(the "Company")










(the "Union")








Sole Arbitrator:                        Michel G. Picher




Appearing For The Company:

Gilles Pépin            – Labour Relations Officer, Calgary



Appearing For The Union:

Abe Rosner            – National Representative

Sylvian Levert            – Regional Vice-President, Local 101

Gilles Antinozzi            – Co-Chair, Labour Adjustment Committee




A hearing in this matter was held in Montreal on June 11, 2001




            By an award herein dated November 22, 1999 (SHP-489) the Arbitrator directed that the grievor, Carman Alain Albert, be reinstated into his employment, without compensation. The award concluded that the grievor should not have been discharged for alleged theft of Company property, it being disclosed in evidence that Mr. Albert had maintained possession of certain tools following his layoff, in contemplation of a possible recall. On balance, the Arbitrator concluded that the grievor had failed in his obligation to the employer with respect to the return of the tools in question, valued at approximately $350.00, and that a suspension in lieu of discharge should be substituted as the appropriate penalty for his error in judgement.


            The parties are now in disagreement with respect to the interpretation and implementation of the award. Specifically, the Company takes the position that the grievor must be viewed as having effectively lost his lay off benefits pursuant to article 7B of the Job Security Agreement. Very simply, the Company asserts that the suspension substituted by the Arbitrator, and the grievor’s reinstatement “without compensation for wages and benefits lost” is tantamount to the grievor having lost the layoff benefits which would have been available to him but for his suspension. The Union submits that there is no provision under the collective agreement for the Company to convert a period of suspension into an effective period of layoff, and that the language of the Job Security Agreement is expressly to the contrary. In the submission of the Union’s representative the entitlement to layoff benefits, based on cumulative compensated service, is in the nature of an earned entitlement which cannot be taken away by reason of a suspension from employment.


            The final paragraph of the award herein of November 22, 1999 reads as follows:


In the result, I am satisfied that the substitution of a suspension for the period of the grievor’s time off work, which is extensive, is appropriate in the particular circumstances of this case. The Arbitrator therefore directs that the grievor be reinstated into his employment forthwith, without compensation for wages and benefits lots, and without loss of seniority.


            The entitlement of the grievor to layoff benefits, earned on the basis of service, is expressed as follows in article 7B.2.2 of the Job Security Agreement:


7B.2.2 (a) An Eligible Employee will be allowed a gross layoff benefit credit in accordance with the table below:


8 – 22 completed years CCS 3 years

23 – 29 completed years CCS 4 years

30 plus completed years CCS 5 years


Benefit Level – 1st year – 90% Basic Weekly Rate

– 2nd year – 85% Basic Weekly Rate

– Remaining years – 80% Basic Weekly Rate


The number of years of CCS will be calculated from the last date of entry into the Company’s service as a new employee. The benefit level will be calculated as per the rate of pay of the permanent position held on the date of the change.


(b) Notwithstanding the provisions of Article 7B.2.2(a), employees performing any work pursuant to 7B will be topped up to 100% of the rate of pay of the position they held prior to being affected or the rate of the position they are filling, whichever is greater.


Further, the method of payment is described in article 7B.2.4 as follows:


7B.2.4 An Eligible Employee, as defined above, may make application to a designated officer in the form and manner prescribed by the Committee, for enhanced Supplemental Unemployment Benefits as follows:


(a) (i) During any week that an Eligible Employee is not eligible for unemployment insurance benefits account eligibility for such benefits having been exhausted or account such employee not being insured for unemployment insurance benefits, or account unemployment insurance waiting period, such employee may claim an Enhanced SUB for each complete week of seven calendar days laid off of an amount that, when added to outside earnings, will result in the employee receiving 90, 85 or 80 percent (as per 7B.2.2(a)) of his Basic Weekly Rate at time of layoff (hourly-rated employees 40 x the basic hourly rate).


(ii) An Enhanced SUB for each complete week of seven calendar days laid off referred to in Article 7B.2.1, of an amount that, when added to unemployment insurance benefits and/or outside earnings in excess of those allowable under unemployment insurance for such week, will result in the employee receiving 90, 85 or 80 percent (as per 7B.2.2(a)) of his Basic Weekly Rate.


(b) Enhanced SUB provided for under 7B.2.2 shall cease when an Eligible Employee has exhausted the benefit of accumulation as specified in Article 7B.2.2(a) of this agreement.


Finally, the Job Security Agreement contains express provisions with respect to whether an employee is deemed to be laid off, and provides, in part, as follows:




(b) Notwithstanding anything to the contrary in this Article, an employee shall not be regarded as laid off:


(i) during any day or period in which his employment is interrupted by leave of absence for any reason, sickness, injury, disciplinary action (including time held out of service pending investigation), failure to exercise seniority (except as otherwise expressly provided for in Clause (b)(ii) hereof, retirement, Act of God, including but not limited to fire, flood, tempest or earthquake or reduction or cessation of work due to strikes by employees of the Railway;


(vii) after his dismissal from the service of the Company.


            In the Arbitrator’s view the language of the foregoing provisions provide a complete answer to the parties’ dispute. As is evident from the language of article 7B, entitlement to a lay off benefit is characterized as an earned benefit, the scope and duration of which turns entirely on the number of years an employee has provided in terms of cumulative compensated service. It is common ground that Mr. Albert’s earned lay off benefit entitlement would be of a duration of three years, with the benefit level being 90% of his basic weekly rate in the first year, declining to 85% and 80% in the second and third years respectively. It should also be noted, as is stressed by the representative for the Union, that the grievor’s entitlement would not, absent his discharge and substituted suspension, necessarily have been exhausted in the first three year period following the abolishment of his job in 1996. For example, Mr. Albert would have been eligible for the possibility of obtaining approved work outside the Company, under the auspices of the Labour Adjustment Committee, with his wages being topped up in accordance with article 7B.2.2. Alternatively, he might have found occasional work within CP Rail during the period in question. In either eventuality, his gross layoff benefit would not have been debited for any corresponding period of time.


            Essentially, what the Union asserts is that, following his reinstatement, at the conclusion of his suspension, Mr. Albert remains entitled to the value of his earned gross layoff benefit credit under the provisions of the article 7B option of the Job Security Agreement. The Company’s representative suggests that if the Union is correct, in the circumstances the grievor would go virtually unpunished for his misconduct in relation to his failure to return the Company’s property. The Arbitrator has some difficulty with that submission. Firstly, the fact remains that Mr. Albert has lost some three and one-half years of pensionable service by reason of his removal from the Company’s payroll, it being understood that he cannot now buy back that pensionable service. He also lost the value of his health benefits for the same period of time, as well as all other benefits which he might have received had he been in the status of a laid off employee.


            The case presented is somewhat unprecedented, and the parties have referred the Arbitrator to little, if any, direct authorities from the Canadian arbitral jurisprudence. The Union’s representative does rely, in part, on the following principle stated in Brown & Beatty, Canadian Labour Arbitration, in section 7:4220:


[T]he view commonly held is that although an employer may validly discipline its employees by depriving them of the opportunity to work, it has no right to appropriate from them that which they have already earned.


Reference is also made, although only by analogy, to the reasoning in the supplementary award in CROA 2807. In that case the arbitrator ruled that a period of suspension could not be included in the calculation of an employee’s average earnings for the purposes of establishing a maintenance of earnings incumbency. The Union also cites the following reported awards: Re United Automobile Workers, Local 252 and Canadian Trail Mobile Ltd. (1966), 17 L.A.C. 189 (Arthurs) and Re Corporation of the City of Brampton and Amalgamated Transit Union, local 1573 (1978), 19 L.A.C. (2nd) 237 (Shime). Both of those cases concerned the protection of an employee’s earned entitlement to holiday pay, notwithstanding a disciplinary suspension.


            In the Arbitrator’s view this dispute should be resolved on the basis of first principles, namely a close scrutiny of the parties’ own agreement as reflected in the language of the Job Security Agreement. The position of the Company rests entirely on its apparent view that the grievor was both suspended and laid off at the same time, and that he lost the value of his layoff benefits by reason of that overlapping status. That position, however, is clearly contrary to the parties’ own understanding as reflected in the language of the Job Security Agreement. Article 7B.2.1, reproduced above, is categorical that “an employee shall not be regarded as laid off … during any … period in which his employment is interrupted by … disciplinary action”.


            In the instant case the grievor was initially dismissed by the Company, pending the award of November 22, 1999. After that award he must be deemed for all purposes to have been suspended for disciplinary reasons from the initial date of his discharge to the date of his reinstatement by the order of the Arbitrator. In other words, the very article of the Job Security Agreement which provides lay off benefits expressly stipulates that an employee who is suspended, as was the status of Mr. Albert for the entire time in question, is not to be regarded as laid off. When regard is then had to the provisions of article 7B, which concern both entitlement and the method of payment of layoff benefits, it becomes clear that those provisions are conditioned upon the employee in fact being “laid off” for the purposes of article 7B. There is no language to which the Arbitrator has been referred, either in the collective agreement or in the Job Security Agreement, which would allow the Company to unilaterally deplete the layoff benefits of an employee who, by the terms of the Job Security Agreement, is not in fact laid off, and whose employment or layoff has been interrupted by a suspension. Obviously, the position of the Company would be more persuasive but for the express provisions of article 7B.2.1(b)(i) of the Job Security Agreement. For reasons they best appreciate, however, the parties did agree that a suspended employee cannot be treated as laid off. In that circumstance it is not open to the Arbitrator to disregard the language of the agreement, and effectively treat the grievor as having been laid off during the period of his suspension, during which time he would have supposedly suffered the depletion of his layoff benefits. Nor does the fact that the Arbitrator accepts the interpretation advanced by the Union necessarily prejudice the Company. It remains available to the employer to deal with Mr. Albert as with any other employee on layoff, including the possibility of forestalling the payment of layoff benefits to him through the possibility of the grievor holding outside employment, as approved by the LAC. Alternatively, the grievor’s right to claim layoff benefits might also be qualified by such possibilities as may exist for his performing work within the Company’s own operations.


            For all of the foregoing reasons the Arbitrator accepts the interpretation advanced by the Union, and confirms that the grievor retains the right to the gross layoff benefit credit attributable to him under article 7B.2.2 of the Job Security Agreement. The matter is remitted to the parties, and the Arbitrator retains jurisdiction in the event of any further dispute concerning any aspect of the interpretation or implementation of this award.



Dated at Toronto, this 19th day of June, 2001