Canada labor board orders rail employees back to work, imposes binding arbitration

Canada’s federal arbitrator has ordered employees at the country’s two major railroads back to work, imposing binding arbitration following a work stoppage that halted freight shipments since Thursday morning.

The Canada Industrial Relations Board agreed Saturday to Labor Minister Steven MacKinnon’s request for arbitration as well as an extension of the workers’ expired contracts, clearing the way for the railways to resume operations starting Monday.

Canadian National Railway (NYSE:CNI) and Canadian Pacific Kansas City (NYSE:CP) shut down operations on Thursday after talks with the Teamsters Canada Rail Conference failed; after MacKinnon requested arbitration, CN trains began operating early Friday, but CPKC workers went on strike, and a strike notice was issued to CN by the Teamsters for this morning.

The Teamsters union said it will comply with the board’s decision but plans to appeal the ruling in court, arguing it “sets a dangerous precedent” and that “the rights of Canadian workers have been significantly diminished.”

CN Rail (CNI) said it is disappointed an agreement could not be reached at the bargaining table, but it is “satisfied that this order effectively ends the unpredictability that has been negatively impacting supply chains for months.”

CKPC (CP) said it expects to “take several weeks for the railway network to fully recover from this work stoppage and a period of time beyond that for supply chains to stabilize.”