BETWEEN:

(the "Company")

AND

(The "Union")

SOLE ARBITRATOR: Michel G. Picher

There appeared on behalf of the Company:

A.Y. de Montigny – Labour Relations Officer

Len Stone – Complex Operations, Manager

And on behalf of the Union:

Brian R. McDonagh – National Representative

Ron Laughlin – Vice-President, Local 101

Bill Nash – Local Chairperson

A hearing in this matter was held in Toronto on September 30, 1996.

The Union grieves what it alleges as the assignment of bargaining unit work to non-employees. The Company denies that there has been any violation of the provisions of the collective agreement. The dispute, joint statement of fact and joint statement of issue, filed at the hearing, read as follows:

• the Company violated Rule 41.1 of the Collective Agreement 52.1, in place at the time, when it allowed outside workers to cut up freight equipment on CP Property.
• Therefore the Union asks the Arbitrator to so award and compensate the two senior Carmen on the 07:00 to 15:00 shift at Agincourt Yard an amount equal to all hours worked by the outside workers, at overtime rates.

Rule 41 of the collective agreement recognizes that the scrapping of cars is work which is properly to be assigned to bargaining unit employees. It reads as follows:

[page 2]

The Company submits that it sold eight rail cars, which were no longer useable, to Intermetco Limited. As the cars could not be removed from the property, arrangements were made for the employees of Intermetco to dismantle the cars for scrap on the Company’s premises at Agincourt Yard, Toronto. As the Company characterizes it, the cars were effectively sold to the buyer, who then came on the Company’s property to dismantle them prior to taking them away. It appears that it is not uncommon for the Company to sell rail cars for scrap, under conditions whereby they are taken away to the purchasers’ premises to be dismantled. The Company asserts that the only distinction, in the instant case, is that the cars were sold to the purchaser who then dismantled them on the Company’s premises before hauling the scrap metal to Intermetco’s facility in Hamilton.

In the arbitrator’s view, if the cars in question had in fact been sold unconditionally to Intermetco, there would appear to be no basis to assert any violation of the work jurisdiction provisions of the collective agreement. On closer examination, however, it is not accurate to say that Intermetco Limited purchased the cars outright. As appears from the representations made at the hearing, in fact, the arrangement between Intermetco and the Company is that Intermetco purchased the scrap metal from the super-structure of the cars, on the understanding that the wheels, trucks and brake equipment in the undercarriage would be retained by Canadian Pacific Limited. More precisely what Intermetco purchased was the scrapable plate steel from the cars, to be paid for at a set price per net ton. In the circumstances, the arbitrator cannot agree that the cars which were dismantled could fairly or accurately be described as the property of Intermetco Limited. At best, the scrap company had a conditional interest in part of the cars or, more accurately, an interest in such scrap as could be removed, while leaving the undercarriage to the company. What the evidence reveals, therefore, is that rail cars which remained within the effective possession and ownership of CP Rail were dismantled by persons other than bargaining unit members on the understanding that certain useable scrap would be purchased by Intermetco Limited. The fact that the Company retained a substantial portion of the cars, namely the wheels, trucks, and brake assemblies critically colours the nature of the transaction. In essence, the Company arranged with persons other than bargaining unit employees to disassemble rail cars in which it retained a substantial ownership interest.

[page 3]

In the arbitrator’s view, the work which was performed in respect of the eight cars in question must be viewed as falling within the purview of Rule 41.1 of the collective agreement, as it involves the scrapping of rail cars of which the Company retains a significant degree of ownership. As the language of Rule 41.1 clearly indicates, such work is to be performed by members of the bargaining unit. On that basis, the grievance must be allowed.

It should be stressed, however, that nothing in this award should be taken as ruling on the right of the Company to sell entire rail cars to outside purchasers for scrap, where the entire car is sold and removed from the Company’s property. That circumstance is substantially different from what appears to have occurred in the instant case and has not been argued before me. Indeed, as the evidence establishes, the kind of work performed in the instant case by the employees of Intermetco Limited on Company remises was previously performed, on a regular basis, by bargaining unit employees.

[page 4]

In the result, the arbitrator finds and declares that the Company violated Rule 41.1 of the collective agreement an directs that the two senior carmen on the 0700 to 1500 shift be compensated at prevailing overtime rates for the hours worked by the employees of the outside company, in relation to the dismantling of the eight freight cars in question. I retain jurisdiction should there be any dispute with respect to the precise amount of compensation payable or in relation to any other aspect of the interpretation or implementation of this award.

DATED at Toronto this 9th day of October, 1996.