Union vows to fight Canada's move to end rail shutdown, sparking uncertainty

By Allison Lampert, David Ljunggren and Anna Mehler Paperny

MONTREAL/OTTAWA (Reuters) -The union representing over 9,000 Canadian rail workers vowed on Friday to challenge the federal government's effort to mandate binding arbitration that would end an unprecedented rail stoppage at both of the country's main freight rail carriers.

The Teamsters union also filed notice to strike on Monday at Canadian National Railway, Canada's largest railway.

The union's moves are the latest twist in labor disputes at CN and Canadian Pacific Kansas City, which locked out Teamsters members on Thursday, triggering a simultaneous rail stoppage that business groups said could inflict hundreds of millions of dollars in economic damage. 

They further complicate the task of the Canada Industrial Relations Board (CIRB), which was meeting for hours on Friday with union and railway representatives, after the government asked it to end the impasse.

The Teamsters union on Friday night said the parties had concluded a day-long meeting, in which it argued that the government did not have absolute power to end the labor action. "The union will lawfully abide by any decision from the CIRB, and is prepared to file challenges in federal court if necessary," it said.

Railroad CN in a statement said it would move forward with a recovery plan until a CIRB decision was issued.

Labour Minister Steven MacKinnon, citing the risk to the economy, also asked the board to impose binding arbitration on talks between the union and companies, and for operations at both railways to resume immediately.

Canada, the world's second-largest country by area, relies heavily on trains to transport a wide range of commodities and goods. 

The Canadian Chamber of Commerce said it was disappointed with the Teamsters' decision to challenge the government's directive.

"This action will prolong the damage to our economy and jeopardize the wellbeing and livelihoods of Canadians, including union and non-union workers across multiple industries," the group said.

LEGAL CHALLENGES

Legal experts warned the Teamsters' challenge creates uncertainty and delays.

If CIRB orders workers back on the job pending binding arbitration, the union could challenge that decision and ask for a judicial review, said University of Manitoba employment law professor Bruce Curran, adding that if the employees do not return to work while the hearing is pending, the railways could seek an injunction forcing them back.

The federal government could also seek to pass back-to-work legislation, for which it would need the support of at least one other party because it does not control a majority of seats. The left-leaning New Democratic Party, which traditionally enjoyed strong union support and which props up Trudeau's government, has decried the government's intervention.

The timeline for a CIRB decision is unclear, the union said on Friday afternoon in a statement.

Earlier in the day, Francois Laporte, president of Teamsters Canada, denounced MacKinnon's decision.

"We don't believe a third party (should) decide what are going to be our working conditions," he told reporters at a picket outside CPKC's Calgary headquarters.

He said that in case of a back-to-work order, "our people will still be on strike. We will still be on the streets, so operations will not resume. It's not going to be business as usual for both companies".

STRIKE NOTICE

The union representing CN workers also served the company with a strike notice on Friday, shortly after saying its members would return to work in response to CN lifting its lockout.

The union filed notice that conductors, locomotive engineers and other workers at Montreal-based CN would strike on Monday at 10 a.m. ET (1400 GMT).

The Teamsters said they were prepared to negotiate with CN over the weekend and reach a deal despite disputes over scheduling, duration of shifts and availability of labor.

The Canadian government and CPKC had no comment on Friday.

CPKC said late on Thursday that it was preparing to restart operations in Canada and that further details on timing would be provided once it received CIRB's order.

A CN spokesperson said on Friday trains were starting to run and that its plan to resume operations was under way.

"We are focused on getting back to work," said Jonathan Abecassis, CN's spokesperson. "The Teamsters are focused on getting back to the picket line."

A lockout at CPKC has not been lifted. The union had already served CPKC with a strike notice before the lockout began.

MacKinnon had expressed confidence on Thursday that his move to refer the matter to CIRB and seek binding arbitration would survive a court challenge, given the broad power he has under the country's labor code.

"We're very, very confident about the path that we've selected here."

(Reporting by Allison Lampert in Montreal and David Ljunggren in Ottawa and Anna Mehler Paperny in Toronto; Additional reporting by Nilutpal Timsina; Editing by Ismail Shakil, Jonathan Oatis, Rod Nickel, David Evans and Diane Craft)