SHP675

IN THE MATTER OF AN ARBITRATION

BETWEEN:

Progress Rail Transcanada Corporation

-and-

Canadian Auto Workers (CAW-Canada)

and its Local 101

Grievance re: Platers

Lorne Slotnick, Arbitrator

Representing the Union – Brian Stevens

Representing the Company – Owen Jones

Hearing – Winnipeg, Man., November 3, 2011

A W A R D

The issue in this grievance is whether platers are performing certain work that should be performed by machinists at Canadian Pacific Railway’s Weston Shops in Winnipeg, shops that are managed by Progress Rail Transcanada Corporation. The relevant work is second-hand axle cutting and qualifying, which involves inspecting and machining the used axles to specifications for reuse. The company asserts its right to assign this work to the lower-paid plater classification, while the union argues the work belongs exclusively to machinists. The grievance alleges a continuing violation of the collective agreement from November, 2010.

Background Facts

Weston Shops is a Canadian Pacific Railway shop. In 2000, management of the shop was taken over by Progress under a 15-year agreement. That year, there was also an agreement between CPR, Progress and the CAW that now forms part of the collective agreement as Appendix 42 and which will be referred to in more detail below. Appendix 42 contemplates that Weston Shops will have both Progress and CPR employees working. The appendix states that the basic principle is that the ratio of each company’s employees will be determined by the proportion of work that is CPR work versus Progress work. Progress work is defined as new work brought to the shop by Progress. The appendix also calls for two collective agreements, one for each company’s employees, but which are identical except for pensions and any other items that the parties agree to. However, I was advised that no document representing the Progress-CAW collective agreement covering Weston has ever been produced, and that the national CPR-CAW shopcraft collective agreement is the governing document.

Shortly before taking over management of the Weston Shops, Progress also acquired CAE Vanguard Inc., which operated a nearby axle shop. Progress moved CAE Vanguard’s axle operation into the Weston Shops in November, 2000. The move brought CAE Vanguard’s patented axle plating process into Weston. A number of CAW machinist positions were created at the time, and eight platers, members of another union, were moved from CAE Vanguard’s operation into the relocated axle shop at Weston. The platers, who are now CAW members, are subject to a letter of understanding between Progress and the CAW that dates from 2007. They are Progress employees.

Among the language relied upon by the union is the following from Appendix 42:

1. Exclusive Supply/Capacity to Perform Work

Canadian Pacific Railway guarantees that its arrangement with Progress does not diminish or increase the rights and obligations of Canadian Pacific Railway or CAW as provided for in the Collective Agreement and Job Security Agreement between the parties except as provided hereunder or as may be otherwise agreed to between the parties.

CPR assures the CAW that the Progress deal will not be a vehicle for losing or diminishing capacity at Weston.

CPR guarantees, subject to the parties rights and obligations under the Collective Agreement, that all work and products that are presently and normally supplied on its behalf by bargaining unit members at Weston, which from now on, are to be supplied by Progress will be provided by Progress exclusively from Weston with CAW members (such products to be supplied in the same proportion as is presently the case); except in emergent circumstances beyond the reasonable control of Progress and Canadian Pacific Railway, or except as may be otherwise agreed between the parties. …

3. (a) Weston Appendix

…

CAW recognizes that different or special work rules at Weston may be required to assist in making Weston a successful operation and CAW will work in good faith with Progress to develop Weston work rules to achieve that end.

3. (b) Bargaining Structure

· There will be two separate Collective Agreements (CA), the agreement between Canadian Pacific Railway and the CAW (the existing CA) and a CA between Progress and the CAW. The CA between Progress and the CAW covering Progress work and Progress employees will be identical, as to those provisions applicable to Weston, to the agreement between Canadian Pacific Railway and the CAW except for pensions and other items which the parties may mutually agree to.

…

5. Employment Assurance

The CPR/Progress Agreement will not alter the fact that CPR employees represented by CAW, whether those currently at Weston or who may be staffed into Weston in the future, will remain employees of CPR, members of the CPR CAW bargaining unit, and governed at all times by the collective agreement between CPR and the CAW.

7. Progress Work

CPR employees will not acquire any rights (within the meaning of Rule 53) to 3^rd party work or any other new work brought in by Progress.

Nothing arising from the CPR/Progress Agreement will alter the terms of Rule 53 nor diminish or increase the right or a obligation of either party specifically except as agreed to between CPR and CAW.

Rule 53, referred to in item 7 above, prohibits contracting out, but with a number of specified exceptions.

The 2007 platers’ agreement, which refers to a number of attached appendices, contains the following relevant provisions:

· As per the attached letter of understanding, the Platers are not considered a trade and will not be expected to go for additional training or be enrolled in an apprenticeship. All current and future training will be done in house (Appendix (I))

· The Platers will move into the other Progress Collective Agreement as a separate classification of employee and will be governed by such and receive the same benefit package as the other Progress-CAW employees, including Pension.

…

· As per the attached letter of understanding: the plating patent will be protected and will remain exclusively in the control of Progress Rail. Nothing in the collective agreement limits Progress control of the plating process or use (Appendix (II)).

…

· As per the attached letter of understanding: if the commercial contract with CPR dissolves for any reason, the Platers will be removed from the C.A. and placed under a new Platers collective agreement, unless mutually agreed otherwise (Appendix III)).

· A letter of understanding that if the current Platers are temporarily laid off, they will be permitted to hold other positions within the collective agreement if vacancies exist and they are qualified (or can be with short familiarization). Platers’ seniority in this regard will be applied as outlined in Appendix IV of this Letter of Understanding.

· The letter shall include a provision which requires Progress to offer work opportunities under the Progress CAW collective agreement to any Platers who have been permanently laid off prior to hiring off the Street (Appendix IV).

Also relevant is Appendix 45 to the collective agreement, the Skills Trades Modernization Agreement, which dates from 1996 and which sets out lines of demarcation among the trades. It begins with the following words:

LINES OF DEMARCATION

In what follows, all types of work as set out shall be performed exclusively by employees in the respective trade.

Appendix 45 then sets out details of work for numerous trades. The portion related to the machinist trade reads as follows:

6. MACHINIST

Programs, sets up and operates different major types of machine shop equipment including lathes, planners, milling, turning and boring machines. Lays out own work, responsible for performing all machine operations necessary to complete assigned job, in the production of parts, fitting of parts, tools and components wherein they must operate mills, lathes, drill presses and shapers. Selects tools, speeds and feeds. Works from drawings, engineering orders, sketches or verbal instructions. Uses a wide variety of precision measuring instruments. Such as scales, micrometer, verniers, gauges, squares, indicators, etc. Plans work for the best sequence of operations. May operate any standard machine tool within their capabilities, including grinders. Uses shop mathematics. Works to blueprints, schematic drawings, Machinist’s handbook and other like information. Knowledge of machine shop practice, feeds, tooling, working qualities of metals required. Adapts to new methods, processes, material and equipment.

Some general provisions in Appendix 45 are also relevant:

TRADES MODERNIZATION EXPLANATORY LETTER

The following points mutually address various questions which arose in the course of

finalizing the Trades Modernization negotiations.

…

B. Other Bargaining Units and Contracting-Out

Nothing in this agreement is intended to either expand or diminish the scope of work of

this bargaining unit in relation to other bargaining units, non-bargaining units or outside

contractors.

Likewise, it is not intended that, through implementation of this agreement, shopcraft

Journeymen/journeywomen should lose the skills required for any of the work presently and normally performed by them. Should this happen in respect of any such work in the future, the parties would ensure that necessary measures are taken to provide the required skills through upgrading, rather than citing the lack of such skills as justification to remove the work from the bargaining unit.

…

D. Seniority

1. No employee currently in service shall lose their employment, seniority rights, rate of pay, future increases, benefits, nor be disqualified from any position as a result of the implementation of the Modernization process.

…

4. In workplaces where the trades of Machinist, Pipefitter, Sheet Metal Worker and/or Industrial Mechanic/Millwright presently exist, they shall perform their work as outlined in Appendix 45. Where these trades have been diminished to the extent that employees have nowhere on the Basic Seniority Territory to displace they shall be allowed to displace into one of the other designated trades in accordance with Appendix 45 and the natural flow chart defined therein. This would apply, equally, for Diesel Mechanics and Industrial Mechanic/Millwrights on those respective territories.

The union’s argument is as follows: Appendix 42 guarantees that CAW work will stay CAW work, and that the scope of that work will not be altered or diminished. Appendix 45 makes clear that machinists have exclusive rights to perform such tasks as operating the machine shop equipment such as the lathes that are used in qualifying axles. The platers’ agreement makes it clear that platers are not tradespeople and have access to other work opportunities only if permanently laid off and prior to Progress hiring external candidates. Otherwise, they are restricted to the plating process, which involves electroplating axles with CAE Vanguard’s process but not cutting and qualifying axles, which is work of the machinist trade.

The union submitted in evidence Progress’s Axle Plating Training Program, which it says clearly does not involve any tasks recognized as machinists’ work. Axle qualifying, on the other hand, involves use of a lathe to prepare the axle for electroplating by the platers. This, the union says, is the kind of work done by machinists at Weston long before Progress was on the scene.

The company agrees that the platers are not tradespeople, and that fact, it says, excludes them from Appendix 45. Since Appendix 45 is intended to establish lines of demarcation among trades and since platers are not a trade, there is no basis for describing possible overlapping work with machinists.

While the company acknowledges that axle qualification requires use of a lathe, it says this work does not belong exclusively to machinists, because of Appendix 46. Appendix 46, dated in January, 2008, was a clarification of the CP-Progress proportion rules referred to above and contained in Appendix 42. Appendix 46 includes the following relevant language:

During the 2007/2008 round of negotiations the union raised the issue of the "proportion" of CPR work versus Progress work in Appendix 42.

To clarify the issue it was agreed that at the beginning of each year the "proportion" issue will be reviewed based on a Revenue Methodology basis for work performed by Progress for CP and third parties.

This is not intended to limit the Union’s right to dispute work which it considers to be work presently and normally performed by CPR employees.

Work on the following assets is viewed as "CP" work to be performed by CAW represented employees:

1. CP owned and/or marked cars and government hopper (CP) cars

2. CP locomotives that are CP marked that are assigned to Canada

3. CP Component work

Work on the following assets is NOT viewed as CAW work. They are considered to be viewed as third party work (Progress work):

1. Foreign, SOO and D&H cars

2. CP locomotives that are US assigned

3. All third party work

Other work will be reviewed, in good faith, on an item by item basis by the Company, Progress and the Vice-President of the Union.

The Company, Progress and the Vice-President of Union, will meet by February 28th of each year to review the "proportion" calculation.

…

The proportion calculation will be determined by reviewing each major work area to determine the overall proportion of CP work. Currently the major work areas are: Metal Fabrication, Track, Wheel, Axle and Bearing. The following charts represents how the proportion of Progress Rail revenue for CP work in each work area is used to calculate the target CP employees vs. Progress Employees:

[There follows a chart that lists the Axle work area as producing 0% CP revenue and 100% Non-CP revenue]

The company further points out that Appendix 42 defines “Progress work” as including new work brought in by Progress – which the company says would include the qualifying of axles before plating, a task that was performed by the platers before the axle shop moved to Weston. The full relevant passage from Appendix 42 reads as follows:

2. Staffing at Weston

The basic principle is that the number of CPR employees versus Progress employees will be determined based on the proportion of Canadian Pacific Railway work and Progress work where Progress work is defined as new work brought in by Progress, either from Progress or third Parties, which could include work done by Progress for CPR where such work is not work presently and normally done by CAW members.

The company also says the axle shop is divided into a machining area and a plating area. The plating area, it says, includes two lathes that have been there since the axle shop was relocated to Weston in 2000, and that the platers have used them since then. There was no axle shop at Weston before Progress took over, and only one lathe in the wheel shop, the company says. The company also points out that the plating training program document submitted by the union does mention machining the axle.

The company acknowledges that axle qualification includes many tasks that would come under the definition of machinist work as set out in Appendix 45, and that axles were being machined at Weston before Progress arrived. It also agrees that machinists are able to do most of the work involved in preparing the axles for plating under the process brought in from CAE Vanguard, but says the platers are able to do all the work, including the actual plating. It says machinists can identify axles for possible plating, but these must be sent to the platers for final decision. The company also acknowledged that a mid-2010 change in CPR’s ordering reduced the demand for plated axles at Weston, but increased the demand for qualified second-hand axles that were not plated. The company said the platers continued qualifying axles as they had in the past, and expects plating will increase again in the future.

The company further argues that the longstanding practice of platers performing this work at Weston without any dispute sets up an estoppel against the union claiming that the work must now be done by machinists. The company disputes the union’s contention that the axle qualification work was assigned to the platers only in the fall of 2010, saying platers have performed the work since the axle shop moved into Weston in 2000. The company has submitted numerous Axle Process Control Chart forms from most years since 2000 which check off various stages in the process and which the company says were filled out by platers (although the documents on their face do not indicate what classification did the work or filled out the form.)

The company says that throughout this long practice, the union has represented – through its silence – that it has no issue with the qualifying work being assigned to the platers. The union knew or ought to have known that the work was done by platers, since the practice was easily observable and in no way hidden. The union had a duty to raise the issue if it thought the work should not be done by the platers, for the following reasons, the company says: a change in the work assignments could create a change in staffing, if the work of qualifying axles is considered CPR work; at the very least, the matter should have been raised when the parties clarified Appendix 42 by negotiating Appendix 46 in 2007-08; and the company lost an opportunity to suggest different or special work rules on this issue, which the CAW has recognized (in Appendix 42, section 3 (a), set out above) may be required at Weston. Reliance on the union’s silence has been detrimental to the company, it says, in that it lost the opportunity to have qualifying axles considered as Progress work, and thus to affect proportional staffing.

In response to the estoppel argument, the union argues that there has been no more than an occasional practice of the platers performing work which belongs to machinists. Even though the practice may be longstanding, that is not determinative of the issue, the union says. The axle lathes have been consistently staffed by machinists. The occasions where platers have performed axle qualifications, the union says, typically had arisen when axle machines staffed by machinists were already working at full utilization.

With respect to the Process Control Chart sheets, the union says these confirm only that the platers were checking for damage but do not indicate that they did machinist work.

Decision

The issue in this grievance is not whether the disputed work is Progress work or CPR work. The issue is whether the work in dispute can be performed by platers or whether it must be performed by machinists. The platers are CAW members. The machinists are CAW members. It matters not for the purposes of this grievance whether the work is Progress work or CPR work, since either way it will be done by CAW members and either way there may still be a dispute over whether it must be performed by machinists. For this reason, my view is that Appendix 46 and the portions of Appendix 42 that deal with proportions of Progress versus CPR employees at Weston are not directly relevant to deciding this grievance. As an aside, I would say it is clear that the axle shop work is Progress work as defined in Appendix 42 of the collective agreement, dated March 29, 2000, in that it is new work brought into Weston by Progress after that date. Thus it is not surprising that the table in Appendix 46, referred to above, uses a figure of 100% non-CPR revenue for the axle area in its calculation of the CPR versus Progress employee proportions.

I would add also that the company is relying on a statement in Appendix 46 that seems on its face to contradict reality at Weston and also to be at odds with the rest of the collective agreement. That Appendix, which clarifies how the proportion of CPR work versus Progress work is to be calculated for the purposes of staffing, says, “Work on the following assets is NOT viewed as CAW work. They are considered to be viewed as third party work (Progress work)” [note: emphasis in original]. This statement is confusing to the extent that it suggests that Progress work is not CAW work. In fact, as is made clear by the rest of the collective agreement (including Appendix 42 and the platers’ settlement agreement), all the shopcraft work at Weston, whether performed by Progress employees or by CPR employees, is performed by members of the CAW. In light of this fact and in the context of the rest of Appendix 46, the statement should be read as simply listing work that is not considered CPR work but rather is Progress work. In any event, as stated above, my view is that provisions related to the proportion of CPR versus Progress work are not directly relevant to this grievance.

In my view, the key provision in the collective agreement governing this dispute is at the start of Appendix 45, which states that “all types of work as set out shall be performed exclusively by the employees in the respective trade.” What follows those words is a detailed description of the work of various trades, including machinist (set out in full above). There appears to be no dispute that the work of qualifying axles is captured in the description of machinist work in Appendix 45. I am left with the conclusion that the work is to be performed “exclusively” by machinists. This view is confirmed by the case of Re Canadian Pacific Railway Company and CAW (SHP-438), [1997] C.L.A.D. No. 479 (Burkett) , where the arbitrator commented that, pursuant to Appendix 45, “the work described in the trade definition is exclusively that of the trade.”

The company has argued that because the platers are not a trade, they are not covered by Appendix 45, and that this Appendix is designed only to delineate work among the various trades. I agree that the platers are not covered by Appendix 45; however, this does not mean that the company can assign them any work it wishes. In fact, by setting out work that is “exclusively” that of machinists, Appendix 45 of the collective agreement bars assignment of this work to any employee – whether a tradesperson or not – who is not a machinist.

The fact that platers performed the work of qualifying axles before they moved to the Weston Shops after Progress bought CAE Vanguard is also of no significance for the current dispute. Once the platers moved to Weston, they became subject to the agreements made between the CAW and Progress and CPR, which say that certain work exclusively belongs to machinists.

From the company’s own submissions, it appears that there was a change in 2010 when the demand for plated axles suddenly fell. This presumably meant less work for the platers. Yet there is no indication that any platers were laid off. Given those facts, it is not difficult to infer that the platers began performing more of the work of qualifying axles than they had before, leading to the grievance being filed in late 2010.

The company argues that the union is estopped from pursuing this matter because of the extensive practice of platers performing this work that was acquiesced to by the union. The evidence regarding the extent of the practice is inconclusive. However, I do not find it necessary to delve any more deeply into that aspect of the alleged estoppel since I find that in any event the elements of estoppel have not made out here. In particular, I find no detrimental reliance on the part of the company, even assuming a longstanding and extensive practice known by the union. The company argues that staffing might have been affected had the union raised the issue earlier. I disagree; as noted above, the axle shop work, whether done by machinists or platers, is work brought to Weston by Progress and therefore is “Progress work” under the collective agreement, and classified as such for the purposes of computing the proportion of Progress versus CPR employees at Weston. Appendix 46 confirms this, and raising the dispute earlier would have had no effect on this fact. The company also raises the provision in Appendix 42 for “different or special work rules” at Weston. If in fact, as the company states, the platers have been performing machinist work regularly for 11 years, there was no loss in not requesting a special work rule – the company, in effect, had one and it is still open to the parties to discuss a special work rule outside the scope of bargaining, as per Appendix 42. In this situation, the company cannot be said to have relied on the union’s acquiescence to its detriment. I therefore find that this is not a situation to which the doctrine of estoppel applies.

For the reasons above, the grievance is upheld to the extent that platers are performing work that belongs exclusively to machinists, namely those tasks listed in Section 6 of Appendix 45. The company is ordered to cease assigning work that comes under Section 6 of Appendix 45 (machinist work) to employees who are not machinists. With respect to any other remedy, I remit the matter back to the parties, and I will remain seized in the event of any dispute as to remedy or regarding implementation.

______________________

Lorne Slotnick, Arbitrator

November 28, 2011