SHP Ė 182



Canadian Pacific Limited

(the "Company")


Canadian Council of Railway Shopcraft Employees and Allied Workers

(The "Union")




SOLE ARBITRATOR: J. F. W. Weatherill



There appeared on behalf of the Company:

D. J. David

D. A. Lypka



And on behalf of the Union:

A. Rosner



A hearing in this matter was held at Montreal on August 15, 1985.




The award in this matter, dated July 10, 1984, is as follows:

For the foregoing reasons, the grievance is allowed. While it may be beyond the scope of my jurisdiction to direct the company to terminate its contracts with outside contractors in respect of the work in question, it is in any event a sufficient and proper award to declare that the contracting-out in question was in violation of the letter of understanding and as well, to award that the employees affected be compensated for any loss of earnings attributable to the contracting-out, for the period during which such losses may continue. I so award, and I remain seized of the matter for the purpose of determining any issue which may arise with respect to the relief awarded.

An issue has arisen with respect to the relief awarded. The Joint Statement of the parties in that regard is as follows:


Determination of compensation awarded by Arbitrator J.F.W. Weatherill on July 10, 1984, in the matter of a grievance relating to the contracting out of bunkhouse work at Brandon, Broadview and Swift Current.


The Union contends that the above-cited award requires full compensation of lost salary to those senior laid-off employees in the relevant seniority terminals, Superintendentsí Divisions, or Prairie Region, who would have been able to hold work had the bunkhouse maintenance not been contracted out.

The Company contends that compensation was payable only to those employees directly adversely affected by the contracting out. These employees were Messrs. W.G. Taylor, G.P. Kostiuk, R.L. Cox, J. Nagy, D.J. Urschel, D.H. Chartrand, R.E. Block, and D.R. Corby. With the payments to these employees, the award of July 10, 1984 was fully satisfied.

The company has not reinstated any employees as Bunkhouse Attendants. The work in question, it would appear, is still being performed for the company by outside contractors, so that the breach of the collective agreement continues. Certain compensation has been paid to persons affected, pursuant to the award. Such persons have been either those whose positions were abolished when the contracting-out went into effect or, where these persons exercised displacement rights, those who were ultimately displaced or demoted as a result of the exercise of seniority. The persons thus directly affected appear to have been identified, and the matter of the amount of compensation paid to them was not dealt with in the present case, although I retain jurisdiction in that respect.

It is the unionís contention, however, that there are other persons who have been "unable to hold work" as a result of the contracting-out, and who are therefore persons affected by the breach of the agreement and entitled to compensation under the award. The companyís position is that compensation is payable only to those "directly" affected by the contracting-out, that is, those whose lay-off is directly attributable to the abolition of the positions in question.

The material provision of the collective agreement, referred to in the award of July 10, 1984, prohibits the contracting-out of work "presently and normally performed" by employees, except in certain circumstances. It was held that the circumstances of this case did not come within the exceptions set out. The collective agreement further provides that where work is contracted out contrary to its provisions (as was held to be the case), "and this results in an employee being unable to hold work", a grievance may be progressed "in respect of such employee". The question is, then, whether employees other than those seen to have been displaced as a direct result of the abolition of the jobs in question are persons entitled to the benefit of the provision and entitled to grieve.

In particular the question may be said to be whether employees on lay-off at the time the jobs in question were abolished, or who were subsequently laid off in circumstances having no direct relationship to the abolition of those jobs, are persons who may be properly said to be unable to hold work, as a result of the contracting-out.

The question which arises under this collective agreement is, I think, different from that which arises under the Special Agreement made pursuant to the Railway Passenger Service Adjustment Assistance Regulations, and what was said in the North Bay case (November 10, 1983) is not appropriate in the present case. The Special Agreement provided benefits for employees "adversely affected" by certain quite proper changes in railway operations, and it was held that this phrase referred to employees "directly" so affected. In the provisions material to this case, however, the collective agreement provides for a right of grievance for employees "unable to hold work" because of the improper contracting-out of work. In some ways the two situations are similar, but the analogy is far from precise, and the language used and the benefits contemplated in the two agreements are quite different. The same is true, I think, as between the collective agreement and the Job Security Agreement.

What was said in the Crane Wheels case (February 8, 1982), does, however, relate to the application of the collective agreement language in a contracting-out case. The following passage deals with the same question as that now before me:

The company contends that the matter is not arbitrable because there were no employees laid off as a direct result of this contracting-out. In fact, however, there were employees laid off from Ogden Shops at the time, and it appears from what is before me that if the work had been done by the company, members of the bargaining unit would have been recalled there, even temporarily. In my view, it was at least an indirect result of this contracting-out (but clearly attributable to it), that certain employees were "unable to hold work" within the meaning of the final paragraph of the Letter.

The same question is also dealt with in CROA case No. 1115, although the decision did not turn on the point:

The work in question was generally of a sort "presently and normally performed by employees" in the bargaining unit. The contracting-out, however, did not affect the rights of employees on the "seniority territory", that is the Saskatchewan Area, in which the work was performed, because such persons were fully employed, and thus not "unable to hold work" at the material times, so that no right of grievance arose with respect to such employees under the provisions of the contracting-out letter. Had there been such employees on layoff in that area at the time, it would be my view that the grievance should succeed, other things being equal.

In the instant case, it is said that there were persons on lay-off, both at the time the jobs were abolished and subsequently, who would have been entitled to exercise seniority rights in respect of those or some other jobs, had those jobs not been abolished. That is, had it not been for the improper contracting-out and the consequent abolition of the job of Bunkhouse Attendant, such persons would have been able "to hold work". What was said in this respect in CROA Case No. 1115 applies equally here: "If such persons were otherwise entitled to perform the work in question, then their continuing to be laid off while the work was contracted-out meant, in my view, that they were "unable to hold work" as a result, and that they would have the right to grieve".

The provisions of Appendix "D" itself are, I think, determinative of the issue. Work "presently and normally performed" by members of the bargaining unit - such was the work in question - is not to be contracted out, subject to certain exceptions. One exception is the case "where sufficient employees, qualified to perform the work, are not available from the active or laid-off employees". This clearly contemplates that, subject to the other exceptional grounds on which contracting-out may be allowed, bargaining-unit members, including those laid off, are entitled (subject of course to collective agreement provisions relating to qualifications, seniority or other matters), to perform bargaining-unit work. This may be thought to be an expression of the general principle that the bargaining unit is not to be improperly "eroded".

For these reasons, it is my conclusion that the unionís contention in this matter is correct, and that the class of persons unable to hold work as a result of the contracting out may well be greater than the class of employees whose jobs were abolished or who were consequently displaced. The number of persons affected by the contracting-out would not exceed the number of jobs thus lost to the bargaining unit. The determination of what persons would have been able to hold work but could not as a result of the contracting-out may in some instances be difficult as long as the work is not assigned to employees; losses may well continue to accrue as long as the contracting-out continues. Relief pursuant to the award of July 10, 1984 is to be granted pursuant to what is set out in this supplementary award, and I remain seized of the matter for the purpose of determining any issue with respect to such relief which the parties may be unable to resolve.


DATED AT TORONTO, this 5th day of September, 1985.


(signed) J. F. W. Weatherill