The union representing almost 9,300 workers at Canada’s two biggest rail operators says the railroads are pushing toward a work stoppage after negotiations have deadlocked over issues of working conditions and wage increases.
“CN and CPKC aim to eliminate all safety-critical rest provisions from our collective agreements,” François Laporte, national president of Teamsters Canada, said in a news release on Monday. “These provisions are necessary to combat crew fatigue and ensure public safety. We want to reach a negotiated settlement, but their demands are non-starters for the Teamsters.”
On Friday, Canadian National Railway Co. (CN) and Canadian Pacific Kansas City (CKPC) filed notices of dispute with the federal labor minister and requested the appointment of a conciliator for the bargaining process over a new collective bargaining agreement for train conductors, engineers and yard workers.
The notice of dispute starts the clock on a possible strike or lockout, which could occur in 81 days, or early May.
According to the Teamsters Canada Rail Conference (TCRC), the union that represents workers at both companies, CN and CPKC are effectively inviting a work stoppage.
“Canadian railroads don’t care about supply chains, farmers, or small businesses,” Paul Boucher, TCRC president, said in a statement. “They care about their bottom line, and squeezing everything they can out of their employees. If they need to manufacture a work stoppage to get there, they won’t think twice.”
TCRC represents 6,000 conductors, conductor trainees, yard coordinators and locomotive engineers across CN’s network in Canada, as well as 3,200 locomotive engineers, conductors, and train and yard workers at CPKC in Canada.
TCRC’s Rail Canada Traffic Controllers division also represents about 80 rail traffic controllers in Canada.
The collective bargaining agreements between TCRC workers and CN and CPKC expired Dec. 31.
Railroads push back against union accusations
CPKC (NYSE: CP) spokesman Patrick Waldron said the company has offered wage increases, quality-of-life improvements and predictable schedules with assigned days off, but that the railway and the union “remain far apart on the issues.”
“It is unfortunate that once again the TCRC–Train & Engine (T&E) division has chosen to grossly misrepresent the facts regarding our ongoing collective bargaining and the multiple proposals made by CPKC,” Waldron said in an email to FreightWaves. “The TCRC running trades leadership has again distorted the truth in an attempt to create a false narrative.”
CPKC has offered two options for renewed contracts that provide benefits for all workers, Waldron said.
According to Waldron, CPKC’s first option includes significant pay increases, as well as predictable days off through a simplified system.
CPKC’s second option offers competitive wage increases that are consistent with recent settlements and maintain the status quo for work rules within Transport Canada’s updated regulatory framework for rest, Waldron said. The second option does include an exception amending CPKC’s held-away-from-home provision for train crews.
“Our proposal recognizes the needs of our evolving workforce and the needs of our customers and Canada’s supply chains,” Waldron said. “Importantly, neither of these proposals, or anything CPKC has put forward, creates any risk to safety or employee well-being.”
Officials for CN (NYSE: CNI) said recent regulatory changes to worker rest provisions have made it harder to find available crews, necessitating a “modernization of the compensation model.”
“The union wants increases without the modernization of the compensation model that would support those increases,” CN spokeswoman Ashley Michnowski said in an email to FreightWaves.
Michnowski said under CN’s proposal, employees would work a scheduled 40-hour work week, with a minimum of 10 to 12 hours to rest between shifts and either two or three consecutive days off each week, which complies with the government’s Duty and Rest Period Rules in Canada.
“A scheduled railroad means a predictable railroad, and a predictable railroad is one that benefits customers and employees alike,” Michnowski said. “Our offer, which was refused by the union, guaranteed predictable schedules and consecutive days off for employees to specifically address work/rest balance, while keeping supply chains fluid.”
Wall Street not worried yet about rail strike
In a Tuesday note to clients, Deutsche Bank analyst Amit Mehrotra said CPKC and CN’s request for a federal conciliator in negotiations with the TCRC “is a fairly common development in these types of negotiations.”
“The bottom line is we don’t consider these items as meaningful for the outlook for CPKC and CN shares, though the timing is unfortunate given both companies have seen recent volume momentum which has begun to be reflected in the share price,” Mehrotra wrote. “If there is any work stoppage, which may not happen, it’s most likely (and rightfully) to be considered as an extraordinary event with limited impact to shares.”
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