(the "Company")










(the "Union")









Sole Arbitrator:                        Michel G. Picher



Appearing For The Union:

J. R. Moore-Gough             – President, Local 100, Windsor

D. Witwicky            – Grievor

J. Burns            – Vice-President, Mountain Region, Langley


Appearing For The Company:

S. Blackmore            – Labour Relations Associate, Pacific Division, Edmonton

D. VanCauwenbergh            – Human Resources Associate, Prairie Division, Winnipeg

A. Cugliette            – Project Officer, Edmonton




A hearing in this matter was held in Calgary, Alberta on Monday, May 7, 2001



            This arbitration concerns an appeal under article 2.6 of the Employment Security and Income Maintenance Agreement (ESIMA). Article 2 of the ESIMA deals with an employee’s option, in the event of the abolishment of his or her position, to take up work outside the Company, with a top-up of wages, as approved by the joint Labour Adjustment Committee (LAC), or failing agreement of the Committee, the decision of an arbitrator. The nature of the issue is reflected in the statement of Dispute and Joint Statement of Issue filed at the hearing, which reads as follows:




The parties disagree as to the acceptability of the application by Mr. Doug Witwicky of Jasper, Alberta, for approval of the position of liquor store manager as work outside the company under the provisions of article 7.1(e) of the Employment Security and Income Maintenance Agreement.




On February 1st, 2001, the Company issued an article 8.1(a) notice abolishing all of the car mechanic positions at the Company’s facilities in Jasper, Alberta effective May 31st, 2001. Mr. Doug Witwicky, a car mechanic in Jasper, would no longer be able to hold work with the Company at this location on May 31, 2001 as a result of this notice.


Mr. Witwicky found employment as the manager of Avalanche Spirits in Jasper and applied for approval under the provisions of work outside the company on March 23rd 2001. The Labour Adjustment Committee consisting of Mr. D. Fisher, Director, Labour Relations CN and Mr. J.R. Moore-Gough, President Local 100, was unable to reach agreement on the acceptability of the position for work outside the Company. As the position in question was being filled almost immediately, the parties agreed to grant Mr. Witwicky a leave of absence to take the job and the parties would progress the matter to arbitration as quickly as possible. If the Arbitrator rules the position is acceptable for work outside the Company then Mr. Witwicky will be considered as covered under the provisions of the work outside the Company effective the beginning of his leave of absence. If the Arbitrator finds that position is not acceptable then Mr. Witwicky will be required to make a new election under the terms of the ESIMA. This agreement is without prejudice to either party’s position concerning the appropriateness of the position in question for work outside the Company. More particularly, the granting of the leave of absence by the Company to Mr. Witwicky does not prejudice the Company’s position concerning the feasibility and appropriateness of releasing Mr. Witwicky for work outside the Company prior to the effective date of the notice, May 31st, 2001.


It is the Union’s contention that when all factors are taken into account such as the age of Mr. Witwicky, his length of service, other options available at the location, the nature and its long term prospects, etc. that the position of liquor store manager is appropriate for work outside the Company.


The Company contends that the ESIMA does not contemplate an employee taking work outside the Company prior to the effective date of the planned TO&O change. Further, the Company contends that a position being assessed for work outside the Company must be of a nature to develop skills which an employee could use on an existing job at the location at CN in the future and that the position being considered does not meet this criteria. Finally, the Company considers that the rate of pay of the job in question does not meet the standard required for approval.


            Before turning to the facts of this case it is useful to review two prior awards which dealt with similar issues arising under comparable provisions of a Special Agreement concerning the closure of CN’s operations in Newfoundland. In CROA 2808 the arbitrator concluded that outside employment involving truck and automotive sales and service operations was appropriate for an individual whose principal duties and responsibilities within the Company, prior to the abolishment of his job, mainly involved truck fleet maintenance. As the award reflects, the Company appears to have taken a two-fold position in that case, concerning the approach to the approval of outside employment. That is reflected in the following passage of the award:


The Company submits that certain guidelines should be brought to bear in determining what is appropriate alternative employment outside the Company, for the purposes of article 6 of the Special Agreement. Firstly it maintains that the outside job should be similar to the employee’s job at CN, or be one that would allow the employee to acquire skills pertinent to future Company service. It states that in that circumstance it would approve the work in question, regardless of the wage rate and, indeed, even if the above criteria were not met, that it would nevertheless approve a proposed job if it paid at least 50% of the employee’s CN wage rate.


The foregoing would suggest that, at least in relation to the Newfoundland agreement, the same employer appeared to be of the view that employment paying at least 50% of an individual’s CN wage rate might be deemed appropriate, even if the criteria of similarity and related skills were not met.


            CROA 2809, arising out of the same Special Agreement, found that outside employment as a Behavioural Aide/Respite Care Worker, paid at substantially less than half of the grievor’s CN wage rate as an Intermodal Clerk, was not appropriate for approval. In coming to that conclusion the arbitrator commented, in part:


After careful consideration, the Arbitrator concludes that in this case the Company’s position is well founded. The work available to the grievor is clearly not work which would be of future value to the Company, however worthy it may be from the standpoint of social utility. Of equal concern is the extent of the burden which would be borne by the Company, given that the top up cost to the Company substantially exceeds the hourly rate which the grievor would earn. While generalities should be avoided in dealing with issues of this kind, and each case must be determined on its own merits, the Arbitrator is not persuaded that the arrangement which the grievor seeks to have approved falls within the ambit of the obligations contemplated under article 6.1 of the Newfoundland Special Agreement.


            The facts in the instant case are not in dispute. Employment options in Jasper, Alberta are relatively narrow. As a small tourist centre with a population of approximately 4,700 persons, Jasper is virtually devoid of work within heavy industrial enterprises comparable to the operations of a railway repair shop. The evidence establishes that the great majority of available work is in the tourist industry, at wage rates substantially less than those enjoyed by the Company’s car mechanics at Jasper, and that there are virtually no opportunities for work within analogous mechanical trades such as plumping, pipe fitting or electronics.


            In approaching this issue it is significant to appreciate that the parties, by the very language of the ESIMA, specifically contemplate that local factors are to be considered in the assessment of work outside of CN. In that regard article 7.1 of the ESIMA lists a number of sequential options which an employee must satisfy to protect his or her employment security. As a note to article 7.1 makes clear, before being compelled to seek work on the basic seniority territory employees have a right to accept “… permanent unfilled vacancies in other bargaining units, non-schedule or management positions or work outside CN Rail (as determined by the Labour Adjustment Committee) at the location.” It may also be noted that article 7.1(e) emphasises that outside work is to be “at the location.” In the Arbitrator’s view these provisions confirm the mutual understanding of the parties that the purpose of outside employment is to attempt, insofar as is possible, to relieve employees from the obligation of moving themselves and their families from the location at which their job was abolished. It appears, as stressed by the representative for the Union, that that concession in favour of employees was gained before Arbitrator George W. Adams in 1995, in exchange for substantial reductions in the scope, amount and duration of employment security protections previously existing.


            While for the purposes of this award it is not necessary for the Arbitrator to fully accept or reject the two suggested criteria reflected in the position taken by the Company in CROA 2808 and 2809, when those criteria are applied to the facts at hand there are, in my view, reasons to view the position of the Union as relatively persuasive. Dealing firstly with the issue of similar employment or, more broadly, the likelihood that the skills acquired in an outside job might benefit the Company, it should be noted that at present the Company work available at Jasper generally involves three categories of endeavour: transportation operations, clerical work and management/administration. When regard is had to the proposed position of liquor store manager it would appear that the work in question would afford to the grievor opportunities for growth and learning in areas of managerial and supervisory responsibility, and the overall administration of one segment of a larger enterprise. I am not prepared to conclude that skills gained in that regard would be of little or no value to the Company should the grievor be recalled to work at Jasper, bearing in mind that he could be recalled to work within another bargaining unit, or in a non-scheduled or management position.


            Dealing with the second criterion, while it is true that the wages initially available to Mr. Witwicky will be substantially lower than those he enjoyed as a car mechanic, at $9.00 per hour as opposed to $21.44 per hour, bearing in mind that the present top up obligation is to only 90% of the grievor’s prior salary, it appears that the differential which the Company will be required to make up will be $10.30 per hour. It also appears that that figure can be expected to decline if, as indicated in a letter from the grievor’s new employer, he succeeds in getting wage increases in accordance with an established schedule of periodic reviews.


            In the result, while the figures are not precisely what the Company urges as the 50% standard, the proposed employment as liquor store manager in Jasper does come close to the 50% threshold discussed in CROA 2808. Additionally, for the reasons touched upon above, the Arbitrator is satisfied that the work is question would, by reason of the managerial, clerical and administrative responsibilities involved, be such as to develop skills which would be of value to the Company should the grievor be recalled to work at Jasper in any administrative capacity. While it is true that the amendments to the ESIMA made in the wake of the 1995 interest arbitration award substantially reduced the protections of individuals such as the grievor, whose job was abolished after twenty-eight years of service with the Company, he is nevertheless entitled to a fair application of the provisions of article 2.2 of the ESIMA. Part of the consideration to be applied in the administration of that article does, I am satisfied, involve a fair assessment of local conditions, given that the parties contemplate that the work in question must be “at the location”, as well as considerations relating to whether the work in question may develop skills of value to the Company, and the wage level, and corresponding top up burden, for the outside employment. Taking all of those considerations into account I am satisfied that the position of liquor store manager is one which should have been approved by the LAC. I also note that the parties are agreed as to the issue of the timing of the outside employment on the particular facts of this case. The grievance is therefore allowed. I retain jurisdiction in the event of any dispute between the parties concerning the interpretation or implementation of this award.


Dated at Toronto, this 22nd day of May, 2001