Canadian National Railway said on Thursday it would impose new work rules on 2,700 train engineers and other workers beginning next week if it is unable to reach a new labour deal with their union.
The Teamsters Rail Conference, which represents CN's train conductors, yard employees and traffic coordinators, says it is opposed to the deal recommended by a conciliator and endorsed by the railway.
CN is asking the union to accept a three-year status quo plan as the basis for a new collective agreement.
Conciliator Michael Bendel has recommended a deal that includes wage and benefit improvements comparable with those granted to other CN employees and a deferral of contentious issues such as crew scheduling.
The union rejects the status quo because there are problems with the current agreement, as evidenced by the number of grievances, said Teamsters spokesman Bryan Boechler ahead of mediated talks Thursday afternoon.
"After six months of extensive bargaining, we are now at a critical juncture," CN Chief Executive Claude Mongeau wrote in a letter to the unionized staff on Wednesday and disclosed a day later.
"We can either accept the recommendations ... or move forward to modernize a few sections of our collective agreements that impede our ability to improve customer service."
The letter does not say what changes are required to improve customer service, but did say the initiatives will have no affect on safety, rest rules, or a mileage cap.
"We told the union that if we are not able to settle the collective agreements by tomorrow (Sept. 30), we will implement changes to work rules with a view to improve customer service effective next Monday Oct. 4," Mr. Mongeau wrote.
"At the same time we will increase your wage rates by 2 per cent."
That is below wage increases in the conciliator's recommended plan of 2.4 per cent, 2.6 per cent and 3 percent over a three-year period.
"If they did go ahead and unilaterally change the terms and conditions, once again, it would depend on which articles they changed, whether that would spur us to serve a 72-hour strike notice," Mr. Boechler told Reuters during a break in the talks.
"But at this time, we still have no intention of serving strike notice."
Ninety per cent of union members have voted in favor of authorizing a strike if no agreement is reached. The workers have been without a contract since July 22.
The two sides must give 72 hours' notice of a strike or lockout.
The union has also said it is not willing to accept a second consecutive arbitrated settlement that fail to address its safety and health concerns.
CN shares were down 21 cents at $65.63 at mid-session Thursday on the Toronto Stock Exchange.