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(Adds CN and Unifor unable to reach agreement)
TORONTO, Feb 22 (Reuters) - Canadian National Railway said late on Sunday it was unable to reach full agreement on a negotiated settlement with Unifor, the union representing 4,800 of its mechanical, clerical and intermodal staff, and will resume talks on Monday morning.
Canada's No. 1 railway had called for binding arbitration on Friday when it first announced it was preparing to lock out employees represented by the union, a move it said could come as soon as Monday.
"We reiterate that binding arbitration may be the best way to prevent a labour dispute with Unifor members tomorrow evening," CN Rail Chief Executive Claude Mongeau said in a statement late on Sunday.
With the Feb. 23 lockout deadline looming, CN said it had begun advising customers that it may have to deploy labour contingency plans.
CN Rail also said it is prepared to supervise specially-trained employees represented by Unifor who maintain electric-powered Montreal commuter trains if the union agrees to allow them to work during any dispute.
Unifor said it has committed to federal mediators that if CN does lock out Unifor members, the union will not disrupt the Montreal commuter service.
Unifor, which on Friday called for CN Rail to return to the bargaining table, said on its Twitter feed on Saturday that the railway should negotiate a deal rather than seek arbitration.
With protracted contract talks between CN and Unifor at an impasse, the union had said on Thursday it planned to proceed with a vote to strike.
Unifor made the decision after CN on Wednesday said it would unilaterally alter a labour pact covering staff represented by Unifor if a new accord was not agreed by Feb. 20.
Reporting by Jeffrey Hodgson in Toronto and Supriya Kurane in Bengaluru; Editing by Phil Berlowitz and Anupama Dwivedi