SHP Ė 145




(the "Company")



(The "Union")




SOLE ARBITRATOR: J. F. W. Weatherill



There appeared on behalf of the Company:

D. J. David

M. M. Yorston

And on behalf of the Union:

J. W. Asprey

V.E. Bourgeois


A hearing in this matter was held at Montreal on June 17, 1983.




The Joint Statement of Fact and Issue in this matter is as follows:


Claim on behalf of Machinist Helper H.G. Rutherford of Ogden Shops, Calgary, in accordance with Rule 32.7 of Wage Agreement No. 51.


Machinist Helper H.G. Rutherford of Ogden Shops has been classified as a Machinist Helper since December 6th, 1968 and has been paid in accordance with Rule 32.7 up to December 31st, 1982.

Since January 1st, 1983, Mr. Rutherford is paid the Helperís rate as specified in Rule 32.1.


The Council claims that Mr. Rutherford should be compensated at the established rate for Helpers in accordance with Rule 32.7.

The Company has denied the claim.

Article 32.1 sets out the rates payable to persons in the various classifications covered by the collective agreement. Those rates include the rates appropriate to the grievorís classification. There are various rates set out, payable at different times during the life of the collective agreement. In paying the grievor according to article 32.1, the company is paying him at the "scheduled" rate.

That would be proper payment as a general matter. It is claimed, however, that the grievor is entitled to be paid at a higher rate, pursuant to article 32.7. That article is as follows:

Rates of pay established in certain classifications or positions at each point on each Railway for helpers in their basic trades and for wheel pressers and belt men in excess of the rates specified above shall be maintained as the minimum rates of pay for such classifications at such points.

The grievor is a Machinistís Helper at Ogden shops, and has been in that classification, at that point, for many years. The grievor works in a classification and at a point for which an "established rate" existed. That rate having been in excess of the "scheduled rate" as it was set out in the collective agreement from time to time, the grievor was paid the higher, "established" rate in accordance with article 32.7. As of January 1, 1983, however, the grievor, who had been receiving payment at the rate of $10.110 per hour, that being the established rate (whereas the scheduled rate then in effect was $9.983), was paid at the rate of $10.582. This, however, is the scheduled rate. It is the companyís position that the scheduled rate now exceeds the established rate, that its obligation to maintain the established rate as a minimum rate has been met, and that the collective agreement is complied with if the higher rate is paid.

It is the unionís position that the established rate itself has been increased, and remains greater than the scheduled rate now in effect. It was the unionís position that the established rate now in effect for the grievorís position is $10.844 per hour. The document on which the union relies, however (being a company-issued document entitled "Maintenance of Rates for Helpers in Excess of Scheduled Rates - Rule 32.7"), shows the rate for a Machinist Helper at Ogden Shops, effective January 1, 1983, to be $10.717. In any event, if this document properly sets out the established rates, it is clear that whether the rate the grievor may properly claim be $10.717 or $10.844, it is in excess of the scheduled rate now in effect, and the grievance would succeed, subject to determination of the correct established rate for the grievor.

The particular issue to be determined, then, is whether or not the established rate increased on January 1, 1983. That is a matter to be determined in accordance with the provisions of the collective agreement. Article 32.1, as has been noted, sets out rates to be in effect at various times throughout the term of the collective agreement. Article 32.7 does not do that, but instead in effect "red-circles" the rates for certain classifications or positions (including the grievorís) in providing that established rates are to be "maintained as the minimum rates" for such positions.

The language - maintaining established rates as minimum rates - does not suggest any variation in the established rates during the term of the agreement. It is the companyís position that it acted in error in publishing the "Maintenance of Rates for Helpers" document referred to above, which showed increases in established rates occurring at the same times as increases were to occur in the scheduled rates. The company appears to have applied the general provision for a percentage increase in "all basic hourly rates of pay" not only to the basic rates of pay provided for in article 32.1 - the scheduled rates - but also to the established rates. There does not appear to have been any obligation under the collective agreement to do that. I agree with the companyís submission that the reference to "basic rates" is a reference to the scheduled rates, and not to the established rates, which exist only at some points and constitute exceptions to the basic rates which would otherwise be payable.

Article 32.7 was in issue in the case of CNR and CCRS (Cormier and D.M. Rutherford), decided on January 6, 1983. In that case it was held that the grievors were entitled to be paid at the established rate as long as it exceeded the scheduled rate ("however anomalous that may appear"). That conclusion is not in issue here, it being agreed that the grievor is entitled to the established rate as a minimum. The question rather is, what is the current established rate for the grievorís position? or, as it has been put above, was the established rate subject to increase during the term of the collective agreement?

Two passages from the Cormier and Rutherford case may be referred to. The first is at p. 4 of the award:

From the material before me, it is clear that this provision, or rather a predecessor thereof, was introduced into the collective agreement many years ago in what was a continuing effort to rationalize the rather widely-varying wage rates which existed across the system, mainly for historical reasons. It could appear that the original intention of the parties concerned was, in effect, to "red-circle" rates paid to some persons working as Helpers, in order to do away with anomalous - and unfair - differences in the rates paid for the same work. The creation of a regular system of payment in accordance with the rates set out in the collective agreement was to be achieved over time, through a process of attrition.

The second is at pp. 6 and 7:

In the instant case, the company does not purport to have changed the provisions of the collective agreement (it could not do so), but rather to have applied them in accordance with their intent. The intent of Rule 32.7, the rule not being ambiguous, is to be gleaned from the rule as it now stands. Its effect, in my view, is to "red-circle" not an individualís wage rate, but rather the rate of a classification at a particular location. The "established" rate at a given location (as of the effective date of the collective agreement), is the minimum rate for persons in that classification, at that location, for the term of the collective agreement. That is what the collective agreement provides, and that is what must be given effect.

It may be added, however, that the collective agreement does not provide for increases in the "established" or "minimum" rate during the term of the agreement. When, during that term, the applicable rate as called for by Rule 32.1 exceeds the "established" rate as it existed at the effective date of the collective agreement then the "minimum rate" would be surpassed, and the rate provided for in Rule 32.1 would apply. In that way, with the passage of time, the "red-circling" would be given effect for the classification at the location in question. That is, the "established rate" is not subject to increase, whereas the rate set out in Rule 32.1 does increase from time to time.

What is said in the second of the passages just cited was perhaps not necessary for the decision of that case. The observation that the collective agreement does not provide for increases in the established or minimum rate during the term of the agreement is, nevertheless, correct, and I would confirm it, having studied the matter for the purposes of the present case. Since the whole purpose of article 32.7 was to maintain certain existing rates as minimum rates for those classifications and thus to "red-circle" them, it would be quite inconsistent to have them subject to the same percentage increases as the basic rates themselves. The goal - "the creation of a regular system of payment in accordance with the rates set out in the collective agreement" - could never be achieved.

It is my conclusion that the collective agreement, in article 32.7, referred to an existing set of established rates for certain classifications (although there is no doubt that over the years the established rates had increased), which were then simply to be "maintained". On the evidence, they were maintained, and as long as the established rate exceeded the scheduled rate, the grievor appears to have properly been paid at the higher established rate. As of January 1, 1983, by reason of wage increases provided for by the collective agreement, the scheduled rate for the grievorís classification was increased. The grievor was then properly paid the higher scheduled rate.

There has, therefore, been no violation of the collective agreement, and the grievance must accordingly be dismissed.


DATED AT TORONTO, this 24th day of June, 1983.


(signed) J. F. W. Weatherill