Canadian National Railway well within rights to contract out employees

No qualified workers around to do the job, employer says

THE UNITED STEELWORKERS union accused the Canadian National Railway Company of violating the rules in the collective agreement on contracting out. The union sought $2,000 in damages. In the summer of 2011, the company dispatched a "tie gang" to perform repairs on a section of track near Lillooet, B.C. While the gang included a machine operator tasked to work the tie crane, the group did not include anyone who was qualified to operate excavating equipment.

However, the need for a qualified excavator operator soon became apparent in light of the degraded state of the track ballast (the gravel rail bed under the railway ties).

The company engaged a contractor to operate an excavator to shore up the ballast.

The United Steelworkers filed a grievance, arguing the railway was in violation of articles 33, 34 and 38 of the collective agreement. Those outlined the rules and limitations on contracting out.

But arbitrator Michel Picher specifically rejected the union’s argument that the company was in violation of article 33.1, which set out the fundamental limitations on the company’s right to contract out.

No qualified employees

There was an exception to article 33.1, Picher said, to be made in cases where there were no qualified employees — either active or laid-off — available to perform the work.

The arbitrator was satisfied that the employer was unable to find any available and qualified employees to do the required work. The steelworkers union went on to argue that the railway had violated the contract, especially in terms of how much notice the employer was required to provide regarding its intent to contract out work.

As part of the collective agreement, the employer was required to submit to the union its plans for any work that was to be contracted out at the beginning of every year and by no later than Jan. 31.

Except in cases of emergency, the national railway was required to provide at least 30 days’ notice of its intention to contract out work, according to the union. That did not happen here, the Steelworkers said. Therefore, the union was well within its bounds to seek the damages.

The arbitrator affirmed the union’s right to proper notice concerning the company’s intent to contract out work. The arbitrator also agreed that it was appropriate for the union to seek a remedy in the form of monetary damages in cases where the company violated those notice requirements.

However, a determination on an employer’s obligations would necessarily depend on the terms of the collective agreement and the facts of each case, according to the arbitrator’s ruling.

In this case, it was clear the employer had no pre-existing plans to undertake ballast repairs when it set out on its plan to address concerns about the railway ties on that section of track. Clearly, the arbitrator said, in the circumstances, the employer was not in a position to provide notice at the beginning of the year as required by the contract.

No adverse effect

The union was also unable to make its case for advance notice based on the contract requirement that the union could show that the contracting out "would have a material and adverse effect on employees."

"On what basis can it be said that in the instant case that the contracting out of the operation of the excavator can be said to have had a material and adverse effect on employees? I can see none," Picher said. "This is not a circumstance where the union can demonstrate that employees were laid off or otherwise lost work opportunities by reason of the contracting out engaged in by the company."

The arbitrator accepted the union’s concerns and observed that the work in question was work normally performed by members of the bargaining unit.

"However, the arbitrator is bound to apply the collective agreement as it is. I am compelled to find that there were not sufficient employees qualified to perform the work in question, which then gave the company the right to engage in contracting out as it did," he concluded.

The grievance was dismissed.

Reference: CROA# 4154. Canadian National Railway Company and United Steelworkers, Local 2004. Michel G. Picher — Sole Arbitrator. P. Jacques for the Union. B. Laidlaw for the Employer. November 19, 2012. 5pp.

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