SHP - 441-s



Canadian Pacific Limited

(the "Company")


National Automobile, Aerospace, Transportation and General Workers Union of Canada (CAW-Canada) Local 101

(the "Union")


Sole Arbitrator: Michel G. Picher


Appearing For The Union:

B. R. McDonagh – National Representative, CAW-TCA Canada

R. Laughlin – Vice-President, Eastern Region, Local 101

P. Doré – Local Chairperson, Lodge 511, Local 101

R. Laroche – Financial Secretary, Local 101

S. Levert – Vice-President, Atlantic Region, Local 101

G. Antinozzi – Local Chairperson, Unité Québec, Local 101

Appearing For The Company:

A. de Montigny – Labour Relations Officer, Montreal

D. Meyler – General Manager, Technical Support, Calgary

G. St-Pierre – Human Resources Coordinator, Montreal

D. Miller – Director, Iron Highway, Mississauga

A. Parry – Director, Iron Highway, Mississauga

J. Flowers – Supervisor of Maintenance, Iron Highway, Toronto

A hearing in this matter was held in Montreal on Saturday, December 6, 1997.



This dispute concerns the contracting out of certain maintenance work in relation to a Company initiative known as "The Iron Highway". It involves a new form of equipment which allows intermodal trailers to be loaded onto a continuous platform which makes up a 1,200 foot deck. The element is comprised of thirty foot articulated platforms which allow trailers which might not otherwise be rail compatible to be transported. From a service standpoint, the Iron Highway operates on a time critical basis, much like a passenger train, operating at scheduled hours, six days a week in both directions between Toronto and Montreal. The platforms or "element" are leased from another railway, CSX Intermodal Inc.

This grievance initially came on for hearing because the Company contracted out the maintenance of the element to a private contractor, Rail-Term Inc. Employees of Rail-Term were assigned not only to load and unload the Iron Highway trains, work which is not claimed by the Union, but also to perform pull-by inspections, brake tests, and running repairs traditionally performed by members of the bargaining unit. In the award herein dated May 6, 1997 the Arbitrator found that the Company violated the prohibition against contracting out in the collective agreement. At p. 12 of that award the Arbitrator found and directed as follows:

For the reasons related above, however, the case must succeed on its merits, with respect to the primary allegation of the Union. I am compelled to conclude that the work which was contracted out was plainly work "presently and normally performed by employees" of the bargaining unit. Nor can I find any evidence which would sustain the Company’s submission that the exceptions to the prohibition to the contracting out are made out in the case at hand. Needless to say, the contractual arrangement with the lessor CSX Intermodal Inc., whereby Rail-Term Inc. is to perform the inspection and maintenance work, can be given no weight, as it is an integral part of the Company’s violation of rule 53. However, given the innovative nature of the operations, and the fact that the parties have not had the opportunity to consider together the best means by which the work in question could be performed, in whole or in part, by carmen in the bargaining unit, the Arbitrator deems it appropriate, for the present time, to reserve on any further remedy beyond a declaration to the effect that the Company has violated the contracting out provisions. Should a direction to cease and desist, or an order for compensation, be necessary or justified, that may be dealt with expeditiously. It appears to me more important to allow the parties to confer in light of the determination of the Arbitrator, in a good faith attempt to resolve any remedial issues themselves. Should they be unable to do so, the matter may be further be spoken to.

For the foregoing reasons, the grievance must be allowed. The Arbitrator declares that the Company has violated rule 53 of the collective agreement by contracting out the work of bargaining unit members to Rail-Term Inc. I retain full jurisdiction for the purposes of any further remedy.

The Union has requested that this matter be brought back on for hearing, alleging that the Company has refused to comply with the findings and directions of the Arbitrator, and seeking greater precision in the way of remedial order. The matter was therefore convened for hearing on an expedited basis for the purposes of refining the Arbitrator’s remedial order in light of the arrangements worked out between the parties, and those areas in which they remain in dispute.

The evidence before the Arbitrator confirms that certain work previously contracted to the employees of Rail-Term was returned into the hands of bargaining unit employees. It appears that in both Montreal (St-Luc Yard) and Toronto (Lambton Yard) bargaining unit employees have been assigned to perform brake tests, pull-by inspections, mechanical inspections and light repairs such as changing out brake shoes. There are, however, certain forms of work which have not been assigned to the bargaining unit, and which are the basis of the parties’ continuing dispute.

The evidence before the Arbitrator establishes that the following work continues to be assigned to employees of Rail-Term:

The thrust of the position advanced by the Company is that the work performed by Rail-Term employees is not "work presently and normally performed" by carmen in the bargaining unit represented by the Union. More specifically, it asserts that the CSX equipment, being leased equipment, is subject to periodic scheduled maintenance, and that such scheduled maintenance has not, traditionally, been assigned exclusively to bargaining unit members. The position argued by the Company is that scheduled maintenance of the Iron Highway train is to be performed weekly, on Saturdays, when the train is out of service. As a result, for example, if a wheel is identified on a Wednesday as being close to the point at which it should be changed out, rather than change the wheel out at that time, the change will be made on Saturday, as part of "scheduled maintenance".

The Company’s point of departure is the Arbitrator’s initial award. Its representative stresses that the Arbitrator stated, in part:

There can be little doubt but that the Company has contracted out work presently and normally performed by bargaining unit members. Specifically, such functions as pull-by inspections, mechanical inspections and related running point repairs, as well as brake tests, are all functions which are the core duties and responsibilities of carmen in the service of the Company, both in Toronto and Montreal. …

The position of the Company flows from its view of the concept of running repairs, as distinguished from scheduled, preventative or planned maintenance. The Company stresses that the equipment utilized in the Iron Highway is leased, interchange equipment, which is subject to the interchange rules found in the A.A.R. Field Manual. The rules, described as a code agreed among North American railroads, are intended to allow the roads to handle interchange traffic in such a way as to allow host roads to make the repairs necessary on interchange equipment, while the car owners remain responsible and chargeable for such repairs. The Company’s representative cites the definition of "running repairs" which appears in the Car and Locomotive Cyclopaedia:

A term describing, itemized standard repairs performed and billed by the railroads in accordance with the Interchange Rules.

The Company submits that when incidental repairs are performed on a daily basis, as for example the changing out of brake shoes on the Iron Highway, such work qualifies as running repairs, and falls within the work jurisdiction of the bargaining unit, and therefore constitutes work which cannot be contracted out. By contrast, the Company submits that planned maintenance, particularly in relation to leased or interchange equipment, is not work which has traditionally been assigned to bargaining unit members. The owner of interchange equipment has traditionally maintained the discretion to advise the Company as to the manner in which scheduled or planned maintenance is to be performed. That can, in some circumstances, involve returning the equipment to the owner railroad or, alternatively, forwarding it a private contractor for the maintenance in question, which is generally in the nature of a substantial inspection and overhaul, in accordance with a pre-established maintenance schedule. As an example, the Company cites the service of multi-level cars used in the transportation of automobiles. It has some 2,800 cars of that type in the A.A.R. reload pool. Running repairs to such cars are performed by bargaining unit members. However, in accordance with the Reload Rules and Specification M970, such cars are removed from service every eight years, and can be delivered to outside contractors for overhaul and eventual re-certification.

The Company submits that the Iron Highway equipment is unique, and that planned or preventative maintenance in relation to it involves different considerations. It argues that the decision to do preventative maintenance, such as the changing out of wheels, on Saturdays when the train is not in service is, although different, nevertheless in keeping with the concept of performing scheduled maintenance on interchange equipment. On that basis it justifies, for example, the changing out of wheels and hitches on Saturdays, work it acknowledges is performed entirely by Rail-Term employees, and is denied to members of the bargaining unit.

Upon a careful review of all of the evidence and materials, the Arbitrator has substantial difficulty with the position asserted by the Company. This is not a circumstance where the employer can point to a pre-established schedule of preventative maintenance, or periodic overhauls, of the type described above, in the nature of scheduled maintenance and overhauls which have long been in place within the railway industry. In this, as in any matter of contractual rights, substance, and not form, must prevail. What has transpired, in substance, is the delay of certain discretionary running repairs for a matter of a few days, to a point in time when the train is not in service. That, of itself, is not substantially different from the treatment of other railway equipment which is subject to running repairs. If, for example, a boxcar is identified by a carman as approaching a point at which a particular part will need to be repaired or replaced, the fact that the repair may be delayed to a more convenient time does not, of itself, change the nature of the repair to scheduled or preventative maintenance. It is simply a matter of performing a running repair at a time and place that is more convenient, without necessarily having to take the equipment in question immediately out of service. The changing of worn wheels, hitches and couplings in rail cars, as the need arises, is of the essence of running repairs. It is, I am satisfied, work which can be fairly characterized as "presently and normally performed by employees" of the bargaining unit.

Indeed, the evidence before the Arbitrator falls well short of establishing any existing plan of long term maintenance, comparable to scheduled or preventative maintenance as it is generally understood within the industry. The evidence of Mr. David Meyler, the Company’s General Manager of Technical Support, who has been directly involved in overseeing the service of the train, confirms that part of the Company’s endeavour in performing Saturday maintenance is to gain information by which it may ultimately develop an actual preventative maintenance schedule for the Iron Highway equipment. Mr. Meyler’s evidence, which the Arbitrator accepts as fair and candid, tends to confirm that there is in, as yet, no established preventative maintenance or scheduled maintenance program for the Iron Highway equipment being utilized by the Company.

The Arbitrator is satisfied that all of the work listed above, with the exception of the computer monitoring of shunts, and operating locomotives during loading and unloading, is work which properly belongs to members of the bargaining unit, which has been improperly contracted out by the Company, in violation of Rule 53 of the collective agreement. I am satisfied that the computer monitoring exercise is in the nature of research and development work, for the purposes of gaining better knowledge with respect to the performance of the shunt devices. It is not work traditionally performed by members of the bargaining unit, either directly or by analogy.

The Arbitrator’s conclusion with respect to the Union’s claim to the contracting out of work in relation to the operation of locomotives also accepts the position of the Company. There appears to be little dispute that the bulk of the work in relation to operating locomotives in both Lambton Yard and St-Luc Yard is for the purpose of assembling and disassembling the Iron Highway train platforms for the loading and unloading of the train. In the Arbitrator’s view, the work so understood is more closely analogous to the operation of a locomotive in the switching and marshalling of trains in yard operations. It is not, in my view, comparable to the work of hostlers which, it is not disputed, involves the operation of locomotives on or about shop tracks, moving equipment solely for the purpose of facilitating servicing and repairs. I cannot, therefore, find on the evidence before me that the Company’s utilization of persons other than carmen for the purposes of operating the locomotives is in violation of the contracting out provisions of the Union’s collective agreement, as the work in question has not traditionally been performed by the Union’s members.

The issue of the fuelling of the locomotive should, in the Arbitrator’s view, not be ruled upon at this time. I am advised that grievances in respect of the contracting out of fuelling, apparently at several locations, have been filed and remain unresolved between the parties. In my view it is more appropriate to allow the issue of fuelling to be dealt with within the context of those grievances, and with the benefit of more substantial evidence and argument. Moreover, the representatives of the parties have indicated their agreement to the Arbitrator deferring on this issue, with a direction from the Arbitrator that the dispute in respect of fuelling be dealt with within the context of the existing grievances which are presently going forward. The matter is therefore remitted to the parties on that basis. Should they be unable to resolve the matter, or for any reason not deal with it within the context of the other grievances, I retain jurisdiction to hear further submission and to resolve that issue as well, as it relates to the Iron Highway.

On the other hand, the work in the nature of the changing out of wheels, servicing and changing hitches and couplings, and other similar tasks performed on Saturdays is, for the reasons touched upon above, plainly in the nature of running repairs, and therefore constitutes work which the Company is contractually prohibited from contracting out. The same is true in relation to other incidental functions such as coupling hoses and cables, handling SBU units, changing dolly wheels, work on rotational dampers and the operation of cranes and similar equipment used in the performance of repairs. The Arbitrator therefore directs that the Company cease and desist, forthwith, from the contracting out of such work to Rail-Term Inc., or any other private contractor, including crane contractors, and that all such work be assigned to bargaining unit employees in the carmen’s classification. The Arbitrator further directs the Company to compensate employees in respect of whom it can be established that work opportunities were lost, whether in the form of overtime, recall from layoff or otherwise, in respect of wages and benefits. The Company shall further compensate the Union for all dues lost as a result of the contracting out.

The Arbitrator continues to retain jurisdiction with respect to the quantum of compensation payable, as well as any other aspect of the interpretation or implementation of this award.

Signed at Toronto, December 19, 1997