SHP - 404

IN THE MATTER OF AN ARBITRATION

BETWEEN

CANADIAN NATIONAL RAILWAY COMPANY

(the "Company")

AND

NATIONAL AUTOMOBILE, AEROSPACE, TRANSPORTATION AND GENERAL WORKERS UNION OF CANADA (CAW-CANADA) (SHOPCRAFTS), LOCAL 100

(the "Union")

RE AGREED REFERENCE OF DISPUTE ON FILLING OF SHOPCRAFT POSITIONS IN TORONTO, ARTICLE 7.11

 

SOLE ARBITRATOR: M. G. Picher

APPEARING FOR THE UNION:

J. R Moore-Gough – President, Local 100

T. Wood – National Representative, CAW

A. Rosner – National Representative, CAW

G. Woods – President Lodge 550, Local 100

D. Wray – Prairie Region Vice- President, Local 100

R Hanlon – Great Lakes Region Vice-President, Local 100

J. Gouveia – Local Chairman Lodge 110, Local 100

R Laite – Shop Steward Oshawa Lodge 110, Local 100

P. Poplar – Atlantic Region Vice- President, Local 100

APPEARING FOR THE COMPANY:

John Coleman – Counsel

Anouk Violette – Counsel

Mark Boyle – Director, Labour Relations

Katya Laviolette – System Labour Relations Officer

Ross Bateman – Assistant Manager, Labour Relations, CN East

Frank O’Neill – Labour Relations Officer CN East

Henry Hartman – Manager, Regional Placement Office

John Dunn – Superintendent Mechanical, Great Lakes District

Paul Mathieson – Chief Mechanical Officer

A hearing in this matter was held in Toronto on December 18, 1995 with further written submissions filed on or before December 22, 1995, with a Supplementary Hearing in Montreal on January 16, 1996.

 

CONSENT AWARD

The Union and the Company were in disagreement as to the rights of the employer and the obligations of employees with respect to the dislocation of employees to fill some 17 vacant positions at Toronto, Ontario. The original position of the Company was that certain employees on Employment Security can be forced to fill the Shopcraft vacancies in question while the Union contended that the Company violated the provisions of the Employment Security and Income Maintenance Agreement (ESIMA), as well as the collective agreement, by forcing the employees in question to move. The joint statement of dispute and issues, filed at the initial hearing, reads, in part, as follows:

On October 31, 1995, a meeting of the Labour Adjustment Committee was held in Montreal, Quebec to deal with a number of issues, including "the requirement of employees on Employment Security in the transaction group or employees who went on Employment Security after June 14, 1995 to fill positions". Agreement was not reached on this matter during the meeting. On November 3, 1995, Mr. J.P. Mathieson, Chief Mechanical Officer for the Company, wrote to Mr. J.R. Moore-Gough, President of Local 100, stating the position the Company would be taking in this respect. On November 6, 1995, Mr. R. Bateman, Assistant Manager, Labour Relations, contacted Mr. Moore-Gough and informed him that the Company would begin a process of canvassing and forcing individuals on Employment Seniority to fill shopcraft vacancies in Toronto, Ontario.

DISPUTE:

It is the Union’s contention that the Company violated the provisions of the ESIMA and the Collective Bargaining Agreement in that the Labour Adjustment Committee was not permitted to fulfil its rights and obligations in this respect such as: to review the status of surplus employees as well as any initiative which may impact on employees represented by the Union; to examine placement opportunities for surplus employees inside the Company system-wide; to fill vacancies on a voluntary basis system wide with senior employees with the view to providing employees who are currently on Employment Security with a permanent position; to develop additional opportunities for employees on Employment Security, to assess to the extent possible, the stability of positions Employment Security employees are required to fill, and to establish the rules with respect to the application of consolidated seniority. Further, it is the Union’s contention that the Company failed to provide a transfer of benefits to senior employees and that the Company provided incorrect information to employees concerning their rights and entitlements. It is the Company’s contention that the process utilized for filling the vacancies in Toronto was in accordance with the provisions of the Employment Security and Income Maintenance Agreement and the Collective Bargaining Agreement

While it is not necessary to review extensively the facts giving rise to the dispute, it may be noted that since June 14, 1995, the parties have been in negotiations with a view to finalizing the terms of the ESIMA in a manner consistent with the award of the Mediation-Arbitration Commission issued under the chairmanship of Mr. Justice George Adams. During the course of those negotiations, it came to the Union’s attention that the Company intended to force employees on Employment Security status to relocate to Toronto to fill some l7 vacant shopcraft positions. The Company indicated that it would not make those positions first available to active employees, a position which the Union immediately disputed. The Union’s concerns became more aggravated when it came to believe that the Company was also in the process of abolishing the positions of a number of Carmen in the Company. Although such layoffs did not proceed, the Union was openly troubled by the possibility that the Company might manipulate the timing and location of layoffs, and the forcing of employees on Employment Security to relocate, in such a way as to effectively reduce the number of employees who benefit from Employment Security protection, in a manner inconsistent with the intention of the ESIMA and the collective agreement. Further to its concerns, the Union moved in the Court of Queen’s Bench at Winnipeg, Manitoba, for an injunction and other relief to prevent the Company from forcing employees to displace to Toronto. On November 22, 1995, one day before the hearing of that application, the parties agreed to submit the issues in question to this arbitration for expedited the resolution. On that basis, the application before the Court was discontinued.

The award of the Commission chaired by Mr. Justice Adams, dated June 14, 1995, contained a provision incorporating the terms of article 7.11 of the CN-RCTC agreement as governing the Employment Security of the employees in the instant bargaining unit. Page 59 of that award reads, in part, as follows:

Rights and obligations of employees currently on ES shall be as set out in the CN and RCTC agreement with the exception that there will be a four-month delay in the application of these new rights and obligations, and on the explicit understanding that these employees are entitled to a full 6-year benefit, regardless of the period of time they have already been in receipt of ES.

Article 7.11 of the CN-RCTC Agreement provides as follows:

Employees on Employment Security benefits as June 30, 1995, and governed by the terms and conditions of Article 7 of the E.S.I.M.A. of April 21, 1989, ("the Former plan") will continue to be governed by those provisions subject to the following additional conditions or limitations which will come into effect on October O1, 1995.

The duration of Employment Security entitlement will be limited to the duration outlined in Article 7.4 of this Plan.

When employees have expended their Employment Security benefits and are not occupying a permanent position, such employees must occupy a permanent position pursuant to Article 7.1 or elect options 1 or 3 of Article 7 Section B). Employees currently in receipt of benefits who are in the transition period of 4 to 6 years outlined above, will be required, in addition to requirements of Article 7 of the Former Plan, to fill permanent vacancies in all other bargaining units, non-scheduled or management positions on the Region and accept work outside of CN Rail at their home location. Any outside earnings will be deducted from Employment Security payments.

When permanent vacancies occur on the System within the bargaining unit, the Labour Adjustment Committee will meet to ensure the filling of such vacancies, initially on a voluntary basis to senior employees with the view to providing employees who are currently on Employment Security with a permanent positions (sic) on their Region. If the Labour Adjustment Committee cannot fill such a vacancy on a voluntary basis, the junior employee on the Region, currently on Employment Security of the Former Plan, must fill that vacancy on the System.

During this period, the Labour Adjustment Committee will meet to develop additional opportunities and/or options for such employees, including but not limited to placement assistance, job searches, special training, etc., with the ultimate goal of finding permanent employment opportunities.

(emphasis added)

The first dispute between the parties concerned the meaning of the first sentence of penultimate paragraph of article 7.11, reproduced above. The Union asserted that that sentence contemplates the canvassing of all senior employees, including employees actively at work to fill vacancies with the result that employees on Employment Security can be brought back to active service in permanent positions on their region. The Company took the view that the reference to senior employees in that sentence is to senior employees who are on Employment Security, and that the exercise of identifying volunteers on a seniority basis is restricted to that group, and does not extend to employees who are actively at work.

The Union maintained that the Company’s failure to accept its interpretation had a substantial practical impact on employees. It stressed that there are senior employees employed at both Winnipeg and Montreal who have expressed an interest in relocating to Toronto. If its interpretation were accepted, these employees would be able to volunteer to fill the vacancies at Toronto, thereby opening active positions for persons on Employment Security at their own locations, on their respective regions. It argued that it is contrary to the intention of article 7.11 to begin the exercise by canvassing volunteers among employees on Employment Security, and ultimately forcing the junior employees on [Employment] Security to displace to Toronto to fill the vacancies in question.

The Company asserted that at one point in time the Union was agreeable to its method of implementing the provisions of article 7.11. This the Company believed, was the result of discussions between the parties on October 31 and November 6, 1995. The Company argued that, in fact, it was the Union which first proposed the canvassing of transitory Employment Security employees in seniority order, system-wide, on the basis of "senior may but junior must", with respect to the filling of vacancies.

If it were necessary to rule on the issue, the arbitrator could not find that there was, in fact, an agreement between the parties with respect to the final interpretation and application of article 7.11 in the circumstances in question. It is clear from that record that the Union plainly registered its concerns with respect to issues such as the calling procedures proposed by the Company, relocation expenses and related matters. At most, there were exploratory discussions within the context of the meetings of the Labour Adjustment committee. Bearing in mind that that parties to this process are sophisticated and experienced in the ways of collective bargaining, it is significant that there was no jointly signed letter of understanding or other memorandum in written form confirming the process to be followed in the implementation of article 7.11. In these circumstances, the arbitrator can not accept the suggestion that the matter can be said to have been resolved in a mutually binding manner by agreement between the parties. It is also significant to note that a Company document of November 9, 1995 specifically states that there were a number of unresolved issued, including:

On the whole, the arbitrator would not find any basis to conclude that the parties should be taken to have reached conclusive agreement with respect to the Company’s interpretation of article 7.11. However, as the parties have now agreed to resolve this dispute on the terms of this consent award, the issue of arbitrability has been rendered academic.

The second issue which arose was the Union’s contention that the Company has violated the "transfer of benefits" provisions of article 9.1 of the agreement between CP and RCTC. That article which was also awarded to the parties by Adams, J. provides as follows:

9.1 Where an employee with 8 or more years of Company CCS and who commenced service prior to January l, 1994, is affected by a change pursuant to Article 1.1 (a) of this Agreement and is unable to hold a permanent position in his bargaining unit or is required to relocate in order to hold a permanent position in his bargaining unit, Article 4.2, Option l, 2 or 3 will be offered to senior employees in his bargaining unit in seniority order on the affected roster at the location of the affected employee.

It is Common ground that Option 1, referred to above, is early retirement under what is generally referred to as the VIA Rail Formula. Option 2 is a bridging provision to the age of early retirement while Option 3 provides a severance package of $65,000.

The fundamental purpose of article [9.1] of the CP/RCTC agreement is not in dispute. It is plainly intended to maximize employment opportunities for persons on Employment Security by triggering the availability of retirement incentives to senior employees. The Union took the position that in the circumstances of the instant case, before employees who are already on Employment Security are compelled to displace from a location such as Winnipeg, to fill a vacancy in Toronto, there is a requirement upon the Company to make "transfer of benefits" opportunities available to senior employees in the Winnipeg location, thereby creating possibilities of active work for the employees on ES at their home location, and avoiding the requirement to move to Toronto. The Company took the position that the provisions of article 9.1 of the CP/RCTC agreement are triggered only at the time of a technological, operational or organizational change, that is to say when the notice under article 1.1(a) of the CP/RCTC agreement of such a change is given to the Union. It is at that time, according to the Company, that the offering of retirement incentives is to be explored, as a means of reducing the overall impact of such change upon employees. The Company submitted that employees, such as those who are the subject of this grievance, have been on Employment Security status for a considerable period of time as a result of an operational or organizational change implemented sometime in the past, and they cannot invoke the protections of article 9.1 of the CP/RCTC agreement on every occasion they are subject to exercising their seniority or fulfilling some other obligation to protect their ES status. In the Company’s view, the ongoing obligation of the employee to protect work as condition of maintaining Employment Security cannot, in its day-to-day exercise, be the basis for triggering the not insubstantial costs and protections associated with the transfer of benefits as contemplated in article 9.1 of the CP/RCTC agreement.

The third and final issue to be resolved is the dispute between the parties with respect to the treatment of employees on Employment Security who decline to fulfil their obligations under the provisions of article 7.11. The Company’s position was that the employee in that circumstance forfeits his or her Employment Security protection and falls back on such protections as he or she may have under the terms of the agreement in respect of job security. The Union submitted that an employee who fails to fulfil the obligations of article 7.11 is nevertheless entitled to the new form of Employment Security protection fashioned by the Adams arbitration award.

This aspect of the dispute between the parties necessitates some examination of the provisions of the Adams award, as well as those of the CP/RCTC and CN/RCTC agreements referred to therein. The issue of the parties’ dispute as to Employment Security is disposed of at pp 58-60 of the Adams Commission report, which awarded as follows:

Employees hired on or after January l, 1994 will not be eligible for ES.

ES benefits will be available in an amount equivalent to 90% of salary, for a period of six years, to those employees hired on or prior to December 31, 1993 with at least eight years of CCS and who:

Employee obligations in order to remain eligible for ES shall be as set out in the CP and RCTC agreement.

Rights and obligations of employees currently on ES shall be as set out in the CN and RCTC agreement with the exception that there will be a four-month delay in the application of these new rights and obligations, and on the explicit understanding that these employees are entitled to a full 6-year benefit, regardless of the period of time they have already been in receipt of ES.

The enhanced SUB and options as in the CP-RCTC Agreement will apply save that the enhanced SUB will be modified to provide a 3 year benefit for employees with CCS from 8 years to 22 years, and to provide to all employees electing the enhanced SUB, benefits as follows: in the first year a 90% wage replacement, in the second year an 85% wage replacement, and in all remaining years an 80% wage replacement.

Enhanced SUB to require relocation only on the basic seniority territory.

Enhanced bridging and early retirement allowances shall be made available to ES employees, as provided for in the CP and RCTC agreement.

Relocation allowances and costs as provided for in the CP and RCTC, agreement.

Transfer of benefits as provided for in the CP and RCTC agreement.

Enhanced optional severance payments as provided for in the CP and RCTC agreement.

All side letters as proposed by CN and as provided for in the CN and RCTC agreement including 2 year restraint on subsequent relocation.

Regular SUB shall be amended to provide for 6 weeks for each year of service for employees with 8 to 19 years CCS, and relocation only on the basic seniority territory.

The terms of this award are effective immediately.

The parties will, within 30 days of the date of this award, meet and agree to more detailed provisions to implement the intent of the terms of this award. Failing agreement, the parties shall refer all outstanding differences pertaining to such provisions to final and binding arbitration by Justice Adams on an expedited basis.

I turn to consider the merits of the dispute. Firstly, the arbitrator deals with the issue of transfer of benefits. In its supplementary written submission, the Company maintains, in part, that the Union cannot claim transfer of benefits rights on behalf of its members as article 7.11 of the CN-RCTC agreement makes no provision for the transfer of benefits. With respect, the arbitrator finds that argument unduly technical and narrow. As is evident from the provisions in the award of the Adams Commission, reproduced above, it is clear that employees in the CAW Shopcraft agreement with CN are to have "transfer of benefits as provided for in the CP and RCTC agreement". I am, therefore, satisfied that there are transfer of benefit rights, as a general matter, available to the Union and its members. The issue, therefore, becomes whether they are applicable in the case of employees who were already on ES at the time of the Adams’ award and who may now be forced to relocate to vacant positions in Toronto.

Article 9 of the CP-RCTC agreement provides, in part, as follows:

Article 9 - Transfer of benefits

9.1 Where an employee with 8 or more years of Company CCS and who commenced service prior to January 1, 1994, is affected by a change pursuant to Article 1.1 (a) of this Agreement and is unable to hold a permanent position in his bargaining unit or is required to relocate in order to bold a permanent position in his bargaining unit, Article 4.2, Option 1, 2 or 3 will be offered to senior employees in his bargaining unit in seniority order on the affected roster at the location of the affected employee.

It appears clear to the arbitrator that, based on the language of article 9.1, the transfer of benefits concept, which is new to the ESIMA, is intended to have a prospective effect. As is apparent from the language of the article, its application is triggered only when there is a change pursuant to article 1.1(a) of the agreement. I am satisfied that that must be taken to mean a newly-instituted technological, operational or organizational change of a permanent nature with adverse effects on employees holding permanent positions. In the arbitrator’s view, it is highly doubtful that the above language would intend the ongoing or recurring offer of benefits to operate each and every time an individual employee is compelled to exercise his or her seniority to another location, perhaps months or years after the initial operational or organizational change was implemented. It is therefore difficult to conclude that the transfer of benefits would apply to employees who were already on ES status at the time of the Adams’ award, when this provision first became effective.

When a purposive view of the provision is taken, the position of the Company is more compelling. Article 9.1 is plainly intended to operate in conjunction with giving notice of a technological, operational or organizational change under the terms of article 1.1(a) of the ESIMA. Within the CP-RCTC agreement, article 9 appears as one of a number of provisions intended to minimize the adverse impacts of a technological, operational or organizational change on the employees who may be affected. The article provides for the operation of a range of retirement incentives to become available to senior employees, for the obvious purpose of saving an employee on ES from the obligation to relocate to hold a permanent position in his or her bargaining unit. In the past, within the railway industry, such provisions have been specifically agreed to, as part of special agreements negotiated in light of specific technological, operational or organizational changes. They have been negotiated for the purpose of accelerating the rate of employee redundancy, thereby minimizing the need to relocate employees. Such arrangements benefit both the Company and the employees affected, allowing employees to remain actively employed at their home location, while allowing the employer to effect the long term savings inherent in a reduced workforce, with lower relocation costs.

It appears to the arbitrator more compelling to conclude that such a provision is intended to operate on a rational and comprehensive basis at the time the material change is implemented. Just as it is important for employees in that circumstance to know what their options are with respect to the elections available to them and the obligations and benefits which attach to those elections, it is essential for the employer to allow, with some reasonable certainty and finality, the costs which it will be required to bear as part of the implementation of a change. If the Union’s position were correct, the Company could have little or no certainty as to the ultimate cost of implementing a change, to the extent that the fallout of the change could be felt for years to come, if employees could, perhaps much later, invoke the transfer of benefits obligation whenever they found themselves obliged to relocate to protect their ES status. That could happen, for example, as in the instant case, where vacancies are created elsewhere on the system, in circumstances entirely unrelated to the original technological, operational or organizational change.

In the arbitrator’s view, it would require clear and unequivocal language to support the conclusion that the parties would have intended such an open ended and unpredictable obligation on the part of the employer with respect to the extraordinary obligation to provide substantial opportunities in the form of retirement incentives to senior employees. In the absence of such language, I am satisfied that the intention of the parties was, as noted above, to provide for the possibility of transfer of benefits as part of the original exercise, upon the actual initial implementation of a change pursuant to article 1.1(a) of the agreement. That obligation operates on a one-time basis, and is not revived each and every time an employee might be obligated to relocate at some later time, in circumstances unrelated to the original change.

For the foregoing reasons, the arbitrator could not sustain the position of the Union with respect to the application of the transfer of benefits provision. That provision has no application as regards the relocation of employees who were already on ES status at the time of the Adams award, such as the employees who are the subject of this dispute, who may be required to relocate to Toronto.

I turn to deal with the next issue, which is the matter of the consequences on an employee who was on Employment Security benefits as of June 30, 1995 and who fails to meet the obligations imposed upon him or her under the terms of the award and agreement with respect to protecting work, including work in another location or region. This issue is governed primarily by the language of the first paragraph of article 7.11 of the CN/RCTC agreement. It provides as follows:

7.11 Employees on Employment Security benefits as of June 30, 1995, and governed by the terms and conditions of Article 7 of the E.S.I.M.A. of April 21, 1989, ("the Former plan") will continue to be governed by those provisions subject to the following additional conditions or limitations which will come into effect on October 01, 1995.

Article 7 of the ESIMA of April 21, 1989 (the Former plan) includes article 7.6 which provides as follows:

7.6 Except as otherwise provided in the NOTES to this Article 7.6 an employee who has Employment Security and who fails to comply with the provisions of this Article 7 will lose his/her Employment Security. Such employee will, however, be entitled to such other benefits under the Plan for which he/she is eligible.

The Company asserted that other benefits under the "Plan" referred to in article 7.6 means such benefits as an employee might obtain under the ESIMA of April 21, 1989. The Union argued that the benefits to which an employee can have access upon losing his or her Employment Security are now to be found under the provisions of the new CP-RCTC plan which, according to the Adams Commission award, governs "employee obligations in order to remain eligible for ES". At the supplementary hearing, the parties agreed to resolve the dispute by mutually accepting the following interpretation, for the present dispute, and for the future, with respect to article 7.11:

When an employee on E.S. governed by the former plan fails to fulfil the obligations under that plan to protect his or her ES status, that employee will have the following options:

1. Elect layoff with Supplementary Unemployment Benefits;

2. Occupy a permanent position pursuant to the provisions of article 7.1 of the CN-CAW agreement that his or her seniority will allow; or

3. Elect options 1 or 3 of Article 7, Section B of the CN-CAW agreement

I turn to consider the next issue, now resolved by agreement, relating to the filling of vacancies on the system, including the filling of vacancies at Toronto, which gave rise to this dispute. In considering this issue it is worthwhile to again reproduce the language of the fifth paragraph of Article 7.11:

When permanent vacancies occur on the System within the bargaining unit, the Labour Adjustment Committee will meet to ensure the filling of such vacancies, initially on a voluntary basis to senior employees with the view to providing employees who are currently on Employment Security with a permanent position on their Region. If the Labour Adjustment Committee cannot fill such a vacancy on a voluntary basis, the junior employee on the Region, currently on Employment Security of the Former Plan, must fill that vacancy on the System.

By the agreement of the parties, for the purposes of this dispute, and for the future, as regards their collective agreement and ESIMA, the foregoing paragraph shall be applied as follows:

1. First, volunteers shall be canvassed, in seniority order, from among active employees holding a permanent position at a location where there are employees on E.S.. Any active employee who volunteers to relocate shall do so with training, if necessary, and without relocation expenses.

2. If no volunteer can be found among the active employees holding a permanent position, volunteers shall be canvassed, in seniority order, among employees on E.S. Any volunteer so selected shall relocate with training, if necessary, and with relocation expenses. Absent any volunteer, the Company shall require employees on ES to relocate, in inverse order of seniority.

3. If a volunteer is found among the ranks of active employees holding a permanent position, the position vacated by that employee shall be filled by a qualified employee on E.S. at that location, subject to the expedited bulletining of positions, to insure that all employees are afforded the opportunity to bid on positions, shifts and work schedules on the basis of their seniority, in keeping with the general intention of article 23.11 of the collective agreement. It is understood that the parties shall cooperate to ensure the expeditious re-allocation of positions, with as little delay as possible, generally not to exceed a minimum of seven to ten days. It is also understood that in the operation of article 7.11, the Company is not to incur an obligation to train more than one employee, in the implementation of the relocation of an active employee and resulting return to active employment of an employee on E.S.

Finally, as further agreed by the parties, the employees affected by the actions of the Company which gave rise to this dispute shall be returned to the position of having the opportunity to exercise their rights and options in accordance with the process described in this consent award. The general issue of the redress appropriate to the individuals so affected is remitted to the parties for their consideration and agreement. Should they be unable to resolve that issue in respect of any employee, the arbitrator retains jurisdiction to do so, and also remains seized with respect to any other dispute which may arise within respect to the interpretation or implementation of this consent award.

DATED at Toronto this 7th day of February, 1996.

(Signed) MICHEL G. PICHER

ARBITRATOR