CN Issues Lockout Notice to Teamsters Canada Rail Conference
MONTREAL — CN (TSX: CNR) (NYSE: CNI) has officially informed the Teamsters Canada Rail Conference (TCRC) of its plan to initiate a lockout of its Canadian employees represented by TCRC. This lockout is set to begin at 00:01 ET unless an agreement or binding arbitration is reached beforehand.
Although discussions took place over the weekend, there has been little progress in negotiations, leaving the parties still far apart.
If a resolution to the labor dispute is not achieved quickly, CN will have no choice but to speed up the phased shutdown of its network, leading to a potential lockout.
CN recognizes the importance of a systematic approach to shutting down operations in light of the possibility of an unpredictable strike notice. This proactive step is essential to protect the communities it serves and to ensure the safety of customers' goods while allowing the network to recover from any disruptions. Additional embargoes will be implemented shortly.
Background on Recent Negotiations
Earlier this year, CN put forward a modernized agreement aimed at improving safety standards, increasing wages, and ensuring a better work/life balance while protecting acquired rights. However, TCRC rejected this proposal.
In April, CN sweetened its offer, emphasizing more competitive wages — including $75 per hour for Locomotive Engineers and $65 per hour for Conductors — along with job security and guaranteed earnings. Unfortunately, this revised offer was also turned down by TCRC.
In May, CN made a more streamlined proposal based on the existing collective framework, which included better wages and more predictable days off. Regrettably, this offer was similarly rejected by TCRC.
To help resolve the situation, CN suggested voluntary binding arbitration in June, which would involve appointing an independent third-party arbitrator to determine the settlement terms. This impartial approach is designed to effectively resolve disputes without causing significant disruption to supply chains or negatively impacting the Canadian economy. However, TCRC declined this offer as well.
Current Employee Rest and Wage Structure
Rest
Conductors and Locomotive Engineers typically work around 160 days each year, utilizing a mix of Duty and Rest Period Rules (DRPR), paid sick days, personal leave days, and the existing provisions for rest and vacation as outlined in their collective agreements.
Wages
- Last year, the average conductor earned approximately $121,000, not including pension and medical benefits.
- The average locomotive engineer earned about $150,000 in the previous year, also excluding pension and medical benefits.
Understanding Embargoes
Railroads implement embargoes when there are indications of physical or operational issues that may require restrictions on movement. This is particularly crucial during times of labor unrest to prevent sensitive or hazardous materials from being stranded on the network. Embargoes take effect within 48 hours of being issued.
During a work stoppage, any products that arrive, depart, or move within Canada by rail will not be transported, with only limited train operations permitted within yards due to a lack of certified management crews for intercity services.
If an agreement is reached or arbitration is accepted, CN will promptly lift its embargoes and return to normal operations.
About CN
CN is vital to the economy, efficiently transporting over 300 million tons of essential natural resources, manufactured goods, and finished products across North America each year. Operating an extensive rail network of nearly 20,000 miles since 1919, CN connects Canada’s Eastern and Western coastlines with the U.S. Midwest and Gulf of Mexico, fostering sustainable commerce and enhancing 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.
