. 20?


The difference raised in this question can be addressed by considering whether an engineer whose actual earnings exceed 80 hours at the yard rate or twice basic weekly pay should be entitled to exceed the limits set out expressly in Section 4.3.1.  The question is whether Section 4.3 has general application to the payment of MBRs or whether Section 4.2 represents an exception which would permit engineers to receive a higher amount than is contemplated in Section 4.3.


The position of the Union is that the language of Section 4.6 mitigates in favour of the conclusion that Sections and are not intended to restrict the calculation of an employee’s MBR entitlement.  That section appears on p. 21.  It reads as follows:


4.6         All compensation, including guarantees paid an employee by the Railway during each checking period will be taken into account in computing the amount of the employee’s MBR.


The immediate answer to the hypothetical question is found in the structure of the two provisions to which it relates.  Section 4.2 deals with the calculation of “basic weekly pay”.  By contrast, Section 4.3 deals with the calculation of the payment required to maintain an employee’s basic weekly pay.  In terms of the hypothetical question, it is Section 4.3 that deals with how MBRs are paid.


The language of Section 4.6 does not serve to defeat the clear implication contained in Section 4.3.  As stated, that section deals with a calculation of the maximum amount of MBR to be paid.  That is, it deals expressly with fixing the amount of MBR to which an employee is entitled.  Section 4.6 addresses the factors which “will be taken into account in computing the amount of the employee’s MBR”.  As with Section 4.2.2, the provision addresses the calculation of MBR entitlement as opposed to the maximum entitlement, being the issue addressed in Section 4.3.1.  Under Section 4.6, engineers are entitled to include “all compensation” to bring them up to the caps in Section 4.3.1.  Hence, the answer is that MBRs “are capped as per Items and”.  Once again, that ruling is subject to further review by either party in particular circumstances.


3.   Is the 1.25 ratio which reflects the impact on the spareboard (Item 6.2 on p. 23) calculated by specific terminals or on the system?


That question arises in the context of the commitment of the Railway with respect to “early retirement allowance and/or severance opportunities”.  Section 6.2 does not contain any indication of whether “the number of opportunities” is to be calculated system-wide or within terminals.  The question only arises if the Railway “determines there is a surplus of locomotive engineers” and it then elects to “offer early retirement and/or severance opportunities”.


          The position of the Union is that the impact of converting yard assignments to beltpack will be felt system-wide because of the fact that, under Article 17.1.5, seniority in the bargaining unit is system-wide.  Conversion of yard assignments to beltpack will reduce the number of assignments available across the system as the employees affected in the various terminals exercise their seniority to accommodate the reduction in available work.


          I agree with the Union’s submission.  The interpretation of provisions that impact upon seniority rights are subject to the principle defined in Tung-Sol of Canada Ltd., (1964) 15 L.A.C. 161 (Reville).  Arbitrator Reville wrote as follows on p. 162:


Seniority is one of the most important and far-reaching benefits which the trade union movement has been able to secure for its members by virtue of the collective bargaining process.  An employee’s seniority under the terms of a collective agreement gives rise to such important rights as relief from lay-off, right to recall to employment, vacations and vacation pay, and pension rights, to name only a few.  It follows, therefore, that an employee’s seniority should only be affected by very clear language in the collective agreement concerned and that arbitrators should construe the collective agreement with the utmost strictness wherever it is contended that an employee’s seniority has been forfeited, truncated or abridged under the relevant sections of the collective agreement.


          Applying that reasoning to the Memorandum, it can be assumed that if it was intended by the Railway in presenting its Memorandum that Section 6.2 was to be applied on a terminal basis, that intention would have been reflected in the language selected.  The answer to the question is that “the 1.25 ratio which reflects the impact on the spareboard” is to be calculated on the system.  Once again, the parties are free to revisit the issue in the context of particular facts in keeping with the nature of the reserved jurisdiction.


          DATED at the City of Prince George, in the Province of British Columbia, this 9th day of November, 2001.



                     “H. Allan Hope, Q.C.”              

                     H. ALLAN HOPE, Q.C. – Arbitrator