AH577

IN THE MATTER OF AN ARBITRATION

 

 

BETWEEN

 

 

CANADIAN PACIFIC RAILWAY COMPANY

(the “Company”)

 

 

AND

 

 

TEAMSTERS CANADA RAIL CONFERENCE EAST

(the “Union”)

 

 

 

RE: MATERIAL CHANGE NOTICES – OUTREMONT YARD

 

 

 

Sole Arbitrator:                      Michel G. Picher

 

 

 

Appearing For The Union:

            Denis Lavoie            – Legal Counsel, Montreal

            Daniel Genereux     – General Chairman – Trainmen East, Oka

            T. Beaver                   – General Chairman – Engineers East, Oshawa

            Benoit Brunet           – Local Chairman, Division 258, Engineers, Montreal

 

 

 

Appearing For The Company:

            Ron Hampel             – Legal Counsel, Calgary

            John Bairaktaris       – Director, Labour Relations, Calgary

            Dave Freeborn         – Manager, Labour Relations, Calgary

            Alain Regimbald      – Claims Analyst, Montreal

 

 

 

 

A hearing in this matter was held in Montreal on June 23, 2008

 

 

 

 

AWARD

 

            This arbitration is in relation to a material change notice provided to the Union under article 34 of the collective agreement governing enginemen and article 72 of the material change provisions which govern trainpersons. The event triggering the material change notice is the sale of the Company’s Outremont Yard. By a prior agreement a shortline company, Genesee & Wyoming Railroad, maintained operations in Outremont Yard. With the sale of that facility the Company arranged to transfer the operations of GWRR to the Sainte-Thérèse Yard, ceasing its own operations at that location as well as at Saint Martin. The practical impact of the material change is the abolishment of one road switcher assignment, referred to as Assignment 201.

 

            The notice to the Union was issued by the Company on April 9, 2008 to the General Chairmen responsible for enginemen and trainpersons, respectively. It reads as follows:

 

April 9, 2008

 

Dear Sirs:

 

Pursuant to Article 34 of the Collective Agreement between Canadian Pacific Railway (CPR) and the TCRC (E) and Article 72 of the Collective Agreement between the CPR and the TCRC (T) please accept this letter as notice of a material change in working conditions to be implemented on or about August 18th, 2008 coincident with the weekly crew change.

 

Please accept this letter as notice of cancellation of any agreement(s) or arrangement(s) which provided for the servicing of St. Therese terminal, St. Martin and area with crews having Montreal or Ste-Therese as their home terminal.

 

The Company intends to cease all operations at St. Therese, St. Martin and area including applicable spareboard work, with TCRC Employees based out of the Quebec Seniority District.

 

In due course a list will be jointly compiled identifying all incumbent employees impacted by this change.

 

Recognizing that this change will affect some Locomotive Engineers, Conductors and Trainpersons, notice has been provided under the CPR-TCRC (T) and CPR-TCRC (E) Agreements. Should, however, there be no detrimental impact on Locomotive Engineers or trainpersons as a result of this change, no benefits for trainpersons under article 72 of the CPR-TCRC (T) Collective Agreement or Locomotive Engineers under article 34 of the CPR-TCRC (E) are required.

 

A representative of Labour Relations Department will be pleased to meet with you at the earliest opportunity to discuss this matter in accordance with Articles 34.02 TCRC (E) and 72.04 TCRC (T) of the respective Collective Agreements.

 

It would be greatly appreciated if you could contact the Director of Labour Relations, John Bairaktaris at […] to arrange a mutually convenient date and time to meet regarding this matter.

 

Please acknowledge receipt of this notice. Yours truly,

 

Guido DeCiccio

Asst Vice President

Eastern Region

Canadian Pacific

 

            In the circumstances of a notice such as the notice reproduced above, the purpose of arbitration is to resolve any differences between the parties concerning measures to mitigate the adverse effects of the material change on affected employees. That is, in part, the issue before this Arbitrator. However, the Union raises issues preliminary to the resolution of issues of adverse impact. Its counsel submits that in fact the Company cannot implement the material change it seeks to achieve, arguing that to do so is in violation of the Company’s contractual obligation already established under an agreement referred to as the Trois-Rivières Agreement. He submits that the abolishment of the road switcher assignment in the case at hand violates the Trois-Rivières Agreement and, alternatively, constitutes sharp practice which should not be permitted.

 

            The Trois-Rivières Agreement, dated September 30, 1997, involved the transfer of operations at Outremont and St. Luc from the Company to Genesee Rail One (GRO), the predecessor of GWRR. In that case the parties reached a tentative agreement on mitigating elements. As the change impacted upwards of ninety employees, the tentative agreement was extensive, including maintenance of basic rate protection, layoff benefits, early retirement, bridging, severance, rail traffic controller training and relocation allowances. When the tentative agreement negotiated between the parties was not in fact ratified, it was ultimately awarded by this arbitrator in a decision dated October 10, 1997. Part of the Union’s submission in the case at hand is that the initiative taken in respect of Sainte-Thérèse and Saint Martin is essentially a continuation of the material change giving rise to the Trois-Rivières Agreement. The Union therefore submits that that agreement should essentially apply and be adopted as the award of the Arbitrator, with some upward adjustment of the monetary benefits by reason of inflation.

 

            The Arbitrator cannot accept the submission of the Union that the material change notice of the Company issued on April 9, 2008 violates the Trois-Rivières Agreement which was incorporated into the award of the arbitrator. Paragraph 1.1(b) of that agreement provides as follows:

 

b)         It is understood that running rights granted to GRO are for the purpose of interchange of traffic; in this regard it is also understood that St. L&H will grant GRO the use of sufficient tracks at Outremont or St. Luc. GRO will be limited to the exchange (receipt from St. L&H and delivery to ST. L&H) of GRO cars/trains or work directly concerned with such interchanged cars/trains, i.e. handling of bad order cars or marshalling violations. All switching contrary to this limitation and to the detriment of St. L&H Quebec Seniority District employees, will require the Company to serve notice as required in the Material Change Articles of the Collective Agreements and enter into negotiations prior to any operational changes so as to minimize adverse effects upon employees.

 

            As can be seen from the foregoing, the parties anticipated the possibility that there might be further material change innovations in switching limitations which could give rise to further material change notices. That, as the representatives of the Company point out, is what has transpired in the instant case. That switching at the Sainte-Thérèse terminal, Saint Martin and area by Montreal or Sainte-Thérèse based crews would no longer be done is the type of further material change contemplated within the Trois-Rivières Agreement. Moreover, even if it is not, there is nothing within the language of the Trois-Rivières Agreement which can fairly be construed as restricting the fundamental discretion of the Company to implement material changes in its operations, in any event. In the Arbitrator’s view the evidence in the case at hand does not disclose any violation of an agreement by the Company nor sharp practice which can be said to justify a finding, assuming that the Arbitrator had such jurisdiction, that the material change cannot be implemented. This aspect of the Union’s position is therefore rejected.

 

            With respect to the merits of the issue of measures appropriate to mitigate the adverse effects of the material change, the Union submits firstly that by the terms of article 72, governing trainpersons, the Company is under a contractual obligation to grant the benefits covered by sections 2 and 3 of article 72.01. In that regard its counsel points to articles 72.01, 72.02 and 72.03 which provide as follows;

 

Section I

 

72.01 Notice of Material Change

 

The Company will not initiate any material change in working conditions that will have materially adverse effects on employees without giving as much advance notice as possible to the General Chairperson concerned, along with a full description thereof and with appropriate details as to the contemplated effects upon employees concerned. No material change will be made until agreement is reached or a decision has been rendered in accordance with the provisions of Section I of this Article.

 

72.02 Measures to Minimize Adverse Effects

 

The Company will negotiate with the Union measures other than the benefits covered by Sections 2 and 3 of this Article to minimize such adverse effects of the material change on employees who are affected thereby. Such measures shall not include changes in rates of pay. Relaxation in schedule rules considered necessary for the implementation of a material change is also subject to negotiation.

 

72.03   While not necessarily limited thereto, the measures to minimize adverse effects considered negotiable under Clause 72.02 may include the following:

 

(I)         Appropriate timing.

(2)       Appropriate phasing.

(3)       Hours on duty.

(4)       Equalization of miles.

(5)       Work distribution.

(6)       Adequate accommodation.

(7)       Bulletining.

(8)       Seniority arrangements.

(9)       Learning the road.

(10)     Eating en route.

(11)     Work en route.

(12)     Lay-off benefits.

(13)     Severance pay.

(14)     Maintenance of basic rates.

(15)     Constructive miles.

(16)     Deadheading.

 

The foregoing list is not intended to imply that any particular item will necessarily form part of any agreement negotiated in respect of a material change in working conditions.

 

Sections 2 of article 72 deals with relocation expenses, in the following terms:

            Section 2

 

72.14   Relocation Expenses

 

(1)        The benefits set forth hereunder shall be allowed, where applicable, to an eligible employee. They shall apply to an eligible employee only once or each change.

 

(2)        Eligibility of specific employees for relocation benefits specified below will be negotiated provided that in each case the following basic qualifications are fulfilled:

 

An employee:

 

(a)        Must have 24 months cumulative compensated service (to establish one month of cumulative compensated service, an employee must, for the purposes of this Article, in that month have worked and/or been available for service on:

 

30 days (road)

21 days (Yardpersons and Yardmasters)

or major portion thereof.

 

(b)       Must occupy unfurnished living accommodation to be eligible for benefits under paragraphs (2), (6) and (7) of Clause 72.15.

 

(3)        must establish that it is impractical for them to commute daily to new location.

 

…

 

Sections 3 of article 72 deals with early retirement, in the following terms: [I HAVE ADDED THIS SENTENCE]

            Section 3

 

72.16   Early Retirement Allowance

 

An employee whose position is abolished by a change made under the provisions of Clause 72.01 or who is displaced by a senior employee, such displacement being brought about directly by and at the time of implementation of such change will, if they are eligible and elects to receive an early retirement pension with an actuarial cutback, be entitled to receive:

 

(1)        An allowance of S60.00 per month commencing in the month immediately following the last month in which the employee received wages and continuing each month until the date at which they would have been eligible for the pension without a cutback. The maximum period for which the employee will be eligible for the allowance is 5 years; or

 

(2)        a lump sum payment calculated as follows:

 

Age at Retirement

Lump sum equivalent of the total value of monthly allowances he/she could have received under this provision

 

55 to 60

75% up to 60 months entitlement

56 or 61

80% up to 48 months entitlement

57 or 62

85% up to 36 months entitlement

58 or 63

90% up to 24 months entitlement

59 or 64

95% up to 12 months entitlement

 

An employee who elects benefits under this Section 3 will not be entitled to any other benefits provided elsewhere in this Article. The early retirement allowance will cease upon the death of the employee

 

            As noted above, the Union’s position is that the benefits in respect of relocation expenses and early retirement allowances are a right which vests in the employees whose positions have been abolished or who are displaced as a result of the implementation of the abolishments. Additionally, the Union maintains that the broader panoply of rights found under the Trois-Rivières Agreement should apply. Finally, it also maintains that the material change benefits of this award should be extended to include an earlier abolishment of assignment, namely the abolishment of Assignment 202 on or about February 23, 2008. The Union maintains that that reduction in service was in effect part of the reduction which is the subject of this material change notice, and should be included accordingly.

 

            The Company’s representatives take a substantially different view. Firstly, they stress that there are no job losses as a result of the change implemented in the Sainte-Thérèse and Saint Martin area. Its representatives explain that the Company is suffering a current future anticipated manpower shortage, and that the employees impacted by the cancellation of assignment 201 will not lose employment and will not be compelled to work beyond the general region in which they have worked previously. In these circumstances, as the Company views it, the implementation of the maintenance of basic rates, which it is prepared to grant, will more than mitigate any adverse impacts suffered by the employees whose jobs were abolished, or who may be indirectly displaced. The Company’s representatives advert to the following passage of the arbitrator in AH 319:

 

Upon a plain reading of the foregoing provisions, the arbitrator must agree with the Company that the purpose of the article is to provide notice and certain protections to locomotive engineers who may be adversely affected by a material change in working conditions initiated by the Company. Plainly, the purpose of the provision is not to bestow windfall benefits on employees who, in fact, have suffered no adverse consequences on the occasion of a material change.

 

The Company’s representatives maintain that it is counter-intuitive, and inappropriate, to implement incentives to encourage retirement, among other things, when in fact there is no real adverse impact and the Company is itself facing a manpower shortage. Its position, therefore, is that only the granting of MBR protection should be allowed.

 

            I turn to consider the merits of the dispute. Firstly, the Arbitrator accepts the submission of the Company with respect to the elimination of assignment 202 in February of 2008. That step was plainly taken in response to a dramatic decline in traffic at the Sainte-Thérèse – Saint Martin locations. It was not, as was the abolishment of assignment 201, the result of an initiative taken by the Company in the reorganization of its property and work, including its contractual arrangements with GWRR. I am therefore satisfied that the instant matter extends only to the abolishment of Road Switcher Assignment 201, pursuant to the notice of April 9, 2008.

 

            But for the language of the collective agreement the Arbitrator would also be inclined to agree with the Company that the maintenance of basic rates would appear to be the appropriate measure of mitigation as applied to the facts of this case. The Union has not drawn to the Arbitrator’s attention the hardship of actual job loss suffered by any employee as a result of the Company’s actions, or indeed that any employee has been compelled to relocate any significant distance to protect work as a result of this material change. On its face, therefore, the instant matter is substantially less complex and extensive than the wide ranging job abolishments which were the subject of the Trois-Rivières Agreement and arbitration.

 

            However, the Arbitrator is compelled to recognize that the Union is correct in part of its assertion, namely that the Company has no discretion with respect to the benefits provided under parts 2 and 3 of article 72 of the collective agreement, that is to say that the provisions which apply to trainpersons. For reasons they best appreciate, the parties have made those provisions contractually mandatory in the event of a material change which involves the abolishment of an employee’s position. It is clear from the language of article 72.02 that the benefits provided by sections 2 and 3 are deemed to have been negotiated. It is only other measures which are to be negotiated under the procedures contemplated therein. In the result, “where applicable” relocation expenses are to be made available to “an eligible employee”. Additionally, under article 72.16, the benefit of an early retirement allowance must be made available to an employee “whose position is abolished … or who is displaced by a senior employee, such displacement being brought about directly by and at the time of the implementation of such change … if they are eligible …”. It would appear that eligibility in the sense contemplated by the foregoing provision would refer to the eligibility of an employee to receive early retirement benefits from and after the age of fifty-five.

 

            The benefits which are contractually vested for trainpersons do not, however, appear in the language which governs locomotive engineers. The Company’s representatives point to that fact to suggest to the Arbitrator that no such benefit should be granted. The Union’s representatives, on the other hand, maintain that equity would suggest that both the locomotive engineers and the trainpersons should receive the same benefit. The Arbitrator is impressed with neither of these submissions. For reasons which the parties best appreciate, they negotiated different benefits for trainpersons and for locomotive engineers in the event of a material change. An arbitrator should take the collective agreement as he or she finds it, and assume that there is some rational basis, possibly in other trade offs, for the different treatment of different employees under the broader terms of a collective agreement. In the result, I am satisfied that the trainpersons who are impacted by the material change notice of April 9, 2008 are to receive the benefits of part 2 and part 3 of article 72 of the collective agreement, to the extent that they are eligible. It may well be that in the circumstances no employees can claim relocation expenses, however, that is a matter for the parties to examine and for the Arbitrator to resolve only in the event that they cannot.

 

            Subject to the foregoing, the Arbitrator is fully in agreement with the Company. This is not, it seems to me, a material change which would justify the granting of relief, other than the contractual relief referred to above, beyond a direction that employees whose positions were abolished or who are displaced by reason the abolishment of the road switcher assignment receive maintenance of basic rates as a form of wage protection. It is therefore so directed.

 

            For all of the foregoing reasons the Arbitrator finds and directs that MBR protection is to be provided to all employees adversely impacted by the material change of which the Company gave notice on April 9, 2008. Additionally, trainpersons shall have the benefits provided by section 2 and section 3 of article 72 of the collective agreement.

 

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

 

 

Dated at Ottawa this 17th day ofJuly, 2008.

 

 

_________________________________

MICHEL G. PICHER

ARBITRATOR