(the "Company")



(the "Union")



Sole Arbitrator:        Michel G. Picher


Appearing For The Union:

Brian McDonagh                – National Representative, Vancouver

Dennis Wray                       – Vice-President, Local 100, Prairie Region

Bryon De Baets                  – Local Chairman, Symington

George Wood                    – President, Lodge 551, Local 100


Appearing For The Company:

Scott MacDougald             – Manager, Labour Relations, Montreal

Rob Fuller                           – Human Resources Associate, Winnipeg

Wayne Nohlgren                 – Senior Technical Officer, Mechanical

Ross Bateman                   – Human Resources Associate, Toronto

Verne Kalichuk                   – Business Partner, Winnipeg

Basil Laidlaw                      – Human Resources Associate, Winnipeg


A hearing in this matter was held in Winnipeg on November 1, 1999.


The Union grieves that the Company violated the collective agreement by assigning crew and equipment of an independent contractor to perform clean-up operations at a derailment site at Ghost River, Ontario in March of 1997. The Dispute and Ex Parte Statement of Issue filed by the Union reflect the outlines of its complaint, as follows:


Company’s alleged violation of rules 6.1, 24, 40, 51.1 and 52.1 of wage agreement 12.35 when they failed to call the Winnipeg Auxiliary to a derailment site to the final clean-up operation at Ghost River on March 7 – 13, 1997.


On 7-13 March 1997 Laverendrye District Technical Officer Dave Ettinger, equipment and a crew from General Scrap Co. attended the derailment site at Ghost River, ON to perform the final cleanup operation.

It is the Union’s position that the Company is in violation of rules 6.1, 24, 40, 51.1 and 52.1 of wage agreement 12.35 when they sent a crew and equipment from General Scrap Co. rather than the Winnipeg Auxiliary to attend the final clean-up operation at Ghost River, ON. The Union requests full redress for ten employees assigned to the Winnipeg Auxiliary including wages, benefits and all lost overtime including interest.

The Company raised a preliminary objection to the grievance. It submits that the grievance was resolved by a settlement between the parties in the form of a letter to the president of local 100 of the Union, dated December 11, 1998, signed by both the Union’s president and the Company’s labour relations manager. That settlement contains, in part, the following provision:

The parties met on December 10 and 11, 1998 in Montreal to review all outstanding disputes and the following summarizes our discussions and agreement:

1.         With the exception of specific cases identified in item #2, all grievances related to contracting out (Rule 51) or emergency/wrecking (Rule 6) that were outstanding in the grievance procedure or pending arbitration on or prior to August 22, 1998, will be considered resolved on the basis of a lump sum payment to the Union in the amount of two hundred and forty-four thousand dollars ($244,000.00).

2.         The parties agree that the following three cases cannot form part of the overall settlement as the issues are ongoing and remain unresolved:

a)         Contracting out the cleaning of gearcases at MacMillan Yard LRC to RailTech Corp.

b)         Contracting out the loading and unloading of wheels at Winnipeg to former employees.

c)         Contracting out the tool room to General Motors at Walker Yard Motive Power.

At the outset of the hearing the Arbitrator reserved on the Company’s objection, as the Union’s representative indicated his belief that the instant grievance in fact contained elements beyond the issue of contracting out. It was the Arbitrator’s view that it would be more appropriate to hear the full nature of the dispute before making a determination, given that representation.

Having heard the full merits of the dispute, I am compelled to agree with the Company. As is evident from the evidence and arguments presented, while the Union does raise a number of provisions of the collective agreement which it maintains were violated, each and every one of those provisions is allegedly violated only to the extent that the Company might have improperly contracted out the work of the bargaining unit. In other words, in its essence, the instant dispute is in the nature of contracting out dispute, and nothing more. The thrust of the Union’s case is that the Company allowed a contractor to proceed to the wreck site, to itself cut, scrap, load and remove wrecked rail cars, thereby performing work which belongs to the bargaining unit. There is no other real substance to the allegations made by the Union, and I do not see how the grievance can be characterized as other than “… related to contracting out (Rule 51) or emergency/wrecking (Rule 6)” which was outstanding or pending arbitration prior to August 22, 1998 in the sense contemplated by paragraph 1 of the parties’ settlement, reproduced above. In the circumstances, I have no alternative but to find that the grievance must be taken as settled, for the payment of good consideration to the Union, and that it is therefore not arbitrable.

Notwithstanding the foregoing, for the guidance of the parties it may be useful for the Arbitrator to indicate that, in the alternative, if the preliminary issue had been resolved in favour of the Union, the grievance could not succeed in any event. The evidence before me clearly establishes that the Company made a contract with General Scrap Company whereby some fifteen rail cars, seriously damaged in a derailment at Ghost River in December of 1996, were sold on an “as is, where is” basis to the independent contractor, through the intermediary of the Company’s subsidiary, Canac International Inc. In the result, when the contractor proceeded to the wreck site to cut, scrap and load the damaged rail cars, it did so solely for the purpose of dealing with its own property, and not the property of the Company. There is no suggestion before me that the work jurisdiction and contracting out prohibitions of the collective agreement can extend to protect work in relation to mechanical or other equipment which no longer belongs to the Company. In these circumstances a claim of a violation of the contracting out provisions of rule 51, or indeed any of the other rules cited by the Union, could not succeed. Nor would I conclude that, having sold the damaged cars in question, the Company was under any obligation to provide notice of the fact that the Company was engaging in contracting out of the Union’s work so as to trigger the obligations of advice or notice to the Union contained within rule 51 of the collective agreement, quite apart from the doubtful question as to whether there was, in any event, “a material and adverse effect on employees” within the meaning of rule 51.3.

For all of the foregoing reasons the grievance must be dismissed.



Dated at Toronto, November 22, 1999