The Supreme Court Monday said it would decide if railroads can ignore their union contracts when they consolidate operations under a merger approved by the Interstate Commerce Commission.

The court agreed to hear a case involving two separate instances where rail employees were laid off as part of a plan to streamline operations.The high court's ultimate decision in the case could have a significant impact on mergers in the rail industry and the commission's powers in rail labor matters.

"The carriers' position is that this is the way things have been since 1948," said Jeffrey Berlin, an attorney for one of the railroads involved in the case.

But Robert Rafferty, secretary-treasurer for the American Train Dispatchers Association, one of the unions named in the Supreme Court case, said: "They (the commission) are overstepping their bounds. The ICC was never empowered with the authority to interpret collective bargaining agreements."

In each case - one involving the 1982 merger of the Norfolk & Western Railway with the Southern Railway Co. and the other involving the 1980 merger of the Chessie and Seaboard rail systems into what became CSX Corp. - rail labor argued that the railroads were violating the job preservation provisions in their union contracts.

N&W was consolidating its Roanoke, Va., systems operation center into the Southern control center in Atlanta. The move, announced in 1986, eliminated several supervisor positions. The train dispatchers union argued that the move violated its contract with N&W.

CSX was transferring the Waycross, Ga., freight car repair station operated by Seaboard to a Chessie System facility in Raceland, Ky. The transfer meant the loss of jobs at both sites. The Brotherhood of Railway Carmen protested the action.

The commission, claiming it had the authority to intervene when rail labor contracts interfered with the completion of a merger, allowed the railroads to ignore the contracts and proceed with the consolidations.

The U.S. Court of Appeals for the District of Columbia remanded the

commission's actions in the cases, however. It ruled that the commission had no authority to override contracts negotiated between labor and management.

CSX and N&W appealed the cases to the Supreme Court. The commission asked the high court not to act on the issue until it had finished reviewing the appeals court remand. The Supreme Court apparently chose to ignore the

commission's request.

The railroads argue that the appeals court decision gives rail labor veto power over railroad consolidation decisions. The commission's power to settle rail labor matters "is a cornerstone of the nation's longstanding policy of fostering railroad consolidations in the interest of economy and efficiency," N&W told the high court.

The ICC's power to override laws interfering with railroad mergers dates back to World War II, N&W told the court.

"We think it could have very significant implications for mergers and consolidations in the railroad industry," said a CSX spokeswoman.

"We have been trying for five years to decide the issue of whether rail labor collective bargaining agreements can be set aside by the ICC," said a spokesman for the Rail Labor Executives' Association. "Finally the Supreme Court has agreed to decide the issue."