November 25, 2009 / 6:48 PM / 8 years ago

CN Rail, Teamsters schedule fresh contract talks

OTTAWA (Reuters) - Canadian National Railway Co said on Wednesday it will meet with the union representing 1,700 locomotive engineers on November 27, one day before the workers are scheduled to go on strike.

The country’s biggest railroad received a 72-hour strike notice from the Teamsters union on Wednesday, after talks between the two sides broke off last week over disagreements on wages and the cap on how many miles engineers must drive.

“I‘m hoping we can come to some sort of solution,” Teamsters Canada Rail Conference President Daniel Shewchuk told Reuters in an interview. “I‘m cautiously optimistic.”

CN had earlier urged the union to either resume talks immediately or submit disputed issues to binding arbitration before the strike deadline.

The federal government appointed two mediators, who have worked since August to help resolve the dispute. The engineers have been without a contract since December 31, 2008.

“The mediators have requested the parties meet in Montreal at noon Friday,” said CN spokesman Mark Hallman. “We will attend and ... we very much hope that we can reach an agreement to avoid a strike.”

The union said it had no choice but to issue a strike notice after CN said on Monday it planned to increase the engineers’ monthly mileage cap to from 3,800 miles to 4,300, the current level for train conductors. The railway also said it would raise wages by 1.5 percent effective November 28.

“As advised by the company, these changes are the tip of the iceberg and we cannot sit idly by while CN simply changes the terms and conditions of the collective agreement,” Shewchuk said separately in a statement.

The change would see some locomotive engineers work seven days a week, with no time off, and cause layoffs among conductors, trainmen and yardmen, the union said.

CN says it needs to change the mileage cap to increase productivity, but some employees complain it raises safety concerns.

CN SAYS CURRENT CAP OUTDATED

Engineers operating trains outside of freight yards are paid on a system that ties their wages to the distance the train travels, with a cap that currently limits them to working no more than 3,800 miles per month.

CN said in a recent note to employees that the current cap is outdated, because it was put in place in 1919, when the company used steam locomotives and freight trains covered less distance per day than they can now.

Raising the monthly cap would increase the amount of time the engineers would be available for work. The company said it invoked the changes to move forward after 14 months of fruitless bargaining with no resolution in sight.

The union had accused the railway of refusing to negotiate a new agreement. When the latest round of talks ended last Friday, the union said it suggested new dates for negotiations, but CN declined further meetings.

If there is a strike, the Montreal-based railway said it will provide the best possible service to customers.

Scotia Capital analyst Cherilyn Radbourne said a strike at CN was “not a good thing”, but the railway could continue operating with other qualified staff.

“What probably mitigates that potential impact of any kind of a strike in this situation is just simply that traffic volumes are down dramatically,” she said in an interview.

“So you don’t have the congestion on the system, it’s occurring at a time of year when, seasonally, traffic volumes start to decline and it’s happening before the onset of winter weather.”

The contract dispute does not involve CN’s unionized locomotive engineers in the United States.

CN shares fell 3 Canadian cents to C$56.32 on the Toronto Stock Exchange on Wednesday, but gained 27 cents to close at $53.76 on New York.

($1=$1.04 Canadian)

Reporting by Susan Taylor and Allan Dowd; editing by Rob Wilson

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