November 24, 2009 / 2:52 AM / in 8 years

Union mulling options after CN Rail imposes terms

VANCOUVER, British Columbia (Reuters) - A union representing train engineers at Canadian National Railway Co is unhappy with the railway’s decision to impose labor contract terms on its members and may consider the move tantamount to a lockout, the union’s president said on Tuesday.

The Teamsters Canada Rail Conference, which represents 1,700 engineers at Canada’s biggest railroad, is getting advice from its lawyers and will likely issue a statement later in the day, President Daniel Shewchuk said.

“We are not very happy at all... it is a bit threatening,” Shewchuk told Reuters.

“What we may be considering is that in essence you (CN) have locked us out as we don’t have to accept the changes you have imposed on us,” he said.

CN said late on Monday it will raise locomotive engineers’ wages by 1.5 percent beginning November 28, but also hike their monthly mileage cap, the upper limit on the number of miles they must travel on the job, to 4,300 miles from 3,800.

It said it had decided to impose these terms to “move the company forward” after holding on-again, off-again contract talks with the Teamsters for more than a year. The engineers’ last contract with CN expired at the end of 2008.

“CN’s notice yesterday to the (Teamsters) is by no means a lockout and we expect our engineers to report to their assignments and carry out their duties as required,” CN spokesman Mark Hallman said in an emailed statement.

CN said it would still prefer to resolve the dispute without a labor disruption. The two sides have the right under Canadian labor law to issue a 72-hour notice for a strike or lockout. The union has a strike mandate from its members.

The higher cap could increase the number of days the engineers would have to be available for work each month, but CN says they would be paid more with the adjusted wage rate.

The carrier said it made three offers, including one with a status quo mileage cap and another that would put the unsettled issues to binding arbitration. The union rejected those proposals.

Shares in CN were 56 Canadian cents lower at C$56.91 on the Toronto Stock Exchange on Tuesday afternoon.

Lumber futures on the Chicago Mercantile Exchange were up sharply in thin holiday-week trade on Tuesday on concerns CN workers may strike.

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

Reporting by Nicole Mordant; Editing by Jeffrey Hodgson

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