AD HOC 554








(the "Company")







(the "Union")






SOLE ARBITRATOR:                    Michel G. Picher




J. A. Coleman                       – Counsel

K. Madigan                            – Vice-President, CNR, Montreal

M. Becker                              – Director, Labour Relations, Chicago

J. Torchia                               – Director, Labour Relations, Edmonton

A. Nashman                          – General Manager, Transportation, Edmonton

E. Storms                               – Sr. Manager, Crew Management, Edmonton




M. A. Church                        – Counsel

B. Boechler                           – General Chairperson

R. Hackl                                 – Vice-General Chairperson

J. W. Armstrong                    – Sr. Vice-President

G. Gower                               – Local Chairperson, Toronto

W. G. Scarrow                       – Vice-Local Chairperson, Sarnia



Hearings in this matter were held in Toronto on September 29 and 30, 2004



This grievance concerns the Union’s objection to a number of alleged changes in practice by the Company with respect to the management of furlough boards and the rules governing the rights of protected employees to bid and hold furlough board status in Western Canada, under the provisions of collective agreement 4.3.

Shortly prior to the hearing, on September 24, 2004, the Union communicated the following ex parte statement of issue concerning this dispute:


Pursuant to the Collective Agreement (formerly Articles 37 and 39 including but not limited to Paragraphs 37.5, 37.7, 37.16, 39.23 and 39.24) and past practice, Conductors and Assistant Conductors were permitted to transfer to another home terminal on temporary or permanent clearances in accordance with certain conditions. This interpretation and practice continued upon the ratification and application of the Conductor Only Agreement. These Conductor and Assistant Conductors who transferred to new home terminals were permitted to exercise their seniority to furlough boards on the next board change at their new home terminals. This interpretation and practice continued without restriction in excess of three (3) years.

As a result of the negotiation of the May 5, 1995 Agreement, the Collective Agreement was amended to restrict eligible employees from occupying the furlough board at the new terminal for a period of six (6) months unless subsequent to their transfer they were unable to hold (Paragraph 107.68). Subject to the above, eligible employees continued to transfer to new home terminals and to occupy furlough boards without restriction.

On July 8, 2003 the Company advised the Union that the aforesaid provisions had been misapplied for the previous years and that any employees who had transferred in accordance with Paragraph 107.30 could not declare to the furlough board that their new home terminal. Rather, the Company advised that the employee in question must exercise his or her seniority to actively work in the classification (from which they transferred) at the new home terminal.

The Company also advised that, in accordance with Article 107.68, employees could only transfer to a new home terminal only on a permanent basis and only when they could not hold work at their original home terminal. Only under this scenario could an employee subsequently declare to a furlough board after a period of six (6) months (under Article 107.68) but not under Article 107.30. Subsequently, and in addition to the above, the Company has restricted people who move to a new terminal for any reason from occupying a furlough board. The Company has also attempted to enshrine its new interpretation and practices during the negotiations for the new collective agreement by tabling proposals that, if accepted by the Union, could result in employees totally forfeiting furlough board privileges.

Notwithstanding the objections of the Union, the Company implemented its new interpretation and change in practices. Moreover, the Company deleted furlough board bids of all employees regardless of their means of relocation.

The Union filed a policy grievance in regard to the above noted decisions (September 17, 2003). The Union provided further particulars in a series of further communications and meetings (including but not limited to a letter dated February 18, 2004 setting out the issues in dispute.

The Union contends that the above-noted agreements were violated as alleged. The Union also contends, inter alia, that the Company violated Articles 44 and 148 and the conductor Only Agreement (including but not limited to Clause 11). The Union contends that the Company is estopped from re-interpreting the provisions in question on the grounds as set out above and including past practice, negotiations and detrimental reliance by the Union. The Union also contends that the Company’s decisions were arbitrary, discriminatory and made in bad faith.

The Union requests a finding that the Company has violated the agreement as alleged; an order to comply with the collective agreement; an order to cease and desist and a make whole order for all employees adversely affected by the Company’s decisions.

The Company maintains that it has not violated the collective agreement. The Company rejects all of the relief sought by the Union.

For the Union:

Bryan Boechler

General Chairperson

September 24, 2004

A preliminary issue with respect to the scope of the grievance arose at the commencement of the hearing. The Company takes the position that in this arbitration the Union has sought to place issues before the Arbitrator which are beyond those first raised by the Union. The Union maintains that there has in fact been no expansion of the grievance and no surprise which might prejudice the Company.

It is common ground that this matter was processed to arbitration by the agreement of the parties, at the urging of the Canada Industrial Relations Board (CIRB). The action which initiated the Union’s protest is a letter submitted to the Union’s General Chairperson, Mr. B.R. Boechler by then Sr. Vice-President, Western Canada Region, Keith E. Creel, in a letter dated July 8, 2003. That letter included notice of a radical change in the Company’s approach with respect to the interpretation of certain furlough board rights in the context of a transfer from one home terminal to another. It prompted an unfair labour practice complaint to the CIRB dated August 29, 2003. After registering its objection with the Company in a letter to Mr. Creel on July 21, 2003, the Union then also filed a policy grievance in the form of a letter dated September 17, 2003. Both the correspondence of July 21, 2003 and September 17, 2003 specified violations of article 107 of the collective agreement by the Company.

It is common ground that prior to the hearing of the CIRB, by letter dated December 23, 2003, counsel for the Union submitted additional issues which the complainant wished to place before the Board. In that letter counsel for the Union alleges an exacerbation of the situation by the Company allegedly “… increasing its misconduct all across Western Canada.” Among the allegations cited in counsel’s letter are the following:

·         The Company has cut off furlough boards in terminals throughout Western Canada

·         The employer has cut off guarantees to employees, causing significant wage reductions

·         The employer has clawed back money from employees

·         The employer has changed board adjustments and schedules of employees contrary to the procedure agreed within the collective agreement

·         The employer had changed established practices and workload allocations in Western Canada

On February 13, 2004 the parties met at the CIRB for a pre-hearing conference. During the course of that meeting it was agreed to submit the dispute before the CIRB to this Arbitrator for final and binding resolution. Unfortunately the parties cannot now agree on what they agreed on. The Company takes the position that the matter to be forwarded to arbitration was solely the initial grievance concerning the violation of article 107 of the collective agreement. The Union submits that it was clearly understood by all present that the entire file before the CIRB was being deferred to the Arbitrator for final and binding resolution. To that effect, Mr. Boechler wrote a letter to the Company’s Director, Labour Relations, Mr. Joe Torchia on February 18, 2004 emphasizing that in the Union’s view it was clear that the issues subsequently raised before the CIRB in the letter of the Union’s counsel of December 23, 2003 were also to be dealt with at arbitration.

Having heard the parties on this issue at the outset of the grievance the Arbitrator ruled that, absent any written evidence to the contrary, it must be concluded that the entire matter which was outstanding before the CIRB has been progressed to arbitration. After careful consideration, I am satisfied that all of the allegations contained in both the original complaint of August 29, 2003 and the original grievance letter of September 17, 2003, as augmented by the additional letter of December 23, 2003, do constitute the real dispute between the parties, and the full scope of their conflict which was agreed to be moved from the CIRB to arbitration. In the Arbitrator’s view, however, that conclusion should not operate so as to prejudice the Company which, it appears, went forward in the belief that only article 107 would be at issue. On that basis I ruled that the additional issues raised by the Union would be heard, albeit not at the immediate hearing, but at a subsequent hearing date, mutually agreed by the parties, and subject to particulars of the matters being objected to being provided to the Company in advance of that subsequent hearing. In the result, the Arbitrator ruled that the hearing would continue on October 28, 2004 and that particulars would be provided to the Company no later than noon Eastern Time, October 17, 2004.

The Arbitrator does not propose to elaborate at great length the reasons for the procedural ruling, save to emphasize that there is no ultimate surprise or prejudice to the Company, and that the ruling is within the spirit of a leading decision of the Courts, in Re Blouin Drywall Contractors Ltd. and United Brotherhood of Carpenters and Joiners of America, Local 2486 (1975), 8 O.R. (2d) 103 (Ont. C.A.)). As must have been evident to the CIRB, and as is clearly evident to this Arbitrator, there are a number of aspects to the dispute and misunderstanding surrounding the administration of the furlough board system in Western Canada. It is the totality of those misunderstandings which was before the CIRB and which, I am satisfied, would have been referred to the Arbitrator for final and binding resolution by the agreement of the parties at the urging of that tribunal. To take the more narrow approach proposed by the Company would, in my view, disregard the labour relations realities and bring undue technicality to bear in a manner which would frustrate the workings of the grievance and arbitration process. In the circumstances disclosed, there is no substantial surprise or prejudice to the Company, and it will have the fullest opportunity to know the case that it has to meet. For these reasons, and on the conditions described, the Company’s objection as to the scope of the grievance was denied.

I therefore turn to consider the merits, for the time being restricted to the issue of the application of article 107 of the collective agreement. The following two provisions of article 107 are central to the resolution of this dispute:

107.30          A conductor who is displaced and unable to hold a conductors [sic] position will be permitted to displace a junior conductor in other than passenger service on the promotion district.

a)                   A conductor who is unable to hold work as a conductor at his home terminal and who desires to work as a conductor may transfer to another home terminal on a temporary or permanent clearance;

b)                   An assistant conductor who is unable to hold work as an assistant conductor at his home terminal and who desires to work as an assistant conductor may transfer to another home terminal on a temporary or permanent clearance.

107.68          Employees with a seniority date on or prior to June 29, 1990 will not be laid-off. An employee who cannot hold work at their home terminal will be permitted to transfer to another terminal on a permanent basis, however, they will not be permitted to declare to the furlough board for a period of six (6) months unless subsequent to their transfer they are unable to hold.

It does not appear substantially disputed that following the introduction of conductor only operations in Western Canada in or about 1992, and the setting up of furlough boards as an instrument of job security for protected trainpersons, employees continued to have the right to exercise their seniority to transfer from one terminal to another within their seniority district. That was so regardless of whether they could hold work at their home terminal, on the principle that seniority rights extend to the full seniority district. From 1992 through 2003 the protected employees who so transferred to a new home terminal were allowed to bid onto the furlough board at the new location. That appears consistent with the provisions of clause 11.1(6) of the original conductor only agreement. Sub-paragraph (b) of that provision expressly allows eligible protected freight employees to elect the furlough board in the job bidding process at the seasonal changes of card. That is further confirmed in the questions and answers appended to the agreement. Question and answer 51 confirms the ability to elect the furlough board at terminals where there is a separate pool agreement, subject to the forfeiture of any maintenance of earnings the employee might otherwise receive. A review of the practice confirms, beyond dispute, that for close to a decade the parties accepted that employees could move voluntarily from one terminal to another without jeopardizing or limiting their protected status or their entitlement to bid the furlough board, although it appears that it has always been understood that an employee could never bid from a position on a furlough board at one home terminal onto a furlough board at another home terminal.

It appears that in 1994 the Company became concerned with the swelling of furlough boards in certain locations as a result of employees transferring to those locations and subsequently bidding the furlough board. That led to discussions with the Union during the course of bargaining for the renewal of the collective agreement. Minutes of the meetings between the parties confirm that in some circumstances, Biggar, Saskatchewan being one example, the furlough board might come to be occupied by a majority of employees who were in fact non-residents of the location of that terminal. The Union’s representative, Mr. John Armstrong, acknowledged the legitimacy of the Company’s concern and gave the Union’s undertaking to make an adjustment which would “… blank off employees moving to a terminal to occupy the furlough boards.” In the result, the eventual memorandum of agreement between the parties, dated May 5, 1995, included a paragraph to the following effect:

Employees transferring under this article (article 39 – now article 107) will not be permitted to occupy the furlough board for a period six months [sic] unless unable to hold work at that terminal.

That paragraph came to be folded into the collective agreement in the language of article 107.68 of the agreement, as reproduced above.

In the Arbitrator’s view it is extremely significant that the parties negotiated the foregoing understanding. That they did so would clearly indicate that the Company then did recognize the ability of protected employees to move voluntarily to another home terminal and to bid the furlough board once there. It was the abuse of that right which caused the amendment of the agreement at the Company’s request. The employer did not then simply assert the view that to transfer voluntarily limited the furlough board bidding rights of protected employees. Nor did the parties craft clear language that would create such a radical limitation or otherwise undo the all important general rule of article 11.1(6) of the Conductor Only Agreement.

Upon a close review of the provisions in question, the history of bargaining, the practice which governed the voluntary transfer of employees from one terminal to another before conductor only operations, and perhaps most significantly the practice which endured for close to a decade since the conductor only agreement was instituted, the Arbitrator has substantial difficulty with the position advanced by the Company. To the extent that the Company would seek to rely on the provisions of articles 107.30 and 107.68, the strict interpretation of those provisions would arguably support the conclusion that the transfer of an employee from one terminal to another within a seniority district can never be made on a voluntary basis but can only happen when an employee cannot hold work at their home terminal. That is obviously not the case, as employees have for decades enjoyed the ability to transfer to other terminals as an inherent right of seniority within their seniority district. If there is any cornerstone provision in Canadian labour arbitration law it is that the limitation or truncating of seniority rights can only be based on clear and unequivocal language within the terms of a collective agreement. (See Re Tungsol of Canada, (1964) 15 L.A.C. 161 (Reville).) A narrow technical interpretation of article 107.68 would also suggest that the six month limitation against furlough board bidding would be limited to an employee who was forced to another home terminal by reason of his or her inability to hold work at an original home terminal. The Union’s representatives state, however, that the Union has never held to that view, and has accepted that the six month bar also applies in the case of a voluntary transfer.

In the Arbitrator’s view the resolution of this dispute can only be made by a sensible and purposive understanding of what the parties intended to achieve by article 107.68. Clearly they did not, by the terms of that article, bring to an end the long standing ability of employees to transfer from one terminal to another on a voluntary basis. In the Arbitrator’s view what the article recognizes is the narrow situation of the protected employee who cannot hold work at his or her home terminal and is compelled to transfer to another terminal. In that narrow circumstance, the parties registered their agreement that the individual in question cannot declare immediately to the furlough board at that location. As noted above, that provision was inserted for the express purpose of discouraging the artificial inflation of furlough boards, as requested by the Company in bargaining in 1995. Indeed, the original paragraph found in the parties’ own memorandum of agreement reflects a broader intention, consistent with the Union’s view, that the purpose of the article is that all employees transferring under what was previously article 39 of the collective agreement are barred from occupying the furlough board for a period of six months, unless they are unable to hold work at the new terminal.

The interpretation advanced by the Company is to the effect that a protected employee who voluntarily transfers from one terminal to another can never voluntarily bid the furlough board at the new location, albeit he or she may have the protection of the furlough board in the event that their seniority does not permit them to bid active work. That represents a substantial departure from past practice and, as I am satisfied, a substantial departure from the long standing intention of the collective agreement, including the conductor only provisions of the collective agreement governing the establishment of furlough boards. While the Arbitrator appreciates that there is a certain business logic to the view advanced by the Company, as reflected in the letter of Mr. Creel dated July 8, 2003, it is clear that the language of the collective agreement, as reflected in the wording of the provisions as well as the long standing practice of the parties, does not support the interpretation of the Company. That interpretation must, in the result, be arrived at only through bargaining and the appropriate amendment of the collective agreement.

The Arbitrator therefore finds and declares that the interpretation of article 107 reflected in the letter of July 8, 2003 is incorrect and contrary to the collective agreement. For the duration of the current collective agreement, and absent any change in the language in any similarly worded successor collective agreement, a protected employee who voluntarily transfers from one home terminal to another can, subject to the six month limitation, properly bid the furlough board at the new home terminal.

With respect to remedy the Arbitrator deems it appropriate to refer the matter to the parties for their own discussion while retaining jurisdiction in the event that they are unable to agree as to the specific terms of the remedy which is most appropriate in the circumstances.

Dated at Toronto, this 18th day of October 2004