MONTREAL — Canadian National Railways received a 72-hour strike notice from the Teamsters Canada Rail Conference (TCRC) of its plan to strike the company just after midnight on Nov. 28.

On Nov. 23, CN notified the TCRC of its intention to implement only one work rule change (to align mileage caps between the engineers and conductors) to the collective agreements and increase wages by 1.5 percent effective Nov. 28. CN decided to invoke these contractual changes to move the company forward after 14 months of bargaining with no resolution in sight.

The parties have been assisted by federal mediators since August in the hope of renewing their collective agreement, which expired on Dec. 31, 2008.

"Canadian National Railways has forced us to service strike notice after they informed us of the unilateral change to the terms and conditions of the Collective Agreement effectively locking out our members" said Daniel Shewchuk, president of Teamsters Canada Rail Conference (TCRC). "It is obvious to us that CN is counting on the federal government intervention to settle the issues rather exploring solutions to a negotiated agreement."

CN said the TCRC’s decision is unfortunate because a strike is in no one’s interest – not the locomotive engineers, CN’s other employees, its customers or the Canadian economy. CN is urging the TCRC to resume negotiations immediately to reach a settlement. If that is not possible, CN believes the union should agree to submit issues in dispute to binding arbitration before the Nov. 28 strike deadline.

Such an approach is fully consistent with the TCRC’s agreement to binding arbitration to end its strike at VIA Rail in July 2009. In that dispute, the TCRC asked for two percent wage increases.

However, according to a research report from National Bank Financial, the TCRC had previously rejected CN’s offer to refer the matters to binding arbitration before calling for the strike.

At the end of the bilateral talks, on Nov. 23, CN offered a 1.5 percent wage increase to the engineers and one work rule change to add more days to their schedule (engineers have a 3,800 mileage cap versus 4,300 for conductors).

The following were the key highlights of CN’s offer: a wage increase of 1.5 percent; an extra run to align the engineers mileage cap with the conductors, implying an additional $11,000/yr in compensation (engineers only work 15-17 days/month currently); other than the extra run/days to balance the mileage cap with the conductors, no other work rule changes; the union may give notice they are going on strike, but CN can operate without them; CN previously indicated it would not lock the engineers out.

“Although the previous agreement with the Teamsters included a wage increase north of 1.5 percent, we highlight that this is a different environment from an inflation perspective and a wage increase of 1.5 percent is in the ballpark of recent industry benchmarks,” states the report.

“Recall, the same union recently struck a deal for a 2 percent wage increase at VIA Rail. Against that backdrop, we believe CN is being relatively fair to the engineers, as engineers will see an overall increase in their compensation from the wage increase and extra run,” the report continued. “There could be some room to increase the 1.5 percent by a small amount, in our view, but the Teamsters will have to consider the environment (coming out of a recession, volumes down in 2009, with a slow recovery underway, little inflation, etc.).”

If the TCRC strikes CN, the company says it is committed to provide the best possible service to its customers in the circumstances.