December 3, 2009 / 4:19 PM / 8 years ago

CN Rail, union resume contract talks

OTTAWA (Reuters) - Canadian National Railway Co is resuming labor talks on Thursday with its locomotive engineers after a brief strike, with a one-week deadline to reach a deal on wages, benefits and contract length.

<p>Rail cars sit in the CN MacMillan Yard in Toronto February 10, 2007. REUTERS/J.P. Moczulski</p>

The talks come a day after Canada’s largest railway reached a settlement with 1,700 unionized engineers to end their walkout, which started early on Saturday.

“CN’s negotiators will be meeting with (union) negotiators and the mediators today. The arbitrator has not been selected,” CN spokesman Mark Hallman told Reuters.

“The length of the contract is an item for discussion between CN and the union and if the parties do not reach agreement that term of the contract will be decided by the arbitrator.”

If the two sides cannot reach an agreement by December 10, outstanding wage, benefit and contract term issues will go to binding arbitration. Work-rule issues can go to binding arbitration only if the company and union agree.

The arbitrator will have 90 days after appointment to report a decision, Hallman said.

The Teamsters Canada Rail Conference union was not immediately available for comment.

Engineers went on strike after CN unilaterally imposed a 1.5 percent wage increase and raised their monthly mileage cap to 4,300 miles from 3,800 after 14 months of negotiation failed to produce a new contract.

The engineers’ last contract expired on December 31, 2008.

Under the settlement deal to end the strike, CN agreed to roll back the imposed monthly mileage cap and wage increase.

“We are getting our operations back to normal as quickly as possible and all of the locomotive engineers are expected to return to work and are doing so,” Hallman said.

In an attempt to maintain service, CN used some 225 managers trained to operate locomotives to replace the striking engineers.

The dispute did not affect CN engineers in the United States, northern Alberta and northern Quebec.

Despite initial jitters, shipments of grain and lumber were not disrupted by the walkout.

The company would not discuss or speculate on the financial impact of the strike, Hallman said.

Shares in CN were down 12 Canadian cents, or 0.2 percent, at C$56.03 Thursday morning on the Toronto Stock Exchange.

($1=$1.06 Canadian)

Reporting by Susan Taylor; editing by Rob Wilson

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