UPDATED: CN and CPKC plan for potential lockout amid CIRB ruling

Following the Canada Industrial Relations Board (CIRB) ruling Aug. 9 that no activities by CN or CPKC would need to be maintained in the event of a strike or lockout, both railways issued notice of a planned lockout.

In its ruling, CIRB also imposed a 13-day “cooling off period” before a potential strike or lockout can occur, giving CN and CPCK until Aug. 22 to take any strike action, with 72-hours’ notice of such a move being the minimum.

CPKC released a statement saying it will issue notice to the Teamsters Canada Rail Conference (TCRC) – Train and Engine division and TCRC – Rail Traffic Controller division of its plan to lock out employees at 12:01 a.m. ET Aug. 22 if union leadership and the company are unable to come to a negotiated settlement or agree to binding interest arbitration. CPKC said the company is committed to continuing good faith negotiation throughout.

CN also responded, saying in a release that the company 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,” read CN’s statement. “However, no progress has been made as the TCRC has not engaged meaningfully at the negotiating table.”

CN said it is willing to keep negotiating with the TCRC, but has lost faith in the process and is concerned that a negotiated deal is no longer possible without a willing partner.

“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 12:01 a.m. ET on Aug. 22,” CN said.

On its website, TCRC said it met with CPKC prior to the CIRB ruling but the parties were unable to come to an agreement and would continue negotiating through the weekend of Aug. 10-11.

“While your bargaining committee is committed to negotiating a new collective agreement, we must move forward and prepare for the work stoppage,” the TCRC notified its members. “We would ask that everyone assist the local executive and strike captains in this necessary procedure. Your bargaining committee will provide updates and support as needed.”

On June 29, TCRC announced that close to 10,000 workers at CN and CPKC had voted to reauthorize strikes at both companies, if negotiated settlements cannot be reached. This came after workers voted to authorize a strike in early May.

As a response, Minister of Labour Seamus O’Regan Jr. posted on social media May 9 addressing the possibility of a strike, writing, “Today, I asked the Canada Industrial Relations Board to look into maintenance of activities agreements between @TeamstersRail, @CNRailway & @CPKCrail. Serious concerns have been raised about potential impacts to the health and safety of Canadians. It’s our duty to look into this.”

On May 19, the government temporarily suspended workers’ right to strike to allow the CIRB to determine whether any shipments must continue in the event of a work stoppage.

Responding to the CIRB ruling, TCRC stated that it verifies that the agreements previously entered were proper and appropriate. The TCRC considers this a successful decision that confirms the membership’s rights to withdraw services if required.

TCRC said it will continue to push for a negotiated settlement with both carriers. Discussions will immediately take place to continue the process and arrange dates to meet.

“Today’s decision strengthens your bargaining committee’s resolve to achieve a settlement, and we thank the membership for your patience during this process,” TCRC said in a statement.

Steven MacKinnon, Canadian minister of labour and seniors, said on social media that both parties in this dispute have a responsibility to Canadians.

“I call upon the parties to stay at the bargaining table and continue holding productive and substantive discussion that meet the needs of this moment,” he wrote. “A negotiated agreement is the best way forward.”

Scott Shannon, vice-president for Canada and cross-border logistics at C.H. Robinson, told Inside Logistics that this potential strike could be historic.

“We’ve been doing business in Canada for over 100 years, and it’s the first time labour negotiations for both railroads have been on the same timeline,” he said. “Before, when one railroad went on strike, freight could be shifted to the other. Both railroads simultaneously being out of commission would paralyze the ports and put instant pressure on trucking. The other thing to understand is that both Canadian and U.S. companies rely on the Canadian railroads. About 70 per cent of freight between cities in Canada moves by rail.”

Back in May, the U.S. Port/Rail Ramp Freight Index from ITS Logistics, indicated that all rail operations throughout North America were being moved to a severe concern due to the potential labour disruption in Canada and inland port intermodal (IPI) congestion at ports in Los Angeles and Long Beach.

Barry Kukkuk, CTO of Netstock, said in May that if the strike takes place, the impact will continue to be seen across the North American supply chain.

“It could result in delivery delays for inventory, thus negatively impacting inventory levels for many companies across the Canadian and U.S. supply chain,” said Kukkuk. “This could be particularly devastating for businesses moving high volumes of inventory that are often rail-dependent or can’t be transported via truck. Industries like agriculture and coal could be impacted.”

Kukkuk said these kinds of inevitable disruptions in the supply chain should spur businesses to prepare for longer lead times on shipments.

“Implementing a long-term inventory management solution and strategy is necessary for helping businesses navigate supply chain complexities,” he said. “With the help of accurate data and supply chain technology, businesses can become more agile and responsive – ensuring they can make the right decisions today to meet demands and remain nimble amid future disruptions.”

Maersk was also weighing its options at the time in the face of a potential Canadian rail workers’ strike.

“In light of concerns for our customers’ supply chains, Maersk has been reviewing contingency actions,” the company said in a release to its customers. “For example, as referenced in our prior advisory, we continue to explore limited truck options for West/East – East/West intra-Canadian transport in the event of a work stoppage.”