SHP – 515




(the “Company”)



(the “Union”)




SOLE ARBITRATOR:                Sidney G. Soronow



There appeared on behalf of the Company:

G. Pepin                                   Labour Relations Officer

G. D. Wilson                             Counsel

D. Gourlay                                 Manager, Winnipeg Diesel Shop

D.E. Guerin                               Labour Relations Officer

And on behalf of the Union:

Brian McDonagh                        CAW National Representative

Amado Rosales                         Vice-President, Local 101

Terry Appleton                           Grievor


A hearing in this matter was held at Winnipeg.



At the outset of the hearing, the parties agreed that he arbitrator was duly and properly appointed. The parties further agreed that the arbitrator had jurisdiction to decide the issues raised by the grievance. No preliminary objections were raised as to jurisdiction or other matters.

The parties had failed to agree upon an arbitrator. As such, the arbitrator was appointed by the Federal Minister of Labour. Under the Canada Labour Code, it is contemplated the arbitrator’s decision will be made within sixty (60) days of the appointment. However, in this instance there was some delay in the parties agreeing to a hearing date. The parties confirmed that they were waiving the time provision contained in Section 64 of the Canada Labour Code. As well, the parties waived any time provision for the delivery of this Award, pursuant to the terms of the Collective Agreement.

Canadian Pacific Railway Company (sometimes hereinafter referred to as “CP Rail” or the “Employer” or the “Railway” or the “Company”) is a party to a Collective Agreement with National Automobile, Aerospace, Transportation and General Workers’ Union of Canada (CAW-Canada) Local 101 (sometimes hereinafter referred to as “CAW” or the “Union”). The Collective Agreement is dated December 20th, 1996. It was brought to the attention of the arbitrator that a subsequent agreement has been entered into between the parties, however the Collective Agreement dated December 20th, 1996 is the agreement in effect for the purposes of this grievance.

The Collective Agreement contemplates that the parties will submit to the arbitrator a Joint Statement of Fact and Issue (the “Joint Statement”). The Joint Statement, in large measure, frames the difference or issue between the parties. In this instance, the Joint Statement reads as follows:


98ARB / 31 - 0GC0036 Grievance on behalf of all employees under the Classified and Unclassified Labourers of the former IBF&O agreement for alleged violation of Rule 53.


In April, 1998 it was observed that an outside contractor with the name Mr. T’s Janitorial services was performing the cleaning and maintenance of washroom, lunchrooms, locker rooms, etc. At the south side of the former Winnipeg Car Shop Building.


It is the submission of the Union that the Company is in violation of Rule 53 for failure to provide the Union the following:

a)             reason for contracting out as per Rule 53.1 ,

b)            reference to which exceptions the work is being contracted out in view of as per Rule 53.1;

c)             advice of the work to be contracted out as per Rule 53.3 and 53.4;

d)            if an exception is sustained, the opportunity to make a business case to have work performed in house as per Rule 53.5; and

e)             description and anticipated duration of the work being contracted out as requested under Rule 53.6;

The Union contends that the work contracted out is normally performed by employees under the Labourer’s classification. The Union requests the arbitrator to provide full compensation including any overtime lost for all employees affected and award the work back to the Bargaining Unit.

The Company denies the Union’s contention and claims.

The issue raised by this grievance is as to whether or not the Company engaged in contacting out contrary to the Collective Agreement and whether the Company complied with other provisions of the Collective Agreement, as they pertain to contracting out. The Company acknowledges that Mr. T’s Janitorial Services (“Mr. T’s”) was engaged to perform cleaning and maintenance of washroom, lunchrooms and locker room facilities at the time and place in question. The Company asserts, however, that the engagement of Mr. T’s does not constitute contracting out and that such engagement was therefore not in violation of the Collective Agreement.

By way of general background, the Railway has had significant infrastructure and facilities in the Winnipeg area. Part of those facilities was a facility commonly know as the Weston Shops. This is part of a complex of buildings which have historically been associated with the Railway operations. The Weston Car Shop was a major repair facility. The evidence disclosed that the Weston Car Shop (while in operation) was primarily engaged in major repairs. As well, some level of light repairs was conducted at the Weston Car Shop.

In February, 1997, the Railway decided to close the Weston Car Shop, leaving the Calgary and Montreal facilities as the only remaining major repair shops for CP Rail. While no doubt the closing of the Weston Car Shop was a traumatic occurrence for employees, there is no suggestion that this action on the part of the Railway was not a legitimate or bona fide exercise of its management rights. Such closure was not, in any way, a device to create a scenario that would legitimize the subsequent actions of the Railway pertaining to the engagement of Mr. T’s.

At a date subsequent to the closure, the Railway intended to create an indoor facility in connection with the light repair function. Initially, it was anticipated that a new building would be created on a site some distance from the Weston Car Shop. Eventually, however it was determined that creating this building facility would cost approximately $2,000,000.00. In consequence, this plan was abandoned.

In the interim, efforts were made to lease the Weston Car Shop. A portion of the shop was leased to an unrelated company who performs repairs for other railways. Considering that a large portion of the Weston Car Shop building remained vacant, a decision was made by CP Rail to utilize a portion thereof as an indoor repair facility. As a result, the Railway began to occupy a portion of the Weston Car Shop for that purpose.

During the decades that the Weston Car Shop operated as a major repair facility, the washrooms, lunchrooms and locker rooms were cleaned by unionized labourers. It is fair to say, that this type of work (that is, maintenance and cleaning) is very typical of work performed by labourers employed by the Railway.

It appears, however, that although the labourers are currently represented by CAW, they were formerly represented by another union. Based on the evidence, it would seem that the previous union was not particularly aggressive in addressing contracting out situations. As a result of this apparent lack of aggressiveness, the maintenance and cleaning function is, in many railway establishments, presently conducted by outside contractors rather than by labourers employed by the Railway. On the other hand, the Union’s suggestion is that CAW has been aggressive in attempting to stem the erosion, as evidenced by this current dispute.

One of the witnesses who gave evidence was Bill McKelvy, the Operations Co-ordinator – Repair Areas. Mr. McKelvy testified that the department known as the “Winnipeg Car Department” does not employ labourers. Consequently, the various facilities in Winnipeg associated with the Winnipeg Car Department do not utilize unionized labourers to do the maintenance and cleaning in their facilities, but rather outside contractors are engaged, as necessary. Indeed, it appears that Mr. T’s already is involved in custodial work at a Railway facility known as the Modular Building.

While the Winnipeg Car Department may not employ unionized labourers to do custodial work, it appears that the labourers have been used to do that work in the Railway’s Brandon facilities. Apparently, an individual by the name of Gerry Sichello, who is the Facility Manager of the Winnipeg Car Department, is also the manager of the aforesaid Brandon facility.

During the evidence of Mr. McKelvy, reference was made to a building referred to as the “One Spot”. This building was physically situated close to the Weston Car Shop and was a building used in connection with light repairs. Sometime in the mid 1990s, this building was demolished. Some of the repairs performed in the One Spot, were moved into the south end of the Weston Car Shop. Prior to the demolition of the One Spot, the Railway had unionized labourers who were responsible for cleaning and maintenance functions in that building.

On CP Rail, repair work is essentially conducted by a classification of Railway employees know as Carmen. When the Weston Car Shop was in full operation, it was substantially occupied by Carmen who performed daily repairs. Likewise, the light. repairs performed in the One Spot, were also performed by Carmen. In other words, Carmen are involved in the maintenance of trains, although some may be more involved in minor types of repairs, and others are involved in heavy repairs.

In view of the foregoing, it is obvious (and not disputed) that the repairs conducted in the portion of the Weston Car Shop now administered by the Winnipeg Car Department are performed by Carmen. The maintenance and cleaning however, is not performed by Railway labourers, but rather by the outside contractor, Mr. T’s.

The foregoing generally sets out those facts either admitted or arising from the evidence and the presentations of the respective parties. It is against that factual background, that the parties take differing views of the rights that flow from the Collective Agreement.

Unlike many industrial contracts, the provisions of the various paragraphs of this Collective Agreement are referred to as Rules. The opening words of Rule 53.1 read as follows:

Effective July 9, 1995, work presently and normally performed by employees who are subject to the provisions of this collective agreement will not be contracted out except:

(i)            when technical or managerial skills are not available from within the Railway and cannot be made available through a permanent transfer of employees from other locations on the system, through a reasonable level of training, re-training or upgrading of the active or laid off employees; or …

(ii)           where sufficient employees, qualified to perform the work, are not available from the active or laid-off employees and cannot reasonably be made available through a permanent transfer of employees from other locations on the system; or

(iii)         when essential equipment or facilities are not available and cannot be made available at the time and place required from Railway-owned property, or bona fide leased from other sources at a reasonable cost without the operator; or

(iv)          where the nature or volume of work is such that it does not justify the capital or operating expenditure involved; or

(v)            the required time of completion of the work cannot be met with the skills, personnel or equipment available on the property; or

(vi)          where the nature or volume of the work is such that undesirable fluctuations in employment would automatically result.

In order for the Union to succeed in this grievance, the arbitrator must first be satisfied that the work in question is work “presently and normally performed by employees who are subject to the provisions of this collective agreement”. In this instance, the employees in question are those classified as labourers. In the event that the Union meets its onus of proof and satisfies the initial criteria then the onus falls on the Railway to show that one of the named exceptions applies.

In this case, the Company did not attempt to justify its actions based on one of the exceptions. Rather, the Company’s position is based on its assertion that the Union has not met its initial onus.

It should be noted, that the Union claims other violations of the Collective Agreement associated with this circumstance. It is appropriate to quote Articles 53.2 to 53.6 in their entirety, as follows:

53.2        The conditions set forth above will not apply in emergencies, to items normally obtained from manufacturers or suppliers nor to the performance of warranty work.

53.3        At a mutually convenient time at the beginning of each year and, in any event, no later than January 31, representatives of the Union will meet with the designated officers to discuss the Company’s plans with respect to contracting out of work for that year.

53.4        The Company will advise the Union representative involved in writing, as far in advance as is practicable of its intention to contract out work which would have a material and adverse effect on employees. Except in case of emergency, such notice will be not less than 30 days.

53.5        Except in cases where time constraints and circumstances prevent it, the Company will hold discussions with representatives of the Union in advance of the date contracting out is contemplated. The company will provide the Union a description of the work to be contracted out; the anticipated duration; the reasons for contracting out, and, if possible, the date the contract is to commence, and any other details as may be pertinent to the Company’s decision to contract out. During such discussions, the Company will give due opportunity and consideration to the Union’s comments on the Company’s plan to contact out and review in good faith such comments or alternatives put forth by the Union. If the Union can demonstrate that the work can be performed internally in a timely fashion as efficiently, as economically, and with the same quality as by contract, the work will be brought back in or will not be contracted out, as the case may be.

53.6        Should a Regional Union Representative, or equivalent, request information respecting contracting out which has not been covered by a notice of intent, it will be supplied to him promptly. If he requests a meeting to discuss such contracting out, it will be arranged at a mutually acceptable time and place.

The Union argues that the work being performed by Mr. T’s is work which was performed by labourers in the CAW bargaining unit up until the closure of Weston Car Shop and that if such work continued to exist, then it ought to have been assigned to the labourers classification as it was in the past. They further argue that there are labourers who continue to work in or around the Weston facility and in any event there are other labourers available across the system.

The Railway acknowledges that before the Weston Car Shop ceased operations in February, 1997, custodial work had, for the most part, been performed by the labourers located in the main shop. After the closure, there was an empty asset, as equipment was moved out except for overhead cranes. A portion of the building was leased to P.D.S. Rail Car Services and a further portion of the building will be leased to Dominion Bridge. In late 1997 the Railway, through the Winnipeg Car Department, took over 25% of the building.

It is the Railway’s position, that the Winnipeg Car Department is distinct and entirely independent operationally, from any main shop activity previously performed in the old car shop building. The company points out, that the Weston Car Shop was a main shop facility responsible primarily for the heavy repair of railway cars. With the closure of the Winnipeg Main Car Shop, the only main shop car repair facility remaining in Western Canada is located at the Company’s Ogden installation in Calgary.

The Company distinguishes the Winnipeg Car Department, which performs only light running car repair work and does not perform any heavy repairs whatsoever. The company further points out that the Winnipeg Car Department has a maximum of 22 Carmen who work in the subject building over the course of three shifts on any given day.

The Company further argues that the Winnipeg Car Department has its headquarters located a short distance away from its satellite operation in the former Weston Main Car Shop building. At such headquarters, the Company does not employ any labourers and has always utilized a subcontractor to clean offices, washrooms, locker rooms, etc. at its Higgins Street headquarters since it opened in I986.

The Company asserts that the cleaning or maintenance of washrooms, lunchrooms, locker rooms, etc, does not fall under the exclusive work jurisdiction for labourers and that several facilities, including the Winnipeg Diesel Shop and the Winnipeg Car Departments “H” Yard Office have used maintenance forces for a number of years to perform maintenance work.

The work performed by Mr. T’s occurs twice weekly for a total of approximately four hours per week. It is the Company’s position that this does not warrant a fulltime labourer’s position. Moreover, they argue there was no material or adverse effects on the bargaining unit as a result of the decision to have work contracted out.

It may be that the work involves only 4 hours per week and consequently does not warrant a fulltime labourer’s position. However, issues of contracting out should not be simply decided on the basis of expediency, unless that is a test mandated by the Collective Agreement for determining whether an allocation of work is or is not an exercise of contacting out.

Furthermore, where the Collective Agreement prohibits contracting out, it is not an adequate response to simply indicate that there is no material or adverse effects on the bargaining unit.

Moreover, an issue of whether there is or is not material or adverse effects on the bargaining unit is a test to be incorporated into the Collective Agreement, if the parties intend that to be the governing factor in describing or defining that which constitutes contacting out. Subject to the exceptions recited in Rule 53.1, the Collective Agreement simply dictates that:

work presently and normally performed by employees who are subject to the provisions of this collective agreement will not be contracted out …

There can be little doubt that the work performed by Mr. T’s is the type of work presently performed by labourers, albeit in other facilities. Indeed, this kind of custodial work appears to be a core function of the labourers group governed by the provisions of the Collective Agreement.

Can it however be said that this type of work is “normally performed by employees who are subject to the provisions of this Collective Agreement”. The word “normally” is not synonymous with the work “always” or the word “invariably”.

It is clear that the labourers formerly performed the custodial work in the same physical facility when it was operated for heavy equipment repairs. Likewise, the labourers were responsible for cleaning and maintenance functions in the facility referred to as the “One Stop”. Some of these same repair functions that were formerly performed at the One Spot were moved into the south end of the Weston Car Shop.

In reaching my decision, I have had the benefit of reviewing the case law referred to by each of the parties. It is clear that whether any particular work is “presently and normally performed by employees” is a question to be decided on a case by case basis. In this particular situation, having regard to the evidence and the presentations of these parties, I am satisfied that notwithstanding other examples of custodial work being contracted out, this work being performed by Mr. T’s in the facility in question, is in fact, work “presently and normally performed by employees” within the meaning contemplated by the provisions of the Collective Agreement. Indeed the nature, scope and character of the custodial activities being performed is the very type of work activity or function performed by those who hold the labourers classification.

Accordingly, I have concluded and determined that the engagement of Mr. T’s was in fact contracting out and therefore in violation of the Collective Agreement, unless the situation fell within one of the exceptions recited in Article 53.1. As the Company, in good faith, believed this not to be an instance of contracting out, the Company did not attempt, during the course of the arbitration, to justify its actions on the basis of any of the exceptions. Accordingly, there is not sufficient evidence before the arbitrator from which to conclude that any of the exceptions apply.

As the Railway did not consider they were engaged in prohibited contracting out, they did not undertake the consultative processes contemplated by various other paragraphs in Rule 53. I am satisfied that the Company acted honestly (although mistakenly) in arriving at their conclusion. Perhaps, as a result of the determination that this circumstance was (and is) contracting out, the parties may hereafter choose to address those portions of Article 53 which have not been previously addressed, including the consultative process.

The Union requests “full compensation including any overtime lost for all employees affected”. However, no real attempt was made by the Union to particularize any material loss or adverse impact referable to any employee. Furthermore, I am mindful of the fact that there has been some historical lack of diligence on the part of the union representative (although not necessarily CAW) in opposing or taking issue with previous circumstances in which outside contractors were used to perform custodial work.

In the circumstances, I am satisfied that the interests of the Union are sufficiently served by a declaration that the contracting out to Mr. T’s of the cleaning and maintenance of washroom, lunchrooms, locker rooms and the like at the south side of the former Winnipeg Car Shop Building was contrary to Section 53.1 of the Collective Agreement. Furthermore, for the reasons aforementioned, I do not deem this to be an appropriate circumstance to make an order of compensation.

The decision reached in this arbitration is, of course, particular to the facts and evidence tendered. As such, this decision should not be considered by either party as representing a general commentary on other locations or situations in which the Railway has engaged outside contractors to perform custodial type work.

In conclusion, the grievance is allowed in the manner and to the extent above set out. The Arbitrator retains jurisdiction in the event of any dispute between the parties with respect to the interpretation or implementation of this award.

The issues raised in this arbitration were both significant and interesting. I would like to express my appreciation and thanks to both parties for their skill, competence and clarity in presenting their respective positions.

DATED at the City of Winnipeg, in Manitoba 31 day of January, 2000.