SHP 333





International Association of Machinists and Aerospace Workers


Brotherhood of Maintenance of Way Employees





There appeared on behalf of the Union:

A. Rosner Executive Secretary, CCRSU

L. Biniaris System General Chairman, IAM& AW


There appeared on behalf of the Company:

S. A MacDougald Manager, Labour Relations, Montreal

L. F.Caron System Labour Relations Officer, Montreal

B.J. Everard Manager, Newfoundland


There appeared on behalf of the INTERVENOR:

David A. McKee Counsel

Ron Bowden System Federation General Chairman C.N. Eastern Lines



A hearing in this matter was held in Montreal on December 6, 1990.



In the arbitrator's view the nature of the dispute and issue to be resolved is sufficiently described in the following

statement filed by the Company:


A claim concerning the alleged violation of certain Rules of Agreement 12.32 and Agreement 12.10 as they relate to various employees employed on the Rail Removal Gangs in Newfoundland.

Company Statement of Issue

On June 22, 1988, the Company served notice on the unions concerning the closure of the Newfoundland Railway. On September 9, 1988, the Company, the International Association of Machinists and Aerospace Workers (IAM&AW) and the Brotherhood of Maintenance of Way Employees (BMWE), amongst other unions, signed the Newfoundland Railway Closure Special Agreement to provide assistance to employees adversely affected by the closure of the Newfoundland Railway.

On May 17, 1989, and thereafter, employees in the IAM&AW bargaining unit who had been placed on Employment Security status as a result of the closure of the Newfoundland Railway were, in keeping with the provisions of the Special Agreement, obligated to fill positions on newly created Rail Removal Gangs or forfeit Employment Security. The work in question is work normally performed by Maintenance of Way employees (BMWE). The employees in question had the higher applicable wage rate of their original positions protected while working in the new positions and they were in all other respects treated as coming under the scope of the BMWE Agreements 10.61 and 10.73.

The Union contends that at all material times, the employees in question remained solely within the scope of the IAM&AW Agreements 12.32 or 12.10. The Union claims that in failing to recognize this, the Company violated numerous rules of the IAM&AW agreements, including Rules, 1.1, 2.1, 2.3, 2.4, 2.8, 3.1, 5.1, 5.2, 5.3, 5.4, 5.8, 7, 8.1, 8.2, 8.6, 8.9, 8.10, 23.4, 23.5, 44.1, 46, 46.7, 46.10, 47.4(i), and 48.1 of Agreement 12.32, and the corresponding Rules of Agreement 12.10; as well as Article 7.5 (a) and (b) of the Newfoundland Railway Closure Special Agreement. The Union requests a ruling to this effect. The Union further requests that any employees who suffered losses be made whole, and that the union dues revert to the IAM&AW for the periods of time in which they were improperly deducted.

The Company has denied the Union's contentions and declined its request.


The facts giving rise to the grievance are relatively straight-forward. Following notice of the Company's intention to close the Newfoundland Railway the parties signed the Newfoundland Railway Closure Special Agreement on September 9, 1988. The preamble of that agreement indicates that it is intended "... to provide assistance to employees adversely affected by this change". The recitals go on to establish that the Special Agreement is supplemental to the Employment Security and Income Maintenance Agreement, and that together the ESIMA and the Special Agreement provide the terms, conditions and benefits for employees of Non-Operating and Shopcraft Unions adversely affected on Terra Transport and the Company's Atlantic Region.

The Special Agreement goes beyond the ESIMA in two respects which are material to the appreciation of this dispute. Firstly, under its terms, employees are not required to exercise their seniority on positions outside Newfoundland, as would be the case under the general terms of the ESIMA. Article 7.5 of the Special Agreement then further provides as follows:

7.5 Subject to the provisions of this Article 7.5, an employee covered by the provisions of Article 7.3 hereof who goes on Employment Security within the territorial limits of the Province of Newfoundland, must accept employment in any capacity within the Company within the Province of Newfoundland.

(a) While working in another position pursuant to this Article 7.5, the employee will retain his Employment Security status in his original classification and will not forfeit such status as a result of accepting such other employment;

(b) Employees on Employment Security status will be listed in the order of their respective Cumulative Compensated Service (C.C.S.) and the filling of positions pursuant to this Article 7.5 will be on an optional basis in C.C.S. order;

(c) In the event a senior employee does not accept such employment, the junior employee must fill such position. Failure to do so will result in forfeiture of such employee's Employment Security status;

(d) Employees accepting other employment under this Article 7.5 will have the applicable rate of their original position protected while working in the new position.

On or about May 3, 1989, the Company notified some 15 members of the Machinists' bargaining unit, all of whom were on employment security status, that they must report to work at various locations in Newfoundland on May 16, 1989 to work as part of rail removal gangs. It is common ground that the gangs were established to remove track throughout Newfoundland following the closure of the railway. The gangs operated from May 15 to December 5, 1989 and were again reinstated on or about May 17, 1990 for a second season of work anticipated to end on or about December 5, 1990.

The material before the Arbitrator establishes beyond dispute that the Company treated the work in question as coming under the scope of the collective agreement of the Brotherhood of Maintenance of Way Employees. The machinists assigned to the rail removal gangs were therefore treated, as regards their terms and conditions of employment, under the terms of the BMWE collective agreement, save that they continued to receive the rate of pay of machinists in respect of the hours which they worked.

The Union submits that the treatment of the machinists resulted in their suffering monetary losses, as well as benefits and privileges which would otherwise have been theirs if the terms of the machinists' collective agreement had been applied to them. It cites, among other things, the requirement that they must travel on their own time and expense, inferior meal expenses, loss of overtime pay, loss of annual vacations, and violations of the calling procedures, by way of examples. Its representative submits that in fact the machinists deployed to work on the rail removal gangs were financially disadvantaged, to the extent that they would have enjoyed greater wages and benefits if they had merely remained at home on employment security status.

The Company's representative submits that the Special Agreement reflects a compromise reached between the parties whereby employees on employment security as a result of the closure of the railway operations of Terra Transport make certain gains in exchange for certain concessions. In particular, he argues that the ability to retain employment security while not being obligated to leave Newfoundland is a substantial advantage, in exchange for which employees are required to accept employment "in any capacity within the Company" which is a broader requirement than existed under the ESIMA.

In the arbitrator's view the position of the Company is not readily supportable on an examination of the language of the ESIMA as compared with the Special Agreement. Nor is it consistent with the underlying purpose of either of those documents. A cornerstone principle of both the ESIMA and the Special Agreement is that an employee who has employment security is not to be laid off. That is reflected in Article 7.2 of the ESIMA which is as follows:

7.2 An employee who has Employment Security under the provisions of this Article will not be subjected to layoff or continuing layoff as the result of a change introduced through the application of Article 8.1 of The Plan.

The foregoing provision is the background against which the Special Agreement was negotiated. Arbitral jurisprudence has established that transfer from a non-seasonal permanent position to work within a separate bargaining unit of seasonal employees constitutes a layoff. (See e.g. Re Imperial Leaf Tobacco Company of Canada Ltd. and International Chemical Workers Union Local 843 (1975), 9 L.A.C. (2d) 407 (Weatherill), and see also Re United Steelworkers and Roscoe Metal Products Ltd. (1966), 17 L.A.C. 8 (Fuller) and Re United Auto Workers, Local 1525 and Northern Electric Company Ltd. (1971), 23 L.A.C. 104 (Weatherill).) An employee moved from one bargaining unit to another, with a resulting financial loss, is generally considered to be laid off from his or her original bargaining unit.

It is clear from the terms if the ESIMA that the Company is entitled to require employees who have employment security status to exercise their seniority to fill "an unfilled permanent vacancy" elsewhere within the Company's operations, both inside and outside the bargaining unit, according to a descending scale. The failure to exercise seniority in that way can result in the forfeiture of employment security.

In the instant case it is not disputed that the Company was entitled to assign the employees in question to the work of the track removal gangs, work which is not disputed is seasonal in nature and did not involve permanent bulletined positions. To the extent that the machinists so treated would receive travel allowances, overtime pay and other conditions or benefits inferior to those which would accrue to them under their own collective agreement, by virtue of their being treated as falling under the BMWE bargaining unit, they would, in accordance with general principle, be suffering a form of layoff.

That, however, is what the ESIMA protected them against. Is there any reason to conclude that their protections in that regard were forfeited in the negotiation of the Special Agreement? I think not. While article 11.2 of the Special Agreement provides that it is to have precedence over the collective agreements or the ESIMA, that provision could only have application where there is some clear conflict or inconsistency between or among those various agreements. The arbitrator can see nothing in the terms of the Special Agreement to suggest that the parties intended to suspend the protections of employees with employment security against the adverse effects of a layoff. In the arbitrator's view the intention of article 7.5 is to allow the Company to utilize machinists who have the benefit of employment security to perform work "in any capacity within the Company" and to force them to do so by inverse order of seniority. There is nothing in the language of the article, or of the agreement as a whole, however, which suggests that employees so treated are to forfeit the general wage and benefit standards of their own collective agreement, or that they cease to be represented by their union while they are assigned to such work, particularly as it might relate to work which does not involve an unfilled permanent vacancy within the meaning of article 7 of the ESIMA In order words, as a matter of principle, while the Company retains the flexibility to require employees to accept work in any capacity within the Company, in inverse order of seniority, the employees retain the full benefit of the rights which they enjoy by virtue of their employment security. The instant grievance does not concern the status of employees who fill permanent vacancies in bulletined positions, and no comment in respect of that circumstance need be made. There is no basis upon which to conclude that machinists on employment security who are given temporary or seasonal work assignments necessarily forfeit the wage and benefit protections of their own collective agreement, or are removed from their bargaining unit. I can find nothing in the language of the Special Agreement to support such a conclusion.

For the foregoing reasons the grievance must be allowed. The Arbitrator finds and declares that the machinists assigned to the track removal gangs were at all material times under the scope of the IAM collective agreement insofar as their wages and benefits are concerned, including travel allowances, overtime payments and the like. They were, moreover, to be treated as employees remaining within the machinists bargaining unit for the purposes of dues deduction. I so declare, and remain seized of this matter in the event of any dispute between the parties with respect to the interpretation or implementation of this award as it may affect particular employees.

DATED at Toronto this 10th day of December, 1990.

(sgd) M. G. Picher