Canadian Rail Workers Union Appeals Decision Ordering Binding Arbitration — Update

By Robb M. Stewart

The order that forced almost 10,000 Canadian rail workers back to their jobs and an end to a shutdown that risked continuing damage to the economy has been challenged by Teamsters Canada.

The labor union said Friday it filed four separate appeals with Canada's Federal Court of Appeal, challenging federal Labor Minister Steven MacKinnon's demand the work stoppage end and pushing both sides into binding arbitration and the labor-relations board's ruling enforcing the decision.

Among other things, the appeals argue that workers' rights were violated and that imposing arbitration stripped them of their right to collective bargaining.

"The right to collectively bargain is a constitutional guarantee. Without it, unions lose leverage to negotiate better wages and safer working conditions for all Canadians," said Paul Boucher, president of Teamsters Canada Rail Conference.

The court filings won't disrupt efforts by Canadian National Railway and Canadian Pacific Kansas City to fully recover freight-rail operations but does add to tensions in the dispute.

In a ruling Saturday, the Canada Industrial Relations Board concluded it had no discretion or ability to refuse to implement orders issued by MacKinnon directing the railways and workers to resume operations and imposing arbitration to reach collective agreements. MacKinnon made the decision hours after both rail companies locked out employees and finalized a rolling shutdown of rail operations.

Business leaders in Canada and the U.S. had pressed Prime Minister Justin Trudeau's Liberal government to intervene, warning that a prolonged shutdown of rail traffic in Canada could have a deep impact on the movement of freight through North America. Canadian National and Canadian Pacific transport the equivalent of roughly $282 billion worth of goods annually and economists estimated a shutdown would cost the economy hundreds of millions of dollars daily and disrupt cross-border trade.

Teamsters Canada, which has requested that the court expedite proceedings, in its appeal called for the orders to be declared invalid and the government's directive to be quashed. It argued the minister failed to provide "any, let alone sufficient, procedural fairness" to the union before issuing the direction and that labor board interpretation of the Canadian Charter of Rights and Freedoms was unreasonable.

"Arbitration is a neutral process that is agnostic to outcome," a spokeswoman for Canadian National said. "It does not favor one party over another. It is specifically designed to break an impasse, and in this case to prioritize the safety and economic security of all Canadians."

The rail operator has said it would have preferred a negotiated settlement but that after nine months of attempting to reach a deal it was evident the union wasn't looking tor a resolution. The impasse and risk of a strike began inflicting damage on the Canadian economy from April, when traffic began diverting away from Canadian ports, Canadian National said.

The rail company said that it continues to be prepared to participate in arbitration, and was in the meantime focused on a recovery plan.

Both rail companies have said it would take several weeks to fully catch up on the effect the shutdown and preparations for a strike had on supply chains.

Canadian Pacific declined to comment on the court appeals but said its recovery was proceeding well. It previously said the board's order ended months of uncertainty and disruption to the economy and North American supply chains.

Teamsters Canada is seeking to renew two collective agreements covering 3,200 employees in what are known as running trades and a unit of 85 rail traffic controllers at Canadian Pacific and the renewal of a collective agreement covering about 6,000 railroad transportation employees at Canadian National. It has argued it was company proposals, not union demands, that had stymied talks.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

August 30, 2024 13:28 ET (17:28 GMT)

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