(the “Company”)







(the “Teamsters”)




(the “UTU”)






Sole Arbitrator:                      Michel G. Picher



Appearing For The Unions:

      Michael Church                   – Counsel, Toronto

      Bruce Willows                      – General Chairman, TCRC, Edmonton

      Robert Thompson                – General Chairperson, UTU, Edmonton

      Garth Bates                           – Vice-President / Canadian Legislative Director, UTU, Ottawa

      Roland Hackl                        – Advisor / Witness, Saskatoon

      Roy McNally                         – Local Chairman, TCRC, Humbolt

      Ivan Galandy                        – Local Chairman, TCRC, Canora


Appearing For The Company:

      Doug VanCauwenbergh    – Director, Labour Relations, Edmonton

      Basil Laidlaw                        – Manager, Labour Relations, Edmonton

      Jim Newton                           – Superintendent, Saskatoon



A hearing in this matter was held in Montreal on July 7, 2008.




            This is an arbitration pursuant to the provisions of article 89 of collective agreement 1.2 and article 139 of collective agreement 4.3, involving material changes in operations impacting the bargaining units of the United Transportation Union and the Teamsters Canada Rail Conference at three terminals on the Prairie North Line (PNL). The Company’s ex parte statement of issue outlines the history of the dispute and the affected locations, and reads as follows:



Failure to reach agreement on addressing the potential adverse effects on employees following negotiations on the Company’s Material Change Notice dated September 5, 2007 pursuant to Article 89 of Agreement 1 .2 and Article 139 of Agreement 4.3.



On September 5, 2007 the Company issued notice to the TCRC under Article 89 of Agreement 1.2 and to the UTU under Article 139 of Agreement 4.3 outlining changes that would be implemented atthe terminals of Dauphin, MB, Canora, SK, Humboldt SK on the Prairie North Line (PNL).


The Company and Unions engaged in the negotiation process outlined in the collective agreements in an attempt to reach mutual agreement on measures to minimize significantly adverse effects on employees. This included several meetings and discussions including a final mediation of the outstanding issues by a Board of Review. The results were unsuccessful and the parties have been unable to reach mutual agreement on appropriate measures to minimize adverse effects on employees.


The Company proposes to provide Maintenance of Earnings provisions as contained in the respective collective agreement to employees who are financially disadvantaged by these changes on the PNL. The Company also proposes to provide a limited number of relocation packages pursuant to the respective collective agreement to employees at affected terminals who wish to relocate to one of the following shortage terminals – Saskatoon, North Battleford, Brandon or Winnipeg.


The Unions do not agree that the Company’s proposal is sufficient to address adverse effects on employees at the affected terminals.


The parties have progressed this dispute to arbitration in accordance with Article 89.4 of Agreement 1.2 and Article 139(d) of Agreement 4.3, and the matter is now properly before the Arbitrator.


            The sole issue in these proceedings is the appropriate measures to mitigate the adverse effects on employees negatively impacted by the Company’s initiatives. There are three locations and three operational changes which have given rise to this dispute. They are succinctly described in the following terms in the Company’s brief to the Arbitrator:


The changes outlined in the Company’s Notice involved a transfer of work from one terminal to another that would result in increased efficiencies:


i) Train 550 – this train assignment operates at Swan River, MB and is manned out of Dauphin. Currently a Dauphin crew deadheads to Swan River by taxi and operates the assignment servicing local customers in and around Swan River, and upon completion the crew deadheads back to Dauphin. The Company’s change will transfer the operation of Train 550 to Canora based crews, thereby eliminating the deadhead costs out of Dauphin and resulting in a loss of work to  Dauphin.


ii) Trains 453/452 at Humboldt – operating between Saskatoon and North Battleford using Humboldt crews. The Humboldt crews deadhead by taxi from Humboldt to Saskatoon and pick up Train 453 and operate to North Battleford over the Warman and Aberdeen Subs. The return trip has the Humboldt crew operating Train 452 from North Battleford to Saskatoon where they drop the train and deadhead back to Humboldt. The Company’s change transfers the operation of Trains 453/452 to Saskatoon crews thereby eliminating the deadheading costs at Humboldt and resulting in a loss of work at Humboldt.


iii) Margo Subdivision – trains operating on the Margo Subdivision between Canora and Humboldt are manned by employees home-stationed at Canora. The Company’s change will transfer this work to employees home-stationed at

Humboldt. This will cause a loss of work at Canora, (offset by the gain of work from Dauphin), but will result in an increase of the work at Humboldt thereby offsetting the loss of work associated with transferring work from Humboldt to

Saskatoon on Trains 453/452.


            It is common ground that the material change implemented by the Company has the effect of eliminating four positions, being two from each trade, at each of the three locations of Dauphin, Canora and Humbolt.


            The issue before the Arbitrator is relatively straightforward. As indicated in its ex parte statement of issue, the Company takes the position that maintenance of earnings protections will sufficiently minimize the adverse impacts of the work reduction which has been visited upon these three locations. It submits that that alternative, coupled with relocation packages, as contemplated within the terms of the collective agreement, will allow employees to relocate to certain defined shortage terminals, should they choose to do so.


            The Union’s position is that in fact the Company’s actions will cause junior employees, referred to as “D” employees, to be laid off. Its counsel argues that each of the three locations of Dauphin, Canora and Humbolt is in fact in a surplus position as regards the complement of employees. In that regard he notes that a furlough board of four employees is in place at Dauphin while in recent history employees at Canora and Humbolt have either bid or been forced to relocate to shortage terminals elsewhere. The fundamental position advanced by the Union is that, in accordance with prior jurisprudence, early retirement credits and bridging opportunities are made available in circumstances of employee surplus, providing incentives for senior employees to leave the workforce to avoid the layoff of more junior personnel. The Union refers to the arbitrator’s comments in CROA 3310 to the following effect:


… As reflected in prior arbitral awards, early retirement credits are a device which may be appropriate in some circumstances of material change. They may be particularly appropriate where redundancies will be caused by the material change in question. In that situation early retirement credits can be an incentive to attrition whereby the acceleration of the retirement of senior employees frees up available positions at the location to more junior members of the bargaining unit.


            The first position of the Union, therefore, is that this is an appropriate situation for offering the incentive of retirement credits. On that basis it submits that two credits should be available to each of the crafts at each of the three locations. In an alternative submission, the Union seeks an enhanced formula for relocation packages, as well as travel allowance and maintenance of earnings protections. With respect to the relocation packages it invokes the fact that the agreement negotiated in the closure of the Prince Albert terminal involved a relocation payment of $27,000, augmented by $18,000 should an employee opt to move to shortage location. It argues that on the basis of inflation the two figures should now be $32,000 and $21,000 respectively. As regards travel allowance, basing its argument on the Rainy River award of some eighteen years ago, which involved a lump sum payment of $18,000, the Union requests a one time lump sum of $25,000. It would appear that the offer of the Company on travel allowance would be a payment of $425 a month, or $10,000 per year.


            During the course of discussions the Company offered an additional protection, in the form of “guaranteed boards”, a device which would protect employees by keeping them in their same location with certain earnings protections guaranteed. In the final submission before the Arbitrator, however, that aspect of the Company’s proposal was deleted.


            Turning to the merits of this dispute, the Arbitrator is less than persuaded by the submission of the Company that it is most appropriate to allow the affected employees the protection of maintenance of earnings. There can be little doubt but that the elimination of the positions which is the subject of this dispute will, in the end, result in the layoff of junior employees or, at a minimum, the forcing of those employees to move to work shortage locations at considerable disruption and expense to themselves. Obviously, to the extent that those consequences can be avoided or reduced, the object of mitigating adverse impacts, which is the purpose of these collective agreement provisions governing material change, will be advanced.


            On the whole of the material the Arbitrator is not persuaded that the Company has demonstrated that it is in an acute manpower shortage position that would otherwise make it inappropriate to consider early retirement credits with bridging or severance payments. By the same token, the Arbitrator is not persuaded that a full complement of twelve early retirement credits, bridging opportunities or severance opportunities would be necessary on the particular facts of the instant case. That is especially so if the alternative measure of guaranteed boards is put into place so as to reduce the likelihood of displacements from the three locations in question. During the course of the hearing the Unions’ representatives agreed that implementing the concept of guaranteed boards at these locations would have a mitigating impact on what would otherwise be the layoff and/or possible displacement of employees.


            In the result the Arbitrator is satisfied that a blend of these two mechanisms, combined with relocation packages, travel allowance and maintenance of earnings in accordance with the terms which the parties themselves have negotiated within the collective agreement, will constitute a satisfactory set of conditions to mitigate the adverse effects of the loss of work at the three locations.


            Consequently, the Arbitrator directs that the parties implement a total of six retirement credits, with bridging and/or severance where applicable, as contemplated within both collective agreements. There shall be two such credits established at each location, one for each trade.


            Additionally, the Arbitrator directs that the parties establish guaranteed boards in the manner initially proposed by the Company. As reflected in its brief, the guaranteed working board would be “a separate working board with attrition conditions attached”, to be established at the affected terminals to include the number of employees impacted by the loss of work at the terminals. That number is in effect four positions at each terminal, two for each trade. Given the Arbitrator’s decision to award a limited number of retirement credits, bridging and severance, the size of the guaranteed working board at each location may be appropriately adjusted accordingly.


            The Arbitrator hereby directs and orders the terms set out above, and refers the matter to the parties for discussion and implementation. Should there be any dispute between them with respect to the interpretation or implementation of this award, the matter may be spoken to, as I retain full jurisdiction in that regard.



Dated at Ottawa this 17th day of July, 2008.