Canada Labor Board Orders Rail Employees Back to Work

(Bloomberg) — An independent tribunal in Canada has ordered workers at the country’s two largest railways to get back on the job and to engage in binding arbitration to resolve a dispute that has snarled North American supply chains.

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The Canada Industrial Relations Board agreed on Saturday to Labor Minister Steven MacKinnon’s request for arbitration as well as an extension of the workers’ expired contracts and for the railways to resume operations “forthwith.”

“The board has concluded that, in this case, it has no discretion or ability to refuse to implement, in whole or in part, the minister’s directions or modify their terms,” the CIRB said in its decision, signed on behalf of Chairwoman Ginette Brazeau. The decision was unanimous.

MacKinnon had argued that a return to work was needed because Canadians’ livelihoods, safety and communities were at stake. “I expect that railway companies and employees will resume operations at the earliest opportunity,” he said on X.

Canadian National Railway Co. and Canadian Pacific Kansas City Ltd. shut down operations Aug. 22 after talks with the Teamsters Canada Rail Conference failed. Following MacKinnon’s request to the board, CN trains started rolling again early Friday, but CPKC workers went on strike. A strike notice was issued to CN by the Teamsters for 10 a.m. on Aug. 26.

The Teamsters union, which represents nearly 10,000 workers at the two railways, said in an emailed statement that it will “lawfully comply” with the decision. However, it will appeal the ruling to the Federal Court.

“This decision by the CIRB sets a dangerous precedent,” union President Paul Boucher said. “The rights of Canadian workers have been significantly diminished today.”

CN said in a news release that it’s “satisfied that this order effectively ends the unpredictability that has been negatively impacting supply chains for months.”

CPKC said in an emailed statement that it has ended its lockout. Employees are expected to resume their duties at 12:01 a.m. New York time on Monday. “We are working with customers on a balanced return to normal operations,” the railway said.

The tribunal directed parties to attend a meeting on Aug. 29 about the implementation of the arbitration process.

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Business groups in Canada and the US had been calling on the Canadian government to intervene, as the lockout disrupted their interconnected supply chain and thwarted C$1 billion ($740 million) in goods transported by train each day.

Commodities like coal, wheat, fertilizer and lumber depend on the railways to transport product between Canada’s ports and the two countries. Collectively, the two companies account for 80% of the country’s rail network.

Talks between the two parties have stalled over arrangements to address scheduling and crew fatigue issues. The previous collective agreements expired at the end of 2023.

–With assistance from Monique Mulima.

(Updates with Steven MacKinnon statement in fourth paragraph, union response starting in sixth paragraph, CN response in eight paragraph, CPKC in ninth paragraph.)

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