ELIGIBILITY FOR BRIDGING OF G. FRADETTE AND G. ARCHAMBAULT

AWARD OF THE ARBITRATOR

The grievance at hand is filed on behalf of two employees, Mr. G. Fradette and Mr. G. Archambault. The Union alleges that they were denied the opportunity of early retirement bridging benefits under the terms of the Job Security Agreement. The Company denies that there was any violation of the rights of the employees. The nature of the dispute is more concisely reflected in the joint statement of fact and issue filed at the hearing, which reads as follows:

DISPUTE:

The denial of 7-year bridging benefits to G. Fradette and G. Archambault.

JOINT STATEMENT OF ISSUE:

Both grievors were “Angus employees” as defined at Item 1 of Appendix F of the Job Security Agreement. After exhausting their employment security benefit entitlement (Nov. 6, 2003 and April 1, 2004 respectively), each employee requested a 7-year bridge to retirement. The Company declined their requests, stating that as they had exhausted their benefit period, they were no longer eligible for the bridging benefit.

JOINT STATEMENT OF FACT:

The Union submits that irrespective of whether the employees may have made their requests very shortly after exhausting their ES benefit, the language and intent of the Angus Special Agreement, as continued and modified by Appendices F and J, require that bridging is a significant benefit which should be available to the grievors. Refusal of such benefit creates a windfall to the Company and is contrary to the pertinent clauses of the Angus Special Agreement (as modified). The Union requests a ruling to this effect and that the grievors be made whole.

The Company denies the Union’s submissions and requests.

There is no dispute as to the facts pertinent to this grievance. Mr. Fradette was hired on November 23, 1973 and worked as a pipefitter at Angus Shops in Montreal. With the closure of Angus Shops in 1992 he was one of more than 900 employees negatively impacted. In that capacity he gained certain protections under the Angus Special Agreement executed on February 3, 1992, including employment security (ES) benefits by reason of his having completed more than eight years of cumulative compensated service. At the outset that protection would have been his until he reached retirement age, however it was redefined following the award of the interest arbitration panel chaired by then Judge George Adams, and the subsequent renegotiation of the Job Security Agreement by the parties themselves. In the result, Mr. Fradette became entitled to eight years of ES benefits. When allowance is made for certain recalls to work, his benefits became exhausted on November 5, 2003.

Mr. Archambault entered Company service on April 24, 1974 and worked in the Angus Shops as a boilermaker. He also then fell under the benefits of the initial, as well as the revised, Angus Special Agreement. With the factoring of certain periods of recalls to work, he eventually exhausted his eight years of employment security benefits on April 1, 2004.

As noted above, the parties emerged from the interest arbitration process and subsequent negotiations in 1995 with important amendments to their Job Security Agreement, amendments dealing in substantial part with employment security benefits. The Job Security Agreement itself reflects certain of those amendments in article 7A.9 which reads as follows:

7A.9 Employees on employment security benefits as of June 14, 1995, and governed by the rights and obligations of the current Article 7 of the Job Security Agreement will continue to be governed by those provisions along with the following additional conditions which will come into effect on October 14, 1995.

NOTE: This provision does not apply to employees covered by the Angus Special Agreement.

(a) The duration and level of employment security benefit entitlement will be limited to the duration outlined in Article 7A.4.1 of this Agreement.

(b) When an employee has expended his employment security benefit and is not occupying a permanent position, such employee must occupy a permanent position pursuant to Article 7A or elect options 1, 2 or 3 pursuant to Article 7B.1.

(c) While an employee currently on employment security is in the transition period of 5 years outlined above, such employee will be required, in addition to the current requirements of Article 7 of the Job Security Agreement, to fill permanent vacancies in all other bargaining units, non-scheduled or management positions on the Region or accept work outside of CP Rail at the home location. Any earnings will offset the Company’s employment security payments.

(d) When permanent vacancies occur on the System within the bargaining unit, the Labour Adjustment Committee will meet to ensure the filling of such vacancies. A senior working employee in the same bargaining unit may voluntarily fill the vacancy, if by doing so, an employee in receipt of employment security on his Region obtains a permanent position. If the Labour Adjustment Committee cannot fill such a vacancy on a voluntary basis as outlined above, then the junior employee in the bargaining unit on the Region currently on employment security must fill that vacancy on the System.

During this period, the Labour Adjustment Committee will meet to develop additional opportunities and/or options for such employees, including but not limited to placement assistance, job searches, special training, etc. with the ultimate goal of finding permanent employment opportunities.

(emphasis added)

As can be seen from the foregoing, the provisions of article 7A.9 do not extend to employees covered by the Angus Special Agreement, which would include the grievors Fradette and Archambault. It is noteworthy, however, that under the general provisions of the Job Security Agreement a person who has exhausted employment security benefits is given the option of occupying a permanent position or electing three options, one of which includes early retirement bridging benefits.

It is generally acknowledged that the Angus Special Agreement, not covered by the foregoing, provides a somewhat higher level of benefits to the employees protected under it. Appendix F of the Job Security Agreement represents the amended Angus Special Agreement. That agreement provided for a $25,000 lump sum incentive for bridging, as described in article 8 of Appendix F of the Job Security Agreement, which reads as follows:

8. Angus employees who are or will become eligible for bridging or early retirement no later than December 31, 2001 shall be entitled to receive an additional lump sum of $25,000, paid at the time of retirement or in bi-weekly instalments during the period of bridging, as the case may be, on condition that:

(a) Such employees desiring to receive the lump sum declare in an agreed-upon form, prior to December 31, 1995, their irrevocable intention to bridge or retire upon reaching eligibility; and

(b) such employees actually bridge or retire no later than three (3) months after becoming eligible; and

(c) by bridging or retiring, such employees cause the removal of an Angus employee (whether themselves or other employees) from employment security or enhanced SUB status.

Additionally, employees who, by bridging or retiring, vacate a position with the effect of causing an Angus employee to be recalled to a permanent position, will be entitled to receive the $25,000 additional lump sum.

The parties further agreed to implement a separate seven year bridging provision for employees under the Angus Special Agreement, apparently to bring them into conformity with the benefits available to other employees. That option does not attract the $25,000 incentive payment and is recognized by the parties as being available to employees through the period of their ES eligibility. While no specific language was drafted to deal with the mechanics of entitlement to the seven year bridging benefit, it was addressed in the terms of Appendix J of the Job Security Agreement, in the form of a letter sent to the Union’s Special Representative from the Director, Labour Relations of the Company, Mr. D. Cooke. That letter reads, in part, as follows:

3. Montreal employees who may wish to avail themselves of the “7-year bridging” provision at some future date are not required to so declare in the Special Bidding Procedure, notwithstanding the erroneous wording of Section II(b) of the form provided.

I understand that this matter has been corrected by specifying in the note that “the 5 year bridging option is irrevocable. Specifically, in the special Bidding Procedure meetings, employees have been told that only the early retirement and 5-year bridging are irrevocable options and also, they could select the 7-year bridging at any time during the duration of the actual agreement because there is no $25,000 involved in this case.

It is common ground that in the case at hand both Mr. Fradette and Mr. Archambault did not opt for early retirement bridging while they were still drawing employment security benefits. Both of them made their requests for bridging only after the expiry or exhaustion of their ES benefits, in the case of Mr. Fradette on November 24, 2003, nineteen days after his ES benefits were exhausted and in Mr. Archambault’s case, on April 22, 2004, some twenty-one days after the exhaustion of his benefits on April 1, 2004.

The Company takes the position that as employees whose ES benefits were exhausted neither of the grievors could purport to assert an entitlement to the seven year bridging option. The position put forward by the Company’s representatives is that that option could only be available to them while they remained in receipt of ES benefits. They submit that that is consistent with the overriding principle to the effect that early retirement bridging benefits are generally given in exchange for a reduction of the employment security benefits burden of the employer. In the Company’s view, there is no benefit to the Company should the grievors be able to fully exhaust their ES benefits and thereafter elect the seven year early retirement bridging option. In support of that approach reference is made to the conditions contained in article 8 of Appendix H of the Job Security Agreement, the amended Angus Special Agreement.

The Union’s representative counters that the provisions of article 8 of Appendix F of the Job Security Agreement are fashioned solely in relation to the extraordinary entitlement to the $25,000 lump sum contained therein. While he does not dispute that the parties understand that employees are generally to elect the seven year bridging option while they are still in receipt of ES benefits, he disputes the contention of the Company that a condition of receiving the benefits of the bridging option is that the employee electing the bridging option effectively removes either himself or another employee from being in receipt of ES benefits. The Union’s representative also stresses to the attention of the Arbitrator the language of paragraph 3 of Appendix J which he submits confirms that there is no strict time limitation on the election of the seven year bridging benefit. In that regard he points to the words: “… they could elect the 7-year bridging at any time during the duration of the actual agreement because there is no $25,000 involved in this case.” The Union’s representative submits, on the basis of the foregoing, that the seven year bridging option is a vested entitlement which was not lost by the grievors by reason of the of the exhaustion of their ES benefits. He argues that in the absence of any language which would limit their entitlement to those benefits, they were entitled to claim them at any time during the duration of the Job Security Agreement, as expressed in paragraph 3 of Appendix J.

I turn to consider the merits of the dispute. After careful consideration of the submissions of both parties the Arbitrator is left in some difficulty with respect to the position argued by the Company. Firstly, the suggestion that there is an implicit principle to the effect that early retirement bridging opportunities are given only in exchange for a reduction of the employer’s ES burden is itself less than persuasive. Firstly, the general rule appears to be well expressed in article 7A.9 of the Job Security Agreement. Sub-paragraph (b) of that provision expressly recognizes that an employee who has exhausted his employment security benefit can elect to take early retirement bridging pursuant to article 7B.1 of the Job Security Agreement. While it is true that article 7A.9 of the Job Security Agreement does not apply to employees covered by the Angus Special Agreement, there is no reason to believe that the parties intended any lesser protection for employees under the Angus Special Agreement, absent clear and unequivocal language to the contrary.

In fact, in the Arbitrator’s view Appendix F of the Job Security Agreement, which is the amendment of the Angus Special Agreement, strives to ensure that still greater benefits are provided to Angus employees. Among those, as reflected in paragraph 8, is the opportunity of receiving a lump sum payment of $25,000 as an incentive to elect bridging or early retirement. I must agree with the Union’s representative that the condition of reducing the Company’s employment security benefits burden contained in that article is intended to attach solely to the receipt of the $25,000 lump sum bonus. It is not, in my view, intended as a general condition for entitlement to bridging or early retirement, any more than would be the case under the general provisions of article 7A.9 of the Job Security Agreement.

In the result, the fact that the grievors might have fully exhausted their employment security benefits before electing the seven year bridging option does not offend any overriding principle in the Job Security Agreement, the terms of which specifically contemplate, in situations other than those covered by the Angus Special Agreement, that employees may elect five or seven year bridging options notwithstanding that they have exhausted their employment security benefits. While it may be arguable that the passage of a considerable period of time after the exhaustion of those benefits before an employee makes his or her election would be evidence of an abandonment, that is not the case on the facts at hand. It does not appear disputed that in the instant grievance both employees applied for bridging as soon as they realised that their employment security benefits were no longer payable to them, a realization triggered by their receiving reduced amounts of pay.

The parties to these agreements are experienced and sophisticated in the ways of collective bargaining and the drafting of job security protections. Where, as for example, under paragraph 8 of Appendix F of the Job Security Agreement they intend to establish strict conditions respecting the entitlement to certain benefits they do so by mutually agreed language which is clear in its intention. In the case at hand the Company is able to direct the Arbitrator to no language within the Job Security Agreement which stipulates that the seven year bridging benefit is available only if an employee removes himself or another employee from receiving ES benefits (a condition contrary to the general rule under 7A.9 of the Job Security Agreement). Nor is there any language to confirm that the election by the employee must be made before the exhaustion of his or her ES benefits. After a careful review of the language of these agreements, the Arbitrator cannot agree with the Company’s representatives to the effect that general language within the revised Angus Special Agreement, such as references to the duration of the employment security benefit being for eight years, are intended to circumscribe the right of employees to elect early retirement or bridging upon the exhaustion of their ES benefits. In my view the eight year reference, which represents a substantial gain for the Company coming out of the Adams arbitration process, is intended as placing a cap on the Company’s obligation to pay employees their partial wages, generally referred to as “ES benefits”, for a maximum of eight years, rather than until their retirement at age 65, as was previously the case. There is nothing in these provisions to suggest a departure from the more general rule found in the Job Security Agreement which acknowledges the availability of bridging and early retirement rights for employees who have exhausted their ES benefits and are otherwise entitled.

In fact, the scheme of the Angus Special Agreement, as modified, indicates that the parties recognized that the bridging entitlement of employees was to be consistent with the general rule of the Job security Agreement, including article 7A.9, save as specifically agreed to the contrary. That appears to the Arbitrator to be evident from the language of article 8(c) of Appendix F of the Job Security Agreement. By expressing as a condition for receiving the $25,000 payment that the bridging must eliminate a position which would otherwise have E.S. entitlement, the parties implicitly acknowledge that under their agreement employees can opt for bridging without reducing the number of employees on employment security or enhanced SUB status, albeit they do so without the benefit of the lump sum. That is not surprising, as it is in keeping with the general rule under article 7A.9 of the Job Security Agreement.

From a purposive point of view, moreover, it is difficult to escape the logic of the submission made by the Union’s representative, to the effect that the Company’s position results in a substantial windfall to the employer. By the Company’s own admission the grievors could properly have invoked their right to bridging or early retirement on their last day of ES benefits. On what basis should it be concluded, absent any clear language to support the Company’s position, that their important protection in respect of early retirement and bridging is exhausted by the mere passage of the eight year period, particularly when the employees themselves only become aware of that fact by the subsequent reduction of their pay cheque? Again, absent clear language to the contrary, I can find no basis upon which to conclude that the parties would have intended so arbitrary a result.

For all of the foregoing reasons the grievance is allowed. The Arbitrator directs the Company to accept and process the applications for seven year bridging benefits made by Mr. Fradette and Mr. Archambault, subject to a reduction in the payments to them for the period of the delay of their application. The Arbitrator retains jurisdiction in the event of any dispute between the parties concerning the interpretation or implementation of this award.

Dated at Toronto, this 12th day of November 2004

_________________________________

MICHEL G. PICHER

ARBITRATOR