(the "Company")





(the "Union")






(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



Appearing For UTU, Locals 1778 and 1923:

            Sylvia LeBlanc                     – General Chairperson

            Robert W. Sharpe                – Vice President



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



This arbitration was convened by the agreement of the parties to resolve their dispute concerning measures to minimize adverse effects flowing from material changes in working conditions caused by the reorganization of freight service between Fort St. John and Fort Nelson on the Fort Nelson Subdivision.  The Arbitrator’s jurisdiction arises under the provisions of Article 23 of the CAW collective agreement and Article 132 of the collective agreement of the UTU. 


The history and background to the dispute is well articulated in the joint statement of fact and joint statement of issue tabled by the parties at the hearing.  It reads as follows:



Failure to reach an agreement on operational changes and measures to minimize adverse effects on employees in connection with the Company’s notices dated July 27, 2004, in respect of the reorganization of freight service between Fort St. John and Fort Nelson on the Fort Nelson Subdivision.  These notices were served pursuant to Article 23 (CAW 110) and Article 132 (UTU).




Prior to March, 1984, freight crews were stationed at Chetwynd for freight service north and at Fort Nelson for freight service south.  These crew (sic) met at Beatton River, took rest in the camp facilities provided, exchanged trains and returned to their respective home terminal.


In March, 1984, a Material Change notice in working conditions was served by the Company to implement changes in the operation and crewing of trains on the Fort Nelson Subdivision.  A Memorandum of Agreement was signed which addressed the following items (among others):


1.      Freight assignments would be established to crew trains on the Fort Nelson Subdivision.  The home terminal for these assignments would be Fort St. John.

2.      Freight crews at Fort Nelson would be abolished.

3.      The zone for this operational change was to be Fort St. John to and including Fort Nelson.

4.      A premium (“portal to portal pay”) was established for crews who did not book rest en route on the northward and/or southward legs of their round trip.  This premium was intended to compensate employees for extensive running times and was grounded on the fact that the Company would save money on relief costs.

5.      Other benefits such as early retirement allowances and relocation provisions were included to address the adverse effect upon affected employees.


On July 27, 2004, the Company served notice to CAW 110 and the UTU pursuant to Articles 23.1.1 and 132(1)(a) respectively, regarding the Company’s decision to implement a revised scheduling of freight trains and freight crews operating on the Fort Nelson Subdivision.


This notice was necessitated solely by the change from provincial to federal laws regulating the on-duty hours of running trades employees.  While the required time on-duty on the Fort Nelson Subdivision was allowed under provincial regulations, when the operations became federally regulated, CN was required to modify its operation accordingly.  This material change was initiated by the Company solely to permit compliance with federally mandated limitations on the on-duty hours of running trades employees.


In order to permit uninterrupted continuation of freight services on the Fort Nelson Subdivision, and compliance with the Work/Rest rules, the parties entered into an “Interim Agreement” dated August 11, 2004.  This agreement was designed to remain in effect until such time as agreement has been reached, or a decision has been rendered in respect of this Material Change in Working Conditions.  The parties also specified that this interim agreement was non precedential in nature and would not serve to prejudice either party in their negotiations toward a permanent change in working conditions.


Meetings, discussions and the exchange of correspondence between the parties to negotiate a settlement regarding this operational change and the benefits and appropriate process to be applied to employees adversely affected resulted in no agreement being reached.  A proposed Memorandum of Agreement in respect of the scheduling and payment of freight crews on the Fort Nelson Subdivision was tabled by the Company, and responded to by the Unions, but no resolution was reached.


The parties are agreed that the Company was entitled to make this material change, and are further agreed that no job loss, dislocation or relocation of employees has resulted.  The issues before you are related only to the operational change and appropriate measures to address the adverse effects upon affected employees.







Company Position


Operational Change


1.      The zone for this change will continue to be Fort St. John to and including Fort Nelson.

2.      Fort St. John shall be designated as the source of relief for crewing requirements on the Fort Nelson Subdivision.

3.      Unless otherwise indicated by Bulletin Fort St. John shall be designated as the home terminal of the Fort Nelson Subdivision.

4.      Bulletins will be issued in accordance with article 127 of the UTU collective agreement for crew assignments that are operated from intermediate stations on the Fort Nelson Subdivision.  In this case, UTU article 127 shall apply to the CAW 110 as well.

5.      Employees who are assigned to terminals in the application of Item 4 (above) will:


a.      be provided accommodations, including cooking facilities at no cost,

b.      where a cook is provided, be supplied with meals at no cost,

c.      be worked or deadheaded to/from the intermediate terminal at the beginning and/or end of their assigned work cycle,

d.      will not be subject to displacement until the end of their work cycle, and,

e.      must be available at the beginning of their work cycle in order to maintain eligibility for guarantee provisions.


Adverse Effects on Affected Employees


1.      Determine those employees who have performed their preponderance of service on the Fort Nelson Subdivision in the full twenty-six pay periods immediately preceding this change.

2.      Establish a Basic Weekly Rate (BWR) for these employees based upon their earnings on the Fort Nelson Subdivision in the full twenty-six pay periods immediately preceding this change.

3.      Eligible employees will be paid the difference between their BWR and actual earnings subsequent to this change, subject to the usual terms of availability and individual commitment to maximize earnings.

4.      This BWR to continue in effect until December 31, 2006, and until the collective agreement expires in accordance with the Canada Labour Code.


The Company submits that its proposed operational changes on the Fort Nelson Subdivision is consistent with governing provisions contained in our collective agreement and that the Company’s proposal to establish BWRs for qualified employees adequately addresses materially adverse effects upon employees.


Union Position


Operational Change


1.      Permanent rest house facilities be established at Gutah, and establishment of Gutah as the permanent change off point for crews operating on the Fort Nelson Subdivision.

2.      Provision of a cook at Gutah and the supply of meals at no cost.

3.      The 16 hour payment for deadheading between Fort St. John be paid in addition to any guarantee of wages.

4.      If personal rest is booked at Fort Nelson, the 16 hour deadhead payment will go toward the 80 hour guarantee for that pay period, UNLESS the crew is called at Gutah beyond three hours from their bulletined start time.


Adverse Effects on Affected Employees


1.            Payment of $50,000. to each of four identified employees to represent their individual loss of earnings (UTU only).

2.            Payment of $5,000. to each of twenty-one named employees (CAW 110 only).

3.            Provision of a “Fort Nelson Allowance” of $5 per hour while working/operating between Mile 815.9 and Mile 977 (UTU only).

4.            Provision of a “Fort Nelson Allowance” of $5 per hour while working/operating between Mile 730.0 and Mile 977.8 (CAW only).

5.            This “Fort Nelson Allowance” to be excluded from the calculation of any wage guarantee.

6.            This “Fort Nelson Allowance” to apply to all classes of service, with the exception of deadhead service.


The parties have agreed that the Arbitrator is properly appointed to hear this dispute and to determine the range of measures you deem appropriate to minimize the adverse effect upon affected employees in this matter.


        In approaching this dispute, the Arbitrator considers it important to appreciate the difference between the crew scheduling arrangement prior to July 2004 and the arrangement after the implementation of the material change.  Prior to the change, two running crews, stationed at Fort St. John, operated with one brakeman and one conductor, along with a caboose.  On successive days they would operate from Fort St. John to Fort Nelson and from Fort Nelson back to Fort St. John, with a layover at the away from home terminal.  That resulted in the approximate accumulation of 114 hours of service over a two week pay period.  Under the new crew scheduling system, two crews stationed at Fort St. John operate from Fort St. John and Gutah while two crews stationed at Gutah are responsible for operations between Gutah and Fort St. John.  The Fort St. John crew would run to Gutah, returning to Fort St. John the next day.  The work rotation is such as to provide two and three day breaks between assignments, with 48 hours of total running time in a two week pay period.  With an additional 32 hours of guarantee, the employees would then stand to make 80 hours of pay over a two week pay period.  Gutah based crews would run 64 hours, working seven days consecutively, followed by seven days off.  An augmentation of 16 hours of guarantee would bring them to a total of 80 hours paid over a two week period. 


      Two factors emerged from the changes:  firstly, crews based at both Fort St. John and Gutah are compelled to lay over on a regular basis at the remote location of Gutah where they are housed in White Fleet accommodations originally designed to house track maintenance crews.  The accommodations are basic, and prompted the Union’s request for the establishment of a permanent and more elaborate bunk house facility.  Secondly, Gutah based crews work a continuous seven day cycle, albeit it is followed by seven days off duty, in each two week period.  During each seven day work cycle, they lay over at Gutah four times.  In the result, the material change occasions not only a loss of total earnings to all crews, but also involves a degree of isolation to the extent that the crews lay over at Gutah and, for the Gutah based crews, a substantial change in the nature of the work cycle, with successive periods of seven days on and seven days off.  Additionally, all crews will be operating on a conductor only basis, albeit that is a matter dealt with under the terms of a separate agreement, as for example incorporated within Article 141A of the UTU collective agreement.


      The Arbitrator proposes to deal with the items in dispute, issue by issue, as presented in the text of the Company’s proposal.  It should be noted at the outset that the Arbitrator agrees with the Company’s designation of adversely affected employees, based as it is on the work performed by individuals on the Fort Nelson Subdivision in the 26 pay periods immediately preceding the material change.  As a general matter, material change protections are not intended to apply to employees who have only peripheral involvement in the work that is the subject of the change, or who, at best, might become eligible for future employment on the assignments in question.  The Arbitrator also accepts the Company’s wording of Article 3.1 which states that, “the Zone for this operational change shall be Fort St. John to and including Fort Nelson.”


       With respect to Article 3.2 the Company proposes language which would state that “Fort St. John shall be designated as a source of relief for crewing requirements on the Fort Nelson Subdivision.”  The Union submits that the wording of the Company is too broad, as it would allow, for example, the forcing of employees from Fort St. John to perform yard work at Fort Nelson, an obligation that has never existed in the past.  In the Union submission, there would be no objection to the Company’s proposal to the extent that Fort St. John should be made the source relief for the crewing of road assignments only on the Fort Nelson Subdivision.


      The Arbitrator agrees with the position advanced by the Union on this issue.  It is less than clear that the reorganization of the road assignments with the introduction of Gutah as a layover point should have any bearing on the method by which employees can be forced into relief yard assignments, either at Fort Nelson or at Fort St. John.  The Arbitrator therefore directs that Article 3.2 read as follows:

Fort St. John shall be designated as the source of relief for all road assignment crewing requirements on the Fort Nelson Subdivision.



      Article 3.3 involves a proposal by the Company to the effect that Fort St. John shall be designated as the home terminal of the Fort Nelson Subdivision, unless otherwise indicated by bulletin.  The Arbitrator is in agreement with this provision with the proviso that it be qualified by the limitations of Article 3.2 above.


      The parties are agreed with the terms of Articles 3.4 and 3.5, with the exception of the issue of the providing of a cook.  The Union proposes that a cook be provided at Gutah to supply meals at no cost to the employees who lay over at that location.  It does not appear disputed that that is the arrangement that has been put in place for the purposes of the interim agreement following the initiation of the material change.  The Arbitrator considers that this is a matter which properly arises within his jurisdiction.  For example, Article 132 of the UTU collective agreement expressly lists “adequate accommodations” as an item for negotiation to minimize adverse effects.  The hardship of frequent forced layovers in a remote location, particularly in White Fleet accommodations, is a matter which goes to the heart of the quality of working life issues in the instant case.  Prior to the implementation of the change, crews on the Fort Nelson Subdivision were not compelled to pack their own coolers of food nor to prepare their own meals at layover locations.  In the Arbitrator’s view, it is equitable for the Company to continue to provide a cook to prepare meals for the crews laying over at Gutah, bearing in mind that on most days no less than four employees would be working in and out of that location.  The Arbitrator therefore adopts the position of the Unions with respect to Article 3.5 and directs that a cook be provided and crews be supplied meals at no cost at Gutah.


      Article 4.0 deals with maintenance of earnings.  The Company’s proposal is for the application of the standard maintenance of earnings formula, to apply until the expiry of the collective agreement, on December 31, 2006, augmented by the statutory freeze period for its continuation under the Canada Labour Code.  In lieu of maintenance of earnings, the Union has proposed a formula that includes lump sum payments of $50,000.00 for UTU members and $5,000.00 for CAW members, to offset their difference in earnings.  They also propose a $5.00 per hour “Fort Nelson Allowance” for each hour or portion thereof while working on the Fort Nelson Subdivision between Mile 730 and Mile 977.8.


      In the Arbitrator’s view, the demands of the Union with respect to lump sum payments are not sufficiently substantiated in the case at hand.  I must agree with the Company that maintenance of earnings provisions, a concept well established within the industry, are appropriate to mitigate the adverse consequences of any loss of earnings.  The Arbitrator does not agree with the Company, however, that such protection should be limited to the term of the current collective agreement.  While I accept that it is unrealistic to direct maintenance of earnings payments to adversely affected employees for an indefinite period, I am satisfied that a period longer than December 31, 2006 should be envisioned.  In the circumstances, the Arbitrator considers it appropriate to direct that maintenance of earnings be provided to all adversely affected employees for a period calculated between the date of implementation of the material change until December 31, 2007 and thereafter only to the extent that a statutory freeze might apply.


      I turn now to consider a number of proposals made by the Unions.  The Unions propose language in respect of Article 3.2 with respect to the scheduling of the four (4) Train and Engine crews over a two week period on the Fort Nelson Subdivision.  The Arbitrator notes that at the hearing the Company indicated that it could not accept the Unions’ proposal if its effect was to nullify the application of Article 127 of the UTU collective agreement by effectively creating a permanent assignment of crews.  The Arbitrator considers the Employer’s position in that regard to be reasonable, considering that the Employer’s ability to bulletin assignments is a cornerstone management right under the collective agreement.  In the result, the Arbitrator grants the Unions’ proposal for Article 3.2, save it shall be amended to contain clear language to indicate that it is subject to the continuing application of Article 127 of the collective agreement.


      The Unions propose Article 3.3 which would continue the interim arrangement whereby the 16 hour deadhead payments between Fort St. John and Gutah are paid over and above the 80 hour guarantee for employees in both Unions.  Given the overall provisions of this Award, as well as other terms agreed between the parties, I do not consider that it is appropriate to continue in effect the special incentive relating to deadhead payments which was part of the interim agreement intended to promote immediate implementation of the Company’s material change.  For these reasons, the Unions’ request concerning Article 3.3 is denied.  The Unions’ related demand expressed in Article 3.8 is likewise denied.  The Arbitrator also agrees with the Company that the Unions’ proposal for reserving the right in the Company to incorporate mandatory rest time at Fort Nelson is unnecessary, given the Company’s existing ability to re-bulletin assignments under the provisions of Article 127 of the collective agreement.


      Given the complexity of the submissions made by the parties, the Arbitrator retains jurisdiction to deal with any matter which may not be dealt with this Award, as well as to resolve any dispute between the parties concerning the interpretation or implementation of the Arbitrator’s Award.



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