Arbitration Hearing between Canadian Railroads and Union Ends with No Decision on Back-to-work Order

AP

11:30 JST, August 24, 2024

TORONTO (AP) — A workers union on Friday threatened a strike at one of Canada’s two major freight railroads, only hours after the company’s trains restarted following a potentially devastating stoppage. A government-ordered arbitration hearing wrapped up without a decision, and Canadian National trains were expected to keep moving at least through Monday morning.

CN and Canadian Pacific Kansas City Ltd. locked out their workers on Thursday when negotiations over a new labor contract reached a deadline without an agreement. That resulted in a near total shutdown of freight rail in the country for more than a day, until Canadian National resumed its service on Friday morning. Trains operated by CPKC remain parked and its workers, who had already been on strike since Thursday, stayed on the picket line Friday.

The government forced the companies and the union, Teamsters Canada Rail Conference, into arbitration overseen by the Canada Industrial Relations Board — an order the union is challenging. Friday’s nine-hour hearing ended with no order from the board.

The union filed a 72-hour strike notice against CN on Friday morning shortly after it announced that it planned to challenge the arbitration order, union spokesperson Marc-André Gauthier said.

If the board orders the union back to work, “the TCRC will lawfully abide by the decision, but will undertake steps to challenge to the fullest extent,” the Teamsters said in a statement. “Unfortunately this will not provide immediate relief but the Union is prepared to appeal to federal court if necessary.”

“We do not believe that any of the matters we have been discussing over the last several days are insurmountable and we remain available for discussion in order to resolve this matter without a further work stoppage,” the union said in its letter to CN management.

Canadian National, which has about 6,500 workers involved in the dispute, said the impact of the strike notice will depend on the timing of the CIRB’s decision. “It is in the national interest of Canada that the CIRB rule quickly, before even more harm is caused,” the railroad said in a written statement. CPKC has about 3,000 engineers, conductors and dispatchers involved.

Perrin Beatty, President and CEO of the Canadian Chamber of Commerce, said the union’s latest actions “will prolong the damage to our economy and jeopardize the wellbeing and livelihoods of Canadians, including union and non-union workers across multiple industries.”

Labour Minister Steven MacKinnon had announced the decision to force the parties into binding arbitration on Thursday afternoon, more than 16 hours after the lockout shut down the railroads, saying the economic risk was too great to allow them to continue. The government had declined to order arbitration two weeks ago. Mackinnon said he had hoped that negotiations between the companies and the union on a new contract would succeed. A spokesman for MacKinnon declined to comment Friday on the strike notice.

“This is not about disobeying the minister’s order. It’s about exercising our right,” Teamsters Canada President Francois Laporte said Friday in announcing the strike. “We will exercise our right within the legal framework.”

Canadian National trains had begun rolling at 7 a.m. across Canada, said CN spokesperson Jonathan Abecassis. The development initially appeared to at least partially end a work stoppage that threatened to wreak havoc on the economies of Canada and the United States. Both countries, across all industries, rely on railroads to deliver their raw materials and finished products.

“While CN is focused on its recovery plan and powering the economy, Teamsters are focused on getting back to the picket line and holding the North American economy hostage to their demands,” Abecassis said following the union’s strike notice.

Getting even one of the railroads running again is a relief for businesses. In most past rail labor disputes, only one of the Canadian railroads stopped and the economy was able to weather that disruption.

The negotiations that began last year are hung up on issues around the way workers are scheduled and contract rules designed to prevent fatigue. The railroads had proposed shifting away from the current system that pays workers based on the number of miles they travel, to a system based on the hours they work. The railroads said the switch would make it easier to provide predictable schedules. But the union resisted because it feared the proposed changes would erode hard-fought protections against fatigue and jeopardize safety.

Similar quality-of-life concerns about demanding schedules and the lack of paid sick time drove U.S. railroads to the brink of a strike two years ago before Congress and President Joe Biden intervened and forced workers to accept a deal.

In Canada, another issue at CN is the railroad’s intention to expand a system that allows it to temporarily relocate workers to other parts of its network when it’s short on employees in a certain region.

Regarding wages, the railroads said they both offered raises in line with other recent deals in the industry for what are already well-paying jobs. Canadian National has said its engineers make about $150,000 and conductors earn roughly $121,000 for working 160 days a year though some of their time off is spent stuck at hotels on the road between train trips while getting required rest. CPKC says its pay is comparable.

Nearly all of Canada’s freight handled by rail — worth more than $1 billion Canadian (US$730 million) a day and adding up to more than 375 million tons of freight last year — stopped Thursday along with rail shipments crossing the U.S. border. A number of smaller short-line freight railroads that handle local deliveries continued operating but were unable to hand off shipments to either of the major railroads while they were idle.

About 30,000 commuters in Canada were also affected because their trains use CPKC’s lines. CPKC and CN’s trains continued operating in the U.S. and Mexico during the lockout.

Billions of dollars of goods move between Canada and the U.S. via rail each month, according to the U.S. Department of Transportation.

“There are a lot of goods and services shipped across borders,” Sean O’Brien, President of the International Brotherhood of Teamsters, said at a rally in Calgary, Alberta, on Friday. “If this company chooses to continue its bad behavior then it is going to have an impact. … They’ve got a lot of decisions they need to make. And they need to make the most important decision: Reward these workers with what they’ve earned and also don’t try to diminish safety just so they need to feed their bottom lines.”