UPDATE 3-CP Rail, union in talks after labor deal fails

(Adds comment from union president)

CALGARY, Alberta, Nov 19 (Reuters) - Canadian Pacific Railway (CP.TO) and the union representing its 4,500 locomotive engineers and conductors have entered a no-strike and no-lockout agreement while they restart talks to salvage a labor deal, both sides said on Monday.

CP Rail and the Teamsters Canada Rail Conference said they forged the agreement after union members narrowly rejected an earlier contract proposal.

The deal to keep workers on the job runs until Saturday, union President Dan Shewchuk said.

"In the meantime, we've set up a meeting for Friday the 23rd with the company to see if we can start the process and get a negotiated settlement," Shewchuk said.

At a ratification vote on Friday, 50.9 percent of those who cast ballots rejected a tentative contract, which the company and union bargaining committees agreed to in September, according to the Teamsters' Web site.

Union and railway officials declined to say which issues proved to be sticking points with union members, but said they were optimistic they could come to a new agreement.

In September, the two sides agreed on a tentative five-year deal that the union said offered improvements in wages, benefits and pension provisions.

"It's fair to say that the parties understand each others' needs and issues very well. We've been working since September '06," CP Rail spokesman Mark Seland said. "But we'll have to await those discussions to see where the opportunities lie."