SHP 253




(the "Company")

- and -


(the "Union")



ARBITRATOR: Michel G. Picher


S. A. MacDougald – Manager, Labour Relations




Frank Klamph – Representative



A hearing in this matter was held in Montreal on October 23, 1988




The material facts are relatively Straightforward. The three grievors, who were employed as apprentice electricians at the Company’s Main Shops at Moncton, New Brunswick, were laid off after the completion of their apprenticeship, at a time after the Company’s announcements in the summer of 1986, that the Shops would be permanently closed. The Brotherhood’s claim is succinctly expressed in the following Joint Statement of Facts:


In February and March 1987 the following Electrician Apprentices were given notice that they would be laid off upon completion of their apprenticeship. The Company gave this notice because these Electrician Apprentices would have insufficient Electrician seniority to obtain an Electrician position at Moncton or at any location on their Atlantic Region seniority territory. They were consequently laid off.

Date of Notice Date of Layoff

Mr. D. B. MacEachern February 17, 1987 February 23, 1987

Mr. E. LeBlanc February 17, 1987 February 25, 1987

Mr. P. M. McLaughlin March 13, 1987 April 2, 1987

The Brotherhood contends that the layoff off the grievors is subject to notice under Article 5.3 of the Special Agreement of February 5, 1987. In addition, the Brotherhood contends that the grievors are entitled to be covered by Article 7 of the Employment Security and Income Maintenance Plan for purposes of Employment Security.

The Company disagrees and denies the alleged violation.

To facilitate the shutdown of the Moncton shops and maximize, insofar as possible, the protections of the employees affected, the parties negotiated a Special Agreement dated February 5, 1987. It provides, in part:

5.1 During the term of this Special Agreement, Articles 8.1, 8.2 and 8.3 of Article 8 – Technological, Operational and Organizational Changes – of the Employment Security and Income Maintenance Plan(s) identified in Appendix "A" hereto which deal with the advance notice to affected employees are suspended and the following will apply.

5.3 Except as otherwise provided in this Article 5.3, in any event, not less than 90 calendar days advance notice shall be given before the Company implements each phrase of its operating plan for the closure of the Moncton Main Shop complex. In the case of the transfer of employees from the Moncton Main Shop complex to Gordon Yard, not less than 30 calendar days advance notice shall be given. In the case of the lay-off of employees announced to take effect on March 13, 1987, 14 calendar days advance notice shall be given.

The Employment Security and Income Maintenance Plan (ESIMP) contains the following provisions:

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 System General Chairman representing such employees or such other officer as may be named, by the Union, 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.

8.7 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 a 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.

Employees who fall within the protection of the ESIMP enjoy certain rights of notice and job security. Such persons, described as employees who have "Employment Security", must have completed 8 years of cumulative compensated service with the Company.

It is common ground that the grievors all have completed 8 years of cumulative compensated service with the Company. The issue is whether they have been laid off in circumstances which bring them within the Terms of the Special Agreement and the ESIMP.

The Company contends that the grievors were laid off because they could not, by the exercise of seniority upon the completion of their apprenticeship, claim any position as Electricians with the bargaining unit, in accordance with Seniority Rule 23 of the collective agreement. It is common ground that in normal circumstances an employee in that situation is subject to lay-off, subject only to the notice provided under Rule 23.16 which provides, in part:

23.16 When it becomes necessary to make a reduction in staff at any seniority terminal, at least 4 working days’ notice shall be given the men affected before reduction is made, and lists shall be furnished to the Local Committee and General Chairman.

The Company maintains that the grievors, who were allowed to complete their apprenticeship rather than be laid off, were ultimately displaced from employment not as a result of the closure of the Moncton Shops, but because they were unable to exercise seniority rights to hold any position once they achieved a mechanic’s status upon completion of their apprenticeship. Part of the Company’s argument is that as the plan of closure served upon the Union in February of 1989 related only to the Electrician classification, and not to the apprenticeship classification, the Special Agreement and ESIMP have no application. Simply put, the Company maintains that the grievors were in no better position than any employee achieving electrician seniority during the operations of its business as a going concern, and that it is their inability to exercise seniority, and not the closure of the Moncton Shops, that caused their layoff.

A certain amount of argument was directed to an exchange which took place between officers of the Company and the Union during the negotiation of the Special Agreement. The Union seeks to establish a verbal undertaking by the Company that the grievors would be given the protections of the Special Agreement. I am satisfied that at best the evidence in that regard reveals a failure of communication or misunderstanding which is of little value in understanding the intention of the document finally executed which must, in the final analysis, govern the resolution of these grievances. In the Arbitrator’s view, the provisions to be construed are not ambiguous, and resort to extrinsic evidence is not necessary or justified.

The core issue is whether the grievors’ circumstances bring them within the purview of the Special Agreement and, by extension, the provisions of the ESIMP. It is, of course, true that at the conclusion of their apprenticeship they were unable to exercise seniority because of a lack of openings available to them. In the Arbitrator’s view, however, to construe the facts so barely ignores the realities of the situation. The normal expectation of apprenticeship is that at its conclusion employees will be able to gain seniority to bid into journeymen’s positions in the bargaining unit either at their location or on their regional seniority territory. The situation the grievors faced, however, at the conclusion of their apprenticeship is that the workplace in which they were located was no longer a going concern in the normal business sense, but rather an operation which was in the process of permanent shutdown. In these circumstances it is, in my view, artificial to characterize them merely as employees upon whom the shop closure had no impact, and who simply lacked the seniority to claim any available position in the seniority classification of mechanics.

When the collective agreement, the Special Agreement and the ESIMP are read together, it must be concluded that the parties intended that long-term employees in the situation of the grievors should have the protections negotiated on their behalf if their job security should be adversely affected by a permanent shutdown. While the Company may well have had an option of laying them off as apprentices, in which case they would fall under the Special Agreement, or continuing their employment to the completion of their apprenticeship, I must accept the Union’s argument that they could not have been intended to be in a worse position merely because they were not laid off as apprentices. The impact of the shop closure upon the grievors was no less operative simply because they were, for a limited time, shielded from layoff by their apprentice’s status and the company’s admittedly generous decision to let them finish their apprenticeship. While the impact of the shutdown may have been delayed in their case, it was not, in the end, avoided. In the Arbitrator’s view, the fact that other employees who were on layoff prior to the notice of shutdown do not enjoy the same rights as the grievors is of no consequence to their entitlement under the Special Agreement.

On the material and evidence before the Arbitrator, it is impossible to conclude that the grievors’ ultimate layoff was not a direct result of the Company’s decision to wind down and ultimately close the Moncton Main Shops. In this regard, I am impressed by the reasoning of Arbitrator Weatherill in an analogous case between the Company and the International Association of Machinists and Aerospace Workers dated May 22, 1987, arising out of the same factual context.

For the foregoing reasons, the grievances must be allowed. I retain jurisdiction in the event of any dispute between the parties respecting the interpretation or implementation of this award.

DATED at Toronto this 26th day of October, 1988.

(signed) Michel G. Picher