CN Informs Teamsters of Potential Lockout Situation
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CN Issues Lockout Notice to Teamsters Canada Rail Conference
MONTREAL — CN (TSX: CNR) (NYSE: CNI) has formally notified the Teamsters Canada Rail Conference (TCRC) of its intention to initiate a lockout of its Canadian employees represented by TCRC, scheduled to commence at 00:01 ET unless an agreement or binding arbitration is reached beforehand.
Despite discussions over the weekend, significant advancements in negotiations remain elusive, maintaining a considerable distance between the involved parties.
In the absence of an immediate resolution to the labor dispute, CN will be compelled to accelerate the phased shutdown of its network, which would lead to an eventual lockout scenario.
CN has identified the necessity of a systematic approach to shutting down its operations, given the looming threat of an unpredictable strike notice. This preemptive measure is crucial for safeguarding the communities it serves and ensuring the protection of customers' goods while facilitating the recovery of the network following any disruptions. Additional embargoes will be put into effect soon.
Background on Recent Negotiations
In the early part of the year, CN proposed a modernized agreement aimed at enhancing safety standards, improving wages, and ensuring a better work/life balance while safeguarding acquired rights. However, this proposal was declined by TCRC.
In April, CN enhanced its offer, focusing on more competitive wages — including $75 per hour for Locomotive Engineers and $65 per hour for Conductors — along with job security and guaranteed earnings. This revised proposition also did not gain acceptance from the TCRC.
Subsequently, in May, CN presented a more streamlined offer following the existing collective framework, which featured improved wages and more predictable days off. Unfortunately, this offer was similarly turned down by TCRC.
To move towards a resolution, CN proposed voluntary binding arbitration in June, a process designed to appoint an independent third-party arbitrator to decide on settlement terms. This impartial strategy aims to resolve disputes effectively without unduly disrupting supply chains or impacting the Canadian economy negatively, yet the TCRC declined this offer also.
Current Employee Rest and Wage Structure
Rest
Conductors and Locomotive Engineers currently work approximately 160 days per year, utilizing a combination of Duty and Rest Period Rules (DRPR), paid sick days, personal leave days, and existing provisions for rest and vacation as outlined in their collective agreements.
Wages
- In the past year, the average conductor earned roughly $121,000, excluding pension and medical benefits.
- The average locomotive engineer earned around $150,000 in the previous year, also not accounting for pension and medical benefits.
Understanding Embargoes
Railroads issue embargoes under circumstances that suggest a physical or operational impairment that may necessitate restriction on movement. This is especially critical during periods of labor unrest to avoid leaving sensitive or hazardous materials stranded on the network. Embargoes are enacted within 48 hours of issue.
During a work stoppage, any product that comes to, leaves, or moves within Canada by rail will not be transported, with only limited train operations allowed within yards due to insufficient certified management crews for intercity services.
Should an agreement be reached or arbitration accepted, CN will expeditiously lift its embargoes and resume standard operations.
About CN
CN is integral to the economy, efficiently transporting over 300 million tons of essential natural resources, manufactured goods, and completed products across North America annually. Operating within an extensive nearly 20,000-mile rail network since 1919, CN facilitates connections between Canada’s Eastern and Western coastlines and the U.S. Midwest and Gulf of Mexico, promoting sustainable commerce and fostering community prosperity.
Contact Information
Media
Jonathan Abecassis, Director of Public Affairs and Media Relations, (438) 455-3692, media@cn.ca
Investment Community
Stacy Alderson, Assistant Vice-President of Investor Relations, (514) 399-0052, investor.relations@cn.ca
Frequently Asked Questions
1. What is the reason for CN's lockout notice to TCRC?
CN issued a lockout notice due to the lack of progress in negotiations regarding employee agreements and safety plans, with impending labor conflict.
2. What offers has CN made to TCRC regarding employee contracts?
CN has proposed several agreements to enhance wages, job security, and work/life balance, all of which have been rejected by TCRC.
3. How many days do conductors and locomotive engineers work annually?
Conductors and locomotive engineers work approximately 160 days each year, utilizing various leave programs to structure their time off.
4. What happens during a work stoppage in terms of product movement?
During a work stoppage, products transported by rail will not be allowed to move, limiting operations to essential movements within yards only.
5. How significant is CN's role in North America's economy?
CN plays a crucial role in the economy by transporting over 300 million tons of goods annually, linking critical regions across North America and supporting sustainable trade.
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