SHP - 63



Canadian Pacific Limited

(the "Company")



(the "Union")



SOLE ARBITRATOR: J. F. W. Weatherill




A. Manocchio



J.A. McGuire



A hearing in this matter was held in Montreal on December 15, 1977.



The Joint Statement of Fact and Issue agreed on by the parties is as follows:

Joint Statement of Fact

On January 7, 1977 the Company issued a layoff notice in connection with certain reductions of Machinists, Machinists' Helpers and Machinists' Apprentices at Angus Shops, Montreal.

Joint Statement of Issue

It is the position of the Union that these reductions in staff were the result of an organizational change and that the employees affected should have been issued a notice under Article VIII, Clause 1 of the above-mentioned Job Security Agreement.

It is the position of the Company that the layoff did not result from any change in organization, in operation, nor as a result of the introduction of new technology and, therefore, the provisions of Article VIII, Clause 1 of the above-mentioned Job Security Agreement do not apply.

* * * * *

Article 8, clause l of the Job Security Agreement is as follows:

8.1 The Company will not put into effect any technological, operational or organizational change of a permanent nature which will have adverse effects on employees without giving as much advance notice as possible to the General Chairman representing such employees or such other officer as may be named by the Union concerned to receive such notices. In any event, not less than three months' notice shall be given, with a full description thereof and with appropriate details as to the consequent changes in working conditions and the expected number of employees who would be adversely affected.

The question to be determined in the instant case is whether, in the circumstances, the Company should be said to have put into effect a "technological, operational or organizational, change of a permanent nature" such as is contemplated by article 8.1. There is no doubt that the change was "of a permanent nature", the layoffs being of an indefinite duration with no real expectation, in the majority of cases, of recall. There was no "technological change", no new equipment or installation which displaced employees, rather there was a change in assignment content and in supervision, and the determination to be made is whether these constituted an "operational or organizational change" within the meaning of article 8.1.

The lay-off notices issued on January 7, 1977 were a result of a work analysis performed at Angus shops by a firm of outside consultants. The main finding of the consultants was, it seems, that work assignments were not related to controllable periods of time, that is that employees were, for the most part, determining for themselves the pace at which they would work. Also, it was found that the supervisors did not have sufficient knowledge of production expectancies to enable them to measure productivity and institute action if required. The Company concluded from this that productivity could be improved by ensuring that the supervisory staff provided better direction and control over the work force. Given such direction and control, a considerably reduced work-force was required. Accordingly, the notices of lay-off were issued.

The conducting of a work study, the drawing of the appropriate conclusions therefrom, the development and installation of improved methods of supervision and control, and the reduction of the work force made possible by the foregoing are all steps which the Company may properly take in the exercise of its management functions. The exercise of those functions is not in itself in question here. Rather, the question is whether this particular exercise of management functions involved the putting into effect of an operational or organizational change within the meaning of article 8.1 of the Job Security Agreement.

The Company, in support of its view that what took place here did not constitute such a change referred to certain decisions in similar cases in the Canadian Railway Office of Arbitration. In CROA 228, for example, it was held that the mere abolition of a position is not necessarily an operational change. It is also to be borne in mind, of course, that normal reassignment of duties arising out of the nature of the work in which employees are engaged, and changes brought about by fluctuation of traffic or normal seasonal staff adjustments are not considered operational or organizational changes for the purposes of article 8: that is made clear by article 8.7. The instant case does not involve such changes, nor should it be described as "the mere abolition of a position" What was involved here appears to have been a change in the character of supervision, in the forms of control, and in rearrangement of tasks to apportion time more effectively (not a faster work pace as such).

Changes of this sort, made on a large scale are, in my view, significant changes in the way in which the conduct of the Company's operations is organized. It involves a reorganization of directional efforts and consequently of individual assignments and performance. Its result is a significant reduction in the work force, a reduction which will, subject to changes in the volume of work to be done, be permanent.

CROA 284 and 316 dealt with similar problems, and in those cases it was held that no operational or organizational change within the meaning of article 8 had taken place. They were cases where the available work could be done by fewer employees, or where local supervision was told to "tighten up its operations". In a general sense, the same phrases might be used here, but it is my view that in the circumstances of this case that would mask the reality of what has happened. The instant case, I think, falls on the other side of the line from CROA 284 and 316. It is something more than a tightening up of operations, although it is that in a sense. It appears to have been a thoroughgoing recasting of supervisory methods and of work assignments, so that the latter would be related to controllable periods of time. This was a change in systems which I think should properly be described as an operational or organizational change within the meaning of article 8.

For the foregoing reasons, the grievance is allowed. A notice under Article 8 should have been issued in this case.

DATED at Toronto, this 16th day of January, 1978.

(signed) J.F.W. Weatherill