SHP - 225




(the "Company")



(the "Union")





SOLE ARBITRATOR: J. F. W. Weatherill



A. Rosner –

L. Biniaris –




A. Giard –

J. Glazer –




A hearing in this matter was held at Montreal on April 28, 1987.



The parties submitted separate statements of the Dispute and Issue in this matter. The general nature of the issue is, however, quite clear, as will appear. The nature of the dispute is succinctly stated in the union’s Statement of Dispute as follows:

Applicability of Article 8 of the Employment security and Income Maintenance Plan to a layoff at Moncton Main Shop, effective October 10, 1986.

As for a general statement of the matter, the company’s statement may perhaps state the case more objectively, and is sufficient for the purposes of this award:

On September 29, 1986, the Company issued notices to thirty Machinists and four Machinists Helpers employed in the Motive Power shop at the Moncton Main Shop Complex advising them that their positions were to be abolished effective October 10, 1986. The Union contends that these 34 positions were abolished as a result of a technological, operational or organizational change and that three months’ notice to the Union was required pursuant to the provisions of Article 8.1 of the Employment Security and Income Maintenance Plan.

The Union requests that the employees affected by the abolishment of 34 positions be provided the benefits and conditions of the Employment security and Income Maintenance Plan. The Company disagrees with the Union’s contention and has declined the Union’s request.

Article 8.1 of the Employment Security and Income Maintenance Plan provides that 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 at least three months’ notice. The notice is to include "a full description" of the change, together with "appropriate details as to the consequent changes in working conditions and the expected number of employees who would be adversely affected."

Article 8.7 of the Plan is as follows:

The terms operational and organizational change shall not include normal reassignment of duties arising out of the nature of the work in which the employees are engaged nor to changes brought about by fluctuation of traffic or normal seasonal staff adjustments. Any permanent shutdown or permanent partial shutdown of an operation, facility or installation, shall be considered as Technological, Operational or Organizational change. Any permanent company-initiated change, excluding changes which are brought about by general economic conditions and which result from the reduction or elimination of excess plant capacity shall also be considered as Technological, Operational or Organizational changes.

There have, in recent years, been substantial changes in the nature and amount of the work performed at the company’s Moncton Main Shop Complex. Some types of work, such as the re-manufacture of Bombardier MS-10 locomotives, have ceased. That particular change led to the issuance of an Article 8.1 notice in 1982. There have been technological changes, such as one caused by the reduction in the use of brass friction bearings, which resulted in the issuance of an Article 8.1 notice in February, 1986. There have been a number of other instances in which the company has recognized that an Article 8.1 notice was appropriate, and such notices have been issued accordingly. There would appear also to have been instances, over the years and including perhaps some recent ones, where reductions in work force requirements have been attributable simply to a decline in volume of business ("fluctuation of traffic or normal seasonal staff adjustments"), and nothing else. In such cases, notices of layoff have been given in accordance with collective agreement 12.32 (which calls for four days’ notice), and not pursuant to Article 8.1 of the Plan. There would appear to have been no grievances filed in such cases.

In the instant case, the union contends that the layoffs in question are in fact related to the shutdown – what will be the permanent shutdown – of the Moncton Main Shops, and that this company is putting into effect an operational or organizational change of a permanent nature which has adverse effects (there is no question of that), on employees. It is the company’s contention that the layoffs in question are due to fluctuation (reduction) in traffic, and that what occurred was solely a reduction in existing staff levels in order to bring labour expenditures in line with work load.

The company has shown that with respect to each of the positions abolished, there was insufficient work available in the department concerned to justify the retention of the position. There was certainly less work coming in to the Moncton shops: there was less work being assigned to the employees in the departments affected. This was not due to any "technological" development in the normal sense. It might be thought to follow, as a general matter, that work had simply fallen off, and that the employees were thus being laid off in the manner contemplated by the provisions of collective agreement 12.32.

A number of arbitration cases have dealt with situations where it has been held to have been properly determined that a "fluctuation in traffic", even a permanent one, need not call for an Article 8.1 notice. Thus, in CROA case No. 1634 it is said that "a reduction of the workforce caused by a general decline in business does not constitute an operational and organizational change". With respect, I agree with that general conclusion, although it is to be read, as are all arbitral utterances, in the context of the award in which it was made.

Clearly, changes which are "brought about by fluctuation of traffic or normal seasonal staff adjustments" are not operational or organizational changes within the meaning of the Plan any more than are normal reassignments arising out of the nature of the work: that is what the first sentence of article 8.7 states. The situations there referred to are situations of "normal" business activity, whether the volume of business be expanding or contracting. Article 8.7 goes on to provide, however, that "Any permanent shutdown or permanent partial shutdown of an operation, facility or installation, shall be considered as a Technological, Operational or Organizational change". When Article 8, and indeed the Plan itself is read as a whole, I think it is clear that the permanent shutdown of a facility would be required to be considered an organizational or operational change notwithstanding that the underlying motive for the shutdown was a decline in volume of business.

In the instant case, it is clear that the Moncton Main Shop Complex is to be closed. The balance of the distribution by the company of the work performed there and at other main shops has altered. On the material before me, I find that one reason at least for the reduced need for employees at Moncton, for the reduction in the assignment of work there, is the of work elsewhere in the company’s assignment operations. It is true that the volume of traffic in Eastern Canada has declined, and it is no doubt the case that the company’s actions are based on sound business reasons which are not in issue in this arbitration. It nonetheless remains the case that the Moncton shops are to be closed, and that it is not simply a decline in local traffic volume which has led to the loss of the jobs involved in this case.

On the evidence, the company has "no schedule … no prepared plan" for the closure of the Moncton shops. It is, however, contemplated that such closure will occur some time in 1988. While the shop "capacity" may remain at the same level, its actual utilization, following piecemeal staff reductions such as the one in question, each perfectly in accordance with the requirements of the work which the company may decide to assign at the time, will be reduced to zero. This sort of situation is, in my view, precisely the sort of situation to which the Employment security and Income Maintenance Plan addresses itself. It provides certain benefits to employees whose jobs are lost, not through "normal" fluctuations in the nature or availability of work, but through changes of the sorts referred to in the Plan. Such changes include the permanent shutdown of facilities. While the "appropriate details" of that shutdown are not available, no formal plan or schedule having yet been made, the intention to achieve this change is clear, and the layoffs in issue in the instant case, related as they may be to the, work assignments now made available, give partial effect to that intention. This is the sort of situation in which, in my view, an Article 8 notice is required.

While the layoffs may thus in a sense be associated with certain "fluctuations of traffic", when that phrase is read, as I believe it should be, ejusdem generis with the other situations referred to in the same provision - "normal reassignment of duties" and "normal seasonal staff adjustments", and when the overall nature of the restructuring of Main Shop operations which is taking place is considered, then it becomes clear, as I view the matter, that the reduction in work assignments here in issue is not the sort of "fluctuation" which may be expected in the normal course and to which reference is made in the first sentence of Article 8.7, but is rather part of an operational; and Organizational change within the meaning of the second sentence of the article. protection of employees in circumstance, such as these is the very purpose of the Employment Security and Income Maintenance Plan.

For the foregoing reasons, it is my conclusion that an Article 8 notice ought to have been given in the instant case. The grievance is accordingly allowed.

DATED AT TORONTO, this 22nd day of May, 1987.

(signed) J. F. W. Weatherill,