CN Asks Federal Government to Order Binding Arbitration to Protect Canada’s Economy
10 August 2024 - 7:30AM
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
OffersIn 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 here.
Current Rest and WagesRest:
- 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 EmbargoesRailroads 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.
CN Forward-Looking Statements
Certain statements by CN included in this news release constitute
“forward-looking statements” within the meaning of the United
States Private Securities Litigation Reform Act of 1995 and under
Canadian securities laws. By their nature, forward-looking
statements involve risks, uncertainties and assumptions. CN
cautions that its assumptions may not materialize and that current
economic conditions render such assumptions, although reasonable at
the time they were made, subject to greater uncertainty.
Forward-looking statements may be identified by the use of
terminology such as “believes,” “expects,” “anticipates,”
“assumes,” “outlook,” “plans,” “targets,” or other similar words.
Forward-looking statements reflect information as of the date on
which they are made. CN assumes no obligation to update or revise
forward-looking statements to reflect future events, changes in
circumstances, or changes in beliefs, unless required by applicable
securities laws. In the event CN does update any forward-looking
statement, no inference should be made that CN will make additional
updates with respect to that statement, related matters, or any
other forward-looking statement.
About CNCN powers the economy
by safely transporting more than 300 million tons of natural
resources, manufactured products, and finished goods throughout
North America every year for its customers. With its nearly
20,000-mile rail network and related transportation services, CN
connects Canada’s Eastern and Western coasts with the U.S. Midwest
and the Gulf of Mexico, contributing to sustainable trade and the
prosperity of the communities in which it operates since 1919.
Contacts:
Media |
Investment Community |
Jonathan Abecassis |
Stacy Alderson |
Director, Public Affairs and |
Assistant Vice-President |
Media Relations |
Investor Relations |
(438) 455-3692media@cn.ca |
(514)
399-0052investor.relations@cn.ca |
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