CN strike settled;locomotive engineers back to work as quickly as possible

The Canadian Press ~ The News
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MONTREAL - Canadian National Railway Co. (TSX:CNR) and the Teamsters union reached a deal on Wednesday to end a strike by locomotive engineers, avoiding a potential blow to the fragile economic recovery.
Teamsters Canada president Daniel Shewchuk said the engineers will get back to work as quickly as possible, but didn't provide a timeline.
Federal Labour Minister Rona Ambrose said restoring full service quickly is critical to the economy.
"Canada is still at the early stages of a recovery from the global economic downturn and could not afford slowdowns and stoppages in such a critical component of the national infrastructure," Ambrose said in a statement.
The minister said the deal to end the strike, which began on Saturday, was reached as a result of "intense bargaining."
Under the terms of the agreement, CN will not proceed with controversial work rule changes it announced last week including increasing the monthly mileage cap for the locomotive engineers.
The union had argued the hike would require some workers to work seven days a week, with no time off, and cause layoffs, something the company said was untrue.
CN and the union have also agreed to continue negotiations to resolve issues related to wages, benefits and work rules, but if there is no agreement any dispute over wages and benefits will be settled by binding arbitration.
The two sides may also agree to submit work-rule issues to binding arbitration, but only if they can agree on the ones that should be subject to arbitration.
CN president and chief executive Hunter Harrison said the deal gives both sides the flexibility to negotiate issues further, but also ensures the finality of binding arbitration for issues that remain in dispute.
"We have always sought, since starting negotiations 14 months ago, to achieve a settlement with the TCRC through negotiations or binding arbitration," Harrison said in a statement.
Shewchuk said the most contentious issue of the increased mileage cap was resolved at the last minute.
"Despite the threat of impending back to work legislation, it was made clear that any increase to the mileage cap would not result in an agreement," he said in a statement.
Ambrose said she will appoint federal mediators and an arbitrator to help finalize the other outstanding issues.
The deal came after Ottawa introduced legislation Monday to end the strike.
CN is the country's largest railway and the government cited worries about the weak economy to justify the strike-ending legislation.
"Continuing the strike for any further amount of time would have had grave consequences for our economy," Ambrose said.
Managers have been running the trains since the walkout began.
Edward Jones analyst Brian Yarbrough said the deal looks positive for both sides.
"You never like to see people out there unemployed in this kind of environment and you don't like to see the potential negative impacts this could have caused to the overall economic rebound," Yarbrough said from St. Louis.
Since the strike was so short, there shouldn't be any serious economic effects, he added.
The 1,700 engineers, members of the Teamsters Canadian Rail Conference, have been without a contract for almost a year.
CN shares closed down 27 cents at $56.03 on the Toronto Stock Exchange.

Organizations: CN, Canadian National Railway Co., TSX Toronto Stock Exchange

Geographic location: Canada, MONTREAL, Ottawa St. Louis

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