(the “Company”)







(the “Union”)







Sole Arbitrator:                      Michel G. Picher




Appearing For The Union:

            Ken Steubing                 – Counsel, Toronto

            Luc Couture                    – International Representative, Hawkesbury



Appearing For The Company:

            Mike Moran                     – Labour Relations Officer, Calgary

            Bruce Lockerby              – Labour Relations Officer, Calgary

            Glenn Mullally                – Manager, S&C Construction, Calgary

            Stephanie Stone            – Industrial Relations Intern (FMCS), Calgary




A hearing in this matter was held in Montreal on December 14, 2007.




            By a decision dated February 15, 2007, the Arbitrator allowed the grievance, finding that the Company improperly failed to provide an Article 1.1(a) Notice under the Income Security Agreement (ISA) with respect to the abolishment of the position of S&C Maintainer B. Pelto at Sudbury. The Arbitrator remitted the matter to the parties for them to discuss the possible remedy that would be appropriate in the circumstances.


            The impact of the Company’s actions, found by the Arbitrator to constitute an operational change, is related in some detail in the award of February 15, 2007, and need not be repeated here. Suffice it to say that two employees who were on the receiving end of the displacement chain did suffer either a real or a potential loss of earnings. Those employees are Mr. Dave Desjardins and Mr. Steve Beaudry.


            The Union maintains that the two individuals should be “made whole” in the sense that the Arbitrator should consider what would have occurred if the notice had been given properly, and what the resulting wage treatment of the two employees would therefore have been. The Union’s position begins with the assumption, based on the arrangements made with respect to other job abolishments at or about the same time and place, that either Mr. Pelto, or another employee with the requisite seniority would have been offered and would have accepted a severance package. That, in the Union’s submission, would have avoided the displacement of employees and would have saved Mr. Desjardin and Mr. Beaudry from a loss of earnings in the period between the year 2000 and the year 2006. Significant among their respective losses are such factors are the loss of standby pay as well as overtime opportunities. On that basis the Union places Mr. Desjardin’s loss at slightly over $21,000.00, with Mr. Beaudry’s claim being $35,326.00.


            The Company submits that there is no basis no compensate the two employees as argued by the Union. It notes that both individuals have since returned to the full S&C Maintainer position, and are therefore no longer arguably suffering any wage loss as a result of the abolishment of Mr. Pelto’s position in May of 2000. The focus of this dispute is, therefore, limited to the period between 2000 and the time of their return to full S&C Maintainer’s duties. The Company submits that the appropriate means of compensating the two employees is by the implementation of a maintenance of basic rates (MBR). That mechanism, it submits, is the mechanism traditionally used for protecting employees who suffer adverse impacts as a result of a technological, operational or organizational change.


            The Company’s representatives note to the Arbitrator’s attention that none of the employees affected by the notice failed to comply with the provisions to article 4 of the Income Security Agreement, as they did fully exhaust their seniority in their own bargaining unit on the Basic Seniority Territory. There was, in that circumstance, no right to invoke the severance options otherwise available under article 4. In the result, the protection of the employees affected would be the maintenance of basic rates under the terms of article 7 of the ISA.


            Having considered the respective positions of the parties, the Arbitrator is compelled to accept the argument of the Company in the case at hand. It is, at best, speculative to consider whether there would or would not have been a severance buy out negotiated if Mr. Pelto had been included in the article 1.1(a) notice which issued in May of 2000. Mr. Pelto, or another senior employee, may or may not have had the necessary eligibility or, alternatively, may simply not have wished to sever their employment at that time. On what basis can it now be determined that there would have been no ripple effect, in any event? I can see none which can be reliably used to ground a considerable award for what would be earnings replacement.


            The Arbitrator must agree with the Company that what the ISA contemplates is rate protection for employees who are negatively impacted by a technological, operational or organizational change. That rate protection is implemented through the accrediting of an MBR formula for the benefit of each of the employees, so as to maintain them at their then current wage rates. I must agree with the Company’s representative that overtime and overtime opportunities have no bearing in that calculation. To allow the remedy which the Union now seeks would arguably give to the grievors a windfall which they could not have secured even if there had been the proper application of the notice provisions to Mr. Pelto.


            For the foregoing reasons the Arbitrator finds and declares that the position of the Company is correct. The Arbitrator directs that the Company apply, retroactively, to Mr. Desjardins and to Mr. Beaudry the protections of the maintenance of their basic rates in accordance with the ISA, and pay to them forthwith any amounts which might accordingly be owing. I continue to retain jurisdiction in the event of any further dispute concerning the interpretation or implementation of this award.



Dated at Ottawa this 19th day of December, 2007