IN THE MATTER OF AN ARBITRATION
BETWEEN
CANADIAN PACIFIC RAILWAY COMPANY
(the “Company”)
AND
INTERNATIONAL BROTHERHOOD OF ELECTRICAL
WORKERS
SYSTEM COUNCIL NO. 11
(the “Union”)
RE: GRIEVANCE OF S&C MAINTAINER
BRUCE PELTO
Sole Arbitrator: Michel G. Picher
Appearing For The Union:
K.
Stuebing – Counsel, Toronto
L.
Couture – International Representative. Hawkesbury
K.
Kearn – Sr. System General Chairman, Boston Bar
S.
Dembinski – System General Chairman, Burlington
P.
Watt – Eastern General Chairman, Woodstock
Appearing For The Company:
A.
Azim – Manager, Labour Relations, Calgary
K.
Henty – Manager, Signals & Communications, SOSA
M.
Moran – Labour Relations Officer, Calgary
K.
Bilson – Counsel, Calgary
M.
Gauthier – Manager, Signals
& Communications, NOSA
A hearing in this matter was
held in Montreal on Monday, 12 February 2007.
AWARD
This
grievance concerns the Union’s claim that the abolishing of the position held
by S&C Maintainer B. Pelto, at Sudbury,
constituted a technological, operational or organizational change within the
contemplation of article 1.1(a) of the Income Security Agreement (ISA). The
Company denies that what transpired was an operational or organizational change
and, alternatively, submits that in any event there were no adverse effects on
employees by reason of the abolishment of the grievor’s
position as an S&C Maintainer at Sudbury.
The nature
of the dispute is outlined within the joint statement of issue, filed at the
hearing. It reads as follows:
DISPUTE:
Claim on behalf of S&C Maintainer B. Pelto for Article 4 Benefits pursuant to the Income Security Agreement (ISA).
JOINT STATEMENT OF ISSUE:
In May of 2000, the Company issued a notice to the Brotherhood pursuant to Article 1.1(a) of the ISA and Article 10.1 of the Collective Agreement, advising of its decision to abolish a number of positions across the system, including Mr. Pelto’s.
Mr. Pelto filed a grievance on his own behalf at step one of the grievance procedure, contending that his job abolishment constituted an organizational change.
The Brotherhood progresses the grievance, contending that an article 1.1(a) notice should have been issued to Mr. Pelto in this instance, with all the rights and benefits provided thereto.
The Brotherhood contends:
1. A notice pursuant to Article 1.1(a) of the Income Security Agreement (ISA) should have been issued by the Company, advising of the abolishment of Mr. Pelto’s position.
2. That failing to have the notice of Mr. Pelto’s position issued pursuant to article 1.1(a) of the ISA, Mr. Pelto should still have been entitled to the benefits described in Article 1.2(c) of the ISA, i.e., benefits pursuant to Article 4 of the ISA.
The Company denies the Brotherhood’s contentions and declines the Brotherhood’s request.
The facts
pertinent to the grievance are not in substantial dispute. By reason of budget
constraints imposed on management at Sudbury, the decision was made that the
S&C maintainers work being performed over a given territory by some five
S&C Maintainers could in fact be handled by four employees, rather than
five. In the result, the position held by Mr. Pelto
was abolished. The Company takes the position that the abolishment took place
under article 10.1 of the collective agreement, as the adjustment did not
constitute an operational or organizational change.
In fact, Mr.
Pelto continued to work as an S&C Maintainer at
Sudbury, exercising his seniority to take a maintainer’s position covering
territory east of Sudbury. That move resulted in a certain degree of chain
bumping. Mr. Pelto bumped a less senior employee
working as an S&C Maintainer out of the Sudbury East Terminal. In turn that
employee exercised his seniority, displacing junior employee Steve Beaudry. Mr. Beaudry was unable
to exercise his seniority to continue to hold a maintainer’s job. In the
result, he was required to return to work on S&C Gangs as an S&C
Wireman. That resulted in Mr. Beaudry losing the
standby pay enjoyed by S&C Maintainers, being 7.5 hours a week, said at
that time to be the equivalent of $8,000 over a working year.
The bump of
Mr. Beaudry into the S&C Gangs prompted a further
chain of bumping which concluded in employee Ken Byrnes being placed in a
position of having to bump, possibly to another location. That result was
avoided, however, as Mr. Byrnes was given the option of remaining in the
S&C Gangs, with the Company effectively creating an additional temporary
S&C Wireman position which Mr. Byrnes elected to fill, apparently until he
eventually returned to a permanent position sometime later.
The sole
issue is whether what transpired constitutes a technological, operational or
organizational (TO&O) change within the meaning of article 1.1(a) of the
ISA, and if so whether the change implemented had adverse impacts so as to
trigger the rights and obligations contained within that agreement.
There is no
question in the case at hand of any reduction or fluctuation in traffic, or
indeed of any reduction of the work which needed to be performed. In fact, at
the end of day, the same number of employees at Sudbury essentially performed
the same work as was previously done. The Company submits, however, that what
transpired was not a TO&O change as contemplated within the ISA. Its
representative submits that that is so firstly because the change was
predicated on a budget constraint and, secondly, the grievor,
Mr. Pelto, in fact suffered no adverse effect,
continuing to work on a full time basis, albeit out of the East Terminal rather
than the West Terminal at Sudbury. In fact, the Company stresses, the grievor’s earnings improved following the job abolishment,
and on that basis the employer submits that the condition precedent of adverse
effects is not made out.
With
respect, the Arbitrator cannot accept the Company’s characterization of what
transpired. Most fundamentally, the issue is not whether the grievor was himself adversely affected, for the purposes of
determining the need to give the proper notice under article 1.1(a) of the ISA.
Notice of a TO&O change must be given if the change is of an operational or
organization nature which will have “… adverse effects on employees holding
Permanent Positions …”. The position of the Company would effectively amend the
article to reduce the inquiry into whether there are adverse effects on the
employee whose job is abolished. That is simply not the nature of the exercise
under article 1.1(a) of the ISA. The provisions of the ISA are in fact
predicated upon the recognition that a TO&O change has a widespread effect
and that protection should extend so as to minimize the adverse impacts on any
and all employees who might be affected. I do not construe the joint statement
of issue as presenting any more narrow question to be determined.
The first
question in the case at hand is to determine whether there was a TO&O
change. I am satisfied that there was. Previous awards within the railway
industry have made it clear that the abolishing of positions in the wake of
budgetary constraints can constitute operational or organizational change.
Indeed, decisions as to reducing budgets and the consequent reorganization of
the workforce are an intrinsic prerogative of management which can be at the
heart of an operational or organizational change. (See, e.g., AH 265.)
It is also
well established that the abolishment of a single position can, of itself,
constitute an operational or organizational change. For example, in CROA 3447 the abolishment of a single
foreman’s position at a butt welding plant was found to constitute an
operational or organizational change. In the analysis of that case the
Arbitrator dealt with the issue of whether the change constituted a normal
reassignment of duties arising out of the nature of the work, an exception to
the definition of an operational or organizational change. In that regard he
commented, in part, as follows:
… This
is not a case, for example, of the relocation of work from one place to another
which eliminates the need for a given position or, for another example, an
adjustment in employee complement by reason of the abolishment of a train or
some other part of the Company’s enterprise. In the case at hand there is
simply no change whatsoever in the plant or the work it performs, save that the
Company has determined that it can do without a first line supervisor in the
relatively small operation at Surrey. That is clearly an organizational or
operational change, and cannot be fairly be characterized as a normal
reassignment of duties inherent in the nature of the work of the production and
maintenance foreman, or of the work performed generally within the butt welding
plant.
In the
Arbitrator’s view the above reasoning applies four-square to the case at hand.
In this case, to achieve budgetary efficiencies, the Company decided to do with
one less S&C Maintainer working out of the Sudbury West Terminal. That was
achieved by abolishing the grievor’s position, a
change which triggered a sequence of job displacements terminating in the
creation of a temporary position for Mr. Byrnes, a measure which apparently
finally avoided the cost of re-locating an employee to another terminal.
The question
then becomes whether there were material adverse effects upon the employees, as
contemplated within the ISA. The Arbitrator is compelled to conclude that the
Union has discharged its onus of proof in that regard. It is not disputed that
by reason of the abolishment of Mr. Pelto’s position
and the subsequent chain of bumping which occurred, Steve Beaudry
ceased to be able to hold an S&C Maintainer’s job, and was compelled to
return to work as an S&C Wireman. There is no dispute that the impact of
that on Mr. Beaudry was the loss of some $8,000 in
wages annually. In the Arbitrator’s view that is not an inconsequential or
incidental effect, and it must be clearly seen as being adverse. By way of
comparison, in AH 57, where two jobs
were abolished and two employees found themselves with reduced wages, it was
found that the conditions of an operational and organizational change,
including adverse effects, were made out.
The
jurisprudence is clear that not all impacts, as for example the obligation to
take less attractive shift or tour of duty, are considered adverse impacts for
the purposes of triggering the protections of the ISA. On the other hand, when
serious wage consequences are demonstrated, such impacts are made out. As the
Arbitrator commented in CROA 2284:
The cases generally reflect the
understanding of the parties that a material change in working conditions
within the meaning of article 8 of the Job Security Agreement must, as a
general matter, be such as to generally impact the employment security of the
persons affected. Such adverse impacts as the abolishment of positions, the
requirement of employees to exercise their seniority rights to lesser paid
positions, or to relocate are typical of the impacts considered in the reported
cases. …
On the facts
of the case at hand the Arbitrator is compelled to conclude, having particular
regard to the substantial reduction in wages suffered by Mr. Beaudry, that the abolishment of the grievor’s
position did constitute an operational or organizational change which had
materially adverse impacts upon the employees. In that circumstance the Company
was obligated to provide notice under the provisions of article 1.1(a) of the
ISA, something which it failed to do as regards the abolishment of Mr. Pelto’s position.
The Union
further made submissions with respect to whether the creation of a temporary
position for Mr. Byrnes was a violation of the collective agreement. The
Arbitrator would make no finding with respect to that allegation, if only
because it is not an issue which is raised within the four corners of the joint
statement of issue, the document from which the Arbitrator draws his
jurisdiction. Alternatively, if it were necessary to rule on this issue, the
Union pointed to nothing in the collective agreement which would prevent the
Company from offering to Mr. Byrnes a temporary position, it being understood
that Mr. Byrnes himself remained at all times free to exercise his seniority to
bump into a permanent position. In other words, he was not deprived of the
ability to continue to hold a permanent position.
Nor does the
Arbitrator make any assumptions with respect to the appropriate remedial adjustments
which should be negotiated, or failing agreement, arbitrated in respect of the
abolishment of Mr. Pelto’s position. That is an
entirely separate matter which the parties are bound to first consider
together.
For the
foregoing reasons the grievance is allowed. The Arbitrator finds and declares
that the Company violated the provisions of article 1.1(a) of the ISA by
failing to give notice under that provision to the Union with respect to the
abolishment of the position of S&C Maintainer B. Pelto
at Sudbury. I remit the matter to the parties and retain jurisdiction with
respect to this matter in the event of any dispute between the parties
concerning the interpretation or implementation of this award.
Dated at Ottawa this 15th day of February 2007.
(original signed by) MICHEL G. PICHER
ARBITRATOR