CANADIAN RAILWAY OFFICE OF ARBITRATION

& DISPUTE RESOLUTION

SUPPLEMENTARY AWARD TO

CASE NO. 3464

Heard in Montreal, Wednesday, 14 December 2005

Concerning

CANADIAN NATIONAL RAILWAY COMPANY

and

UNITED TRANSPORTATION UNION

DISPUTE:

The Company's failure to implement the Arbitrator's decision in CROA 3464.

UNION’S STATEMENT OF ISSUE:

The Union's grievance with respect to the advertisement and awarding of early

retirement credits pursuant to Addendum 31 of Agreement 4.3 was allowed in the arbitrator's

decision in CROA case no. 3464.

In spite of the Union's success at arbitration, the Company has failed to provide the

information required to determine which credits are still available for surpluses at terminals

across Canada. As well, the Company still refuses to recognize genuine surpluses that exist at

terminals across the Western Lines, per the criteria for "genuine surpluses" provided by the

arbitrator in his decision.

It is the Union's position that the Company's ongoing refusal to award retirement credits

to terminals with genuine surpluses violates the collective agreement, and breaches the

arbitrator's orders in CROA case no. 3464.

FOR THE UNION:

(SGD.) R. A. HACKL

FOR: GENERAL CHAIRPERSON

There appeared on behalf of the Company:

K. Morris – Manager, Labour Relations, Edmonton

B. Laidlaw – Manager, Labour Relations, Winnipeg

R. B. Smith – Assistant Superintendent, Transportation, Winnipeg

SUPPLEMENTARY 3464

- 2 -

And on behalf of the Union:

M. Church – Counsel, Toronto

B. Boechler – General Chairperson, Edmonton

R. Hackl – Vice-General Chairperson, Edmonton

J. W. Armstrong – Vice-President, Edmonton

R. Armstrong – Local Chairperson, Rainy River

SUPPLEMENTARY AWARD OF THE ARBITRATOR

The parties have been unable to agree on the implementation of the remedy flowing

from the award herein dated January 17, 2005. Specifically, they are disagreed as to what

constitutes a surplus for the purposes of the Company's obligation to bulletin enhanced

retirement credits at a given terminal. Having heard the submissions of the parties, the Arbitrator

provides the following clarification.

The Arbitrator cannot sustain the interpretation put forward by the Company to the effect

that there is no surplus at a given terminal if it can force the employees in question to protect

work elsewhere on the seniority district. For reasons which they best appreciate, the parties

determined that the existence of a surplus and the granting of early retirement credits was to be

done on a terminal by terminal basis. It is that understanding which, I am satisfied, governs the

determination of whether there is a surplus for the purposes of Addendum No. 31 of the

collective agreement. I accept the submission of the Union that if a condition of surplus at a

given terminal is the objective factor which, for example, allows the Company to compel

employees to protect work at other terminals on the seniority district, it is that same

determination of a surplus condition which also triggers the obligation to bulletin such early

retirement opportunities as may still remain at that terminal under the original terms of the

conductor only agreement. In the Arbitrator's view that flows from the language of Addendum

No. 31, and in particular is reflected in the language of paragraph (4) which mandates that early

SUPPLEMENTARY 3464

- 3 -

retirement opportunities are to be made available "… on a terminal by terminal basis" at each

change of card.

However, different considerations apply with respect to two alternative scenarios argued

by the Union to be evidence of a surplus. Its counsel submits that where employees voluntarily

bid to a shortage at another terminal, as happened in relation to positions in Sioux Lookout

successfully bid by two employees from Rainy River/Fort Frances, the conclusion must be that

there was a surplus of employees at Rainy River/Fort Frances, since the ability to bid out is

conditioned on not creating a shortage at the home terminal. Secondly, the Union argues that

the shifting of work on an extended run subdivision by the application of the Whiteman formula,

whereby employees from one terminal do a percentage of work otherwise belonging to another

terminal, is likewise evidence of a manpower surplus.

The Arbitrator cannot agree that either of the above situations constitutes, of itself,

conclusive proof of a surplus at the given terminal. The allocation and distribution of work is a

complex matter, particularly in the working of a multi-location continuous operation such as a

railway. Subject to any contrary provision of a collective agreement, its is the right of the

employer to determine how many employees will be utilized to perform work at a given location.

The fact, for example, that the Company might feel it necessary to fill a vacancy at one terminal

by bid from employees at another terminal does not of itself confirm a surplus of employees at

the second terminal. The employer may have the latitude to re-organize the work to be done in

such a way as to cover off the situation at the terminal from which an employee bids away.

Similarly, the assignment of employees at one terminal to cover the work which normally

belongs to the employees at another, through the Whiteman formula, does not of itself prove the

existence of a surplus at the first home terminal. Again, it may reflect a deployment of forces

best suited to achieve the Company's immediate needs, without constituting a surplus.

SUPPLEMENTARY 3464

- 4 -

The concept of a surplus, like a vacancy, is one of precise meaning and significant

importance under a collective agreement, and indeed under the terms of Addendum No. 31,

prompted by the introduction of conductor only operations. There can be little doubt, for

example, that an employee who is on a furlough board is surplus, as there is no regular

assignment to which he or she can be deployed. The fact that an employee on a furlough board

can be forced to protect service elsewhere on the seniority territory, under the terms of article

148.11, does not change the fact that the employee in question is surplus to his home terminal,

even if he or she is forced to protect work elsewhere. Additionally, a surplus situation must be

found to exist where non-protected employees are laid off or forced elsewhere, or when

spareboards are artificially inflated beyond the level appropriate to the available work.

The Arbitrator does not, however, agree that the redeployment of the workforce, often on

a temporary basis, to deal with a shortage at another terminal by voluntary bid, or the workings

of the Whiteman formula, are conclusive of a surplus. As noted above, the fact that operations

continue to be adequately serviced by a complement reduced by one or two employees may

similarly reflect a more efficient reorganization or redistribution of work at the location in

question. I am satisfied that the concept of a surplus as it is understood under addendum 31

must be taken to mean that situation where an employee is on a furlough board, if protected, or

laid off, if unprotected, regardless of whether either can be forced to protect work at another

location. Other circumstances, such as shortage bids, temporary promotions to management

without replacement or Whiteman adjustments, do not constitute proof of a surplus for the

purposes of Addendum 31.

The Union's position is therefore sustained, in part. Its submissions with respect to the

operation of article 148.11 of the collective agreement are correct, and in that regard the

SUPPLEMENTARY 3464

- 5 -

Company's position fails to recognize the existence of surplus employees contrary to the

intention of Addendum 31. The Arbitrator cannot, however, sustain the Union's position with

respect to voluntary bids to shortage terminals under articles 40 and 89. Nor can I sustain the

Union's view of surplus situations evidenced through the normal operation of the Whiteman

scenario under article 44 of the collective agreement. Finally, upon a close examination of the

evidence, I am not satisfied that the Union has demonstrated any artificial inflation of the

spareboard at Rainy River/Fort Frances. Consequently, I do not deem it appropriate to direct the

bulletining of any early retirement opportunities at that location.

The matter is remitted to the parties to further implement the remedial aspects of this

award in light of the foregoing. I continue to retain jurisdiction.

December 20, 2005 ___________________________________

MICHEL G. PICHER

ARBITRATOR