Heard in Montreal, Wednesday, 13 December 1995

concerning

and

Interpretation of Article 7.10 of the Job Security Agreement (JSA).

The Brotherhood’s position with respect to JSA Article 7.10 is that if an employee, who is affected by a JSA Article 8 change, exercises his Article 7.10 option to displace and, in so doing, causes relocations, all affected employees, including the employee originally exercising the option, will be entitled to all applicable JSA benefits including, but not limited to, those provided for in JSA Article 6.

The Company’s position is that since Article 7.10 provides an option, an employee, affected by an Article 8, choosing to exercise his Article 7.10 option to displace will not trigger any right to relocation benefits, etc., for any employee involved.

The Union contends that: The Company’s position is in violation of JSA Articles 6 and 7 in general and Articles 6.1, 7.3A and 7.10 in particular.

The Union requests that: It be declared that in the application of JSA Article 7.10, any employee electing to displace a junior employee, which displacement causes relocations, all affected eligible employees are entitled to all applicable JSA benefits including, but not limited to, those provided for in JSA Article 6. It be ordered that all employees who have been denied entitlements because of the Company’s interpretation be compensated therefor.

The Company denies the Union’s contentions and declines the Union’s request.

There appeared on behalf of the Company:

D. T. Cooke – Manager, Labour Relations, Montreal

S. J. Samosinski – Director, Labour Relations, Montreal

D. V. Brazier – Assistant Vice-President, Industrial Relations, Montreal

L. S. Wormsbecker – Manager, Labour Relations, Montreal

D. E. Guerin – Assistant Labour Relations Officer, Montreal

And on behalf of the Brotherhood:

D. B. Brown – Sr. Counsel, Ottawa

J. J. Kruk – System Federation General Chairman, Ottawa

G. D. Housch – Vice-President, Ottawa

D. McCracken – Federation General Chairman, Ottawa

D. J. Bujold – National President, TCU, Ottawa

P. Davidson – Counsel, Ottawa

G. Beauregard – General Chairman, Eastern Region

R. Achin – ESF Plan Administrator

The issue raised by the instant grievance is relatively straightforward. The Brotherhood seeks a declaration that any employee who elects to displace a junior employee under the provision of article 7.10 of the 1992 Job Security Agreement (JSA) is entitled to the benefits of the JSA, including relocation expenses provided under article 6.1 of the JSA. Article 7.10 of the 1992 JSA is, for all purposes material to this dispute, virtually identical to article 7.9 of the 1995 version of the Job Security Agreement which is currently in effect.

Article 7.10 of the JSA was first introduced into the language of the agreement on April 29, 1992. It reads as follows:

Article 6.1, which governs entitlement to relocation expenses, provides as follows:

While the foregoing provisions are found in the 1992 version of the Job Security Agreement, as noted above, they were reincorporated in substance into the Job Security Agreement which became effective June 1, 1995. It appears that following a memorandum of agreement of May 5, 1995, the parties negotiated the contract language of their revised Job Security Agreement. During the course of that process the Brotherhood raised the issue of the application of article 7.10 and its view that the language of the article entitles an employee who elects to displace beyond his or her home location to the full protections of the JSA, including the payment of relocation expenses as provided under article 6.1. The Company disagreed with that interpretation. In its view article 7.10 was established, on the one hand, to benefit employees by saving them from the requirement to move from their home location to protect their ES status where to do so would only place another employee on ES status while, on the other hand, saving the Company the relocation expenses which would otherwise be triggered by the forced displacement which would have been inevitable, but for the option provided in article 7.10.

Counsel for the Brotherhood submits that the issue is one of simple and straightforward interpretation. He submits that article 7.10 makes no reference to displacement expenses, and cannot be construed as having any bearing on the entitlement of an employee to that benefit. Counsel maintains that the issue of an employee’s entitlement to relocation expenses is fully dealt with within the language of article 6.1 of the JSA. In that light, he submits, article 6.1(d) is controlling.

The Brotherhood submits that article 6.1(d) can only be interpreted to mean that an individual with ES who is without a permanent assignment at his or her home location, and is therefore under the obligation to relocate to "have work" is entitled to receive relocation expenses. Similarly, it submits, any employee displaced by a person making such a relocation is similarly entitled to relocation expenses, as are any other employees with ES who may be impacted by the ripple effect of displacement.

Resolution of the instant dispute requires a brief examination of the history of the employment security provisions found within the JSA. While Counsel for the Brotherhood submits that there is no ambiguity in the provisions to be interpreted, and there should be no reference to extrinsic evidence, the Arbitrator cannot agree. A substantial part of the issue before me is whether an employee who makes the election to displace under article 7.10 can be said to be a person "required to relocate to have work" within the meaning of article 6.1(d) of the JSA. As will become evident from a review of the history of employment security provisions within the railway industry, there is, at a minimum, a latent ambiguity within the concept of a person on employment security having work as opposed to being laid off, as those concepts are traditionally understood.

As noted above, article 7.10 was introduced into the JSA effective April 29, 1992. It is common ground that it has its origins in the special agreement negotiated between the Company and the Shopcraft Unions, earlier the same year, in respect of the closure of the Angus Shops in Montreal. It does not appear disputed that in that circumstance Union representatives sought to shelter employees on ES status at the Angus Shops from the obligation to displace to other locations as a requirement to protect their employment security status. It was then agreed that an employee should be under no obligation to do so if the displacement would only result in the removal of an employee at the subsequent location from active service, placing him or her on ES. The compromise so struck saved employees from the obligation of displacing to another location and afforded the Company the efficiency of avoiding relocation costs where the end result would, in any event, be the placing of another employee on ES status. Later, some months after the closure of the Angus Shops, the same formula was negotiated into the Job Security Agreement, by agreement with representatives of the Brotherhood, as well as the other unions signatory to the JSA. This included the Transportation Communications (International) Union, the Canadian Signal and Communcations System Council No. 11 of the IBEW, the Rail Canada Traffic Controllers (effective October 27, 1992) and six Shopcraft Unions now represented by the CAW.

The Arbitrator considers it important to understand the meaning of article 7.10 as it would have operated within the JSA at the time it was agreed to, in 1992. Article 7.1 of the JSA as it then stood granted employment security to an employee with eight years of cumulative compensated service, for employees whose service predates May 1, 1992. Article 7.2 then provided as follows:

The foregoing provision mandated that an employee with ES could not be laid off as a result of a technological, operational or organizational change, such changes being the subject of an article 8.1 notice under the JSA. In the result, although their positions might be abolished, the individuals in question continued to retain the right to the payment of full wages and benefits under the terms of the collective agreement. The status of such persons was confirmed to be different from that of persons who are laid off, and whose protections may be limited to lay off benefits, recall rights or severance payments. The issue of the status of employees on ES was addressed in arbitration between the Canadian National Railway Company and the International Association of Machinists and Aerospace Workers (SHP-286), a grievance relating to the closure of certain CN operations at Moncton. In that award, dated December 7, 1989, at pp 12-13 the Arbitrator made the following comments about the nature of employment security status:

An essential part of the original bargain struck in relation to the establishing of employment security was the obligation of the employee to exercise his or her maximum seniority rights to seek active work on a location, area and region basis. Failure to exercise such rights would result in the forfeiture of employment security. The following provisions applied to members of the BMWE:

As can be seen from the above, while the benefit of employment security, which was then lifetime protection from layoff, was considerable, the corresponding obligation of the employee to seek such active employment as his or her seniority could secure was onerous. To maintain employment security, and thereby avoid layoff and the possible loss of his or her employment security, the employee was definitively required to protect available work which his or her seniority could obtain, and that requirement could extend to locations beyond his or her home location, to the area and region (see CROA 2535).

It is in that context which the language of article 7.10 must be understood to have originated. That article relieved the employee from the obligation to displace from his or her home location where to do so would only place another employee on employment security status. It is significant to note that the language of article 6.1(d), which governed the entitlement to relocation expenses was clearly intended to operate in tandem with the provisions of article 7 of the JSA, the articles which govern the obligation to relocate as a condition of an employee maintaining his or her ES status. The article speaks to employees being "required to relocate to have work under the provisions of Article 7 of this Agreement" (emphasis added).

It appears to the Arbitrator manifest that an employee whose circumstances give him or her the protections of article 7.10 is clearly not an employee required to relocate to have work in the sense contemplated by the provisions of article 7 of the JSA. The requirement to relocate as it is articulated within the terms of article 7 of the agreement is for one purpose, and one purpose only – to protect the employee from the forfeiture of his or her employment security status. An employee who has the benefit of article 7.10 is not, by definition, required to relocate to have work in order to protect his or her ES status, in accordance with the provisions of article 7 of the JSA. It is that obligation to relocate which is contemplated in article 6.1(d) of the JSA. Clearly, if the provisions of article 6.1(d) fell to be interpreted as they stood in the April 29, 1992 version of the JSA, the position which the Brotherhood now argues could not succeed.

Can it be said that changes made in respect of the JSA as it was revised effective June 1, 1995 have materially changed the relationship between articles 7.10 and 6.1(d) of the Job Security Agreement? The 1995 agreement has seen substantial changes to the concept of employment security. Employment security is no longer a lifetime protection; it now operates for a limited period of years. Further, the Company’s liability for employment security is limited to a defined fund contribution, in accordance with a formula found in Appendix E of the Job Security Agreement. Additionally, the protection of the employee, in respect of ES payments from the fund, is now ninety percent of the employee’s basic rate of pay. However, the conditions for maintaining an employee’s entitlement to employment security continue to be onerous. Article 7 of the JSA now provides, in part, as follows:

Further, article 7.4 provides for the obligation to accept temporary work outside the bargaining unit within the Company as a condition of maintaining ES entitlement, while article 7.5 imposes on employees on ES status an obligation, failing all other possibilities, to take available work outside the Company.

The element of requirement is reiterated in the terms of article 7.6 of the 1995 JSA which provides as follows:

It would appear arguable that the wording of article 7.2 of the new JSA could be construed in such a manner as to support the view that an employee with ES whose job is abolished is considered as laid off or subjected to layoff. Further, as the ES allowance is something less than full wages, it is also arguable that the employee on ES status is something less than the equivalent of a fully remunerated, active employee. For the purposes of this grievance, however, it is unnecessary to resolve the issue of whether, under this new agreement, an employee on ES status is laid off, or is more "laid off" than was the case previously, as reflected in the CN– IAM award examined above.

What is most important for the purposes of this analysis, as it bears on the relationship between article 7.10 (article 7.9 in the 1995 JSA) and article 6.1(d), which are materially unchanged in their language, is that there continue to be onerous obligations on the employee who has the benefit of ES payments, to exercise his or her seniority to protect available work, and to do so in some cases which would require relocation from his or her headquarters or home location. Significantly, it is still within that context that the language of article 6.1(d) must be understood. Very simply, to have an entitlement to relocation expenses, under article 6.1(d) an employee must be subject to the requirement to relocate in accordance with the provisions of article 7 of the JSA. Again, as noted above, it appears to the Arbitrator to be clear that the employee who falls within the provisions of article 7.10, that is an employee whose relocation would cause another employee to assume ES status, is not under an obligation or requirement to relocate "under the provisions of Article 7" within the meaning of article 6.1(d) of the Job Security Agreement. In this respect, there has been no change in language, nor is there any reason to conclude that there has been any change in the bargain.

The Arbitrator has some difficulty understanding how it could be argued that the parties were ad idem with respect to the meaning and application of article 6.1(d) in the circumstance of an employee falling under the provisions of article 7.10. As is clear from the material before the Arbitrator, their disagreement as to the obligation to pay relocation expenses for an employee who elects to relocate, although not obliged to do so, was a point of clear disagreement at all times at the bargaining table. The Company refused to agree with the interpretation advanced by the Brotherhood, and ultimately the same language was adopted, on the understanding that the matter would be taken to arbitration for resolution. In that circumstance it cannot be asserted that the parties agreed to an interpretation or a meaning different from that which would have obtained under the identical language provisions of the 1992 Job Security Agreement. For the reasons related above, I am satisfied that the obligation upon the Company to pay relocation benefits under 6.1(d) under that agreement, as under the current agreement, was intended to operate only where the employee is forced to relocate by the operation of the provisions of article 7 of the JSA.

The foregoing conclusion has further support in a purposive examination of the general provisions of the JSA. A review of those provisions reflects a mutual understanding that, as an intrinsic part of the bargain for employment security protection, the Company should be shielded from unnecessary displacements, and the cost which they can occasion. In this regard, it is notable that article 6.1(c) of the JSA, which provides for the payment of relocation expenses to an employee who elects to relocate to assume a bulletined permanent vacancy is entitled to be paid the relocation expenses "... provided this will not result in additional moves being made;". If the Brotherhood were correct in its interpretation of article 6.1(d), that provision could substantially cancel out the protection which the Company has against unlimited additional moves, as intended in the language 6.1(c). On what basis can it be assumed that the parties would have intended that an employee could elect to relocate to take a vacancy, so long as no other moves might be occasioned while, on the other hand, he or she would at the same time be entirely free to elect to relocate, with relocation expenses, thereby occasioning a possible chain of similar additional moves, with further expenses? In the Arbitrator’s view the provisions of article 6.1(d) must be read in a manner which is rationally consistent. In my view the interpretation advanced by the Company is more compelling in that regard.

Ultimately, the Brotherhood would interpret article 6.1(d) to provide that the employee is entitled to relocation expenses if he or she is "required to relocate to have work". However, that is not the wording nor is it the intention of the article. The relocation in question must be in furtherance of a requirement of article 7 or of the Job Security Agreement, i.e. "under the provisions of article 7 of this agreement". In the result, the Arbitrator is satisfied that the instant grievance cannot be allowed. When regard is had to the evolution of the provisions of the Job Security Agreement, the interrelationship between article 6 and article 7 of that agreement and the language of article 6.1(d), it must be concluded that an employee cannot claim an entitlement to relocation expenses unless that employee is required to relocate, as that requirement is understood within the provisions of article 7 of the JSA. The interpretation advanced by the Brotherhood would effectively read out and render meaningless the words "... under the provisions of article 7 of this Agreement" as they appear in article 6.1(d) of the Job Security Agreement. That is something an arbitrator cannot do, without significantly amending or altering the intention of the parties’ agreement.

For all of the foregoing reasons the grievance must be dismissed.

January 12, 1996 (signed) MICHEL G. PICHER