CORRECTED - UPDATE 1-CN to implement its wage proposal for engineers

* Most recent talks ended last Friday

* Union says suggested follow-up dates, company refused (Corrects paragraph 5 to clarify terms of CN's offer)

VANCOUVER, British Columbia, Nov 23 (Reuters) - Canadian National Railway Co (CNR.TO: Quote, Profile, Research) (CNI.N: Quote, Profile, Research) will implement part of its contract proposals on its Canadian locomotive engineers, the carrier said on Monday.

The announcement by Canada's largest railway came after the Teamsters Union, which represents about 1,700 of the company's locomotive engineers, accused CN of refusing to negotiate a new agreement at the bargaining table.

Canadian National said it will raise wages by 1.5 percent beginning Nov. 28, but also hike the engineer's monthly mileage cap from 3,800 to 4,300 miles - a change that would increase the number of days they are potentially available for work.

CN said the increased mileage cap was needed to improve productivity since the engineers now work an average of 15 to 17 days per month, and would bring their contract in line with train conductors who now have a 4,300-mile cap.

Among the contract offers rejected by the union was one that would keep the status quo on the cap, but with wage increases of 2 percent annually in the first three years of a four-year contract and 3 percent in the final year and benefit improvements, a CN spokesman said.

Canadian National said it would still prefer to resolve the dispute without a labor disruption. The two sides have the right under Canadian labor law to issue a 72-hour notice for a strike or lockout.

Wages and the mileage cap were among the issues dividing the two sides. The engineers have been without a contract since the end of last year, and Canada's labor minister had appointed two mediators in June to help resolve the dispute.