(the “COMPANY”)






(the “UNION”)












S. Grou                         - Senior Manager, Labour Relations

D.S. Fisher                  - Senior Director, Labour Relations

Denis Laurendeau     - Manager, Labour Relations

A. de Montigny           - Consultant




S. Beauchamp            - Union Counsel

L. Couture                             - International Representative, IBEW

D. Mitchell                             - Local Union Officer



Hearing in Montreal, July 8, 2013.




            The Union claims the Company violated Agreement 11.1 and the NQISL Memorandum of Agreement and a decision by the Canada Industrial Relations Board (CIRB) made on May 12, 2010, regarding employee compensation, retroactive for the period between January 1, 2008 and May 12, 2010. The Company’s dispute and statement of issue read:




3.    Alleged violation of two collective agreements, 11.1 and NQISL, as well as the Canada Labour Code and the decision of the Canada Industrial Relations Board dated May 12, 2010.




4.    The Union claims that the Company violated the Canada Labour Code and the May 13 [sic], 2010 decision of the Canada Industrial Relations Board (CIRB). 


5.    Conversely, the Union argues that the Company violated article 21 of the NQISL collective agreement, including but not limited to article 21.2.


6.    The Union is seeking damages for its affected members, including, but not limited to, full compensation plus interest for the salary difference, pension and benefits pursuant to Agreement 11.1, since January 1, 2010.


The Company dismisses the Union’s claims.


            The fact that Agreement 11.1 applied to employees of the bargaining unit as of May 12, 2010 is not under dispute. The parties acknowledge that this conclusion stems indirectly from the CIRB decision rendered May 12, 2010 in a motion filed by the United Steelworkers. In its RD 517 decision, the CRIB stated that CN and NQISL maintenance-of-way employees belong to a single bargaining unit and are managed under a single collective agreement. Yet the parties to this dispute acknowledged that as of May 12, 2010 signals and communications employees could no longer be subject to the NQISL Memorandum of Agreement and Agreement 11.1 at the same time. It was therefore agreed that Agreement 11.1 applied to these employees as of May 12, 2010. However, the Union claims that the employees are entitled to the wage provided under Agreement 11.1 retroactively between January 1, 2008 and May 12, 2010. Subsidiarily, it claims that during this period the Company did not apply the salary provided under the NQISL Memorandum of Agreement.


            The employer draws the Arbitrator’s attention to the fact that the CIRB has categorically rejected the claim made by the United Steelworkers that wanted them to be entitled to retroactive compensation.  In its October 30 decision, the tribunal ruled:


[39] Given the circumstances of the instant case, to ensure labour relations stability between the parties, the Board finds that it would be inappropriate to retroactively invalidate the provisions of the supplemental agreement negotiated for the NQISL maintenance of way employees. Even if the supplemental agreement did in fact constitute a parallel collective agreement to the one for the bargaining unit established by the Board, the fact still remains that CN and the Steelworkers followed it and applied its provisions until quite recently.


[40] However, the parties should note that, henceforth, only one collective agreement may apply to the bargaining unit established by the Board and that the unit in question comprises all maintenance of way employees, regardless of whether they are assigned to CN or the NQISL.


            I cannot accept this part of the grievance regarding the retroactive application of Agreement 11.1.  First, I believe that the arbitrator’s award must respect the parties’ expectations. It is obvious that prior to the CIRB’s RD 517 decision, the parties agreed that the NQISL pay rate would be slightly lower than the rate in Agreement 11.1. This stemmed from their mutual acknowledgment that the profitability of the Northern Quebec railway service would be called into question considering the lack of margin in the salary treatment.    


What principle can the Union, which has never made an adverse claim, now use to demand retroactive salary, following the CIRB’s RD 517 decision?  It must be said that the CIRB itself acknowledged the inequity in ordering retroactive compensation, in light of the expectations and agreements by which the parties have governed themselves for a number of years. Even if the parties to this dispute acknowledge, in light of the CIRB’s decision over the Steelworkers, that henceforth Agreement 11.1 should apply as of May 12, 2010, I believe it is clear that they have never subjected themselves to any agreement to adjust their contractual relationship retroactively, back to 2008.


            It is important to understand the logic underlying decision RD 517. The CIRB simply acknowledged that there could not be two collective agreements for a single bargaining unit. The tribunal therefore ruled to the effect that the Steelworkers national agreement should prevail, as of May 12, 2010, without any retroactive effect, given the previous behaviour of the parties and their mutual expectations. In this case, the parties themselves acknowledged that the same principle would bind them in their relationship, and that Agreement 11.1 would prevail over the NQISL Memorandum of Agreement — as of May 12, 2010. In my opinion, we must recognize that the parties have always accepted, before the RD 517 decision, that the pay rates in Agreement 11.1 did not apply to the NQISL territory, which forced the CIRB to conclude that it would be “inappropriate”  to retroactively invalidate the provisions of the NQISL Memorandum of Agreement.


            It is true, as the Union counsel points out, that an arbitration tribunal does not have the same powers as the CIRB and cannot invalidate the provisions of a collective agreement. However, it is incumbent upon an arbitration tribunal to ask itself what was the intent of the parties in interpreting their collective agreement. In my opinion, before they acknowledged that Agreement 11.1 should apply following the May 12, 2010 decision, they mutually agreed that the employees in Northern Quebec would be compensated under the lower rates in the NQISL Memorandum of Agreement. In these circumstances, it would be inequitable to impose on the Company the burden of retroactive salary never claimed by the Union before the CIRB decision rendered on May 12, 2010. Moreover, the conclusion regarding the retroactivity proposed by the Union would definitely go against the contractual arrangement readily accepted by both parties, and well recognized by the CIRB in the Steelworkers file. If the parties are required to reorganize their bargaining unit following the CIRB’s decision of May 12, 2010, they are however not required to redo the contracts to which they had mutually agreed previously, nor impose the burden of unexpected and unforeseeable salary on the employer for a prior period. Subsidiarily, if the Arbitrator’s analysis is wrong, article 13.11 of the collective agreement would impose a limit on retroactive payments to the period 45 days before the filing of the grievance.


            What about the second aspect of the grievance that claims the Company did not respect its obligations under the NQISL Memorandum of Agreement? The employer’s representative points out that the Union’s July 30, 2010 letter filed the grievance under Agreement 11.1, while alleging violations of Agreement 11.1 and the NQISL Memorandum of Agreement. I cannot uphold the employer’s statement as in this case, the Union “made its choice” and can only make its claim under the provisions of Agreement 11.1 and not under the NQISL Memorandum of Agreement. If it is true that after May 12, 2010, Northern Quebec employees became subject to Agreement 11.1 and that prior to this date their salary was governed under the NQISL Memorandum of Agreement, under what principle are they required to “choose” the territory of their grievance if in fact they claim that the Company did not respect the NQISL Memorandum of Agreement prior to May 12, 2010, and did not respect the provisions of Agreement 11.1 after that same date?


            In my opinion, as he did in his July 30, 2010 letter, the General Chairman of the Union was fully entitled to file a grievance containing allegations that the Company had violated “both collective agreements, 11.1 and NQISL” within a single document. To bring up the fact that he describes the grievance as being filed at Step III of Agreement 11.1 constitutes a highly technical objection that cannot be used to prevent pursuing the clearly stated allegation of violation of the NQISL collective agreement. In my opinion, any other conclusion would be artificial and unrealistic.


            I also cannot share the Company’s position that maintains the Union’s claim regarding nonpayment of salaries provided under the NQISL Memorandum of Agreement must be rejected because the Union did not re-negotiate the wage clauses of the memorandum of agreement and therefore did not renew it after it expired, on December 31, 2007. The Canadian labour relations system is not in favour of collective agreements falling into a contractual vacuum.  Article 4.2 of the NQSIL Memorandum of Agreement, which in line with this principle, provides for the memorandum of agreement to continue to be in effect after December 31, 2007, until one of the parties cancels the agreement by providing prior written notice, which what was not done. I must therefore conclude that the memorandum of agreement was in effect during the whole interim period between January 1, 2008 and May 12, 2010, as the Union claims. It follows that the NQISL employees were entitled to the salary claimed by the Union, through what its counsel describes as a “trailer clause.” As the memorandum of agreement does not impose any time limit for compensation to the grievor employees, the employer is required to compensate said employees for all unpaid salary amounts during the period in question, as requested by the Union.


            This aspect of the grievance is therefore upheld. I hereby order the NQISL employees be compensated following the formula presented by the Union in its brief submitted before the arbitrator at the hearing for this grievance, for the period dating January 1, 2008 to May 11, 2010, taking into account overtime, plus interest at the legal rate as of January 1, 2008, with all adjustments and supplementary payments to the pension plan as well as any adjustments to payments received by retirees, as applicable.


            I remain seized of the file to resolve any conflict that may arise concerning the amount of the compensation or any other issue regarding the interpretation or enforcement of this award.


 Ottawa, July 30, 2013                                                              Arbitrator                                                                                                                                    

Michel G. Picher