Hensall Global Logistics - Client Advisories

Monday, September 6, 2010

Client Advisories
Important Information For Hensall Global Logistics Customers

CN Labour SItuation
2009-11-25

Priority:

Urgent

We have received the following notification from Pulse Canada regarding the potential work stoppage at Canadian National Railway Co.:

Last night CN issued a press release which is viewed as having effectively closed negotiations with the Brotherhood of Locomotive Engineers (BLE); imposing contract changes which are to take effect 0001 hours Nov. 28, 2009.

Our understanding, is that the Union will meet with its lawyers today to determine whether or not CN can unilaterally impose the contract changes and if that position can be regarded as lock out notice. In either event, both parties would be required to provide 72 hours notice in the event of a strike or lockout.

It may also be important to pay attention to 0001 hours on Nov. 28th, as there is likely concern that working after that point might constitute acceptance of the ‘offer’.

In either event, there is considerable risk that we will experience a work stoppage.

Further details from a recent article published in the Financial Post are as follows:

CN work stoppage looms after talks hit impasse

A potential work stoppage is looming at Canadian National Railway Co. after the country's largest railway hit an impasse in its labour talks with the union representing 1,700 of its engineers.

The railway says it will now take the unusual step of imposing contractual changes on the workers as of Nov. 28.

The Teamsters Canada Rail Conference, which represents the railway's engineers, has taken the matter to its lawyers and hopes to determine by this afternoon whether imposing the changes unilaterally effectively serves as a lock-out notice for the workers, said Dan Shewchuck, the union's president.

The engineers have been without a contract since Dec. 31, 2008 and currently have a strike mandate. While the TCRC's talks with the railway have been ongoing for 14 months, the parties hit an impasse on rules governing the maximum amount of miles engineers can work in a month and wages.

A federal mediator has been assisting in the talks since August, but last Friday, after another impasse was hit, CN walked away from the bargaining table.

At issue is that CN wants to raise maximum number of miles engineers are allowed to work at the railway from their current cap of 3,800 miles to bring them in line with the railway's conductors, whose cap sits at 4,300 miles.

As a result, however, CN's engineers, who make on average more than $100,000 a year, work on average 15 to 17 days a month compared with the 16 to 18 days conductors do, the railway says. If the mileage cap is increased for the engineers, the Teamsters worry it will lead to layoffs, Mr. Shewchuck said.

The reason for the discrepancy between the two stems the conductors negotiating their terms under the United Transportation Union prior to leaving that union in favour of the TCRC in September 2008.

Under federal law, both parties must serve 72 hours' notice in the event of a lock-out or a strike, and the TCRC is trying to determine today whether the notice that CN will impose the contractual changes effectively serves as that notice. A work stoppage could occur as early as Saturday, if it does, Mr. Shewchuck said.

Both CN and the TCRC have said they have brought numerous proposals to the table, but have failed to reach an agreement on the work rule changes and wages. CN has said it has also offered to take the matter to binding arbitration, which was rejected by the union.

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