Absence of Progress at the Negotiating Table Requires Immediate Action
MONTREAL, Aug. 09, 2024 (GLOBE NEWSWIRE) -- Following the Canada Industrial Relations Board’s (CIRB) decision that does not bring the labour conflict any closer to a resolution, CN (TSX: CNR) (NYSE: CNI) is formally requesting the Minister of Labour’s intervention under section 107 of the Canada Labour Code to protect Canada’s economy from the impacts of prolonged uncertainty.
Negotiations with the TCRC resumed on Wednesday. However, no progress has been made as the TCRC has not engaged meaningfully at the negotiating table.
While CN is willing to keep negotiating with the TCRC, the Company has lost faith in the process and is concerned that a negotiated deal is no longer possible without a willing partner. Therefore, the Company formally requests the Minister of Labour’s intervention.
Unless there is immediate and meaningful progress at the negotiating table or binding arbitration, CN will have no choice but to begin a phased and progressive shutdown of its network, starting with embargoes of hazardous goods, which would culminate in a lockout at 00:01 Eastern Time on August 22nd.
Since the beginning of the year, CN has made four offers to the TCRC. The offers included points on wages, rest, and labour availability while remaining fully compliant with the government-mandated rules overseeing duty and rest periods. None of CN's offers compromised safety in any way. The latest offer proposed third-party arbitration. The union rejected all offers and has made no counter-proposals.
Supply chains require predictability to function properly. Unfortunately, even the possibility of an unpredictable labour disruption and subsequent disorderly shutdown creates a safety risk and unacceptable uncertainty for industries that depend on rail. Prolonged uncertainty will impact consumers and workers across industries and across Canada.
Background on 2024 Negotiations and Offers
In January, CN offered the TCRC a modernized agreement that protected safety and acquired rights while improving work/life balance, which was refused.
The offer was then improved in April with a focus on better wages, job security, and guaranteed earnings for employees. The TCRC refused the improved offer.
In May, CN then presented a simplified offer within the framework of the existing agreement, which the TCRC also refused.
In the absence of a path forward, CN offered to submit to binding arbitration in June. Binding arbitration is a process where both parties empower a mutually agreed upon independent arbitrator to determine the terms of a settlement. It is an impartial approach that would achieve a resolution while avoiding a costly disruption to supply chains, Canadians, and the Canadian economy. The TCRC refused this offer.
All of the information regarding the offers, including details on the proposed wages, rest, and labour availability, is available below.
Current Rest and Wages
Rest:
- By combining Duty and Rest Period Rules (DRPR), paid sick days, personal leave days, and existing rest and vacation provisions in their collective agreements, conductors and locomotive engineers currently work approximately 160 days a year.
Wages:
- In 2023, the average conductor earned approximately $121,000, not including pension and medical benefits.
- In 2023, the average locomotive engineer earned approximately $150,000, not including pension and medical benefits.
About Embargoes
Railroads issue embargoes when, in the judgement of the railroad, an actual or threatened physical or operational impairment, of a temporary nature, warrant restrictions against such movements. It is particularly critical in the event of labor disruption to prevent sensitive and dangerous goods to be stranded on the network. The embargoes are effective within 48 hours of being issued.
Any product coming to, leaving, or moving within Canada on rail will not be transported during a work stoppage. Only limited train movements within yards will be executed as there are not enough certified management train crews to ensure intercity train movements.
Should a settlement be reached, or arbitration be agreed to, CN will remove its embargoes and resume normal operations.