SHP - 392




(the "Company")


I.B.F.& 0. and I.A.M.& A.W.

(the "Unions")






A. Rosner – Executive Secretary, CCRSU

G. Brodsky – Counsel

Ed Fullerston – General Chairman, IAMAW


L. G. Winslow – Labour Relations Officer

M. W. Shannon – Solicitor

R. M. Smith – Solicitor

G. D. Wilson – Solicitor

D. R. Simpson – Production Manager, Component Shop - Weston

J. P. Lotecki – Personnel Development Officer Weston


Hearings in this matter were held in Winnipeg on August 3, 4, 5, 6; December 11, 12, 13, 20, 21, 22, 1993; and January 8, 9, 10; March 23 & 24, 1994.



This is an interim award, issued by the agreement of the parties, in respect of four of the eight grievors whose discharges are before the arbitrator. The grievors, Terry Appleton, Glen Laliberté, James Munch, Manfred Peters, Brent Powell, Domanic Sewell, George Shannon and Phillip Stempnick were discharged by the Company for their alleged involvement in the sabotage of Company equipment which occurred during the course of a strike in 1988. The grievors Laliberté, Peters, Powell, Shannon and Stenipnick are members of the International Association of Machinists employed in the Company’s shop facilities at Winnipeg. The grievors Appleton, Munch and Sewell are also shopcraft employees at Winnipeg, represented by the International Brotherhood of Firemen and Oilers.

The grievors were discharged for their alleged involvement in three incidents of sabotage against Company property which occurred in April of 1988. The first involves damage to signals at Hazelridge, Manitoba on April 1, 1988. The second and third events occurred at Poplar Point on April 21/22, 1988, and involved the disabling of signals, which caused trains to slow down, and the destruction of switches, which resulted in the derailment of a train causing property damage estimated to be in excess of $1 million.

As a result of police investigations in late 1991 and early 1992, criminal charges in respect of the vandalism in question were laid against all of the grievors, save Mr. Appleton. The charges were dismissed in March of 1993 upon a finding of insufficient evidence. However, following Company disciplinary investigations, each of the grievors was discharged for having participated in damage to Company equipment. Mr. Peters and Mr. Appleton are alleged to have been involved in tampering with the signals at Hazelridge on April 1, 1988, along with Mr. Munch. The grievor Sewell is alleged to have been involved in tampering with switches at Rosser, near Poplar Point, resulting in the derailment. Lastly, the grievors Laliberté, Munch, Powell, Shannon and Stempnick were all discharged for their alleged involvement in the destruction of signal equipment at Poplar Point. This interim award deals with the evidence as it pertains to the grievors Appleton, Peters, Munch and Sewell.

Mr. Peters and Mr. Appleton are alleged to have been involved in the damage to the signals at Hazelridge, with the knowledge and involvement of Mr. Munch. The only evidence directly implicating any of the three grievors is the testimony of Mr. Robert Schnerch.

At the time of the strike, Mr. Schnerch was employed in the Weston Shops as a labourer, and was a member of the I.B.F.&O. According to Mr. Schnerch’s evidence, he was approached by the grievor Jim Munch, who was the I.B.F.&O. union officer chiefly responsible for coordinating strike and picketing activity. According to Mr. Schnerch, Mr. Munch approached him, apparently aware of Mr. Schnerch’s prior experience in the signals and communications department, to ask whether he had knowledge of signals, and whether Mr. Schnerch could meet with Mr. Munch in his strike office. According to Mr. Schnerch’s evidence, when they met shortly thereafter in Mr. Munch’s office, he asked Mr. Schnerch how the Company’s trains could be slowed down, whereupon Mr. Schnerch gave a general explanation of how that could be achieved by tampering with signals.

Mr. Schnerch relates that a second meeting occurred in Mr. Munch’s strike office in the Continental Hotel, where he was introduced to the grievor Manfred Peters. According to Mr. Schnerch, he and Mr. Peters made an exploratory trip together that evening to the Hazelridge area. He states that during the course of the evening they discussed which tools would be needed to cut the signal line, and agreed that among other things Mr. Peters would need a rope, a hacksaw, bolt cutters and a saw to cut down the supporting pole. Mr. Schnerch maintains that Mr. Peters indicated that he did not have all of the necessary tools and that Mr. Schnerch agreed to supply them. As related by Mr. Schnerch, when he and Mr. Peters returned to the Continental Hotel they had conversations about their plans with Mr. Munch. He further relates that Mr. Peters indicated to him that he did not require Mr. Schnerch’s involvement in the actual operation. According to Mr. Schnerch, at a later time, he and Mr. Peters agreed to meet to transfer the tools to Mr. Peters. He states that this was done in the parking lot of the hotel when he gave Mr. Peters a rope, bolt cutters, pliers and a hacksaw.

Mr. Schnerch testified that while he was picketing on the evening of the Hazelridge incident Mr. Peters and Mr. Appleton arrived at the picket line in Mr. Peters’ truck. He states that Mr. Peters then said something to him with respect to how the operation had gone, and indicated that the tools which he had supplied were stored in Mr. Appleton’s garage. According to Mr. Schnerch, he went to Mr. Appleton’s home the next morning and retrieved all of the tools from Mr. Appleton.

Upon a careful review of the totality of the evidence, the arbitrator finds Mr. Schnerch’s account of these events to be implausible in the extreme. Mr. Peters was the I.A.M. local chairman of the Weston Shops Machinists. The unchallenged evidence of Mr. Peters is that outside of his work as a machinist he is heavily involved in the use of tools for his own personal projects, including work on a vehicle which he enters into car shows. The evidence establishes that at the time of the events in question he had an estimated $30,000 worth of tools, which would have included all of the tools of the kind allegedly lent to him by Mr. Schnerch. The arbitrator has substantial difficulty believing the account of Mr. Schnerch, which suggests that it was Mr. Peters who asked him what tools would be necessary and requested that Mr. Schnerch obtain them. As a seasoned tradesman with a substantial collection of tools at home, Mr. Peters would not, I believe, have been in a position to require any tools from Mr. Schnerch.

There are, moreover, substantial reasons to doubt the credibility of Mr. Schnerch. By his own account, he was close friends with Mr. Gordon Hilderman, an employee of CN whom he describes as a frightening person. Mr. Schnerch described in his evidence how he and Mr. Hilderman, allegedly in the company of Mr. Sewell, went to the area of Rosser on the night of April 21 to 22, 1988 with the express purpose of sabotaging switches in order to derail a train. The indifference with which he undertook that action, and the casualness exhibited in his account of those events during the course of his testimony, leave the arbitrator with the impression of a person whose stability and trustworthiness are highly in question. If Mr. Schnerch was, as is clear, indifferent to the lives and safety of the employees operating the train which he derailed, there is reason for concern that he is equally indifferent to the truth and to falsely causing damage to the lives of those he implicated in his "confession". It is not without significance, I think, that Mr. Schnerch confessed his involvement in acts of sabotage against the Company only in exchange for immunity from prosecution and, it appears, with some serious overtures on the part of his counsel to obtain for him a monetary reward. On the whole, I find the testimony of Mr. Schnerch entirely lacking in credibility.

Mr. Peters, by contrast, impressed the arbitrator as a fair and candid witness. I accept as truthful his denial of any involvement in the Hazelridge incident or in any plans or conspiracies involving Mr. Schnerch. It is well established that in a matter of discipline or discharge, the standard of proof must be commensurate to the gravity of the offence which an employee is alleged to have committed. When the impugned conduct is criminal or quasi-criminal in nature, it is incumbent upon an employer to adduce clear and cogent evidence to sustain the allegation made. As regards the evidence against Mr. Peters, as well as against Mr. Appleton, which is entirely out of the mouth of Mr. Schnerch, the arbitrator cannot find that the Company’s evidentiary burden has been discharged, on the balance of probabilities. Similarly, I cannot accept as reliable the evidence of Mr. Schnerch with respect to the alleged involvement of Mr. Munch in the events surrounding the signals at Hazelridge. The same conclusion must be drawn with respect to the evidence in respect of Mr. Munch as it pertains to the alleged plan to tamper with the signals at Poplar Point on April 211/22, 1988. There is no direct evidence, beyond that of Mr. Schnerch, to suggest any knowledge or involvement on the part of Mr. Munch in relation to that event. Again, in that respect, the burden of proof has not been discharged.

Lastly, the arbitrator cannot find that the Company’s allegation against Mr. Sewell is sustained, on the balance of probabilities. Mr. Sewell is alleged to have accompanied Mr. Schnerch and Mr. Hilderman on the night of April 21/22, 1988, and actively participated in the dismantling of switches in the area of Rosser, leading to the derailment. Mr. Sewell testified and related that he had no recollection of his whereabouts on the night in question. In the arbitrator’s view that is not surprising, as several years passed before the police investigation gave him any reason to think back on that date. However, the evidence of the grievor’s wife, as well as that of her mother, does bring to bear some clear recollection. It is common ground that the derailment, and the Company’s suspicions that it was, caused by striking employees, was a high profile news item in the Winnipeg media immediately after it happened. The evidence of Ms. Sewell, confirmed by the testimony of her mother, establishes that shortly after the incident, during the course of a conversation with her mother, she related how fortunate it was that Mr. Sewell was at home that evening. Ms. Rita Bell, Mr. Sewell’s mother-in-law, estimates that the conversation took place some two or three days after the derailment. According to her evidence, the conversation, which she believed was by telephone, involved her daughter asking whether she had read about the derailment in the newspapers. According to Ms. Bell, her daughter then expressed how thankful she was that Mr. Sewell was at home on the night in question.

It appears that there is some discrepancy between Ms. Sewell and Ms. Bell as to whether the conversation did take place on the telephone. Ms. Sewell believes that in fact the conversation occurred during the course of a Sunday evening dinner visit between them. In the arbitrator’s view, that discrepancy is not critical. I consider the evidence of Ms. Sewell and Ms. Bell to be candid and accurate, insofar as the content of their conversation is concerned. I, therefore, accept it as evidence, albeit indirect, going persuasively to the whereabouts of Mr. Sewell on the evening in question. Bearing in mind that the evidence of Mr. Schnerch is, in the arbitrator’s view, highly unreliable, I am satisfied that the Company has not established, on the balance of probabilities, the involvement of Mr. Sewell in any wrongdoing.

For the foregoing reasons, the arbitrator directs that the grievors Appleton, Munch, Peters and Sewell be reinstated forthwith into their employment, with compensation for all wages and benefits lost as a result of their discharge. I retain jurisdiction in respect of any difficulties which may arise with respect to implementation of this award.

For reasons to be related in the final award in this matter, it is clear that the evidence of the Company, as against the other grievors, rests on a broader evidentiary base, insofar as it is not solely out of the mouth of Mr. Schnerch. Without commenting on the merits of the grievances of those employees, the arbitrator deems it appropriate, that they be determined only after the completion of the final argument by both parties.

DATED at Toronto this 19th day of April, 1994.