SHP – 484




(the “Company”)



(the “Union”)




SOLE ARBITRATOR:                       Michel G. Picher



There appeared on behalf of the Company:

D. T. Cooke                                           – Manager, Labour Relations, Calgary

S. J. Samosinski                                    – Director, Labour Relations, Calgary

L. S. Wormsnbecker                            – Manager, Labour Relations, Calgary

And on behalf of the Union:

A. Rosner                                              – National Representative, Montreal

S. Levert                                                – Regional Vice-President, Montreal

G. Antinozzi                                          – Union Co-Chair, Labour Adjustment Committee, Montreal


A hearing in this matter was held at Montreal on Wednesday, May 19, 1999.



The Union grieves that the Company has wrongfully declined approval of outside work for Montreal Machinist Francis Paradis. The Joint Statements of Fact and Issue outline the nature of the dispute:


Application for work outside the Company by Machinist Francis Paradis, Montreal.


Prior to his job abolishment effective April 11, 1998 at St. Luc Diesel Shop, the grievor approached the Labour Adjustment Committee for approval of an outside job with starting base rate of $12.00. The Company representative advised that such a job would be consistent with article 7B status of the Job Security Agreement, but not with 7A status. The employee elected 7B status under protest and has occupied the outside job to this date, while the Union filed a grievance.


The Union submits that the Company’s refusal to approve the outside job in question in regard to 7A status was arbitrary and not based on the appropriate criteria as set out in Article 7 and the intentions of the parties. The Union asks for a ruling that the Company has violated article 7A in not permitting the employee to assume this position contrary to the terms of 7A, and requests that the grievor’s 7A status be retroactively restored along with any make whole that may be required.

The Company denies the Union’s contentions and claim.

As appears from the foregoing, the parties are disagreed as to the interpretation and application of the provisions of their Job Security Agreement (JSA) as they relate to the circumstances of Mr. Paradis. The grievor worked at the St. Luc Diesel Shop in Montreal, as an employee with employment security, by reason of having eight or more years of cumulative compensated service (CCS). His position was abolished effective April 11, 1998 pursuant to an article 8.1(a) notice which advised the Union that the Company was implementing a technological, operational or organizational change which involved the abolishment of 129 positions at that location. The grievor was then governed by article 7.1(a) of the Job Security Agreement, which provides as follows:

7.1          (a)           An Eligible Employee affected by a change pursuant to Article 8.1(a) or (b), must decide, prior to the implementation of that change, whether he wishes to be governed by the rights and obligations of either Article 7A or Article 7B of this Agreement.

By electing article 7A an employee protects his or her interests in the greater shelter of employment security, in exchange for obligations to protect work, outside the employee’s basic seniority territory if necessary. Conversely, an employee electing article 7B coverage receives enhanced supplemental unemployment benefits and alternative options, which involve lesser job security protection, with the commensurate benefit of not being compelled to protect work beyond the employee’s basic seniority territory. Articles 7A.1(c) and 7B.1(e) both provide that the employee may hold a job outside CP Rail at their location “… as determined by the Labour Adjustment Committee”, should they be unable to hold work on the basis of the prior options provided in articles 7A and 7B, respectively.

The jurisdiction of the Labour Adjustment Committee is delineated in article 2.8 of the Job Security Agreement, which provides as follows:

2.8          The Committee shall:

                (a)           review the status of surplus employees as well as any change which may impact upon employees represented by the Union.

                (b)           examine and develop placement opportunities for surplus employees inside the Company across the system, as well as with external employers, where appropriate, and determine reasonable parameters for suitable employment outside the Railway.

                (c)           receive, review and approve any reasonable request from surplus employees to perform work in outside industry and/or enrol in training and educational programs in accordance with the terms of this Agreement.

                (d)           engage, as may be deemed appropriate, the services of agencies which have expertise in labour adjustment and the identification of employment opportunities.

                (e)           decide and manage any matter relating to training or upgrading of employees, consistent with the terms of this Agreement, except insofar as such training or upgrading is handled under the terms of the Skilled Trades Program, in which event the pertinent committees shall maintain communication and cooperation in their work.

In the case at hand Mr. Paradis opted for job security protection under article 7A of the Job Security Agreement. He was unable to hold work at his location and sought approval of the Labour Adjustment Committee to take employment with a Montreal industrial water engineering firm, Aquarius Services and Technologies Inc. He was offered a position as maintenance mechanic with that employer, with his initial rate of pay to be at $12.00 per hour for a work week which would vary between thirty and forty hours. It does not appear disputed that the grievor’s duties and responsibilities as a maintenance mechanic include a degree of plumbing and welding work, and that he has recently been accorded a wage increase to $18.00 per hour. His wage rate as a machinist working for the Company is $20.89 per hour. Under the terms of article 7A of the Job Security Agreement an employee in that circumstance would receive an “employment security SUB” whereby the Company would pay the employee the difference between his wages earned in the outside employment and those which he would earn in his own classification within the Company. Under article 7B an employee receives enhanced supplemental employment benefits and, by the terms of article 7B.2.2(b) is topped to 100% of the rate of pay of the position held prior to being affected by the Company’s technological, operational or organizational change. In other words, an employee who takes approved outside employment under either option is protected to the full extent of his or her prior wage rate.

The instant grievance arises because the Company’s representative to the Labour Adjustment Committee declined to approve Mr. Paradis’ employment with Aquarius for the purposes of an article 7A option, but indicated that his outside job offer would be acceptable for a wage top-up if he opted for article 7B coverage. The Company submits that it is not unreasonable to place a higher standard on approval of outside employment for the purposes of an article 7A election than might attach to an article 7B option. In that regard it stresses that article 7A involves a degree of commitment to work protection on a system basis, with the possibility that the employee may have to relocate if work cannot be held at the home location. Noting that work opportunities within the Company would have been available to Mr. Paradis at Toronto, its representative submits that the Company should not be put to the cost of training newly hired employees to fill vacancies at that location while subsidizing Mr. Paradis under article 7A for the purposes of outside employment at Montreal. It maintains that the lesser Company obligations of article 7B would justify subsidizing his wages while in employment at Aquarius, and that it is reasonable for the Company to make the trade-off in question. In other words, in the Company’s view in assessing whether the request of an employee to perform work in outside industry is “reasonable” within the meaning of article 2.8(c) of the JSA, the Labour Adjustment Committee can take into account factors beyond the wage level of the outside job, including whether the employee is committed to protecting work system wide.

The Union’s representative submits that there is nothing within the language of the Job Security Agreement which would sustain the analysis of reasonableness now advanced by the Company. Nor, he submits, is there anything similar in the prior practice of the parties in relation to the administration of these provisions since they were handed down as part of the award of Mr. Justice George Adams in 1995. The Union’s representative argues that there cannot be a link between the approval of an outside job as reasonable and whether the employee opts for protection under article 7A or article 7B of the Job Security Agreement. He submits that the position of the Company undermines what is intended to be an unfettered choice of the employee and introduces a distinction as to reasonableness not intended, either expressly or implicitly, in the language and scheme of the Job Security Agreement.

I turn to consider the merits of the dispute. My jurisdiction appears to arise under article 3.2 of the Job Security Agreement, which contemplates that arbitration is to be utilized to resolve a disagreement among the members of the Labour Adjustment Committee. In dealing with the instant matter I find it unnecessary, and indeed unadvisable, to resort to generalities beyond what is necessary to resolve this dispute. As a matter of first impression, I am compelled to the conclusion that the Company did consider that the job opportunity available to Mr. Paradis was reasonable for the purposes of a wage subsidy under the Job Security Agreement. There is, on the face of the agreement, nothing which would indicate that the Company could consider that a reduction in Mr. Paradis’ future job security with the Company could be traded off for its agreement to subsidize his employment with Aquarius. If such a consideration were legitimate, there would be substantially less reason for the Company to ever approve an article 7A employment security SUB arrangement as long as it has unfilled vacancies on its system.

I am satisfied that the Company’s approach is inconsistent with the framework of article 7A which expressly contemplates that the Labour Adjustment Committee is to consider work outside CP Rail at the location, as well as on the basic seniority territory and region, before requiring an employee to exhaust his or her seniority in their classification on the system. If the Company’s representative on the Labour Adjustment Committee is met with a 7A election and a proposal for employment outside the Company which he or she considers is insufficient by reason of the wages to be earned or the nature of the work to be performed, he or she may decline to approve the request, subject of course to the matter being grieved. I can see no contractual basis, however, for that person approving the request on the alternative basis that the employee is to elect the lesser protections of article 7B.

In the context of the instant grievance it is appropriate to note the words of the arbitrator in SHP 407, a dispute between the instant Union and CN Rail. In that award, dated May 22, 1996 the following comments appear:

… Alternatively, the article affords the employee a maximizing of the ability to remain at his or her location, even if to do so involves taking another position with the Company outside the bargaining unit, or going to work for another employer at their home location, subject to the appropriate approval of the Labour Adjustment Committee.

Moreover, the arbitrator cannot find, on the basis of the language presented, that the Company could purport to exercise a right of veto as a partner in the Labour Adjustment Committee, to effectively nullify the ability of employees to obtain work outside the Company at their location, where it is otherwise appropriate to do so, as a means of forcing them to relocate. I can see nothing in the language or scheme of article 3.1 of the CP/RCTC agreement which would suggest that the Company could exercise such a right, forcing employees to accept work elsewhere on their region, or indeed within another region on the system, because vacancies might exist in those locations and it is therefore more efficient and economical for the Company to do so. If that had been Mr. Justice Adams’ intention, he would clearly have said so.

See also CROA 2808.

The issue in the instant case then becomes whether the employment obtained at Aquarius by the grievor is outside work which should reasonably have been approved by the Labour Adjustment Committee. I am satisfied that it is. Firstly, it is obviously work which the Company found acceptable for the purposes of article 7B. Secondly, as stressed by the Union’s representative, the duties of the position do involve the use and development of skills which will be useful to the Company in the event of the grievor’s return to its service. Ongoing work in the field of plumbing and welding are, I am satisfied, sufficiently within the scope of duties that would enhance the value of the grievor as a machinist when he returns to the Company’s service.

For the foregoing reasons the grievance is allowed. The Arbitrator directs that the grievor be approved for the position at Aquarius for the purposes of his article 7A election, and that he be compensated for wages or benefits lost by reason of the denial of that status. I retain jurisdiction in the event of any dispute between the parties concerning the interpretation or application of this award.

Dated at Toronto, May 27, 1999.