Reasons for decision
George Cairns et al.,
complainants,
and
International Brotherhood of Locomotive Engineers,
respondent,
and
VIA Rail Canada Inc.,
employer,
and
United Transportation Union,
interested party.
CITED AS: George Cairns et al.
Board File: 18938
Decision no. 35
October 22, 1999
Complaint alleging violation of section 37 of Canada Labour Code, Part I.
Unfair labour practice - Duty of fair representation - Negotiation of agreement - Section 37 - Remedies - The complaint arose following VIA's decision to create a new classification of engineers, which merged the duties of locomotive engineers, as represented by BLE, and conductors, as represented by UTU - A Board order subsequently merged the two bargaining units into one unit for which the BLE became the new bargaining agent following a representation vote - VIA and BLE then negotiated a Crew Consist Adjustment Agreement which governed the seniority, selection and training opportunities of the combined group for the new positions which was ratified by a close majority - The complainants, conductors and assistant conductors, and former UTU members, allege that the provisions of the Agreement were negotiated to their detriment in favour of the locomotive engineers - The BLE thereby breached section 37 - Complaint allowed - Following the Board's decision to merge the two bargaining units, the BLE continued to maintain the distinction between the two groups of employees and thus did not fulfil its institutional role of bargaining agent for all of its members - It made promises respecting transfer rights back to CN, without confirmation and thus failed to uphold a reasonable standard of competence in representing its members - Its failure to balance adequately and fairly the interests of all of its members constituted a failure to represent the membership's legitimate interests, which amounted to bad faith under the Code - There was an indication of an improper collaboration between VIA and BLE to achieve a desired outcome at the expense of the conductors' rights, contrary to section 94(1) - As both the BLE and VIA were equal players with regard to the Crew Consist Agreements and its effects on the complainants, the Board ordered that the Agreement be reopened on the issues of the selection process, the seniority provisions and the application of the Special Agreement between UTU, VIA and CN - The BLE was ordered to hold a consultative process to determine the interests and needs of the conductors and to hire a professional to assist them in the process - The BLE was to bear the costs of these services and to pay the conductors' legal fees on a solicitor-client basis.
The Board was composed of Ms. Michele A. Pineau, Vice-Chairperson, sitting alone pursuant to section 14(3)(c) of the Canada Labour Code (Part I - Industrial Relations), R.C.S., 1985, c. L-2, as am. 1998, c. 26. A hearing was held in Toronto on March 1, 2, 3 and May 3, 4, 5 and 6, 1999.
Appearances
Mr. Cyril J. Abbass, counsel, for Messrs. George Cairns, Ken Chorney et al.;
Mr. James L. Shields, counsel, assisted by Mr. Gilles Hallé, for the International Brotherhood of Locomotive Engineers (BLE);
Mr. Michael Church, counsel, for the United Transportation Union (UTU); and
Mr. Jean Lafleur, counsel, assisted by Mr. Bannon E. Woods, for VIA Rail Canada Inc. (VIA).
These are complaints of unfair labour practice filed pursuant to section 97(1) of the Canada Labour Code, alleging that the BLE acted in a manner that was arbitrary, discriminatory and in bad faith in its representation of employees as a result of the merger of two bargaining units, in violation of section 37 of the Code.
GENERAL BACKGROUND
[1] The background to this complaint is particular to the railroad industry, as it relates to running trade employees. Railroad employees have been organized for almost 100 years along two craft lines: the locomotive engineers represented by the BLE and the trainmen (conductors, assistant conductors, yardmen and switchmen) represented by the United Transportation Union (UTU). Until the 1970s, passenger and freight services were provided by CN and CP until passenger services were transferred to VIA as a result of the enactment of federal legislation. These services were staffed through a series of agreements with CN and CP as well as the UTU and the BLE.
[2] As well, efficiencies brought about during the 1960s and 1970s led to a restructuring, and downsizing of the rail industry gave rise to special agreements in or about 1977 to deal with these changes, which had the effect of superseding material change provisions in existing collective agreements. These special agreements were essentially the predecessors of the technological change provisions that became part of the Code and that are designed to reduce the adverse effect of these changes through a negotiated settlement. In 1987, the material change provisions in the railway industry were renamed "Article J" and were reaffirmed in a Special Agreement. Accordingly from 1987 to 1991, Article J notices were used to enact material changes, including changes at VIA. However, in late 1991, the Special Agreement lapsed with respect to crew reduction notices, and parties to collective agreements reverted back to the material change provisions of their respective agreements whenever crew reductions were contemplated. This lapse had the effect of requiring any notice of any material change to be served individually on each union affected by the material change.
[3] Meanwhile, during the 1980s and as a result of section 18 applications under the Code, CN and CP saw their bargaining units for running trades employees consolidated, and the Canadian Council of Railway Operating Unions (the CCROU) was created to bargain national issues. The CCROU is comprised of both the BLE and UTU. In 1986, VIA decided to employ its own running trade employees and negotiated transfer agreements with the UTU, the BLE and CN (excluding CP).
[4] Contrary to CN and CP, however, the running trades at VIA remained in separate bargaining units until VIA decided in March 1997 to serve both the BLE and the UTU with material change notices. Simultaneously with these notices, VIA filed an application with the Board for a review of the bargaining units pursuant to section 18 of the Code. Before the Board, VIA submitted that it intended to abolish the two current classifications of locomotive engineer and conductor and to create a new classification of "operating engineer," whose duties were to include the present duties of locomotive engineers and the greater part of the conductor's duties, inasmuch as they relate to railway rules and regulations. The remaining conductor's duties, which represented approximately 20% of the job description and related to in-train duties, were to be transferred to members of another bargaining unit represented by the National Automobile, Aerospace, Transportation and General Workers Union of Canada (CAW-Canada), known as "on-board services" employees. Also before the Board was the fact that this "crewing initiative," as it came to be called, would result in the loss of some 250 running trades positions and the creation of 70 other positions in the CAW bargaining unit.
[5] In September 1997, the Board ordered the merger of the two units and ordered a representation vote (VIA Rail Canada Inc. (1997), 104 di 67; and 38 CLRBR (2d) 124 (CLRB no. 1206)); the BLE emerged as the successful union to represent the new bargaining unit, including all former UTU members.
[6] Prior to the Board ordered vote, and as part of the procedure under the material change notice provided in the collective agreements, the eastern and western divisions (but not the central division) of the BLE negotiated with VIA a joint Memorandum of Agreement dated May 12, 1997, which was designed to minimize the impact of these changes on affected employees in the bargaining unit. The agreement was to be implemented on January 1, 1998, but was conditional on a similar agreement with the UTU. As will be seen later in these reasons, a series of events took place, which resulted in this agreement never coming to pass. Its impact, however, is that it was used by the BLE as a basis for its campaign in the Board ordered representation vote and eventually as the construct for the Crew Consist Adjustment Agreement, which is the focus of these complaints.
[7] It is also significant that when the material change notice was served upon the unions in March 1997, a collective agreement was still in force between the unions and VIA. (The expiry date of the UTU and BLE contracts was December 31, 1998.) Thus, the significance of the employer's timing was that in the event the parties could not negotiate an agreement on the material changes, the matter had to be referred to compulsory arbitration in keeping with the provisions of the collective agreements. However, the employer could not foresee that the period of time that would elapse between serving the notice, the Board hearings, the representation vote and the certification by the Board would bring the parties into the notice period for collective bargaining. Therefore, in the event that the parties were unable to come to an agreement over the material change notice, the matter could now be the subject of a strike vote as part of the collective bargaining process rather than an arbitration hearing. This change of timing also played on the balance of power between the parties by placing the employer in such a position that it could no longer force an implementation date for the crewing initiative.
[8] It is in this context that on April 8, 1998, when negotiations came to a standstill, VIA decided that the collective agreements had lapsed and not only could it implement the crewing initiative but it could unilaterally impose the terms and conditions as it saw fit. Not unexpectedly, the BLE filed a complaint before this Board, alleging that the employer's decision to apply the crewing initiative job assignment procedures to the conductors and assistant conductors during the freeze period amounted to a lockout contrary to section 92 of the Code. The Board found that the requirements of section 89(1) had not been met and that VIA violated the freeze provisions of section 50(b) (VIA Rail Canada Inc. (1998), 107 di 92; 45 CLRBR (2d) 150; and 99 CLLC 220-010 (CLRB no. 1233)). The Board ordered the parties back to the bargaining table to conclude negotiations or until the right to strike was acquired under the provisions of section 89 of the Code.
[9] After the Board's order, negotiations continued and a tentative agreement, including a Crew Consist Adjustment Agreement, was agreed to by the three regional general chairmen of the BLE. The agreement was put to the membership and ratified by a close majority carried by the locomotive engineers. This complaint arises out of the consequences of the Crew Consist Adjustment Agreement, which is "Appendix A" to the collective agreement.
[10] The complainants are conductors and assistant conductors, all former UTU members, who allege that the provisions of the Crew Consist Adjustment Agreement were negotiated to their detriment in favour of the locomotive engineers.
[11] Their many complaints are captured in the following summary.
[12] The BLE acted in an arbitrary, discriminatory and in bad faith with regard to conductors and assistant conductors in the bargaining unit when:
- it agreed to a selection process for training conductors and assistant conductors to become locomotive engineers;
- it negotiated "bottom down" seniority provisions for conductors and assistant conductors;
- it informed conductors and assistant conductors that they could flow back to positions within CN;
- it made so-called "campaign promises" to the conductors and assistant conductors that it would negotiate an "enhanced standard of living" and "would respond to the collective wishes of the VIA Rail employees";
- it negotiated a $120 premium per pay period to be paid to locomotive engineers for additional duties;
- it accepted a $37,000 sum for the betterment of labour relations as a result of signing the collective agreement, including the Crew Consist Adjustment Agreement;
- it left the decision on the crewing agreement in the hands of the employees.
THE EVIDENCE BEFORE THE BOARD
[13] Mr. Doug Dillon and Mr. Michael Galvin, conductors with 34 years of experience with CN and VIA, testified on behalf of all the complainants. As a result of the signing of the crew consist agreement, Mr. Dillon became unemployed and Mr. Galvin is presently awaiting a transfer back to CN. Their common understanding of the initiative was that the newly created position of "operating engineer" would be a merged position, which provided equality between the bargaining units and dovetailing of the seniority lists. This included equal access to training, severance, transfers and early retirement provisions, and a number of other benefits. In their view, the Crew Consist Adjustment Agreement favoured the locomotive engineers and failed to provide any real benefits to the conductors. For example, the conductors were required through a qualifying process for training while the locomotive engineers automatically qualified for training and, consequently, the newly merged position; locomotive engineers kept their rank on the seniority list, while the conductors were placed at the bottom of the seniority list, according to the date on which they qualified as locomotive engineers, and could no longer transfer back to CN. Both felt it was most unfair that they should have to rebuild their seniority after 34 years of employment with CN and VIA. They also testified that employees who have elected to return to CN are presently without a position and are paid to stay at home while VIA sorts out its differences with CN on this subject.
[14] By way of an example of the inadequate representation by the BLE, Mr. Dillon explained that when the conductors became BLE members on October 31, 1998, the BLE would not admit them as regular members. An appeal had to be made to the national executive for the conductors to be admitted as active members. Mr. Dillon testified as to animosity of the locomotive engineers at having conductors trained to qualify as locomotive engineers. He explained that employees of these two crafts have always been able to flow back between the two different unions at VIA and at CN, when they could not hold a job in their craft and qualified for both crafts, as well as through the twice annual bidding process.
[15] Mr. Dillon was critical about how the May 12, 1997 agreement between the BLE and VIA was not immediately revealed to UTU members and only came to light as a result of the Board hearings in April 1998. In view of the BLE's coyness in not publicizing this agreement, it was christened by UTU members as the "secret agreement." He believes that this secret agreement was the basis for the final Crew Consist Adjustment Agreement and that the BLE knew that it would be carried by the locomotive engineer group since they had the majority in the bargaining unit. He pointed out that the material change notice should have been challenged before a third party as originally planned by the UTU rather than passively accepted by the BLE.
[16] Mr. Galvin testified that although he was selected for training on June 30, 1998, he was told the following day that he no longer qualified, which he later learned was due to three minor disciplinary infractions that took place in 1996 and were not related to his experience and competency as a conductor. The denial of training for the entire conductor group has been grieved and referred to arbitration.
[17] As one of the employees who opted to return to CN, he cannot exercise that option at this time and has seen his present and future earnings significantly reduced since he no longer receives overtime pay, which in the past represented a significant part of his salary as a conductor. He was further frustrated by the limited severance options given to the conductors and the pressure exerted by VIA to make a hasty decision on those options without the benefit of appropriate time to evaluate the consequences of their choices.
[18] He criticized the $200 special assessment levied by the BLE to fund the challenge to the material change notice, which was in fact never initiated since the crew consist agreement was finalized without the necessity of legal action. He asserted that he was unaware that the special assessment had paid for the expenses of Mr. Les Lisle and Mr. Bernard Leclair who were representatives on the negotiating team.
[19] Mr. William Scarrow, national vice-president of the UTU and a seasoned negotiator, testified that in his initial discussions with VIA, he understood that the intent of the crew consist reduction was to create a new position of operating engineer with an expanded on-board services position. The majority of the conductor's duties were to be combined with those of the locomotive engineer, which included that portion of the work that could be done from the engine.
[20] In the fall of 1997, while awaiting the outcome of the representation vote, the UTU drafted contracted proposals on behalf of the conductors, which were passed on to key people in the BLE, including all BLE chairmen. These proposals included a demand that the 70 on-board services positions created as a result of the merging of the positions of locomotive engineer and conductors be awarded on a priority basis to former conductors.
[21] Mr. Scarrow criticized VIA's practices by describing the better conditions at CN whereby conductor positions were enhanced by providing mandatory training to allow them to qualify as locomotive engineers as well as to alternate with the locomotive engineer on certain runs. He also offered as an example of dovetailed seniority what occurred at Quebec North Shore and Labrador (QNS&L) railroad. He testified that through his contacts in the railway industry, he became aware that one of VIA's negotiation strategies was that in the event of an early agreement with the BLE, it would agree to a "top-bottom" seniority list; however, should they not agree, VIA would unilaterally implement a dovetailed seniority list.
[22] He recalled the events that created a lingering animosity between the BLE and UTU over the implementation of the "belt pack agreement" and the UTU's perceived success in obtaining positions at the BLE's expense. He believed that had the UTU negotiated the Crew Consist Adjustment Agreement, it never would have done so without obtaining full training rights for the conductors, flow-back rights, access to on-board services jobs and appropriate relocation payments. He commented that even if the conductors were to return to CN, their training and skills would need serious updating to meet CN present needs.
[23] Mr. Scarrow compared four previous instances of lump-sum payments made by CN that had been used to benefit employees affected by crew reductions and not general union administration.
[24] Finally, he criticized the BLE for not conducting a ratification vote of the Crew Consist Adjustment Agreement along craft lines so as to reflect the true feelings of the members. He concluded that the BLE had sided with the employer in the demise of the conductors as a running trade at VIA. Thus, it came to pass that conductors who lost their jobs or did not qualify for training did not obtain a wage increase or equivalent compensation, whereas the locomotive engineers who all qualified for the new duties through mandatory training obtained significant wage increases and protected seniority.
[25] Mr. Gilles Hallé, the Canadian Director for the BLE, explained in his testimony that in 1984, the locomotive engineers were the last group of employees to be transferred to VIA. To provide employment protection to this group, a transfer agreement including a "flow-back rights" clause was negotiated between CN, VIA and the BLE, which provided that where a locomotive engineer could not hold a position with VIA in his own classification, he could return to CN with full seniority. It is in this manner that the VIA seniority list became identical to the CN list. However, any new locomotive engineer hired directly by VIA after that date is automatically placed at the bottom of the seniority list and is not protected on transfer to CN. In the case of a vacancy at VIA, the position is advertised at both VIA and CN and the most senior locomotive engineer who bids secures that position. Consequently, if the CN employee is more senior than the VIA employee, the CN employee is entitled to the position.
[26] According to Mr. Hallé's understanding of VIA's crew consist reduction, VIA wanted to eliminate the conductor position, as well as to transfer the "rule book" part of the duties to the locomotive engineer and the remaining duties to on-board services personnel. While he was not involved in those negotiations, he understood that the May 1997 agreement was but a preliminary step, since the BLE did not represent the conductors and assistant conductors at that time, and that it was conditional on VIA concluding a similar agreement with the UTU. While the results of the vote became known by the middle of September 1997, the Board's certificate was not issued until October 31, 1997.
[27] The results of the vote notwithstanding, the BLE gave notice to VIA on October 1, 1997, on behalf of the locomotive engineers, to commence collective bargaining. Their contract demands were forwarded to VIA on October 16. At about the same time, Mr. Hallé addressed letters of concern on behalf of all running trades to the Transportation Safety Board and the Minister of Transport with respect to the reduction of work crews on the trains and its impact on railroad safety.
[28] With the presence of conductors in the bargaining unit and a copy of their demands, Mr. Hallé thought of looking for a person to help him with the conductors' collective agreement and as a result spoke to Mr. Bernard Leclair, a former general chairman for the UTU. New contract demands were added to the BLE's list as "Block Three Issues" and forwarded to VIA.
[29] Concurrently, the locomotive engineers and conductors successfully petitioned the BLE executive to appoint Mr. Les Lisle to the negotiating committee, along with the three general chairmen, and Mr. Hallé as their spokesperson. Mr. Lisle was assigned to work on various committees.
[30] During December, negotiations between the BLE and VIA soured as a result of a dispute concerning the applicability of the collective agreements and the numerous grievances previously filed by the UTU on behalf of conductors. Negotiations were suspended during January and February 1998, in part due to the now infamous ice storm and because Mr. Hallé was chairing parallel negotiations with CN on behalf of the rail traffic controllers.
[31] In January 1998, VIA summoned all locomotive engineers to attend training for the duties being added to their job description.
[32] On February 13, 1998, the BLE wrote to VIA and took the position that it considered the memorandum of May 12, 1997 to be defunct since the January 1, 1998 implementation date for the crew consist initiative had now passed, and it no longer considered itself bound by its previous agreement of May 1997. These issues were folded into national negotiations as the BLE was now in the open period of the contract.
[33] Negotiations came to a standstill in March 1998 and the BLE applied for conciliation. On March 6, 1998, a conciliator was appointed. Through the conciliator, the BLE tried to negotiate an attrition process to meet VIA's demands under the proposed crew consist agreement and to integrate newly trained locomotive engineers from the ranks of the conductors. Mr. Hallé also proposed that 15 baggage handling positions be maintained and that VIA create a spare board at all VIA terminals, which had a potential for creating 20 jobs. He also proposed that any retiring locomotive engineer be replaced by a newly trained conductor. Concurrently, Mr. Hallé negotiated a temporary agreement with BLE local chairmen at CN to suspend the advertising of VIA positions at CN pending the internal attrition process. None of these proposals were accepted by VIA.
[34] On April 3, there was no significant progress in negotiations, and on April 13, VIA issued a letter to the BLE informing them of its intent to merge the positions of locomotive engineer, conductor and assistant conductor as of April 16, 1998, with or without the BLE's agreement.
[35] As a result of this ultimatum, the BLE sent a letter to the Minister of Labour seeking consent to file a complaint with the Board pursuant to section 97(3) for an alleged failure to comply with section 50(b). On April 23, 1998, the Board upheld the BLE's complaint that the collective agreements continued to apply. VIA was unable to implement its crewing initiative.
[36] On May 20, 1998, the conciliator filed a no board report. As a result, the BLE negotiating committee discussed with Mr. Hallé the possibility of returning to the bargaining table with VIA to see if anything more could be done about an agreement on the crewing initiative. One week later, in the absence of Mr. Hallé, the negotiating committee, admitting little progress, decided to sign off the proposed agreement and, after discussion with Mr. Hallé, let the membership decide on whether to accept the agreement. The agreement was ratified by a very close vote.
[37] Throughout negotiations, no training had been undertaken with the conductors, as the BLE had been unsuccessful in convincing VIA to enter into a joint training program for them. Mr. Hallé admitted that while they favoured "unprejudiced consideration" to anyone wanting to be trained, in the end, the selection, training and final qualification process was in the hands of the employer. He confirmed that the selection process was presently the subject of a grievance that had been referred to arbitration.
[38] Mr. Hallé's explanation for not merging the seniority lists was that it was not possible to dovetail the locomotive engineer and conductor lists because this would have had the effect of moving a newly qualified conductor ahead of an already qualified locomotive engineers on the seniority list. Furthermore, this initiative would have an adverse effect on the 1,500 locomotive engineers at CN who were entitled to flow back to VIA through the bidding process. Mr. Hallé explained that the suspension of the CN transfer agreement in order to fill the VIA positions resulting from the crewing initiative was only temporary in order to allow conductors in training to qualify and replace locomotive engineers choosing to retire under the crewing initiative. It is only in this sense that the conductors have a right of preference ahead of CN locomotive engineers under the Crew Consist Adjustment Agreement.
[39] In cross-examination, Mr. Hallé admitted that 35 to 40 locomotive engineers will retire as a result of the crewing initiative, so that once these locomotive engineers have retired and been replaced internally by newly trained conductors, CN locomotive engineers would once more be able to bid on VIA jobs. According to CN general chairmen, this was a one- time waiver to allow attrition resulting from the crewing initiative. After the waiver period, 1,500 CN engineers have priority on any vacant VIA position over recently trained conductors already at VIA.
[40] As BLE spokesperson at the negotiating table in 1997-98, Mr. Hallé considered the impact of the loss of jobs and not seniority as the most important issue for conductors and assistant conductors. He took the further position that VIA could not call the merged position an "operating engineer" because all the rule books, the legislation and the certification documents referred to locomotive engineers. Thus, the title of locomotive engineer was maintained.
[41] Mr. Hallé admitted that during the campaign to represent the merged bargaining unit, no agreement was reached with CN about whether the transfer agreement would apply. He was not immediately concerned because CN had not challenged a previous so-called "Mackenzie Agreement," nor had it challenged previous crew reductions at VIA. He did not find out about CN's intentions to block the flow-back until the matter came to light during the Board's hearings in April 1998. In his opinion, the difficulty is merely a financial difference of opinion between the corporations.
[42] Mr. Hallé stated that he agrees with a selection process for conductors because, based on his experience at CN, not all can be trained as locomotive engineers. He acknowledged that he was unfamiliar with the UTU's unsuccessful arbitration challenge involving selection for training.
ARGUMENTS
Arguments on Behalf of the Complainants
[43] The complainants argued that in this case, it was well known that VIA wanted to reduce its crews. What the BLE did was to leave the decision in the hands of the employees, knowing full well that the majority of the locomotive engineers would not turn down an agreement that was so clearly in their favour. What was the incentive to strike over an agreement that provided them with job guarantees, maintenance of seniority within the bargaining unit, a substantial pay raise and a fund for their union? In proposing such a one-sided contract to the membership, the union did not fairly acknowledge and provide for the minority's competing interests of job security, seniority and other critical employment rights.
[44] The BLE allowed extraneous factors, such as the results of the belt pack agreement, to fuel the hostility of the locomotive engineers towards the conductors. By agreeing to a selection process that had such adverse effects on the conductors and assistant conductors, particularly as it implied loss of seniority, the union lacked objectivity in its dealings with the employer. Nor did the BLE keep its representation campaign promises that it would obtain for the conductors the same conditions it had obtained for the locomotive engineers in the May 12, 1997 agreement.
[45] As he was not present when any of the crucial agreements were concluded, Mr. Hallé could not address the complaint's substantive issues. The BLE was negligent in not investigating whether there was a problem with flow-back rights or whether the CN transfer could be modified until this state of affairs was revealed in April 1998. By taking a negotiating position that precluded the dovetailing of seniority lists, the BLE did not put its mind to the consequences of this position on VIA conductors and assistant conductors.
[46] The BLE led the conductors and assistant conductors into believing that they would all receive the training they needed and could legitimately expect to qualify as locomotive engineers. Furthermore, while Mr. Leclair and Mr. Lisle were present and consulted, they did not have the same standing or authority as the general chairmen. The conductors and assistant conductors deserved to be independently represented in matters of crew reductions, transfer agreements and the consequences on seniority.
[47] The complainants cited the following cases in support of their arguments: Gérard Racine et al. (1993), 92 di 118 (CLRB no. 1026); André Gagnon (1986), 63 di 194 (CLRB no. 547); and Dufferin Aggregates, [1982] OLRB Jan. Rep. 35.
Arguments on Behalf of the UTU as Intervenor
[48] The UTU's submissions addressed the narrow issue of the belt pack agreement. It made known that the positions lost by the BLE were not transferred to the UTU and that in fact the UTU lost positions. CN scaled down the yard crews because of new technology and this affected both the BLE and the UTU, as both unions lost positions. The UTU also clarified the fact that Mr. Scarrow had proposed a number of options to the BLE that could have replaced the dovetailing of seniority.
Arguments on Behalf of the BLE
[49] The BLE suggested that the Board consider the complaints in two different time frames: March 7 to October 31, 1997, and November 1, 1997 to June 12, 1998. It submitted that there is no evidence that in the first period the BLE served notice of its intention to get rid of conductors; in fact, it did not even represent them at that time. Both collective agreements had material change provisions. After the notice of material change, it became quite clear that if VIA got its way, there would no longer be a traditional conductor on a passenger train and this became a very emotional issue.
[50] The BLE emphasized that only two BLE districts signed the May 12, 1997 agreement. The central district strongly opposed the material change and proceeded on its own. UTU members mistakenly read into it that they would obtain the same benefits as the locomotive engineers, when all along it was subject to a similar agreement with the UTU. What changed the parameters was that the Board ordered a vote without hearing the merits of the application. The elimination of a bargaining unit and the division of tasks between two other bargaining units drove a wedge between two groups where there could be only one victor. Campaign literature was sent out and the vote was not only very close but divided along union lines. Mr. Hallé's campaign letter was only that, campaign material and not promises.
[51] The BLE alleged that its October 1997 contract demands are now being used to taint events subsequent to November 1, 1997. Neither the UTU nor the BLE was in a position to know which employees would be selected to fill the merged positions. Surely the Board in its decision to merge the bargaining units must have realized that there could never be 500 qualified engineers. The Board had advised the parties that collective bargaining would be difficult. This is why Mr. Hallé actively promoted at a policy level the issue of two locomotive engineers in the train cab and the elimination of conductors as a safety concern, something the UTU had been unable to raise. In addition, the BLE decided to revise its contract demands.
[52] During the period of March 7 to October 31, 1997, the UTU owed a duty of fair representation to its members as the BLE owed the same duty to its members. The BLE cannot be held accountable for what was said during a campaign and there can be no reasonable expectation on the part of UTU members that they would obtain all that had been promised. The experience of UTU members should have taught them that demands put forward at the outset of bargaining are never fully obtained. The respondent took exception to the complainants' allegations that the BLE never asked for benefits for the conductors or that what they asked was mere window-dressing in view of the fact that they intended to discriminate against the conductors.
[53] The respondent argued that the Board should not supervise negotiations, should not "sit next to the conciliator" and should not second-guess the content of the negotiation discussions between the parties.
[54] The respondent argued that the BLE did write to CN regarding the status of the flow- back provisions and received no answer until the Board hearings on April 16, 1998. The BLE faced constant threats that the employer would unilaterally implement the May 12, 1997 agreement and, when it issued the letter on April 8, 1998, the BLE was quick to dispute the matter by seeking an injunction from the Board.
[55] Throughout, the BLE's bargaining strategy was that reductions should be done through attrition and the union had set up a committee to show how attrition could be carried out. However, the Board ordered the parties back to the bargaining table to negotiate an agreement and extended the injunction for eight weeks or until the provisions of the Code could come into effect.
[56] The respondent asserted that there is no evidence before the Board of what really transpired between the Board's order of April 20, 1998 and the outcome of the negotiated crew consist agreement. The Board is in no position to decide, almost a year later, why the BLE did not go on strike but decided to put the matter to a vote. There is no evidence of bad faith, discriminatory and arbitrary decision. What occurred at that time was conditioned by the emotionality of the situation. The conductors and assistant conductors had expectations and, because those expectations were not fulfilled, concluded that the BLE had disregarded their interests with impunity. They cannot be shocked that there is a selection process and that not all conductors will be trained. There is no discrimination in this regard. If anything, this matter is best left to arbitration. Ultimately, there was no issue on which to strike since crew reductions were inevitable.
[57] While the BLE objected to the selection process proposed by the employer, the maintenance of seniority provisions as they appeared in the collective agreement with an October 31, 1997 seniority date for the newly trained locomotive engineers was not unreasonable in view of industry practice. Nor was it unreasonable that training should be based on seniority rights.
[58] The respondent argued that it was not within the Board's jurisdiction to draw any legal conclusions as to the meaning of the transfer agreement between CN, VIA and the BLE, but that the Board should take into consideration how traditional dovetailing of conductor lists would affect the remaining locomotive engineers at CN who are not parties to these proceedings. The Board should give the union a wide berth and should not second-guess decisions taken by union officials nor take a microscopic look at the union's motives even if it might not agree with them. Not only did the BLE take into consideration all the competing interests of the conductors and assistant conductors, it also factored in the complications of the situation as it then existed. The issues of training and transfer are presently the subject of grievances, and any Board decision could prejudice determinations that are yet to be made.
[59] The respondent union cited the following cases in support of its arguments: Dan Reid et al. (1992), 90 di 58 (CLRB no. 972); G. Len Larmour et al. (1980), 41 di 110; and [1980] 3 Can LRBR 407 (CLRB no. 260); Gordon Rhodes (1995), 97 di 103 (CLRB no. 1113); Richard Connolly et al. (1998), 107 di 120; and 45 CLRBR (2d) 161 (CLRB no. 1235); Gendron v. Supply and Services Union of the Public Service Alliance of Canada, Local 50057, [1990] 1 S.C.R. 1298; Valerie Hertz et al. (1990), 81 di 96; and 90 CLLC 16,055 (CLRB no. 806); Gary Robert et al. (1986), 64 di 191; 12 CLRBR (NS) 289; and 86 CLLC 16,030 (CLRB no. 566); Gérard Racine et al., supra; Donald H. Mole et al. (1992), 88 di 14 (CLRB no. 933); Ian G. Black (1991), 86 di 38 (CLRB no. 890); Claude Latrémouille (1983), 50 di 197 (CLRB no. 407); and Nathalie Lapointe et al. (1992), 88 di 209 (CLRB no. 952).
Arguments on Behalf of the Employer
[60] The employer submitted that bad faith is never presumed, it must be proved. The complainants have not provided a shred of factual evidence of bad faith or collusion on the part of VIA. The employer supported the BLE's submissions and gave credence to Mr. Hallé's testimony. In contrast, the employer submitted that Mr. Scarrow's evidence was mere opinions, assumptions, presumptions and wishes, without much evidentiary value.
Complainants' Reply
[61] In reply, the complainants submitted that the Crew Consist Adjustment Agreement applies not only to conductors and assistant conductors but also to all members of the single new bargaining unit. More than half of that bargaining unit is not subject to any training and is simply given a preference to be considered for the job. Besides, all locomotive engineers have been trained in conductor duties.
[62] The BLE cannot hide behind negotiations to obviate its duty under section 37. The crew consist agreement simply does not provide an equal opportunity to every member of the bargaining unit. Mr. Hallé's representations were certainly not misleading to the locomotive engineers, they obtained everything they requested. If that half of the membership believed him, why not the other half?
ANALYSIS
Events Preceding the Certification of the BLE
[63] The respondent invited the Board to divide the events surrounding this complaint into two periods, that is, the initial period preceding the BLE's certification to represent all members of the bargaining unit, including former UTU members, which runs from March 7 to October 31, 1997, and the period from the certification to the ratification of the Crew Consist Adjustment Agreement, which runs from November 1, 1997 to the end of June 1998, whereupon the Agreement was ratified by a majority of the membership.
[64] According to section 3 of the Code, a bargaining agent is "a trade union that has been certified by the Board for the employees in a bargaining unit and the certification of which has not been revoked." The only way another trade union can represent employees is where it has entered into a collective agreement on behalf of the employees in the bargaining unit.
[65] During the initial period, the UTU represented its members until its certification was revoked in favour of the BLE to represent the newly merged bargaining unit. Until that certification was revoked, the BLE had no legal ties with UTU members. In this respect, it can only be said that the BLE took what was a legitimate stance in representing first and foremost the members of the bargaining unit for which it was certified. In fact, it would have been ill-advised to have been influenced by the interests of employees outside the bargaining unit in reaching its decisions. In doing so, it would have exposed itself to complaints from its members, alleging that it had breached its duty of fair representation under section 37.
[66] In discharging its duty to negotiate on behalf of employees of the bargaining unit, the BLE had every right to make the best and most enlightened decisions to benefit its members without regard to any gain or loss by other groups of unionized employees. Nor did the BLE have to anticipate the outcome of an eventual representation vote or take a position with regard to prospective situations where it would come to represent all employees of the bargaining unit. In this regard, the respondent fulfilled its duties to the best of its abilities and the complainants have no cause to take exception to any of the agreements that were negotiated during this period.
[67] The complainants alleged that in its campaign to represent members of the UTU, the BLE essentially oversold what they could deliver in real terms to the conductors and assistant conductors. Through Mr. Hallé's evidence, the BLE stated that this was after all campaign rhetoric and UTU members should have been aware that during negotiations, the union cannot always obtain all its demands.
[68] The uncontradicted evidence established that the representation vote was close. So close in fact that it could be said to be divided almost along union lines. Neither Mr. Dillon nor Mr. Galvin admitted to having voted for the BLE at the time of the vote. It is therefore unlikely that serious reliance was ever put on the BLE's representations to garner the UTU vote. To this extent, the content of the campaign promises are not persuasive evidence that the BLE misled the complainants.
[69] However, the events that occurred after October 31, 1997 deserve closer scrutiny.
The Selection Process for the Training of Conductors and Assistant Conductors
[70] When the Board was first called upon to decide whether the restructuring and consolidation of the existing bargaining units for locomotive engineers and conductors bargaining units within VIA were appropriate (see VIA Rail Canada Inc. (1206), supra), it found that in implementing the new job classification, "clearly all employees in that classification would have a community of interest for collective bargaining purposes" (pages 70; and 127). It took into consideration the employer's intention of abolishing the two current classifications of locomotive engineer and conductor and creating a new classification of "operating engineer." In arriving at its decision, the Board also noted the following:
Whatever the outcome of the vote in this matter, the employer, the successful trade union and many of the employees will be placed in difficult positions, and negotiations between the employer and the successful trade union (which will then be representing many employees whose qualifications to perform the functions of the combined classification of "operating engineer" differ) will necessarily be difficult and delicate. It is important to note that the employer has recognized that significant and expensive training - in particular, training of many conductors to carry out the tasks of engineers - will be required in order to ensure, inasmuch as this is possible, that members of both groups of affected employees will be afforded comparable employment opportunities.
(pages 73; and 130; emphasis added)
[71] While this Board has not held the allegations and promises surrounding the representation vote as being in themselves the subject of a breach of section 37, it is noteworthy that in the BLE's letter of July 15, 1997 to UTU members, Mr. Hallé demonstrated a great concern that the conductors and assistant conductors should receive the necessary training if their wish is to become locomotive engineers. In fact, he stated the following in his campaign letter.
... Enclosed for your review and consideration is a copy of my letter to all Via Locomotive Engineers as well as authentic documentation that has also been sent to our members.
These authentic documents confirm that:
...
4. The Brotherhood of Locomotive Engineers is prepared to train and protect any Conductors or Assistant Conductors who wish to become qualified as Locomotive Engineers and remain at Via Rail.
...
It makes sense to the Brotherhood of Locomotive Engineers to train and qualify any members who want to become Locomotive Engineers.
(emphasis added)
[72] In the BLE's letter of July 21, 1997 to UTU members, Mr. Hallé relied on the "Agreement signed on May 12, 1997" to further express his belief that all conductors and assistant conductors should be trained under what would eventually be the Crew Consist Adjustment Agreement, and stated the following:
The Brotherhood believes that the Agreement signed on May 12, 1997, addresses the concerns of all running trades employees at VIA Rail. The intent of the Agreement provides the following:
...
d) The Corporation and Brotherhood will provide locomotive engineer training for Conductors or Assistant Conductors who choose to stay with VIA Rail or who do not have flowback to CN;
e) The Corporation will provide early retirement and bridging to present Locomotive Engineers at VIA to allow the new Locomotive Engineers from letter "d" above, to work (This will be achieved over a period of 18 months to two years.);
...
The training for Locomotive Engineers will consist of theoretical and practical aspects that must be completed in a classroom and field environment followed by on-the-job training when working in coaches and baggage cars.
The Brotherhood of Locomotive Engineers strongly maintains that this approach and plan will minimize the impact of the material change and will ensure that all Conductors and Assistant Conductors will be afforded an equal opportunity to either remain with the Corporation ...
[73] Yet, the revised contract demands put on the table on December 17, 1997 do not reflect any of these strong convictions. With respect to the reduction of the crew consist, which are part of the "Block Three Issues," not only are these demands unrealistic, they are also in complete contradiction with the intent of reducing the crew and with the Board's reasons for certifying a single bargaining unit.
[74] For example, under the "Scope Rules," the demands read in part as follows:
c) All trains will be manned by at least one Conductor who will be in the body of the train.
d) All trains with a consist of more than 3 coaches will be manned by a Conductor and Assistant Conductor who will be in the body of the train.
[75] Under "Surplus of Employees," the demands read as follows:
Create Furlough Boards for surplus running trades employees.
[76] Under "Block Four Issues," the "Training - Work Force Utilization" demand reads as follows:
To be discussed as it relates to the initiative.
[77] Without presuming to substitute its judgment for that of the respondent union, it seems difficult to comprehend how these terse demands translate the commitments of the BLE for its new members. Nowhere is there any mention of integrating the two trades, of training the conductors and assistant conductors in order to put them on the same footing as the locomotive engineers. In other words, the BLE appears to have followed a course of action designed to keep the two groups separate.
[78] In the end, the Crew Consist Adjustment Agreement provides for the training of conductors and assistant conductors in the following terms:
LOCOMOTIVE ENGINEERS TRAINING COURSE:
...
7.(a) Conductors, Assistant Conductors and Yardmasters who apply for, qualify and obtain positions as Locomotive Engineers shall, after successful completion of the required training and qualification, receive the same rate of pay as stipulated in paragraphs 3 and 4 above.
(b) During the training process, they shall receive the student Locomotive Engineer rate of $1,173.00 per week.
...
CONDUCTORS, ASSISTANT CONDUCTORS AND YARDMASTERS:
FORMER CN EMPLOYEES
13. Conductors, Assistant Conductors and Yardmasters who were VIA employees as of October 31, 1997 and to whom the Memorandum of Agreement dated March 6, 1987 in respect to the inter-Company transfer of employees between CN and VIA (the "Transfer Agreement") is applicable as per item 10 of the said Transfer Agreement, may apply for one of the following opportunities:
...
(b) training as Locomotive Engineer, in seniority order;
...
15. Conductors, Assistant Conductors and Yardmasters will be given full and unprejudiced consideration in the selection for training under paragraph 13(b) by the Corporation in accordance with the implementation plan established in consultation with the Brotherhood.
16. Conductors, Assistant Conductors or Yardmasters who apply for training as per paragraph 13(b) but are not selected or do not qualify for the position will be granted another of the opportunities they have applied for according to the provisions of paragraph 13 .
VIA RUNNING TRADES EMPLOYEES NOT COVERED UNDER THE TRANSFER AGREEMENT
17. Conductors, Assistant Conductors and Yardmasters who were VIA employees as of October 31, 1997 other than those mentioned in paragraph 13, may apply for one of the following opportunities:
...
(b) training as Locomotive Engineer, in seniority order;
(pages 2, 6 and 7)
[79] From Mr. Dillon's and Mr. Galvin's uncontradicted evidence, there is little doubt that access to training to qualify as locomotive engineers was a crucial factor to allow conductors and assistant conductors to continue to work. Without the training, they had no other option but to terminate their employment with VIA according to one of the retirement or severance packages or return to CN (more about this later).
[80] Mr. Hallé's explanation that he was sure that VIA would have a selection process since it was his view and his experience that not everyone can be trained as locomotive engineers, and this should have been understood by anyone with experience in the railway industry, does not reflect the earlier representations made to the affected membership.
Seniority
[81] This issue also ties in with the seniority provisions affecting conductors and assistant conductors. Three points came forth in the evidence. First, there is the uncontradicted statement from Mr. Scarrow that in the course of negotiations, VIA told the BLE that should the union not come to an agreement concerning the crew consist, it could and would unilaterally implement a dovetailed seniority list. Second, there is Mr. Hallé's belief that it would be illegal to amend the VIA seniority lists because of the provisions of the Special Agreement concerning flow-back. Third, there is Mr. Hallé's concern that by agreeing to a dovetailed list, the rights of some 1,500 CN employees who have transfer rights to VIA would be affected.
[82] These issues beg several questions for which there are no answers. Why did Mr. Hallé not explore further the basis for VIA's opinion that their legal position favoured dovetailing and inquire as to other possible options? Why did the BLE not avail itself of further expertise on the effects and consequences of the Special Agreement. Why did Mr. Hallé choose to protect the rights of CN employees to the detriment of those of the conductors and assistant conductors on whose behalf the BLE was negotiating?
[83] The presence of Mr. Leclair and Mr. Lisle on the bargaining team might appear to be consultative, yet there is no evidence before the Board that their opinions carried any great weight. Mr. Hallé's discussions outside the bargaining table were mostly, if not exclusively, with the general chairmen, none of whom were conductors or assistant conductors.
Flow-Back to Positions at CN
[84] The flow-back provisions of the Special Agreement need some explanation. They are mingled with collective bargaining relationships in the railway industry, which is governed not by a single collective agreement but by a complex structure of agreements. Within the operations of a single employer such as CN, CP and VIA, collective agreements are traditionally negotiated by trade as well as by geographic region. At VIA, there are two separate collective agreements for conductors and assistant conductors, one for the eastern and western regions, one for the central region. Thus, it is not uncommon for employees to simultaneously hold seniority rights between different trades, under different collective agreements and different geographic regions. Conductors who qualify as locomotive engineers nevertheless retain seniority as conductors and may return to those ranks when such work is unavailable. This arrangement has been advantageous to both the companies and the employees over the years, as it has enabled the free flow of qualified labour across trade union jurisdictional lines to the benefit of all concerned.
[85] When VIA was set up by the Government of Canada for the purposes of providing passenger rail services in Canada, these services were staffed by CN and CP employees (see Appropriation Act No. 1, 1977, RSC, 1976-77, and Order-in-Council PC 1977-2987, dated October 20, 1977). Regulations under the Act, termed the Railway Passenger Services Adjustment Assistance Regulations - CRC, Vol. III, c. 342, page 2179, provided for the negotiation of special agreements between the various unions that might be adversely affected by operational or organizational changes as a consequence of the transfer of passenger services to VIA.
[86] When in 1987, VIA decided to run its trains with its own employees, the unions managed to protect the prior service of VIA employees transferring from CN to VIA, which allowed them to carry with them their seniority and benefits relating to prior service at CN; furthermore, they retained the right to return to CN with full credit for seniority and service time spent at VIA in certain circumstances.
[87] Consequently, the Special Agreement negotiated between CN and UTU, which is the subject of this complaint, provides what is called "flow-back" rights for employees transferring from CN to VIA, allowing them to go back and forth between CN and VIA. These rights include the maintenance of employment at CN, either inside or outside the same bargaining unit, the transfer of pensions, benefit and vacation entitlements, training, relocation benefits, maintenance of earnings, separation incentives, lay-off and severance compensation, and so on.
[88] Parallel to the Special Agreement between the UTU, VIA and CN, an almost identical agreement was signed between the BLE, VIA and CN with the similar purpose of tempering the adverse effects on locomotive engineers.
[89] At issue in the instant matter is the provision in the special agreement dealing with the flow-back rights between VIA and CN. Article 13 of the Crew Consist Adjustment Agreement provides in part as follows:
13. Conductors, Assistant Conductors and Yardmasters who were VIA employees as of October 31, 1997 and to whom the Memorandum of Agreement dated March 6, 1987 in respect to the inter-Company transfer of employees between CN and VIA (the "Transfer Agreement") is applicable as per item 10 of the said Transfer Agreement, may apply for one of the following opportunities:
...
(c) exercise their right to return to CN under the terms of the Transfer Agreement;
...
An employee may apply for one or more of the opportunities, in which case the opportunities will be given priority by the Corporation in the order of preference indicated by the employee. Should the employee fail to indicate his priorities, the opportunities will be given priority by the Corporation in the order in which they are listed above.
Should an employee fail to apply for any of the opportunities listed above, he shall be deemed to have applied to exercise his right to return to CN under the terms of the Transfer Agreement.
The opportunity to return to CN under the terms of the Transfer Agreement will be granted to eligible employees subject to the agreement of the parties in the event that CN should refuse to allow the eligible employees to return to CN under the terms of the Transfer Agreement.
(page 6)
[90] It appears that at the outset of their negotiations concerning the material change notice, the applicability of the Special Agreement (called the "Transfer Agreement" in the Crew Consist Adjustment Agreement) was a foregone conclusion by both VIA and the BLE. In its campaign letter dated July 21, 1997, to UTU members regarding the representation vote, Mr. Hallé wrote:
a) Conductors and Assistant Conductors will be permitted to flow back to CN;
[91] At the time of the campaign to represent the merged bargaining unit, there was no agreement between CN and VIA that the Special Agreement would be allowed to apply. In fact, this issue did not come to the fore until April 1998, in the course of hearing before the CLRB regarding VIA's intention to unilaterally implement the crewing initiative. In his evidence, Mr. Hallé attributed the lack of agreement between VIA and CN to a purely commercial dispute. Yet, it is also in evidence that as an addendum to the Crew Consist Adjustment Agreement, VIA agreed to protect the basic weekly pay or maintenance of wages for those employees whose option was to return to VIA, to provide full benefit coverage and to allow employees to accumulate seniority for pension purposes pending their return to CN. From the evidence provided to the Board, as of May 1999, some 96 former conductors were affected by the denial of transfer rights back to CN.
[92] While asserting the applicability of the flow-back rights, it is worth noting that some lingering doubt of its applicability subsided in the BLE's mind since General Chairman Bradford E. Wood wrote a letter to CN dated February 9, 1998, which sets out those concerns:
This is in reference to the terms and conditions of the "Special Agreement" between Canadian National Railway Company, Via Rail Canada Inc. and the Brotherhood of Locomotive Engineers dated June 4th, 1987, concerning the flow back rights of Via Locomotive Engineers, Conductors, Asst. Conductors and Yardmasters to Canadian National Railway when reduced from Via Rail.
As you may be aware, the Corporation is merging the positions of Assistant Conductor, Conductor and Locomotive Engineer into a single job classification of Operating Engineer.
This new classification of Operating Engineer shall assume, without distinction, all operating duties previously carried out by the Locomotive Engineers and Conductors/Assistant Conductors. As a result of this merger, an Operating Engineer will need to be fully qualified as a Locomotive Engineer and as a Conductor.
The Brotherhood has been advised by the Corporation that those employees that are not fully qualified as an Operating Engineer and cannot hold a permanent position at his home station, may exercise their rights under their Collective Agreement or the Special Transfer Agreement.
The Corporation has announced that it will implement their changes in Operating crews on April 1, 1998.
As a consequence of the Corporation's unilateral actions, our office requires confirmation from Canadian National Railway that protected Via employees will be permitted to flow back to the Company as specified in the Special Transfer Agreement.
As this matter is extremely time sensitive, we will require an immediate response to our question.
Thanking you in advance for your attention to this request, I remain
[93] In the absence of a response from CN, Mr. Wood followed up with a second letter dated February 25, 1998, which reads as follows:
Our previous correspondence to you regarding the Company's position relative to flowback rights for VIA employees protected under the Tri-party Transfer Agreement clearly conveyed to you our sense of urgency and required your immediate response.
To date, our office has not received the Company's position relative to this matter. Once again, we are requesting a response to our previous correspondence concerning our members' legal standpoint.
Thanking you in advance for your consideration, I remain,
[94] CN's continued silence provoked a further letter from Mr. Wood dated April 14, 1998, where he stated:
This is further to our previous letters to you dated February 9 and February 25, 1998 concerning flow back rights to Via Locomotive Engineers and Conductors pursuant to the Transfer Agreement (Special Agreement).
The Corporation has formally advised the Brotherhood that on April 26, 1998, they will unilaterally implement their "crewing initiative". As a consequence of the Corporation's pending action many of our members will seek to invoke Item 5(B) of the aforementioned agreement which states, in part, as follows:
"During the Reciprocal Rights Period referred to in paragraph (a) of item 4, if a Locomotive Engineer who, in the exercise of seniority, is unable to hold a regular assignment in his/her service at VIA at his/her home station as a Locomotive Engineer and who does not wish to exercise his/her seniority on the seniority district at VIA, may exercise his/her seniority at CN pursuant to the terms of the applicable Collective Agreement."
The language of the Transfer Agreement and it's [sic] administration by the parties over the past decade clearly provide for the unrestricted flow back to CN when VIA makes reductions. The Corporation has also sent a letter to our office confirming their position that:
"It was and remains VIA's firm position that employees unable to hold a regular assignment at VIA as a result of the merger of the positions are entitled to flow back to CN Rail under the terms of the Special Agreement and the Transfer Agreement, provided they meet the seniority requirements within the agreements themselves."
Notwithstanding the foregoing, our office still has not received written confirmation from your office that our members can flow back to CN if and when their positions are reduced by the Corporation.
Once again, we are requesting a response to our previous letters.
This matter is urgent and your immediate reply will be appreciated.
[95] At the date of this hearing the issue was still unresolved. The truth of the matter is that CN vociferously opposes the applicability of the Special Agreement to the type of crew reduction that VIA initiated under the material change notice of March 7, 1997. Indeed, the whole subject of flow-through rights is presently before an arbitrator and is being heard concurrently with this matter.
Allegations of Maliciousness and Bad Faith
[96] In support of their allegations of maliciousness and bad faith, the complainants offered two letters with a view to undermining the BLE's credibility with respect to these events. While the allegations preceded the signing of the Crew Consist Adjustment Agreement by a year, they were not satisfactorily explained by Mr. Hallé's testimony.
[97] The first letter is from Mr. T.S. Secord, Canadian Legislative Director of the UTU, to Mr. Gilles Hallé, dated April 24, 1997, soliciting the BLE's support in resisting VIA's intention to proceed with its crew reductions, based on "serious implications for not only our membership but for the safe operation of the passenger trains themselves." In his reply dated May 8, 1997, Mr. Hallé stated in part as follows:
Your question was raised in the interest of Labour solidarity, of which the undersigned has always been a supporter.
If you remember when Canadian National introduced the belt pack technology we raised concerns about the safety and the jobs lost. We will be as supportive as the UTU was in the belt pack issue a few years ago.
The undersigned will have to review all the correspondence issued by the UTU on the belt pack and be governed by the same labour solidarity.
(emphasis added)
[98] In the course of the introduction of the belt pack technology (which implemented the conduct of the train's engine in the yards by remote control), the BLE lost a number of jobs, some of which were transferred to UTU members. Apparently, this incident was never fully resolved between the parties. The exchange of correspondence that was led in evidence certainly suggests that the negotiation of the Crew Consist Adjustment Agreement revived the unions' differences and may have dampened the BLE's fervour to protect the jobs of former UTU members. There is no dispute that the crewing initiative was meant to bring about significant staff reductions with the effect that job gains among the conductors resulted in the cut-back of an equivalent number of jobs in the ranks of the locomotive engineers, which is something the BLE could not ignore.
Corollary Allegations
[99] The complainants also submitted a number of corollary allegations that may be summarized as follows: the BLE and VIA colluded to eliminate the position of conductor; the May 1997 agreement provided for a premium payment by way of a "bribe" in the amount of $120 per pay period to be paid to all active locomotive engineers; the lump-sum payment of $37,000 paid to the BLE as a result of the signing of the collective agreement was improper; the options negotiated by the BLE were "substandard" in that they did not reflect customary practices in the railway industry.
[100] Overall, the Board finds that no convincing evidence was put forward on these matters, nor do these further complaints bolster the complainants' case. Although the Board takes exception to some of the provisions negotiated as part of the Crew Consist Adjustment Agreement, there is no evidence to cast doubt on the legitimacy of the additional remuneration or premium to be paid to locomotive engineers in recognition of additional duties and responsibilities forming part of the merged positions. In fact, conductors and assistant conductors who eventually become locomotive engineers will also be entitled to this premium. There is no evidence that the lump sum of $37,000 payable on a quarterly basis to the General Chairman of the BLE for the administration of the collective agreement and the betterment of labour relations has been used in any irregular or illegal manner. While the complainants do not agree that the Crew Consist Adjustment Agreement has served them well, this is not to say that these monies have been used for inappropriate or illegal purposes.
[101] Except for the provisions that the Board finds to be arbitrary or discriminatory and that will form part of the remedies in this matter, the Board has no basis on which to find that the conditions of the Crew Consist Adjustment Agreement were better or worse than similar agreements in the industry. Indeed, the complainants did not provide the Board with comparable agreements or expert testimony on this subject, which would have helped corroborate their point of view.
[102] On this basis, the Board finds that these corollary allegations are unsubstantiated.
The Duty of Fair Representation
[103] A bargaining agent's duty of fair representation is statutorily expressed in section 37 of the Code:
37. A trade union or representative of a trade union that is the bargaining agent for a bargaining unit shall not act in a manner that is arbitrary, discriminatory or in bad faith in the representation of any of the employees in the unit with respect to their rights under the collective agreement that is applicable to them.
[104] This duty arises out of the exclusive power given to the bargaining agent to speak on behalf of all employees of the bargaining unit. It has been the subject of countless Board decisions and the standard test has been described in Canadian Merchant Service Guild v. Guy Gagnon et al., [1984] 1 S.C.R. 509. In that judgment, the Supreme Court set out the following principles:
The following principles, concerning a union's duty of representation in respect of a grievance, emerge from the case law and academic opinion consulted.
1. The exclusive power conferred on a union to act as spokesman for the employees in a bargaining unit entails a corresponding obligation on the union to fairly represent all employees comprised in the unit.
...
4. The union's decision must not be arbitrary, capricious, discriminatory or wrongful.
5. The representation by the union must be fair, genuine and not merely apparent, undertaken with integrity and competence, without serious or major negligence, and without hostility towards the employee.
(page 527)
[105] The Board's jurisdiction to review a union's actions is therefore very narrowly focussed. The Board's interest is in the union's process and not in whether the union came to the right decision. As a cornerstone of its jurisprudence, the Board has continuously maintained that a union is entitled, without interference, to exercise its judgment in representing its membership. It is therefore not up to the Board to interpret the collective agreement or any other collateral agreement that might ensue. Having said this, it is safe to assume that when a union signs a collective agreement, it has sought its intended effects, and the representations made to the membership must not distort the intended effect of the agreement.
[106] The duty of fair representation has both a procedural and a substantive component. The substantive component attaches to the effect of the union's actions, the consequences of which could be arbitrary, discriminatory or in bad faith, even though they appear to be legitimate, for example when they result in the exclusion of a particular group from the benefits of the collective agreement. On the other hand, procedural violations include decisions made by the bargaining agent that adversely affect the interests of an individual or minority group of employees as the result of a process that is tainted by hostility, ill-will, discrimination or bad faith. Thus, it is essential that both the process and the substance of the decision be free from arbitrariness or bad faith.
[107] The duty of fair representation may also be assessed by a three-pronged test. Has the union fulfilled its institutional role in representing all its members? Were employee rights within the regime of collective bargaining appropriately protected? Were critical job interests such as seniority, discipline and job security suitably considered in the collective bargaining process?
[108] In the first test, the union need not achieve particular results or even achieve the outcome it set out as its goal in the first place. It should also be made clear that putting a vote to the membership is not wrong per se. What is key, however, is that the vote must be carried out in a context that is fair and free of discrimination and that proposals put to the membership are the subject of due thought and consideration of its membership, including the minority.
[109] The culminating event to all this saga is that the Crew Consist Adjustment Agreement was put to the membership and that it was ratified by a majority, a majority identifiable as the locomotive engineers. It was also established that the vote was divided along craft lines. How could it be otherwise, inasmuch as the majority group had everything to gain, and it would have been unwise to strike over a contract that gave them the lion's share of the benefits. As it were, the conductors and assistant conductors had no hope of defeating the majority group.
[110] While there is nothing unlawful about a union favouring a group of employees over another, and recognizing that a union has a great deal of latitude in making decisions, the union must nevertheless reasonably weigh all relevant factors. Reasonable means rationally applying relevant factors after assessing and balancing all legitimate interests. The issue is not whether a decision is right or wrong, or whether the union could have decided differently. Rather, the union must ask itself whether its decisions are reasonable having regard to all circumstances.
[111] Where critical interests are at stake, the union must even more seriously turn its mind to the circumstances of those who in all likelihood will be adversely affected by its decision. It has been said that seniority is "the most valuable capital asset of an employee of long service" (see Summers and Love, "Work Sharing as an Alternative to Layoffs by Seniority" (1976), 124 U. of Pa. L.R. 893, at page 902, as quoted in Dufferin Aggregates, supra).
[112] As the defender of this most important principle, the union cannot afford to take a careless or casual attitude when continuing employment is at stake. As representative of the bargaining unit as a whole, it has a duty to achieve a certain fairness between all groups. Its position and decisions must not be seen as giving undue advantage to one group over another or allowing extraneous interests to cloud the issue. The Board has consistently found that the bargaining agent will be held to a much stricter standard where the career path of an employee may be seriously jeopardized and its actions more closely scrutinized than in other cases.
[113] The weighing of interests and the ultimate choices are without a doubt highly political and will inevitably be influenced by competing preferences, values and viewpoints. However, the union will be judged on whether it approached the issue objectively and acted responsibly towards all its members. It must take a reasonable view of the problem and thoughtfully assess the various and conflicting interests.
[114] In this matter, the Board notes that the BLE gave little or no weight to the normal and natural consequence of the Board's decision to merge the two bargaining units. In fact, the BLE continued to maintain the distinction between the two groups of employees, the haves and the have nots, where there should have been only one. In this respect, the union did not fulfill its institutional role of bargaining agent.
[115] The second test examines whether the union appropriately protected employee rights within the collective bargaining regime. As the Crew Consist Adjustment Agreement forms part of the collective agreement on behalf of all the employees in the bargaining unit, the conductors and assistant conductors were entitled to the same level of representation as the locomotive engineers. The Board specifically recognized this fact when it decided, based on equal access to the newly created positions by both groups of affected employees, that a single new bargaining unit was appropriate.
[116] What these proceedings have brought to light is the BLE's recklessness in telling the conductors and assistant conductors that they would be able to return to similar positions to CN without ensuring beforehand that these rights were indeed available. It appears that when VIA aggressively put forward its crew reduction initiative, it did not give adequate consideration to the fall out of such a decision. Nor did the BLE take immediate steps to inquire further into the matter until it obtained the right to represent the merged bargaining unit, and discussions with the employer reached a near standstill.
[117] On all accounts, its campaign representations appear to have been based on unverified facts and assumptions, for example, that conductors and assistant conductors would obtain the similar benefits and conditions as the locomotive engineers, that they would have equal access to training and that the Special Agreement would apply. The appointment of Mr. Leclair to the bargaining team, while seemingly a good initiative, was more in the nature of a stopgap measure than as part of an overall framework to better serve the interests of the conductors and assistant conductors. The negotiation of rights involving another employer without confirmation demonstrates an improper representation of employee rights within the regime of collective bargaining.
[118] On this point, the Board therefore finds that the BLE failed to uphold a reasonable standard of competence in representing its members and, in this regard, is accountable to them for its shortcomings.
[119] As to the standards of representation meted out by the third part of the test, the complainants have been successful in establishing that the BLE was not vigilant in protecting the seniority and job security interests of an important part of the bargaining unit. It relied on the majority vote to justify its actions, without addressing the hard core issues that affected almost half of the bargaining unit. The benefits obtained on behalf of the conductors and assistant conductors, which are for the most part directed at terminating their employment, pale in comparison to the generous benefits obtained for the locomotive engineers.
[120] Within the overall spectrum of the crew consist initiative and ensuing agreements, the Board notes a single-minded drive on the part of VIA to see these reductions through. No explanation was given to this panel as to the reasons for the urgency of implementing this initiative, which justified skipping essential steps. These were major changes within VIA. They involved redefining running trades with a history of over 100 years in the making, the disappearance of close to 250 jobs, the creation of some 70 in a competing bargaining unit (the CAW), a major training program to allow conductors and assistant conductors to qualify as locomotive engineers, the assignment of new duties and responsibilities of the locomotive engineers, which warranted a significant premium increase in wages. Somehow, it does not make labour relations or business sense for the BLE to have embarked on such a venture without a blueprint for change, a communications strategy, a support plan for displaced employees and financial objectives. Coming from an experienced and credible trade union, long-range thinking should have accompanied a venture such as this. How else could the membership's needs and interests be balanced in a serious and rational way?
[121] Had the actions under review been those of the Board rather than those of the union, and had the Board acted with the same disregard for the welfare of the complainants as did the union, there is little doubt that on judicial review these actions could only be viewed as falling at the extreme end of the scale of patent unreasonableness.
Conclusions
[122] The BLE's failure to adequately and fairly balance the interests of all its members in circumstances that touched upon the very core of their employment relationship constitutes, in the Board's view, a failure to represent the membership's legitimate interests. This failing to assume its responsibilities with integrity and competence amount to bad faith as prohibited by the Code. The union's behaviour is tantamount to the absence of representation within the context of collective bargaining. In view of the treatment of the complainants, the respondent union is liable for the consequences that attach to the Board's findings.
[123] Based on all these considerations, the Board upholds three of the allegations:
- the selection process for conductors and assistant conductors;
- seniority provisions as they affect conductors and assistant conductors who qualify as locomotive engineers; and
- the application of the Special Agreement negotiated between the UTU, VIA and CN.
[124] However, the Board is not satisfied that the respondent is the only liable party. When this matter was first heard on the section 18 application to review the certification of a single bargaining unit, the employer submitted that all the employees in the merged bargaining unit would be treated equally and have similar access to available positions within the bargaining unit. It was partly on this basis that the Board ordered the representation vote and issued the new certificate.
[125] The Board made it clear at the hearing in this matter that it had no intention of reopening the previous proceedings or of ordering a new representation vote. According to the uncontradicted evidence before the Board, the union did not instigate the process of material change and the agreement on crew consist reductions was a contract that was to a great extent a unilateral offer on the part of the employer. This is obvious both from the point of view of the employer's unilateral decision to implement the crew consist initiative on April 26, 1998 and the final Crew Consist Adjustment Agreement dated July 12, 1998, in regard to the selection process, seniority provisions as they apply to the conductors and assistant conductors, and the application of the Special Agreement negotiated between the UTU, VIA and CN. The clauses are for all intent and purposes identical.
[126] This outcome points to an improper collaboration between the employer and the respondent union to achieve a desired outcome for both parties at the expense of the rights of the minority and most affected group of employees. The Board considers such collaboration as unbecoming and contrary to section 94(1) and the spirit of the Code, which prohibits such practices.
[127] The employer was well aware of the disagreement with CN over the flow-back rights of the former CN employees and that this was not going to be resolved soon. By proposing a bottom down seniority for the conductors and assistant conductors, it realized that it was playing into the BLE's hands, especially since its initial position was to implement a dovetailed seniority. It was also maximizing the effects of the arbitration award in its favour concerning the wording of a selection process clause to form part of the proposed agreement. It follows that it also knew or ought to have known that, by withholding clauses that limited the advancement of the conductors and assistant conductors while providing sufficient benefits to the locomotive engineers group, the proposed Crew Consist Adjustment Agreement would likely pass a ratification vote. The respondent took its chances before the membership based on these considerations. In other words, the union knew that in the end, by putting the agreement to a majority vote, there was little likelihood it would be defeated.
[128] To its credit, the employer accepted to continue to pay the employees who had elected or otherwise been selected by the employer until the matter with CN was decided. But the gamble remains. If CN succeeds in preventing the flow-back as a result of the Crew Consist Adjustment Agreement, the employees who relied on this provision, while trained, will no longer be able to compete for positions within VIA because of their low seniority rank.
[129] These considerations bring us to the issue of remedy. This is a matter where it becomes impossible to set the clock back or to return the complainants to the situation in which they would have found themselves, were it not for the implementation of the Crew Consist Agreement. The Board also finds that while the union must bear the consequences of its actions, the remedy must involve both the union and the employer as they are equal players with regard to the Crew Consist Adjustment Agreement and its effects on the complainants.
[130] Therefore the Board orders the following.
1. VIA and the BLE are to reopen the Crew Consist Adjustment Agreement on the following:
a. the selection process for conductors and assistant conductors;
b. seniority provisions as they affect conductors and assistant conductors who qualify as locomotive engineers;
c. the application of the Special Agreement negotiated between UTU, VIA and CN; and any other related issues as the parties see fit with a view to providing for the interests and needs of the group of former conductors and assistant conductors. The parties are to conclude the negotiations of such amendments no later than December 15, 1999.
2. The BLE will design and hold an internal consultative process to determine these interests and needs and will hire an appropriate professional to assist the conductors and assistant conductors in this process.
3. The choice of such a professional is to be made in consultation with the conductors and assistant conductors.
4. The BLE is to bear, without the assessment of further union dues, the cost of the services of this professional.
5. The chosen professional will represent the conductors and assistant conductors for the purposes of the reopening and negotiation of the Crew Consist Adjustment Agreement, as provided above, and will share an equal voice with BLE representatives in coming to an agreement.
6. The BLE will assume, with respect to the instant proceedings, the fees of the complainants' legal counsel on a solicitor-client basis.
[131] The Board reserves its jurisdiction should the parties be unable to resolve matters concerning the remedies ordered by the Board.
CASES CITED
Black (Ian G.) (1991), 86 di 38 (CLRB no. 890)
Canadian Merchant Service Guild v. Guy Gagnon et al., [1984] 1 S.C.R. 509
Connolly (Richard) et al. (1998), 107 di 120; and 45 CLRBR (2d) 161 (CLRB no. 1235)
Dufferin Aggregates, [1982] OLRB Jan. Rep. 35
Gagnon (André) (1986), 63 di 194 (CLRB no. 547)
Gendron v. Supply and Services Union of the Public Service Alliance of Canada, Local 50057, [1990] 1 S.C.R. 1298
Hertz (Valerie) et al. (1990), 8l di 96; and 90 CLLC 16,055 (CLRB no. 806)
Lapointe (Nathalie) et al. (1992), 88 di 209 (CLRB no. 952)
Larmour (G. Len) et al. (1980), 41 di 110; and [1980] 3 Can LRBR 407 (CLRB no. 260)
Latrémouille (Claude) (1983), 50 di 197 (CLRB no. 407)
Mole (Donald H.) et al. (1992), 88 di 14 (CLRB no. 933)
Racine (Gérard) et al. (1993), 92 di 118 (CLRB no. 1026)
Reid (Dan) et al. (1992), 90 di 58 (CLRB no. 972)
Rhodes (Gordon) (1995), 97 di 103 (CLRB no. 1113)
Robert (Gary) et al. (1986), 64 di 191; 12 CLRBR (NS) 289; and 86 CLLC 16,030 (CLRB no. 566)
VIA Rail Canada Inc. (1997), 104 di 67; and 38 CLRBR (2d) 124 (CLRB no. 1206)
VIA Rail Canada Inc. (1998), 107 di 92; 45 CLRBR (2d) 150; and 99 CLLC 220-010 (CLRB no. 1233)
STATUTES CITED
Appropriation Act No. 1, 1977, RSC 1976-77
Appropriation Act No. 1, Regulations, Railway Passenger Services Adjustment Assistance Regulations - CRC, Vol. III, c. 342
Canada Labour Code, Part I, ss. 3; 37; 94(1)