(the “Company”)







(the “Union”)






Sole Arbitrator:                      Michel G. Picher




Appearing For The Company:

D. VanCauwenbergh  – Senior Manager, Labour Relations, Toronto

J. Torchia                       – Senior Manager, Labour Relations, Edmonton

M. Becker                       – Director, Labour Relations

K. Madigan                    – Vice-President, Labour Relations North America, Montreal

K. Creel                          – Sr. Vice-President – Eastern Region, Toronto



Appearing For The Union:

R. Beatty                        – General Chairperson, Sault Ste Marie

B. Boechler                    – General Chairperson, Edmonton

R. LeBel                         – General Chairperson, Quebec

R. Hackl                         – Vice-General Chairperson, Saskatoon

J. Robbins                     – Vice-General Chairperson

G. Anderson                  – Vice-General Chairperson

P. Vickers                       – General Chairman, TCRC

M. Vistrocy                     – Local Chairperson, Toronto

G. Gower                        – Local Chairperson, Toronto


A hearing in these matters was held in Toronto on April 18, 2006



            The parties agreed to present to the Arbitrator a number of disputes arising out of the interpretation and application of the memorandum of agreement by which they renewed their collective agreements, a document executed February 12, 2005 and ratified by the Union's membership on April 28, 2005. The issues and positions of the parties are generally reflected in the Dispute and Joint Statement of Issue filed at the hearing, which reads as follows:



1.         Union policy grievance disputing the Company's position that the booking of one (1) personal leave day (up to 24 hours) which overlaps from one (1) calendar day to the another calendar day requires a personal leave day "daily allotment" available for each calendar day. (Agreements 4.16, 4.3, 4.2)


2.         Union policy grievance disputing the Company's position that the calculation of a terminal's personal leave days "daily allotment" is to be determined and separated by craft. (Agreements 4.16, 4.3, 4.2)


3.         Union policy grievance disputing the Company's position that the booking of "time off" adversely affects guarantees. (Agreements 4.16, 4.3, 4.2)


4.         Union policy grievance disputing the Company's position in the manner in which deferred suspensions can be issued. (Agreements 4.16, 4.3, 4.2)


5.         Union policy grievance disputing the Company's position that "gain-sharing" is not applicable to employees covered by collective agreement 4.2. (Agreement 4.2)




On February 12th, 2005, the Company and the Union signed a tentative memorandum of agreement covering collective agreements 4.16, 4.3 and 4.2. On April 28th, 2005, the Union's membership ratified the noted memorandum.


The ratified agreement covered a number of changes including:

A.         Personal leave days

B.         Time off

C.        Brown System


In addition to the above, the Company notified the Union that the Company initiated gain sharing program would be discontinued.


Subsequent to the ratification the Union grieved a number of positions being advanced and implemented by the Company as follows:


1.         The collective agreement allows employees to take "personal leave days" (PLDs). A formula was devised and agreed upon in which to calculate how many PLDs would be "available" each day (daily allotment) at each terminal. PLDs were considered as "calendar days" when accessing more than one consecutive PLD. Accessing one PLD was considered up to 24 hours from the start of such leave.


The Company takes the position that when accessing one PLD in one calendar day which overlaps into another calendar day requires that a PLD daily allotment be available on each calendar day.


The Union disagrees. The Union takes the position that a PLD daily allotment need only be available on the day on which such PLD is due to commence.


2.         The Company takes the position that the calculation of PLDs daily allotment is to be separated at each terminal by the craft of employees.


The Union disagrees. The Union takes the position that the calculation of the PLDs daily allotment as agreed, is to be determined by the number of employees in the terminal without separation by craft.


3.         The ratified collective agreement provides for the ability for certain employees to take "time off" after completing certain employment obligations. The Company takes the position that when employees take time off under this provision any applicable guarantee is reduced by way of pro rating the time off activated by employees.


The Union disagrees. The Union takes the position that any established guarantees are not reduced by the activation of the time off provision given that employees, among other things, have fulfilled their employment obligations.


4.         The ratified collective agreement provides that the issuance of discipline must conform with the Brown System of discipline. The parties agreed that deferred suspensions would form part of the Brown System of discipline.


The Company takes the position that it can issue deferred suspensions at any time for culpable behaviour.


The Union disagrees. The Union takes the position that deferred suspensions are synonymous with actual suspensions and can only be issued by the Company consistent with the rules of the Brown System of discipline as it relates to the issuance of actual suspensions.


5.         The Company advised the Union on February 12th, 2005, that it was discontinuing the Company's initiated gain sharing.


The Company takes the position that such advisement eliminated all requirements to issue gain sharing under agreements 4.16, 4.3 and 4.2.


The Union disagrees. The Union takes the position that such notification does not apply to agreement 4.2 as such gain sharing program was not "initiated" by the Company but rather was a negotiated provision of the 4.2 collective agreement.


The matters remain in dispute and are properly before the Arbitrator for resolution.


FOR THE UNION:                             FOR THE COMPANY:

R. A. Beatty                                        Myron Becker

B. Boechler                                        

R. LeBel


Date: January 20, 2006




            This dispute is relatively narrow. The Company maintains that if an employee takes a personal leave day (PLD) which begins on one calendar day and extends into the second calendar day, he or she may do so only if personal leave days are available on each of the two calendar days in question. In other words, according to the Company's view, two daily allotments would need to be available, one on each calendar day. The position of the Union is that a PLD daily allotment need be available only on the day on which the PLD is due to commence.


            The personal leave provision provides as follows:

1.         Employees will, at their discretion, be entitled to take up to and including a maximum of 12 cumulative unpaid personal leave days per calendar year as provided herein. Personal leave days will be recognized, under this agreement, as active cumulative compensated service. However, personal leave days, when taken will not be used in the calculation of Guarantees and/or Maintenance of Earnings. Employees may, at their discretion, activate their entitlement to leave days, jointly or severally up to the cumulative maximum.


2.         Notice in respect of this leave will be given as follows:


i.          One day (24 hours) – upon four hours' notification prior to the commencement of such leave time;

ii.         Two or three consecutive calendar days – upon three calendar days notification prior to the commencement of the leave days;

iii.        Four consecutive calendar days but less than seven consecutive calendar days – upon seven calendar days notification prior to the commencement of leave days;

iv.        Seven consecutive calendar days or more – upon twenty-one days notification prior to the commencement of leave days.


NOTE 1:         Employees in the application of this provision shall not be entitled to activate personal leave days between and including December 20th and December 31st.


NOTE 2:         Personal Leave Days (allotments) shall be established at each terminal utilizing the following exampled criteria:


Terminal X – 100 (Employees) X 12 (PLD)/353 (days) = 3.4 daily allotments.


In such calculations, numbers shall be rounded upward.


            The Union's representative argues that if the Company's position should succeed there would, in principle, be insufficient personal leave day allotments available to ensure that all employees are able to take up to their maximum of twelve unpaid PLDs is a calendar year. The Arbitrator must agree that the mathematics of the situation seem unavoidable, and that the position advanced by the Company does raise the possibility, assuming full usage, that employees will in fact not be able to make the maximum use of their twelve cumulative unpaid personal leave days in a given calendar year.


            By the same token, the Arbitrator can well appreciate the Company's concern. If the Union's position should prevail, and only the day of the commencement of the PLD would be considered an allotment day, in reality the Company might find itself with more employees absent on a given day than there were original allotments for that day. For example, if an employees should commence his or her PLD at 23:00 hours, with the bulk of the PLD in fact being in the next day, while a second employee has already booked the allotment for that day, in fact two employees will be absent where only one allotment was anticipated.


            The agreement is obviously silent on the mechanics of how allotments are to apply. In these circumstances I am satisfied that it must be the intention of the agreement which governs, particularly as the intentions of the respective parties are obviously not the same. After careful consideration I am satisfied that the appropriate resolution and interpretation is to apply the "preponderant day" approach to the issue of allotment. If, for example, an employee should take a PLD which commences at 10:00 and expires at 09:59 hours the following day, the first day should be the day for assessing whether an allotment is available, as that is the day which encompasses the preponderance of hours on the PLD which is being taken. Conversely, should an employee commence a PLD at 22:00 hours, it is the second day which will be viewed as the preponderant day. In that case the second day would be the day for viewing an allotment as taken.


            It would appear, moreover, that the preponderant day approach is in fact the method which the Company used pending the resolution of the parties' dispute. In the Arbitrator's view that approach is the most consistent with the overall intention of the personal leave days provision, to the extent that it does not unduly hamper the access of employees to personal leave days, while, at the same time, it protects the Company against the undue double booking of personal leave days in a way clearly not contemplated by the provision.


            The matter is therefore remitted to the parties to be administered in a manner consistent with this award.




            The position of the Union is that in a given terminal the allotment of PLD days is to be determined on the basis of the total number of employees in the bargaining unit. The Company, on the other hand, maintains that PLD allotments must be based on specific crafts governed under collective agreements 4.3 and 4.6.   It appears to be beyond dispute that the traffic coordinators' collective agreement, collective agreement 4.2, is administered separately, in any event. It raises no issue of craft distinctions.


            The Company's concern is exemplified by the events which occurred at the terminal of Toronto on May 27, 28 and 29, 2005. On those days it would appear that nine of the eleven available PLD days were occupied by yard service employees. That led to an imbalance in manpower which occasioned shortages with the potential for cancellations of assignments and increased overtime. Faced with this difficulty the Company took the position with the Union that the parties should apply a formula which, in fact, might result in an additional PLD day being available to the employees, albeit administered on a craft basis.


            While the Arbitrator can appreciate the concerns which motivate the Company's position, it is difficult to see any basis in the language of the personal leave days provision of the memorandum of agreement to give any support to the employer's view.


            There is, very simply, absolutely no reference whatsoever to any craft or classification of employee, or of assignment, within the language of the personal leave days provision as found in article 26 of the memorandum of agreement. The article speaks of "employees" being entitled to take personal leave days "at their discretion". There is no reference to any constraint with respect to whether they are in yard or road service, or whether they operate as a yard foreman, assistant yard foreman, conductor or assistant conductor.


            It is trite to say that the Arbitrator is compelled to take the collective agreement as he finds it. There is, in the case at hand, no contractual basis upon which the employer's position can be justified. For these reasons the grievance must be allowed. The Arbitrator hereby declares that the interpretation of the Union with respect to the allotment and entitlement of employees to personal leave days as being entirely without reference to craft is correct. Any adjustment in that circumstance must be a matter for negotiation, and not for arbitration.




            Article 25 of the memorandum of agreement allows employees under collective agreements 4.16, 4.2 and 4.3 to take time off upon going off duty, in accordance with the circumstances and conditions described therein. Time off can generally be booked for a minimum of three hours to a maximum of forty-eight hours, excluding call time.


            The parties are in dispute with respect to whether time off taken under the foregoing provisions can have a bearing on the employees' guarantee. It is not disputed that time off is without pay. The Company maintains that when an employee exercises his or her option to take time off the applicable guarantees are pro rated to reflect the time off taken. In the employer's view the general principle governing guarantees, whereby guarantees are reduced to the extent that employees are unavailable for work which they would otherwise perform, applies in the circumstance of time off. The Union does not dispute that maintenance of earnings may be affected by time off taken, but maintains that guarantees are not to be reduced by the exercise of the time off provisions.


            In the Arbitrator's view the instant dispute must be resolved by reference to the general principles which govern the administration of guarantees under the collective agreements. An examination of the guarantee provisions of collective agreement 4.16, and in particular article 2.12 which deals with guarantees in road, joint and conductor spareboards establishes, in accordance with the provisions of article 2.12 (a), a formula for wage guarantees pro rated over a fourteen day period for an employee on a spareboard "who is available for duty for two consecutive pay roll periods in their entirety …". Sub-paragraph 2.12 (b) of the provision then expressly establishes that guarantees are to be reduced "… for each calendar day or portion on which the employee is not available for duty …". These provisions are at the heart of the guarantee system, it being well established that employees cannot claim pay in the form of guarantees when they are not in fact available for work. Properly understood, the guarantee is a form of payment or wage insurance in the event that the Company is not able to provide sufficient work to the employee.


            When those principles are applied in the circumstance of time off as conceived under article 25 of the memorandum of agreement, on what basis can it be argued that any different approach should apply? The Arbitrator is compelled to agree with the Company that if the Union's position is accepted employees will, contrary to the normal scheme of the collective agreements, be paid in the form of wage guarantees notwithstanding that they are not available to work. In the Arbitrator's view so radical a departure from the general workings of the wage scheme within the collective agreements could only be found on the basis of clear and unequivocal language. No such language is to be found in the memorandum of agreement.


            For these reasons the Arbitrator is satisfied that the position of the Company must succeed. Under the time off provision of the memorandum of agreement an employee has the privilege of booking time off for period when he or she would otherwise be available to work. In doing so, however, the employee must bear the consequences of that choice, as reflected in the language found within the guarantee provisions themselves. In the result the Arbitrator declares that the Company is correct in its position that when employees take time off under the provision introduced by way of the memorandum of agreement any applicable guarantee is reduced, by pro rating, accordingly.




            The parties are in disagreement with respect to the meaning of the memorandum of agreement as it relates to Company's undertaking to return to the application of the Brown System of discipline. The Company maintains that under the terms of its agreement with the Union it remains available to it to issue deferred suspensions at any time for culpable behaviour, whereas the Union takes the view that deferred suspensions can only apply in situations where the Brown System would allow for a suspension to be assessed, namely when an employee is at or close to the dismissable level of sixty demerits.


            As part of the memorandum of February 12, 2005, the parties agreed to the language of a letter in the form of an addendum to the collective agreements which is as follows:


This letter will form an Addendum in the referenced Collective Agreement(s)


Re: Brown System of Discipline.


This will confirm discussions held during collective bargaining in 2004/2005 regarding the Company’s approach to discipline.


To resolve the issue of discipline, for the life of the collective agreement(s) or until otherwise mutually agreed, the Company will utilize the Brown discipline system and standards in accordance with past practices and jurisprudence.


The Company and the Union agree that in the application of the Brown system of discipline, the Company may continue to issue discipline in the form of deferred suspensions (subject to Union appeal).


Grievances resulting from the issuance of deferred suspensions will be initiated at Step II of the Grievance procedure.


            The Union maintains that by the language of the foregoing agreement the Company has effectively foreclosed itself from issuing deferred suspensions except in those cases which would allow for a suspension to be assessed under the Brown System. In that regard it relies on the following excerpt from the Brown System of discipline, apparently promulgated by the Company many years ago:


5.         Suspension


If all steps of the discipline procedure are followed the frequency with which suspension will be required will be minimal.


An employee who has accumulated close to 60 demerit marks and who is again subject to discipline may be suspended when a thorough review of the case indicates there are exceptional circumstances which warrant that a further opportunity be given the employee.


The maximum period of suspension which can be assessed for one offence is 6 months.


NOTE: Disciplinary action must not be used solely as a means of avoiding payment for time held out of service.


            The Arbitrator has considerable difficulty with the Union's position. Firstly, the excerpt from the Brown System reproduced above has never been any part of the collective agreements between the parties. It was a unilateral Company policy, a policy which could be followed or departed from at any time in the Company's discretion. Indeed, it would appear that there were instances in the past when the Company did assess suspensions against employees short of situations where an employee was at or approaching a dismissable demerit count. (See, e.g., CROA 48, 2123 and AH 36.) Similar practices were also followed by other railways, as reflected in the CROA jurisprudence.


            The language of the letter of understanding does not, in my view, support the Union's suggestion that the parties intended to entirely wipe out what had become an important disciplinary practice of deferred suspension initiated by the Company in more recent times. If the Union's interpretation is correct, the Company would have agreed to the possibility of using deferred suspensions precisely in that circumstance when a serious measure of actual suspension is most obviously needed, namely where an employee is close to the sixty demerit mark and would otherwise face discharge. On what basis can it reasonably be concluded that the parties contemplated that in that very serious circumstance the Company was effectively bargaining for the ability to not impose a suspension, but rather defer the suspension of an individual who is on the threshold of discharge?


            In my view the words of the second paragraph of the letter of understanding must be given a reasonable meaning. What, then, is to be made of the phrase "… the Company may continue to issue discipline in the form of deferred suspensions …"? By any reading, the foregoing language would appear to indicate a recognition by the parties that the Company was at liberty to continue to utilize deferred suspensions, and that it could do so within the context of a general return to the Brown System. So understood, the language would simply provide another tool to the employer in considering the appropriate discipline to assess. In some cases the awarding of demerits in accordance with progressive discipline might be sufficient. In another case, a suspension or a deferred suspension might be justified. Obviously, whether any particular remedy is justified is always subject to the overriding principle of just cause. The interpretation which the Union would apply to the language of the second paragraph would, in my view, disregard the central importance of the word "continue", a word which I am satisfied is intended to reflect a continuance of the discretion of the employer to have recourse to deferred suspensions where just cause would justify it in doing so.


            For these reasons the Union's grievance in this dispute must be dismissed.




            The record discloses that in the late 1990s the Company wished to initiate a gain sharing arrangement with the Union. As a general matter, the Union's representatives, then under the CCROU, were adamantly opposed to gain sharing. This is reflected in an email from then General Chairperson Gregotski to the Company's then Assistant Vice-President, Labour Relations, Mr. R. Dixon. Mr. Gregotski commented, in part: "If the Company wants to send every employee a turkey at Christmas and stick a cheque in it, then go ahead". The Union refused, however, to make such an arrangement part of the collective agreements.


            The most that can be said is that by a written understanding during the negotiations dealing with the traffic coordinators' collective agreement 4.2, dated October 20, 1996, the parties agreed to a closed period commitment to develop a gain sharing mechanism. It appears that discussions ensued, but no direct evidence of a concluded agreement has been produced. It would appear that in April of 1999 the Company sent to then General Chairperson Long a draft memorandum of understanding with respect to gain sharing for traffic coordinators. However that memorandum of understanding was never returned to the Company in an executed form. In the result, the Company administered its gain sharing programs with the Union strictly on a gratuitous basis. It finally decided to cease doing so in 2004, a situation of which the Union was advised at the start of the last round of negotiations.


            The Union, however, remains under the apparent belief that the Company was under a contractual obligation with respect to gain sharing payments to yard coordinators under collective agreement 4.2. The Arbitrator has substantial difficulty with that position. It is not insignificant that the Canada Labour Code contemplates that collective agreements are to be evidenced in writing. At a minimum, whatever the form of the writing, it should clearly confirm the acceptance of rights and obligations by both parties. In the case at hand the Union is unable to place before the Arbitrator any evidence of a concluded arrangement or understanding between itself and the Company as regards any obligation on the part of the Company to maintain gain sharing payments in favour of yard coordinators under the terms of collective agreement 4.2. There is, in other words, no evidence of any enforceable agreement in that regard.


            For these reasons this grievance must be dismissed.




            All of the foregoing disputes are remitted to the parties to be dealt with in a manner consistent with the rulings herein. The Arbitrator retains jurisdiction in the event of any dispute concerning the interpretation or implementation of any aspect of this award.



Dated at Ottawa this 11th day of May 2006.


(original signed by) MICHEL G. PICHER