BETWEEN

AND

SOLE ARBITRATOR: J. F. W. Weatherill

A. Rosner

J. Glazer

A hearing in this matter was held at Montreal on November 25, 1986.

This grievance involves a claim for separation allowance made by the grievor, an employee of many years’ seniority, following the Company’s decision to reduce the number of employees in the grievor’s classification at Moncton. There is no doubt that the grievor was entitled to elect early retirement in the circumstances, and that he was entitled to a separation allowance. The question is as to the amount of that allowance, and that question will be resolved by the determination of which of two agreements by which the parties are bound governs the matter.

It is the Union’s contention that the matter is governed by the terms of a Special Agreement made on July 7, 1978, between Canadian National and Canadian Pacific on the one hand and the Railway Employees’ Department Division No. 4, A.F.ofL.-C.I.O., representing various shopcraft unions (including the Union party to the present case), on the other. That agreement is commonly referred to as the "Blue Book". It is not disputed that its provisions have remained in force (for those circumstances to which it applies) , at all material times.

It is the Company’s contention that the matter governed by the provisions of a memorandum of made on May 14, 1985, between Canadian and VIA Rail Canada on the one hand and various shopcraft Unions, including the Canadian Council of Railway Shopcraft Employees and Allied workers, representing, among others, the Union party to the instant case, on the other. The provisions of that agreement, which I shall refer to as the "Memorandum", were also in force at the material times.

The Company’s decision to reduce the number of employees in the grievor’s classification at Moncton was announced in a notice dated September 27, 1985, in which the Company advised of its intent to reduce its main shop work force, "commensurate with a reduction in the 1986 VIA workload". The reduction in the Company’s work force was to affect several trades, and to take place in its shops at Moncton, Pt. St. Charles and Transcona.

This reduction in work force was "VIA related" in the sense that it was a direct result of a decision taken by VIA Rail (and approved by the Government), to perform on its own account, and with certain new equipment which it had recently purchased, work which had previously been performed for it by Canadian National at the locations in question. VIA would no longer have this work performed by Canadian National, and it did not find it necessary to increase its own work force in order to perform the work. None of the provisions in the Memorandum relating to the transfer of employees from Canadian National to VIA (which might have been invoked had VIA’s work force increased), were applicable in the circumstances. There was simply a reduction in the work Canadian National required to be done at the locations in question, and it determined to reduce its work force accordingly.

There was certainly no transfer of employees in the circumstances in question. Nor, I think, was there a transfer of work in the sense in which that expression may be used in respect of the application of the agreements referred to. VIA Rail had, at the time of the "Blue Book", taken over certain aspects of the operation of passenger trains. Maintenance of equipment, however, continued to be performed by Canadian National and Canadian Pacific, and the Blue Book provided, among other things, for the transfer of shopcraft employees as between Canadian National and Canadian Pacific to accommodate certain transfers of "passenger related work". VIA Rail was not a party to that agreement, since it appears that VIA did not then perform shopcraft work on its own account, and there was thus no occasion for the transfer of shopcraft employees to VIA. It may be noted that there was, at the same time as the Blue Book, a "Red Book" negotiated in which the employer parties were Canadian National, Canadian Pacific and VIA Rail Canada. The union parties were various operating unions.

Subsequently, VIA Rail did undertake the performance, on its own account, of certain maintenance work. Shopcraft employees were then transferred from Canadian National to VIA Rail. Provisions with respect to such transfers were negotiated and set out in the Memorandum of May 14, 1985. It is the Union’s position that the Memorandum was negotiated with a view to a substantial transfer of employees which occurred in June, 1985. While this may well have been what was primarily in contemplation at the time, the Memorandum, by its terms, applies "to those changes in Railway Passenger Services made up to and including June 27, 1988, in accordance with Government initiatives introduced pursuant to Railway Passenger Services Adjustment Assistance Regulations".

The latter provision of the Memorandum, however, made as an amendment to article M of the Blue Book, must be read in its context, which is that of a duration clause, and is not dispositive of the issue of which of the two agreements (for there is no question but that it must be one or the other), applies in the instant case. The Blue Book itself continues in effect; the Memorandum amends it, for those cases to which it applies. Thus, section 1 of the Memorandum provides as follows:

The Memorandum did not displace the Blue Book. It may be said generally to provide certain parallel – but not identical – benefits for employees affected by those "VIA-related changes" with respect to which it applies. It is to be remembered that the parties to the Blue Book did not include VIA Rail and that the parties to the Memorandum do not include Canadian Pacific. Both agreements deal with "VIA-related changes", but only the Memorandum deals (among other things), with transfers of employees as between Canadian National and VIA Rail.

The Blue Book applies "to employees adversely affected by changes in Railway Passenger Services made in accordance with Government initiatives …". The change in question here – the increase by VIA in the amount of maintenance work it performed – was, it seems clear, of the sort generally covered by the agreement, and there is no doubt that the grievor was adversely affected by that change, his job having disappeared. The Company, indeed, initially calculated the grievor’s severance pay in accordance with the provisions of the Blue Book. Subsequently, it recalculated those payments, taking the position that the Memorandum was the governing agreement. From what has been set out above, it should be clear that the Memorandum applies to some of the cases to which the Blue Book would otherwise apply. That is, the class of persons to whom the Memorandum applies is contained within the class of those to whom the Blue Book applies in the first place. The grievor, I find, comes within the class of persons to whom the Blue Book applies. The question which remains to be determined is whether he comes within the class of persons to whom the Memorandum applies. If he does, then by virtue of the Memorandum, the provisions of the Blue Book would be amended in his case, and the Company’s calculation of his severance payment is correct. If he does not, then it remains that he is covered by the provisions of the Blue Book, and the Company’s original calculation (which involved a substantially larger payment), was correct.

The Memorandum, on its face, applies "to employees adversely affected by the transfer of passenger related work from Canadian National Railway Company to VIA Rail Canada Inc. …". In the preamble to the agreement, it is noted that

and in the body of the Memorandum the Blue Book provisions relating to "Inter-Company transfer CN/CP" are re-entitled "Inter-Company transfer CN/VIA", and a new appendix relating to such transfers is appended. This appendix deals in detail with the transfer of employees from CN to VIA at four locations namely, Montreal, Toronto, Winnipeg and Edmonton.

From the face of the Memorandum, as well as from the material before me relating to certain statements made by the parties at the time it was negotiated, I think it is fair to conclude that the Memorandum was at least primarily negotiated with a view to what the Union described (appropriately enough) , as the "massive" transfers of shopcraft employees from CN to VIA which were contemplated at the time, and which took place. The Memorandum is not, however, expressly limited in its application to those transfers, or to the other adverse effects on employees which occurred at that time. Indeed, the Memorandum expressly contemplates certain future main shop reductions, and makes provision for them. That provision is, I think, significant. It is set out in clause E of Schedule "C" to the Memorandum:

Clause E deals, it is clear, with one special case of "future reductions", and provides a narrower right of transfer than was available to employees at the four main shops to which the general provisions of the Memorandum expressly apply. The presence of such an employees adversely affected by VIA-related changes. Indeed, on at least one occasion of which there is evidence before me the parties, following the Memorandum, negotiated a similar agreement (generally applying the terms of the Memorandum, but adapting it to local conditions), in respect of changes (many of the provisions of the agreement refer to "transfers"), at other locations.

From the document itself, and from all of the material before me which might be pertinent to a determination of its purpose, it cannot, in my view, properly be concluded that the Memorandum applies in respect of employees other than those affected by the transfer of passenger related work at the locations dealt with in the Memorandum. In the instant case, I consider that there was not a "transfer of passenger related work", and in any event I do not consider that the Memorandum applies in respect of employees at the grievor’s location. Accordingly, it is my conclusion that the grievor’s case is not one to which the Memorandum applies. It is one to which the Blue Book applies, for the reasons given above.

It may be that in cases to which the Memorandum applies, one of the effects of Schedule "B" thereof, which amends article F of the Blue Book, would be to render the decision in the Montreuil case (an arbitration between VIA Rail and the C.B.R.T. & G.W., February 8, 1982) inapplicable. Since, as I find, the Memorandum does not apply in the grievor’s case, no question arises in that respect.

For all of the foregoing reasons, the grievance is allowed.

DATED AT TORONTO, this 16th day of December, 1986.