(the "Company")






(the "Union")







Sole Arbitrator:                               Michel G. Picher



Appearing For The Company:

Michael Keiran                     – Labour Relations Officer, North Vancouver

Dan Carter                            – Assistant Superintendent, Fort St. John

Donna Crossan                   – Labour Relations Officer, Prince George

Joe Torchia                           – Business Partner, Edmonton

Basil Laidlaw                        – Manager, Labour Relations, Winnipeg



Appearing For Union, Local 110:

Todd Wallace                        – President

Owen Simpson                    – Trustee

Mike Horne                           – Representative






A hearing in this matter was held in Edmonton, Alberta on July 15, 2005.  



Through this grievance, the Union raises two issues.  Firstly, it submits that the Company has failed to properly apply the terms of the memorandum of settlement dated November 17, 2004 to employees adversely affected by a material change in operations.  Secondly, it seeks a declaration that the Company has implemented a further material change by relocating a spareboard from North Vancouver to Squamish.  The underlying facts are reflected in the joint statement of fact and issue tabled at the hearing which reads as follows:



Whether all affected engineers were properly and/or adequately covered by the Memorandum of Agreement reached November 17, 2004 to address adverse effects brought about by CN Rail’s change in operations on the Squamish, Lillooet and Prince George Subdivisions and CN Rail’s right to relocate spareboard positions from North Vancouver to Squamish.




Material Change notices were issued to CAW Local 110 on July 27 and September 29, 2004 which affected engineers working in North Vancouver/Squamish, Lillooet and Williams Lake, anticipating a complete change in past operations on the Squamish, Lillooet and Prince George subdivisions.  Negotiations on the Material Change notices commenced in late October, 2004 and on November 17, 2004 CN Rail and CAW Local 110 reached an agreement intended to address adverse effects on engineers in the affected locations.  CN Rail wished to implement the new train plan prior to enacting the negotiated material change settlement and negotiations commenced on December 9, 2004 to allow for that, resulting in an implementation agreement, reached on December 17, 2004.  CN Rail implemented the train plan on January 7, 2005 and proceeded to implement the provisions contained in the Memorandum of Agreement of November 17, 2004.  In addition, CN Rail informed CAW 110 that it intended to relocate the engineer’s spareboard to Squamish.





Company Position


All engineers in the zones affected were properly and adequately provided for in the Memorandum of Agreement of November 17, 2004 and there are no more benefits owing, save one buyout/relocation being held in reserve as per the agreement.  CN Rail also maintains that it reserves the right to relocate the spareboard from North Vancouver to Squamish and that all negotiations and agreements made that fact clear.


Union Position


The Union contends that the benefits contained in the Memorandum of Agreement of November 2004 were applied to a lesser number of engineers than actually affected by the Material Change notice(s).  The Union suggests that spareboard or auxiliary board positions are not equal to actual jobs.  The Union also maintains that CN’s desire to move the spareboard to Squamish from North Vancouver was not contemplated either in the negotiations nor the agreements.  The desire to move the spareboard from its longstanding location in North Vancouver to Squamish would result in further adverse effects and therefore needs to be addressed in a further Material Change notice and agreement.


The Union contends that the arbitrator is free to determine the range of measures he deems appropriate to minimize the adverse effect upon affected employees in this matter.


The Company submits that the Arbitrator is functioning as a “rights” arbitrator and his jurisdiction is limited to interpreting the material change benefits negotiated in our Memorandum of Settlement.


The parties have agreed that the Arbitrator is properly appointed to hear this dispute.


            The facts material to the grievance are not in dispute.  Upon assuming the business and operations of its predecessor BC Rail, the Company decided to make certain operational changes.  A significant change involved eliminating the three trains a day in each direction on the North Vancouver to Prince George corridor and substituting a longer single train.  As reflected in the Company’s brief, part of the changes in the North Vancouver/Squamish zone was to abolish all engineers’ work based in North Vancouver, including spareboards and to re-establish the necessary positions at Squamish.  The various changes to be implemented by the Company, including those mentioned herein, were the subject of material change notices dated July 27, 2004 and September 29, 2004.  Following those notices, the Company and the Union negotiated and signed a memorandum of settlement dated November 17, 2004.  Essentially, the memorandum was intended as a settlement governing the integration of the former BC Rail operations into those of the Canadian National Railway Company, including the resolutions of material change issues.


            The first issue concerns the employees who are protected by the terms of the memorandum of settlement to the extent that they are adversely impacted by the substitution of the single train service in the Vancouver to Prince George corridor for the previous three trains per day service.  It does not appear disputed that the jurisdiction of the Arbitrator is to determine whether certain employees are in fact covered by the terms of the memorandum of agreement.  In that sense this is a “rights arbitration” rather than an “interest arbitration” following upon a material change notice. 


            The notice issued by the Company on September 29, 2004 was most specific as to the train reduction aspect of the material changes being implemented.  It appears that the notice contained an estimate of the affected employees but also had the following sentence:

These figures are considered accurate at this point in time however more current detail will be provided at the time of our negotiations.


The Company’s representative relates that as the discussions between the parties progressed, the Employer provided the Union with projected numbers of required positions and the corresponding number of redundant employees.  He stresses that the Union was cautioned that the numbers being presented were projections at best.  He notes that in fact the numbers varied as negotiations evolved and that the Company, in any event, retained the right to modify the scope of the material change.  The original notice of September 29th contemplated a reduction of 49 positions among the Union members.  On November 16th the projected numbers were revised to reflect a total reduction of 31 positions from the bargaining unit.  The memorandum of agreement was then negotiated in mutually acceptable terms, and contained Appendix “A” which presented a compilation of reductions location by location for both the bargaining unit of the United Transportation Union and of CAW 110.  The total impact on the CAW 110 bargaining unit was a reduction of 31 positions.  It should be noted that Appendix “A” is headed by the following sentence:  “The following table outlines the staffing reductions anticipated by the Company.” 


The agreement so framed was ratified by the Union.  The unchallenged representation of the Company, however, is that the parties continued to have discussions with respect to the implementation of the memorandum of agreement, with the Union insisting that the number of separations/relocation opportunities should not be left indefinite or for some future determination, but rather should be established at a firm number which the Company would be required to honour.  It would appear that the Company would have preferred to allow the identification of the adversely affected employees to remain indefinite, depending on the actual impact of the reduction from three to one trains daily in locations south of Prince George. 


It appears that the Union prevailed.  On December 17, 2004 the parties executed an implementing agreement specifically entitled: Implementation of Memorandum of Settlement dated November 17, 2004.  Significantly, for the purposes of this dispute, paragraph 4 of the agreement reads as follows:

As a result of the implementation of this material change, the company will provide for a total number of separation/relocation opportunities as per the terms of the November 17 MOA.  A number of these opportunities, as designated in the table below, will be held for employees who are presently not at work, but expected to return within the next 12 months.  These “reserved” opportunities will be held for the return to work of employees designated as “active soon” in Appendix “A”.


Separation/Relocation Opportunities


. . .




CAW 110





North Vancouver  and Squamish








Williams Lake and  Quesnel                  





CAW 110






            This grievance arises, in part, because the Union now maintains that the figure of 31 employees does not accurately represent those who had been adversely affected by the material change in the reduction of trains.  It notes that the bargaining agent accepted the projections made by the Company which resulted in some 5 employees being placed on the auxiliary board.  It appears that in fact there was ultimately insufficient work for the 5 locomotive engineers who eventually were all displaced from their employment on or about March 1, 2005.


            In the Arbitrator’s view the issue with respect to the status of these 5 employees is relatively straightforward.  If there had been no amendment or alteration of the memorandum of settlement of November 17, 2004, the position of the Union would be compelling.  Appendix “A” of that settlement gave a number of reductions which was described as “anticipated by the Company”.  That language, coupled with the general terms of the settlement would, in the Arbitrator’s view, indicate that the parties nevertheless reserved protection for those reductions which might be in fact unanticipated.  However, for reasons it best appreciates, the Union further agreed to the terms of the implementation agreement of December 17, 2004.  That agreement is categorical with respect to implementing the settlement of November 17, 2004.  As noted above, it states that “…the Company will provide for a total number of separation/relocation opportunities as per the terms of the November 17 MOA.” (emphasis added)  Moreover, the first paragraph of the agreement states “This Agreement will remain in effect until the awarding of the last separation/relocation opportunities as outlined herein”.  (emphasis added)


            It is trite to say that the Arbitrator must take these agreements as he finds them.  That is more so when, as in the case at hand, the parties are sophisticated in the negotiating and drafting of such documents.  If the Union’s position were to prevail, the language of clear finality found in the agreement of December 17, 2004 would be meaningless.  Specifically, the total number of separation/relocation opportunities would not be “as per the terms of the November 17 MOA”, as provided in paragraph 4 of the agreement.  Nor would the agreement of December 17, 2004 expire with the awarding of the last separation/relocation opportunities “as outlined herein”.  Whatever the equities or advisability of a given agreement, it is not the role of a rights Arbitrator to undo the bargain which the parties themselves decided to make.  In the circumstances at hand, the Arbitrator has no alternative but to conclude that for reasons which they best appreciate, the parties agreed upon a total number of 31 separation/relocation opportunities for the purposes of the memorandum of settlement of November 17, 2004.  Given that binding contractual reality, the grievance cannot succeed as regards the employees placed on the auxiliary board.


            The second aspect of the grievance, however, is more persuasive.  The material before the Arbitrator discloses that the Company proposes to change the location of the spareboard from North Vancouver to Squamish, a distance of some forty miles.  In the Arbitrator’s view so significant a change, involving as it does the potential relocation of employees, does constitute a material change which will have materially adverse effects on employees within the meaning of article 23.1 of the collective agreement.  As such, it is a change which requires the notice and other protections provided for within article 23, as the Union submits.  That conclusion is justified by the degree of dislocation occasioned by the relocation of the spareboard over such a substantial distance.  Obviously, if the Company should decide not to implement the relocation of the spareboard to Squamish, the result would be different.


            For the foregoing reasons, the grievance is allowed in part.  The Arbitrator cannot sustain the position of the Union with respect to the purported expansion of the pool of employees identified as being adversely affected by the reduction in the number of trains operating south of Prince George.  The Arbitrator does accept the position of the Union, however, with respect to the allegation that the relocation of the spareboard from North Vancouver to Squamish constitutes a material change which would trigger the application of the protective provisions of article 23 of the collective agreement.  Should the Company proceed with the relocation of the spareboard, it is directed to give the appropriate notice to the Union and to respect the procedures and rights provided within article 23.


            The Arbitrator retains jurisdiction in the event of any dispute between the parties concerning the interpretation or implementation of this decision.





Dated at Ottawa, this 8th day of September, 2005.