16:0749(105)CA - Treasury, IRS, Philadelphia Service Center and NTEU and NTEU Chapter 71 -- 1984 FLRAdec CA



[ v16 p749 ]
16:0749(105)CA
The decision of the Authority follows:


 16 FLRA No. 105
 
 U.S. DEPARTMENT OF TREASURY
 INTERNAL REVENUE SERVICE
 PHILADELPHIA SERVICE CENTER
 Respondent
 
 and
 
 NATIONAL TREASURY EMPLOYEES UNION
 AND NTEU, CHAPTER 71
 Charging Party
 
                                            Case Nos. 23-CA-194
                                                      23-CA-368
 
                            DECISION AND ORDER
 
    The Administrative Law Judge issued his Decision in the
 above-entitled proceeding finding that the Respondent had not engaged in
 the unfair labor practices alleged in the consolidated complaint, and
 recommending that the complaint be dismissed in its entirety.
 Thereafter, the General Counsel filed exceptions to the Judge's
 Decision, and the Respondent filed an opposition to the General
 Counsel's exceptions.
 
    Pursuant to section 2423.29 of the Authority's Rules and Regulations
 and section 7118 of the Federal Service Labor-Management Relations
 Statute (the Statute), the Authority has reviewed the rulings of the
 Judge made at the hearing and finds that no prejudicial error was
 committed.  The rulings are hereby affirmed.  Upon consideration of the
 Judge's Decision and the entire record, the Authority hereby adopts the
 Judge's findings, conclusions and recommended Order, as modified herein.
 
    In Case No. 23-CA-194, involving the Activity's Processing Division,
 the Judge concluded that the Respondent did not violate section
 7116(a)(1) and (5) of the Statute /1/ because its notice of its decision
 to implement "performance expectations" was adequate for the Union to
 have an opportunity to demand bargaining over impact and implementation,
 a well-established right, /2/ and that the Union had not made such
 demand or proposals prior to implementation.  Thus, at the time the
 Union was given the proposed performance expectations, it was told they
 would be implemented the next week.  The Union president replied that
 she wanted to look them over prior to any negotiations.  However, when
 the Respondent began implementation six days later, no demand or
 proposals had been made.  In the Authority's view, as it was clear that
 implementation was forthcoming, and occurred toward the end of the next
 week as predicted, the Union had adequate notice to request bargaining
 or at least to request more time to respond, if necessary.  Accordingly,
 the Authority cannot find that the Respondent's implementation of the
 performance expectations violated the Statute, and the complaint in Case
 No. 23-CA-194 shall be dismissed.  /3/
 
    In Case No. 23-CA-368, the Judge found that the Respondent did not
 violate section 7116(a)(1) and (5) of the Statute by refusing to bargain
 with the Union over its implementation of proposals concerning
 performance expectations at the Taxpayers Service Division, prior to
 implementation on July 2, 1979.  Rather, the Judge found that the
 Respondent was not obligated to negotiate over the proposals.  While the
 Authority adopts the Judge's conclusion that all of the proposals are
 nonnegotiable, it does so for different reasoning with respect to his
 findings on "Minimum Adverse Action Procedures." The Judge found that
 this proposal required the Respondent to take up to 10 sequential steps,
 which included mandatory training and reassignment, that could take up
 to 580 days before it could remove an employee from employment.  This
 delay he found would violate management's rights inasmuch as it would
 render ineffective any decision to remove an employee for not achieving
 expectations and thereby would prevent management from acting to remove
 employees.  /4/ The Authority finds this proposal to be substantially
 identical to Proposal 3 in American Federation of Government Employees,
 AFL-CIO, Local 1708 and Military Ocean Terminal, Sunny Point, Southport,
 North Carolina, 15 FLRA No. 1 (1984) (issued subsequent to the Judge's
 Decision).  In that case the Authority held the proposal to be outside
 the duty to bargain because it interfered with management's rights under
 section 7106(a) of the Statute to assign employees, by requiring their
 assignment to training and their reassignment from their current
 positions to other like-graded positions.  In this regard, the Authority
 held that the effect of the proposal would be to condition the exercise
 of specified management rights on the prior exercise of others.  For the
 reasons expressed in Military Ocean Terminal, Sunny Point, Southport,
 North Carolina and the cases cited therein, the Authority finds that the
 Union's proposal herein on "Minimum Adverse Action Procedures" is
 outside the duty to bargain.  Accordingly, the Authority finds that the
 Respondent did not violate section 7116(a)(1) and (5) of the Statute in
 Case No. 23-CA-368.
 
                                   ORDER
 
    IT IS ORDERED that the consolidated complaint in Case No. 23-CA-194
 and 23-CA-368 be, and it hereby is, dismissed in its entirety.
 
    Issued, Washington, D.C., December 10, 1984
 
                                       Henry B. Frazier III, Acting
                                       Chairman
                                       Ronald W. Haughton, Member
                                       FEDERAL LABOR RELATIONS AUTHORITY
 
 
 
 
 
 
 
 
 
 
 -------------------- ALJ$ DECISION FOLLOWS --------------------
 
    U.S. DEPARTMENT OF TREASURY
    INTERNAL REVENUE SERVICE
    PHILADELPHIA SERVICE CENTER
                                Respondent
 
    and
 
    NATIONAL TREASURY EMPLOYEES UNION
    AND NTEU, CHAPTER 71
                              Charging Party
 
                                       Case No.: 23-CA-194
                                                 23-CA-368
 
    Thomas E. Crowe, Esq.
    For the Respondent
 
    Margaret Ann Sipser, Esq.
    W. Lee Mingledorff, Esq.
    For the General Counsel
 
    Richard Landis, Esq.
    For the Charging Party
 
    Before:  WILLIAM NAIMARK
    Administrative Law Judge
 
                                 DECISION
 
                           Statement of the Case
 
    Pursuant to an Order Consolidating Cases, Complaint and Notice of
 Hearing issued on March 30, 1981 by the Regional Director for the
 Federal Labor Relations Authority, New York, N.Y. Region, a hearing was
 held before the undersigned on July 15, 1981 at Philadelphia,
 Pennsylvania.
 
    This proceeding arose under the Federal Service Labor-Management
 Relations Statute, 5 U.S.C. 7101, et seq. (hereinafter called the Act).
 A charge in Case No. 3-CA-194 was filed on May 7, 1979 by National
 Treasury Employees Union and NTEU, Chapter 71 (herein called the Union)
 against U.S. Department of Treasury, Internal Revenue Service (herein
 called the Respondent).  Thereafter, in Case No. 3-CA-368 a charge was
 filed on July 25, 1979 by the aforesaid Union against said Respondent.
 /5/
 
    The complaint alleges, in substance, that:  (a) Respondent
 unilaterally implemented performance standards in its Receipt and
 Control Branch on or about February 8, 1979;  in its Examination Branch
 on or about February 12, 1979;  and in its Input Perfection Branch on or
 about February 13, 1979-- all without affording the Union an opportunity
 to negotiate regarding impact and procedures for implementing this
 change in working conditions;  (b) Since June 25, 1979 Respondent has
 refused to negotiate concerning the impact and procedures for
 implementing issuance of performance standards for unit employees in the
 Taxpayer Relations Branch, Research Branch, and Exempt Organization
 Branch;  (c) On or about July 2, 1979 Respondent unilaterally
 implemented performance standards for employees in the Taxpayer,
 Research, and Exempt Organization Branches without negotiating with the
 Union concerning the impact and procedures for implementing this change
 in working conditions.  The foregoing conduct was alleged in the
 complaint to violate Sections 7116(a)(1) and (5) of the Act.
 
    Respondent's answer, dated April 24, 1981, denied the commission of
 any unfair labor practice.  In respect to the allegations set forth in
 (a), supra, it alleged that Respondent did afford the Union an
 opportunity to negotiate as to the impact and implementation of
 performance standards in the named branches.  In respect to the
 allegations set forth in (b) and (c), supra, it denied a failure or
 refusal to negotiate impact and implementation of the standards in the
 named branches, and also denied unilateral implementation thereof
 without affording the Union an opportunity to negotiate same.
 
    All parties were represented at the hearing.  Each was afforded full
 opportunity to be heard, to adduce evidence, and to examine as well as
 cross-examine witnesses.  Thereafter, briefs were filed with the
 undersigned which have been duly considered.  /6/
 
    Upon the entire record herein, from my observations of the witnesses
 and their demeanor, and from all of the testimony and evidence adduced
 at the hearing, I make the following findings and conclusions:
 
                             Findings of Fact
 
    1.  At all times material herein the Union has been the collective
 bargaining representative of Respondent's professional and
 non-professional employees at the Philadelphia Service Center.
 
    2.  Both the Union and Respondent are parties to a Multi-Center
 Agreement which was executed on July 18, 1975.  This agreement continues
 in effect and was effective at all times material herein.
 
    Article I, section 1 provides that all certified units of
 professional employees of the various Centers, including Respondent's
 Service Center, shall be covered under the agreement.
 
    Article 32, entitled Adverse Actions, sets forth procedures to be
 followed when an employee is the subject of an adverse action.  The
 latter term is defined to be "a reduction in grade or pay, a removal, a
 suspension for more than thirty (30) days, or a furlough of a permanent
 employee without pay".  Under this Article it is provided, inter alia,
 that specific written notice be given the employee of the charges
 against him;  that he be afforded the opportunity to respond with
 supporting data;  that the employee may appeal the Employer's decision
 on any basis allowed by applicable law and regulations".
 
    The negotiated agreement also contains a grievance procedure (Article
 33) which, under Section 2A, covers requests for personal relief in
 matters involving personnel policies, practices and working conditions.
 Section 2B provides that "this procedure will be the only procedure
 available to bargaining unit employees for the processing and
 disposition of grievances covered by A above".  The grievance procedure
 also sets forth detailed steps to be followed in the submission of a
 grievance, as well as provisions for, and methods of, appealing
 decisions rendered by a supervisor.  Under Section 6 thereof the
 decision of the latter is appealable, via appeals from various higher
 level decisions, to the Center Director and finally to advisory
 arbitration.  /7/
 
    3.  In October, 1978 management at the Philadelphia Service Center
 embarked on a program to implement performance expectations in the Data
 Conversion Branch of the Center.  This involved numerical production and
 quality standards so that the individual performance of employees could
 be measured.  Initially, the expectations had been reached by setting up
 a goal based on a national average for all Service Centers.
 
    4.  Negotiations were held between management and the Union
 concerning the implementation of these standards, and the parties met on
 November 3, 1978.  The purpose of the performance expectation was
 explained, and the Union expressed concern that employees could be
 adversely affected for minimal failure to reach expectation.  Management
 reassured the Union that no rigid adherence to numbers was planned and
 that a range of performance would be acceptable.  The parties met again
 on November 17, 1978 at which time the employer's representatives
 explained the mathematical process used in arriving at the expectations.
  The Union's proposals were discussed, and it was agreed that the
 performance expectations would be initiated as a probationary period for
 the quarter, beginning November 27, 1978.  Another meeting was held on
 December 8, 1978 at which time management agreed to certain items of
 concern to the Union, and the latter was satisfied with the
 implementation of the expectation for the trial period.  /8/
 
    5.  On February 1, 1979 Union President Eleanor Hudson, along with
 Sean Rogers, the Union's attorney, happened to meet James Concannon,
 Assistant Personnel Officer of Respondent, in the lobby of the Service
 Center.  /9/ Concannon told the union representatives that management
 wanted to implement performance expectations in three other branches of
 the Center:  Receipts and Control Branch, Examination Branch, and Input
 Perfection Branch-- all within the Processing Division.
 
    Different versions are presented as to what other statements were
 made by the said individuals on that date.  Thus, Rogers testified
 Concannon said Respondent wanted to implement performance expectations
 in three other named branches, and that the Union attorney remarked he
 wanted to bargain.  Further, Concannon allegedly replied that Respondent
 took the position the substance is not negotiable and that Rogers had
 known about this for some time.  Whereupon the Union attorney, as he
 testified, retorted that "wiser minds than us will decide that, but
 right now we want to bargain".
 
    Hudson's testimony reveals that on February 1, 1979, /10/ in the
 lobby of the Center, Concannon told Rogers management was planning to
 implement performance expectations in other areas of the Center;  that
 Roger said he wanted to negotiate the substance and impact and
 implementation of those standards.  She also testified there was no
 response by Concannon to Rogers' statement in this regard.
 
    According to Concannon, he excountered both union representatives in
 the lobby on February 1, and commented that Respondent wanted to put
 performance expectations into effect in the Processing Division.  The
 Assistant Personnel Officer further testified Rogers commented there was
 a disagreement between the Union's National Office and IRS' National
 Office regarding the negotiability of these standards.  Concannon also
 stated that no demand was made by the Union to bargain.
 
    Upon a careful review of the record herein I am persuaded that, on
 February 1, management representative Concannon did notify the Union
 representative Rogers and Hudson that Respondent wanted to implement
 performance expectations in the three branches, heretofore named, of the
 Data Processing Division.  Further, I find that Rogers did tell
 Concannon the Union desired to negotiate or bargain in regard thereto.
 /11/ Concannon did reply, I find, that there had always been a
 disagreement between the national offices of both the Union and
 Respondent as to the negotiability of these standards;  that Respondent
 took the position the substance is not negotiable.  /12/
 
    6.  The following day, February 2, Concannon called Hudson to meet
 with the branch chiefs of the areas in which the performance
 expectations would be implemented.  At the meeting on that date Hudson
 was given a copy of the proposed standards.  Record facts show that the
 union representative told management she was present merely to receive
 the performance expectations;  that she couldn't discuss or negotiate
 the standards;  and that she wanted to look them over prior to any
 negotiations.
 
    A conflict of testimony prevails as to whether Respondent's official
 informed the Union agent as to when the expectation would be
 implemented.  Concannon testified he stated at the meeting that they
 would be put into effect next week.  John Sawatchi, Chief of Receipts
 and Control, testified that Hudson was informed at the February 2
 meeting that the standards would be issued shortly-- as soon as
 possible.  Hudson's testimony reflects she was given no implementation
 date for the expectations.  However, other testimony in the record tends
 to belie Hudson's statement in this regard.  Thus, Rogers testified
 Hudson called him on Monday, February 5 to report that she received the
 proposed standards at the February 2 meeting;  that she didn't bargain
 or make any proposals.  With respect to Hudson's being informed by
 Concannon as to the date of implementation, the record reflects Rogers
 testified as follows:
 
          A. She (Hudson) had not requested to negotiate at the meeting
       on the 2nd.
 
          Q.  I am sorry-- the 2nd-- and she knew that those performance
       expectations were going to be handed out on the 5th;  is that
       right?  They told her on Monday.  (Feb. 2).
 
          A. Yes".
 
 Note is also taken of the fact that Concannon reduced to writing a
 summary of the aforesaid meeting on February 2;  that he referred
 therein to Hudson's being notified at the meeting that the "Examination
 Branch would implement on February 5, 1979".  Accordingly, I am
 persuaded Hudson was advised at the meeting on February 2 that the first
 implementation of the performance expectations would occur the following
 week.
 
    7.  Respondent issued the standards to employees, and implemented
 same, as follows:  in the Receipt and Control Branch on February 8, in
 the Examination Branch on February 12;  in the Input Perfection Branch
 on February 13.
 
          8.  On February 16 Rogers and Hudson met with Raymond Keenan,
 
 Assistant Director of the Service Center, and Chief of Personnel
 Stalinten.  Questions were posed by the Union representatives as to
 management's right to develop and implement production standards, as
 well as its right to do so unilaterally.  Keenan stated that Respondent
 had the right to do so and he would not bargain as to such right.  In
 respect to impact and implementation, he told Rogers the Union "had some
 rights there";  that he would be happy to discuss any recommendation or
 proposals of the Union in regard thereto.  The record reveals Rogers
 remarked that the Union wanted to negotiate but management didn't allow
 it much time.  Upon Keenan's retorting that no written proposals were
 received from the Union, Rogers replied that the Union did not receive
 anything in writing prior to February 2 indicating Respondent would put
 the standards into effect.  Keenan told the bargaining representatives
 it was never his intention to act without the Union's knowledge of
 Respondent's plans regarding the standards;  that since no word was
 received from the Union, management went ahead and implemented the
 expectations.  The Assistant Director further testified that the major
 issue was over the substance-- the issue of whether Respondent had the
 right to establish the standards.
 
    9.  By letter dated March 9 the Union advised Respondent that the
 implementation of the performance expectations by management was
 unilaterally undertaken;  that the Union demanded rescission thereof and
 that management negotiate on substance, impact and implementation of
 such expectations.
 
    10.  Respondent's representative, Acting Director Keenan, replied in
 a letter dated April 11 to the Union's demands as aforesaid.  Keenan
 stated that the implementation with respect to Receipt and Control,
 Input Perfection, and Document Analysis Branches was explained to the
 Union President on February 2, and a copy of the written message to be
 distributed to employees informing them of the expectations was given to
 her at that time.  Respondent's representation wrote further that he
 considered the notice to the Union was sufficient;  that the demand to
 negotiate received on March 13, was untimely;  that management would not
 rescind the standards but would discuss any problems the Union felt
 warranted consideration.
 
    11.  In a meeting between the parties, which took place on May 4,
 management gave the Union representative copies of performance
 expectations for the Taxpayers Service Division.  These standards were
 to be implemented at, and involved, three branches thereof:  Taxpayer
 Relations, Research, and Exempt Organization.  Whereupon Rogers told
 Keenan that the Union wanted to bargain;  that he would give management
 a written demand but wanted to look over the expectations and talk to
 the employees.  Keenan stated he wanted proposals from the Union within
 about two weeks.  Since Rogers desired more time to study the standards
 and meet with employees, it was agreed the Union would submit proposals
 by June 8.
 
    12.  The "Performance Expectations" to be issued to the employees of
 the Taxpayers Service Division, as applicable to the three branches, set
 forth, inter alia, as follows:  (a) that the past gauging of performance
 by a "peer group average" method was disadvantageous since it did not
 provide objective performance goals;  (b) management has developed a
 technique for measuring performance against a predetermined set of
 individual minimum performance expectations;  (c) the expectations will
 be expressed in terms of "items per hour" and "acceptable quality
 standards";  /13/ (d) successful performance regarding performance
 expectations will be a major factor in determining annual performance
 ratings, within grade increases and all non-competitive actions;  (e)
 the new approach would not change the local awards program.
 
    13.  By letter dated May 16 Rogers wrote Director Norman Morrill that
 the Union demands negotiations on the substance, impact and
 implementation of the performance expectations proposed for all the
 branches where they were put into effect, including the Taxpayer
 Relations, Research, and Exempt Organizations Branches.
 
    14.  Keenan sent a letter dated May 21 to Union President Hudson
 notifying her that Respondent intended to "establish expectations" /14/
 for Research, Taxpayer Relations, and Exempt Organization Branches of
 the Taxpayer Services Division on June 11.  Further, he stated therein
 that management would discuss with the Union any adverse impact of the
 expectations in terms of specific proposals it submitted in writing for
 negotiation.
 
    15.  Concannon replied to the May 16 demand for bargaining by the
 Union in a letter dated May 30 addressed to Rogers.  The management
 official repeated Respondent's willingness to discuss the impact and
 implementation procedures regarding performance expectations in the
 Research, Taxpayer Relations and Exempt Organization Branches upon
 receipt of specific proposals concerning them.  He stated that the
 substance thereof is non-negotiable under Section 7106(a) of the Act.
 Further, Concannon repeated Respondent's contentions that the request to
 bargain regarding the Processing Division standards was untimely;  that,
 as to the Data Conversion Branch, the expectations were thoroughly
 discussed prior to implementation.
 
    16.  In a letter dated June 8 Union President Hudson sent Keenan the
 proposals of the Union in respect to the performance expectations for
 the Taxpayer's Service Division.  The salient and principal proposals
 were as follows:
 
    (a) IV.  ESTABLISHING PERFORMANCE EXPECTATIONS
 
          No performance expectation shall be established for any
       position at the PSC unless and until NTEU, Chapter 71 has been
       informed in advance in writing of the expectation and has agreed
       that the particular expectation is attainable and reasonable.
       Once both parties agree to the proper level for a performance
       expectation it may be implemented by the PSC.  If at anytime
       either party finds an expectation is not attainable it will be set
       aside and a new expectation will be established by mutual
       agreement.
 
    (b) V. APPEALS OF PERSONNEL ACTIONS
 
          Appeals of any and all personnel actions, adverse or otherwise
       from any and all issues involving performance expectations shall
       be processed through the provisions of the existing negotiated
       grievance procedure found in the Multi-Center Agreement II,
       Article 33 and 34.
 
    (c) VI.  MINIMUM ADVERSE ACTION PROCEDURES
 
          The PSC will follow the following minimum steps before
       instituting any removal action.  The PSC may offer more rights to
       an employee in individual cases, but must offer at least these
       rights to each employee before taking a removal action.
 
          1) When first an employee fails to achieve expectations, he/she
       shall receive notice of the performance expectations applicable to
       his or her job and any and all such optional counselling and
       training as the employee may request.
 
          2) If after 30 days the subject employee still fails to achieve
       expectations, he/she shall receive a reasonable amount of
       mandatory training and counselling on how to achieve expectations.
 
          3) If after 30 days after the completion of mandatory training
       and counselling the employee still fails to achieve expectations,
       he/she shall be placed on performance probation.  The employees
       work performance shall be monitored weekly and the employee shall
       be counselled weekly until he/she achieve expectations.
 
          4) If after 60 days of performance probation the employee still
       fails to achieve expectations, he/she shall be offered another
       less demanding available position in PSC without reduction in
       grade or pay.
 
          5) If after 60 days in this alternate position or if no such
       alternate position is available and the employee is still not
       achieving expectations, then he/she will be offered another less
       demanding, available position which may be at a reduced grade.
 
          6) If after 60 days in this reduced alternate position or if no
       such reduced alternate position is available and the employee is
       still not achieving expectations, then he/she may be disciplined
       at the level of oral admonishment.  The Agency shall continue with
       performance probation counselling and to search for either an
       alternate position or an alternate reduced position, respectively.
 
          7) If after 60 days from the date of the oral admonishment, the
       employee still fails to achieve expectations, then he/she may be
       disciplined at the level of a written reprimand.  The Agency shall
       continue with performance probation counselling and to search for
       either an alternate position or an alternate reduced position,
       respectively.
 
          8) If after 60 days from the date of the written reprimand, the
       employee still fails to achieve expectations, then he/she may be
       disciplined at the level of no more than a seven work day
       suspension.  The Agency shall continue with performance probation
       counselling and to search for either an alternate position or an
       alternate reduced position, respectively.
 
          9) If after 60 days from the date of the written reprimand, the
       employee still fails to achieve expectations, then he/she may be
       disciplined at the level of no more than a fourteen work day
       suspension.  The Agency shall continue with performance probation
       counselling and to search for either an alternate position or an
       alternate reduced position, respectively.
 
          10) If after 60 days from the date of the fourteen day
       suspension, the employee still fails to achieve expectations, then
       he/she will be offered the opportunity to resign without negative
       comment on the employees SF 50.  This offer shall also be
       available to an employee who is the subject of proposed discipline
       in either item 8 or 9 above.  If an employee does not accept this
       opportunity to resign within a reasonable time, he/she may be
       disciplined at the level of removal.
 
    (d) VII.  AWARDS
 
          Any employee who meets or exceeds performance expectations
       shall be eligible for awards.  Awards shall be determined by their
       nature and size and set by mutual agreement of a joint NTEU,
       Chapter 71 and PSC Awards Committee.  This Awards Committee shall
       consist of one delegate from NTEU, Chapter 71 and one delegate
       from PSC.
 
    (e) PERFORMANCE EXPECTATIONS
 
          2.  An employee's inability to successfully meet performance
       standards, alone, shall not be determinative of:
 
          a.  An employee's annual performance rating,
 
          b.  An employee's performance for within-grade increases and
 
          c.  All non-competitive promotions.
 
          3.  Acceptable level of competence determinations and annual
       performance ratings will be made in a fair and objective manner
       and will be made only on the basis of the work requirements of the
       particular position or specific work standards as may have been
       established by the employer for the position;  provided, however,
       that a determination that an employee is not performing at an
       acceptable level of competence will not be used to dispose of
       questions of misconduct.
 
          4.  Performance expectations will be reviewed and adjusted in
       January, July and October.  The NTEU shall be notified
       sufficiently in advance to prepare independent analysis and
       participate in these periodic reviews and adjustments.
 
          5.  No performance expectation may be established unless it is
       based upon an already achieved reasonable level of performance.
       Recognizing the unique qualities of individual employees, and such
       performance expectation shall be no more than a guide for
       supervisory personnel and thereby serve as a counseling tool only.
 
    17.  The implementation date of June 11 was delayed so Respondent
 could study the Union's proposals.  By letter dated June 25, Director
 Morrill wrote Hudson that the Union's proposals would limit management's
 right to establish the level of expectation and to remove or reduce
 employees in grade;  that as to the procedures to be used in processing
 actions and the appeal rights available, no change occurred with the
 publication of the expectations;  that Respondent would not negotiate
 regarding the substance of the expectations, already existing
 procedures, or the right to take adverse action.  The letter also
 indicated the standards would be implemented on July 2.  /15/
 
    18.  In an attempt to clarify his letter of June 25, Morrill wrote
 Hudson again on June 29 confirming Respondent's refusal to negotiate the
 substance of performance expectations, the right to take adverse action,
 or already existing procedures.
 
    19.  Record facts disclose that prior to the implementation of
 performance expectations, it was not customary to adopt adverse action
 procedures when employees performed poorly or at low levels of
 production.  Employees who performed unacceptably were downgraded
 voluntarily, although they would be offered a higher step than if action
 was to be taken against them.  Subsequent to the adoption of the
 performance expectations the procedure formerly adhered to was
 discontinued.
 
    20.  As a result of the implementation of performance expectations in
 all branches, some employees were adversely affected.  Thus, there were
 individuals who were denied within grade increases;  some were removed
 from their positions and others were downgraded-- all for failure to
 meet performance standards.  /16/
 
                                CONCLUSIONS
 
    It is asserted by the General Counsel that Respondent ran afoul of
 the Act herein in two essential respects:  (a) the implementation of the
 performance expectations by management in the three branches (Receipt
 and Control, Examination, and Input Perfection) of the Processing
 Division on February 8, 12, 13, 1979 respectively was unilateral in
 nature;  that the standards were implemented without affording the Union
 an opportunity to bargain regarding their impact and the procedure to be
 followed.  By so doing, it is insisted, Respondent did not meet its
 obligation to bargain and violated Sections 7116(a)(1) and (5) of the
 Act;  (b) management, since June 25, 1979, also refused to bargain
 regarding the impact and procedures for implementing performance
 standards in the three branches (Taxpayer Relations, Research, and
 Exempt Organization) of the Taxpayer Service Division;  and the said
 standards were unilaterally implemented on or about July 2, 1979 without
 affording the Union an opportunity to negotiate regarding its impact and
 procedure, thereby failing to meet its obligation to bargain and
 violating Sections 7116(a)(1) and (5) of the Act.
 
    (a) It is a well entrenched principle in the public sector that,
 despite management's right to make certain decisions as to personnel
 practices, practices, or working conditions, it has certain obligations
 with respect to the impact and implementation of actions taken in regard
 thereto.  Thus, it must provide the bargaining representative reasonable
 notice of the proposed action, and thereby afford the representative an
 opportunity to bargain with respect to its impact and implementation.
 Internal Revenue Service (IRS) and Brooklyn District Office, IRS, 2 FLRA
 No. 76;  Federal Railroad Administration, 4 A/SLMR 497.  By the same
 token, a duty revolves upon the union, after it has received such
 notification, to request negotiations or bargaining as to the impact and
 implementation of management's contemplated action.  A failure to do so
 will exculpate the agency from blame for refusing to bargain regarding
 action taken concerning working conditions.  Department of Health,
 Education and Welfare, Social Security Administration, BRSI,
 Northeastern Program Service Center, 8 A/SLMR 188.
 
    In the case at bar both parties focus considerable argument on the
 events which occurred on February 1 at the Service Center.  With respect
 to the conversation in the lobby on that date concerning the performance
 expectations, I am not persuaded that Respondent's advertence thereto
 constituted proper notification of its proposed institution of
 performance expectations.  Management's representative Concannon and the
 union agents met casually that day at the Center.  No meeting was
 scheduled to discuss the proposed action.  Further, Respondent's
 official confined his notification to stating that the employer wanted
 to implement the standards in the designated branches of the Processing
 Division.  No specifics were forthcoming since Concannon intended to
 present the bargaining agent with details of the expectations.
 
    Note is taken of the decision in Jacksonville District, Internal
 Revenue Service, Jacksonville, Florida, 7 A/SLMR 758 where, at a meeting
 between representatives of management and the Union, a passing reference
 was made to a proposed change in a testing program.  It was mentioned at
 the meeting that quality control would be achieved, in part, through a
 series of pre-tests and post-tests.  It was held that the agency failed
 to give adequate notice to the Union of a change in the testing program
 to enable the bargaining representative to bargain in a meaningful
 manner regarding its impact and implementation.  The passing reference
 to the new testing plans was not precise nor sufficiently detailed.
 
    In the case at bar Respondent did announce on February 1 its
 intention to put into effect performance standards.  However, it gave no
 particulars to the Union nor did it state when they would be enforced.
 In the case of Department of the Treasury, Internal Revenue Service,
 Indianapolis, Indiana, A/SLMR No. 909 a similar notification was held
 deficient.  The agency therein informed the bargaining agent of its
 intention to reinstate security restrictions.  It gave, however, no
 indication as to when this would occur nor other details in regard
 thereto.  It was held that such notice did not afford the Union a
 reasonable opportunity to bargain over the procedures or impact of its
 decision.
 
    Based on the foregoing, I conclude that Respondent's reference in the
 lobby on February 1 to its "wanting" to implement performance
 expectation was not sufficiently precise so as to constitute adequate
 notification;  that it did not, on that date, comply with its obligation
 to afford the Union specific notice of its intention and provide it with
 an opportunity to bargain under the Statute.
 
    Notwithstanding its failure to give adequate notification to the
 Union herein on February 1, it is apparent that the employer did fulfill
 its obligation in this regard on the following day.  Thus, on February 2
 management presented Union President Hudson with a detailed copy of the
 proposed standards, and Concannon told Hudson that they would be
 implemented next week.  I am satisfied, and conclude, that Respondent
 gave specific notice to the Union on February 2 as to its proposed
 standards.
 
    In order to establish a refusal to bargain on the part of an employer
 who institutes changes or new procedures in working conditions, the
 bargaining agent is obliged to request negotiations when it has been
 provided ample notification thereof.  This well grounded rule has been
 followed by decisional law in the public sector, and a failure to make
 such request or demand with absolve an employer from any alleged
 violation in that regard under the Statute.  U.S. Department of Air
 Force, Air Force Systems Command, Electronic System Division, Hanscom
 AFB, 5 FLRA No. 88.  Where management notifies the Union of a
 forthcoming change, it is incumbent on the latter to avail itself of
 this opportunity and request to meet and confer or be granted additional
 time to consider proposed changes.  Department of the Navy, Portsmouth
 Naval Shipyard, A/SLMR No. 508.
 
    General Counsel argues that Rogers made a demand on February 1 when
 he met Concannon in the lobby and the latter referred to the
 expectations.  Having concluded that Respondent did not give adequate
 notification to the Union on that date of its proposed standards, I find
 it difficult to determine that a demand to negotiate was made by Rogers
 at that time.  Since no particulars were mentioned and no time of
 implementation was specified, the statement by the Union attorney that
 he wanted to bargain over any standards which might be effected was, in
 my opinion, anticipatory or inchoate in nature.  It could not relate to
 nor be based upon a proper notice of action to be taken by management,
 nor did it specify that the Union desired to bargain as to either the
 procedures or the impact of such expectations.  See Department of
 Health, Education and Welfare, Social Security Administration, BRSI,
 Northeastern Program Service Center, supra, where the complaint was
 dismissed since no evidence appeared that the Union requested bargaining
 on impact and implementation.
 
    Consideration must be given as to whether, in any event, the Union
 herein was afforded, on February 2, a reasonable opportunity to demand
 bargaining on the performance standards.  Record facts reveal the
 expectations were implemented on February 8, 12, 13 in the respective
 branches of the Processing Division.  While General Counsel insists the
 Union was not afforded sufficient time to study the proposed standards,
 I am constrained to find to the contrary.  About six days elapsed
 between the date the expectations were provided Hudson and their
 implementation in the Receipt and Control Branch;  ten days passed
 before they were implemented in the Input Perfection Branch.
 Nevertheless no proposals were submitted by the Union prior to
 implementation, and no demands for negotiations were made until March
 9-- one month after Respondent gave the Union specific notification,
 along with a copy, of the performance expectations.  A case arising in
 the public sector held that a union had been afforded ample opportunity
 to request bargaining were it learned of a planned change in work hours
 five days in advance thereof.  Southeast Exchange Region of the Army and
 Air Force Exchange Service, Rosewood Warehouse, Columbia, S.C., A/SLMR
 No. 656.  /17/
 
    In the instant case Union president Hudson expressly declared to
 Concannon on February 2 that she was not present at the meeting to
 negotiate or discuss the expectations;  that she was there merely to
 receive the written standards which management proposed to implement.
 Thus, except for the incipient request made on February 1-- which I have
 rejected as a proper and sufficient demand to bargain-- the Union herein
 has failed to make a proper negotiating demand prior to the
 implementation of the standards.  Moreover, I am constrained to conclude
 that the interim periods of six, ten, and eleven days between
 notification and implementation afforded the Union herein ample
 opportunity to request that Respondent meet and negotiate with respect
 to the impact and implementation of such performance expectations.
 Accordingly, I conclude that since no such demand was made after
 February 2 and prior to implementation, Respondent did not violate
 Section 7116(a)(1) and (5) of the Act when it put the standards in
 effect in the Processing Division.  See Department of the Army, U.S.
 Military Academy, West Point, N.Y., A/SLMR No. 1138.
 
    (b) In respect to the implementation of the performance standards in
 the Taxpayer Service Division, Respondent concedes it refused to bargain
 regarding the written demands by the Union sent to the employer on June
 8.  It takes the position, however, that the proposals were either
 non-bargainable under the Act, or were not impacted upon by the
 expectations, or involved no changes allowing for mid-term negotiations
 under the contract.
 
    The Authority has issued several cases which discussed in depth the
 obligation by an agency to bargain concerning proposals by a union where
 performance expectations are developed and implemented by management.
 See Office of Personnel Management, Washington, D.C., 3 FLRA No. 120;
 Department of the Treasury, Bureau of the Public Debt, 3 FLRA No. 119.
 Both of these cases, which involve decisions on negotiability issues,
 make it clear that an agency is not obliged to bargain over union
 proposals which require negotiation as to the establishment and content
 of performance standards.  Despite the fact that the Civil Service
 Reform Act provides, under 5 U.S.C. 4302, that each agency shall develop
 performance appraisal systems and encourage employee participation in
 establishing same, the identification of critical elements and the
 establishment of standards are not negotiable.  Proposals of this
 nature, which could concern the quantity, quality, and timeliness of an
 employee's production, would interfere with management's rights under
 Section 7106 of the Act.  Under this section management has the express
 right, inter alia, to assign and direct the work of its employees.
 Proposals which require the bargaining agent to approve performance
 standards, or involve modification of the standards established by the
 agency, infringe upon such management rights set forth in Section 7106.
 
    Nevertheless, the cited cases also make it clear that an agency
 cannot refuse to bargain on any and all matters which pertain to
 performance expectations.  Thus, management can be called upon to
 negotiate proposals dealing with the form of employee participation in
 establishing the standards.  In addition, the employer must bargain
 regarding the procedures related to the identification of critical
 elements and the establishment of performance standards, as well as
 appropriate arrangements for employees adversely affected by actions
 taken under those standards.  Further, an employee, against whom
 disciplinary action has been taken for unacceptable performance, has the
 right to challenge this action under appellate procedures or the
 negotiated grievance procedure.
 
    In the case at bar the Union submitted various proposals which it
 requested should be the subjects of bargaining before the Respondent
 implemented the performance expectations in the Taxpayer Service
 Division.  These form the basis of the pending dispute between the
 parties as to their negotiability and the justifications of Respondent's
 refusal to bargain in regard thereto.  It is thus necessary to examine
 those demands to determine whether they may be deemed management rights
 within the meaning of Section 7106 of the Statute.  They are as follows:
  /18/
 
    1.  "ESTABLISHING PERFORMANCE EXPECTATIONS"
 
    The substance of this proposal requires that both the Union and
 management agree on the performance standard to be established.  A level
 of expectation, under this provision, must be sanctioned by the
 bargaining agent before it could become a standard of performance.
 Levels of performance may comprise the quantity and quality of work
 needed from employees to achieve the agency's function and its mission.
 In Office of Personnel Management, 7 FLRA No. 88 the Authority decided
 that a proposal which requires performance standards and critical
 elements to be "agreed to" is non-negotiable.  Consistent with its
 holding in Bureau of Public Debt, supra, the Authority concluded that
 such a proposal flies in the face of Section 7106(a)(2)(A) and (B) of
 the Act.  In the instant case the Union's proposal, as set forth above,
 calls for agreement by both parties as to the proper level of
 expectations.  It thus infringes upon management's right to establish
 the standards-- and thereby assign and direct the work of the employees
 provided under the Statute.  Further, it interferes with the employer's
 right to identify the critical elements which are essential to a proper
 performance of the job by the employee.  To preclude the implementation
 of a performance expectation, unless the Union is in accord with its
 attainability and reasonableness, is equatable with making the
 bargaining agent a partner in establishing the standard.  Accordingly, I
 conclude management was not obligated to bargain regarding this
 proposal;  and its refusal to do so was not violative of Section
 7116(a)(1) and (5) of the Act.
 
    2.  "APPEALS OF PERSONNEL ACTIONS"
 
    It is argued by General Counsel that this proposal, along with other
 proposals as hereinafter mentioned, deal with provisions for employees
 adversely affected by the performance expectations.  As such, this
 demand allegedly falls within the ambit of bargainable matters involving
 such standards, as set forth in Bureau of the Public Debt and Office of
 Personnel Management, supra.
 
    While it is true that this proposal refers to adverse actions
 resulting from the implementation of the performance standards, it must
 be viewed in light of the statutory language regarding procedures for
 filing grievances.  Thus, Section 7121(e)(1) of the Statute, entitled
 "Grievance Procedures", professes in pertinent part as follows:
 
          "Matters covered under Sections 4304 and 7512 of this title
       which also fall within the coverage of the negotiated grievance
       procedure may, in the discretion of the aggrieved employee, be
       raised either under the appellate procedures of section 7701 of
       this title or under the negotiated grievance procedure, but not
       under both . . . ."
 
 Under this statutory provision an aggrieved employee is given certain
 options provided the matter, concerning which he is aggrieved, is
 covered by both Section 4303 of the Civil Service Reform Act and the
 negotiated grievance procedure.  In such instances he may raise any
 action taken against him for unacceptable performance, as outlined in
 4303, by appealing to the Merit System Protection Board /19/ or by
 filing a grievance under the negotiated agreement between the union and
 the agency.
 
    In the case at bar it would appear that any adverse action taken
 against an employee by Respondent based on his failure to achieve
 performance expectation would constitute a 'matter' within the language
 of Section 7121(e)(1) of the Act.  This is so because Section 4303 of
 the Civil Service Reform Act, entitled "Actions based on unacceptable
 performance", deals with disciplinary acts which may be taken against an
 employee for such unsatisfactory work performance.  An individual
 employee who fails to achieve the performance standards set by
 Respondent, and is disciplined therefor, may come within the coverage of
 Section 7121(e)(1) of the Act.  Thus, if a negotiated grievance
 procedure exists covering such discipline for failure to meet
 performance expectations, the employee may, under 7121, exercise his
 options by filing an appeal to the MSPB or filing a grievance under the
 contract.
 
    Turning to the negotiated agreement between the parties herein, I am
 persuaded that the document does cover adverse actions taken against an
 employee based on unacceptable performance.  Under Article 32 (Adverse
 Actions) of the agreement provision is made for disciplinary conduct
 towards employees.  Section 1A thereof states that "an adverse action,
 for the purpose of this Article, is defined as a reduction in grade or
 pay, a removal, a suspension for more than thirty (30) days, or a
 furlough of a permanent employee without pay".  That this Article is
 intended to cover adverse actions resulting from unacceptable
 performance is apparent from the wording in Section 5 thereof.  The
 latter section bespeaks of instances where an employee who is the
 subject of adverse action for reasons of inefficiency files for
 disability retirement.  Further, Article 33 (Grievance Procedure)
 contains detailed provisions and processing grievances covering
 "personnel policies, practices and matters affecting working
 conditions".  Thus, I would construe the negotiated grievance procedure,
 together with the provisions regarding adverse actions taken against
 employees, as covering a matter involving disciplinary action directed
 toward an employee for unacceptable work performance or a failure to
 meet performance expectations.  /20/
 
    In the instant case, the Union proposal requires that the employee
 process all appeals from adverse actions, which result from a failure to
 meet performance standards, through the contractual grievance procedure.
  As such, the provision runs counter to Section 7121(e)(1) of the Act
 which affords an option to the aggrieved employee to take such route or
 appeal to the MSPB under 4303, as aforesaid.  Therefore, since the
 proposal would violate 7121(e), it would not be within the duty of the
 Respondent to bargain.  Accordingly, I conclude the agency herein did
 not violate Section 7116(a)(1) or (5) by refusing to negotiate as to
 this proposal.
 
    3.  "MINIMUM ADVERSE ACTION PROCEDURES"
 
    This proposal sets forth ten different steps which management must
 take before it can remove an employee from his position for failure to
 meet performance expectations.  The prescribed course of conduct
 proposed by the Union calls for such mandatory actions by the Respondent
 before the employee may be removed, such as (a) counselling and having
 the deficient employee, (b) placing him on probation and counselling him
 until he achieves the expectations, (c) offering him a less demanding
 position without reduction in pay, (d) offering him such a position with
 a reduction in pay, (e) oral admonishment, (f) written reprimand, (g) a
 seven day suspension, (h) a fourteen day suspension, (i) an opportunity
 to resign.  In each instance a specific number of days must elapse (30
 or 60 days as specified) before the next adverse action may be taken
 against the employee-- and then only if the individual still fails to
 achieve the expectations.
 
    In respect to this proposal, the central issue is whether it
 conflicts with a management right provided in Section 7106(a)(2)(A) of
 the Act.  The latter section provides, in pertinent part:
 
    7106.  Management rights
 
          (a) Subject to subsection (b) of this section, nothing in this
       chapter shall affect the authority of any management official of
       any agency--
 
          (b) in accordance with applicable laws--
 
          (A) . . . to suspend, remove, reduce in grade or pay, or take
       other disciplinary action against such employees.
 
    This statutory provision preserves the right of management to
 discipline an employee.  Any proposal which would prohibit such
 disciplinary action by the employer would be contrary to the aforesaid
 section of the statute.  As such it would not be a bargainable matter.
 See, Internal Revenue Service, 6 FLRA No. 88.  In the case at bar I am
 satisfied that the collective adverse actions imposed by the Union would
 affect Respondent's authority to discipline employees.  Each sequential
 step advocated by the bargaining agent involved another adverse action,
 i.e. discipline, which must be taken by management when an employee
 fails to achieve the performance standards.  Respondent may not, at its
 discretion, exercise its right to remove the employee until it has
 undertaken the disciplinary action set forth by the Union.  The
 imposition by the latter of the adverse actions which must be taken by
 the employer would necessarily operate as a restraint upon management's
 right to effect its disciplinary authority.  In essence, the Union is
 compelling Respondent to discipline the employee (who fails to achieve
 the standards) in the manner specified by the bargaining agent.  This
 imposition of discipline is, in my opinion, scarcely consistent with
 Section 7106(a)(2)(A) of the Act.  Further, as a practical matter, it
 renders ineffective any decision to remove an employee for not achieving
 the expectations.  An inordinate amount of time will pass before the
 employer is enabled, under this proposal, to terminate the individual.
 At least 580 days must pass before Respondent could remove an employee
 for failing to meet the standards.
 
    In Internal Revenue Service, supra, the union therein proposed that
 no employee could be disciplined as long as the individual was an active
 participant in a recognized drug/alcoholism program;  and it further
 proposed that any disciplinary action be stayed if the employee entered
 such program.  The Authority concluded these proposals were inconsistent
 with the agency's authority to discipline employees under 7106(a)(2)(A)
 of the Act.  While I recognize that the Respondent herein is not wholly
 precluded from disciplining employees who do not achieve the
 expectations, the proposals in the instant case do restrict the exercise
 of certain adverse action toward the individual.  The preclusion is, in
 reality, one of degree since the employer may not remove an employee
 upon the failure of the latter to perform as required.  Based upon the
 foregoing, I am constrained to conclude the said proposals involving
 minimum adverse action procedures do conflict with Section 7106(a)(2)(A)
 of the Act;  that the duty to bargain does not extend thereto;  and that
 Respondent did not violate Section 7116(a)(1) and (5) of the Statute for
 refusing to negotiate with regard thereto.
 
    4.  "AWARDS"
 
    The Union has proposed that any employee who meets or exceeds
 performance expectations shall be eligible for awards.  Further, its
 proposal states that awards shall be determined by their nature and
 size;  that they be set by an Awards Committee composed of a delegate
 from the Union and a delegate from the Service Center.
 
    It is argued by the Respondent that its award procedure was not
 changed by management when it instituted these expectations.  An
 examination of the negotiated agreement fails to reveal any award system
 covering the awards for work performance.  Article 7, Section 2 provides
 for achievement awards in performing higher grade dates.  But this
 provision relates to temporary assignments of employees to work on
 positions which may be different or higher graded than his regular
 position.  As such, I find it inapplicable herein.
 
    Regulations have been promulgated when do govern incentive awards for
 government employees.  Chapter 451 (Incentive Awards) of the Federal
 Personnel Manual (FPM) sets forth various provisions regulating the
 granting of awards.  These regulations cover awards linked with
 performance appraisal systems.  /21/
 
    It is noted that it is the purpose of the Incentive Award program, as
 set forth under 451.1-2 of the FPM, to reward employees whose job
 performances are substantially above normal job requirements.  Moreover,
 under 451.1-4 it is provided that agencies shall design awards program
 that will recognize special acts or services that substantially exceed
 normal standards expectations.  It thus appears that the awards
 sanctioned under the government-wide regulations are for services beyond
 the normal requirements as expectations of the employee.  The FPM
 bespeaks of superior performance as a prerequisite for an award
 involving work performed.  The Union herein has proposed granting awards
 to employees who meet or exceed performance standards.  Granting an
 award to an employee who performs at the level of competence required
 would be inconsistent with the spirit and language of the aforesaid
 regulations.  The latter makes no provision for granting awards to
 employees who merely meet the performance expectations.
 
    In Bureau of the Public Debt, supra, the union therein proposed that
 the standard for eligibility to receive within-grade increases for
 certain clerks should be the same as the standard of performance for job
 retention.  The Authority concludes this proposal was inconsistent with
 an OPM regulation 531.407 (Work of an acceptable level of competence).
 The regulation requires that a performance level sufficient to receive a
 within-grade increase must exceed the level which is merely adequate for
 job retention.  Thus, the proposal was deemed outside the duty to
 bargain.  While not involving an incentive award, the cited case is
 supportive of the view that, when the regulation limits granting
 benefits to employees whose work performance exceeds the expected level
 of competence, a proposal which grants awards to individuals who just
 meet such level would be non-negotiable.  I so conclude.
 
    Note is also taken of the language in 451.3-3 of the FPM which
 recites that "the decision to grant or not to grant an award . . . is a
 management prerogative, thus, is not grievable".  Under the language
 submitted by the Union herein, management could not grant awards without
 consent of the delegate representing the bargaining agent.  As proposed
 by the Union, awards must occur by mutual agreement of both parties.  It
 would appear to the undersigned that this proposal flies in the face of
 the regulation cited above.  The express declaration, as set forth in
 the agency-wide regulation, would confine to management the decision as
 to granting or denying an incentive award.  Concurrence by the Union, or
 its determinative, with respect to bestowing awards is not within the
 framework of the regulation as aforesaid.
 
    Based on the foregoing, I conclude the Union proposal with respect to
 Awards is non-negotiable-- that Respondent did not violate Sections
 7116(a)(1) and (5) by refusing to bargain regarding such proposal.
 
    5.  INABILITY TO MEET STANDARDS AS NOT DETERMINATIVE OF RATINGS,
 WITHIN-GRADE INCREASES, NON-COMPETITIVE PROMOTIONS
 
    It is proposed by the Union that an employee's inability to
 successfully meet performance standards should not be determinative of:
 (a) his annual performance rating, (b) his performance for within-grade
 increases, and (c) non-competitive promotions.  In other words, if the
 employer adheres to this proposal, an employee would still be eligible
 for-- and possibly entitled to-- a satisfactory rating, a within-grade
 increase, or a promotion despite his failure to meet performance
 expectations.
 
    The thrust of the FPM, as it relates to rewarding employees for work
 performance, refers to achievements beyond the norm set up for
 performing duties.  As hereinbefore noted, the Authority found a union
 proposal, which would allow within-grade increases based on a standard
 of performance similar to that needed for job retention, as inconsistent
 with regulation 531.407.  Under the latter an employee is obliged to
 exceed the level of acceptable competence.  Under the proposal herein,
 an employee could be considered for a within-grade increase if he did
 not even meet the performance standards.  This would run counter to the
 agency-wide regulation and, under the Bureau of Debt case, supra, is not
 a bargainable matter under the Act.
 
    Further, as I read the provisions regarding the establishment of
 Performance Ratings under FPM Section 430.201 et seq., and the
 provisions regarding Promotion in Chapter 335 thereof, no satisfactory
 rating or promotion is warranted when an employee fails to at least meet
 performance standards.  The impact of the Union's proposals under
 consideration allows an employee to obtain such a rating, or promotion,
 even though he fails to meet the standards.  Such a conclusion renders
 the standards ineffective and inoperative.  Adoption of this proposal is
 tantamount to permitting the establishment of the expectations, but
 denying the use thereof.  In such a posture, this proposal is
 non-negotiable, and I conclude Respondent has not violated Sections
 7116(a)(1) and (5) by refusing to bargain concerning same.
 
    6.  ACCEPTABLE LEVELS OF COMPETENCE DETERMINATIONS
 
    This proposal is listed on the separate page entitled "PERFORMANCE
 EXPECTATIONS" of GC Exhibit 18 as item number 3.  It is the verbatim
 wording found in Article 9.  Section 1 of the negotiated agreement which
 exists between the Union and Respondent.  Hence, I found no obligation
 existed on the part of management to bargain in respect to this
 proposal.
 
    7.  REVIEW AND ADJUSTMENT OF PERFORMANCE EXPECTATIONS /22/
 
    The Union has proposed that performance expectations be reviewed and
 adjusted in January, July and October;  that NTEU shall be notified
 sufficiently in advance to prepare independent analysis and participate
 in those periodic reviews and adjustments.
 
    It would appear that, under this proposal, the bargaining agent seeks
 to confer three times per year regarding the adjustment of the standards
 established by Respondent.  While I would find nothing inconsistent with
 the Statute or regulations in the proposed review of the standards, the
 language employed by the Union suggests something more than a periodic
 examination of the expectations.  Under this proposal the bargaining
 agent advocates an adjustment of the standards in the months mentioned
 by it.  Further, the Union proposed that it participate in the
 adjustment.  The latter term, in my opinion, connotes a change or
 alteration in the expectations.  In Office of Personnel Management, New
 York Regional Office, 7 FLRA No. 77 the union proposed that it
 "participate on an equal basis in the development or revision of all
 measures of performance and studies . . . ." The Authority held this
 proposal to be outside the duty to bargain under 7106(a)(2)(A) of the
 Act.  It is true that the proposal in the instant matter does not refer
 to the "development" of the standards.  However, it contemplates
 adjustments thereto, which I perceive as being equAtable with
 "revisions" to the expectations.  Thus, under the cited case the Union
 would not be permitted to participate in adjusting or revising the
 standards, and management should not be obligated to bargain concerning
 this proposal.  Hence, I find no violation of Section 7116(a)(1) and (5)
 of the Act in Respondent's refusal to negotiate in respect thereto.
 
    5.  BASIS OF ESTABLISHMENT OF PERFORMANCE EXPECTATION-- ITS USE
 AS A
 GUIDE AND COUNSELING TOOL /23/
 
    This proposal requires that the performance expectation not be
 established unless it be based upon an "already achieved reasonable
 level of performance;  that it be no more than a guide for supervisory
 personnel and used only as a counseling tool.
 
    The Office of Personnel Management has defined the term "performance
 standard" as the expressed measure of the level of achievement
 established by management for the duties and responsibilities of a
 position or group of positions.  /24/ These standards are then utilized
 by management in determining the quality, quantity, and timeliness of
 work required of employees.  The particulars proposed herein would place
 a limitation upon the establishment by management of the performance
 expectation.  It does not relate to procedures to be observed by
 management in exercising its authority, but goes to the institution of
 the standards.  The development of the latter is not only a
 responsibility of management under 5 U.S.C. 4302.  It is also an
 integral part of its right to assign and direct the work of employees
 under 7106(a)(2)(B) of the Act.  In the case at bar the Union would
 restrict the establishment of the standard to one already achieved.  If
 adopted, this proposal would interfere with anagement's right to
 establish the expectation, /25/ and thus be outside the duty to bargain.
  See Bureau of the Public Debt, supra.
 
    Further, it is proposed by the Union that the performance
 expectations be used only as a guide for supervisors, and that they
 serve merely as a counseling tool.  Both the LSRA and the FPM reflect
 that the performance standards are to have a wider use than advocated by
 this proposal.  All within-grade increases, awards, and promotions are
 based on the performance by employees.  Under the limitation set forth
 by the Union, the standards would lose their efficacy, have no especial
 significance in determining action to be taken regarding employees, and
 would render meaningless their establishment.  Apart from infringing
 upon management's right to direct employees, and assign work to them,
 under Section 7106 of the Act, the prohibitive use of these expectations
 is inconsistent with the legislative directives and the agency-wide
 regulations.
 
    Accordingly, I conclude this particular proposal does not form the
 subject of mandatory bargaining, and Respondent did not violate the Act
 by failing to negotiate in this regard.
 
    The cases cited by the undersigned herein do acknowledge that, in
 respect to performance standards, there is-- and must be-- areas which
 require management to bargain thereon.  Certainly there may be matters
 which the Union, in the case at bar, is entitled to demand Respondent
 negotiate in regard to the performance expectations.  However, I am
 constrained to conclude that, as framed, the proposals herein are
 inconsistent with the obligations imposed on management under the
 Statute and the Regulations.  They neither deal with procedures to be
 observed leading to the standards or this implementation, nor to proper
 adverse effects upon employees.
 
    In view of the foregoing, I conclude Respondent by failing and
 refusing to negotiate the impact and implementation of its performance
 expectations issued in the Data Processing Division on February 8, 12,
 and 13, 1979 did not violate Sections 7116(a)(1) and (5) of the Act:
 that Respondent did not so violate the Act by refusing to bargain
 regarding the Union's performance expectations proposals as to the
 Taxpayers Service Division submitted on June 8, 1979, nor did it violate
 the Act by its implementation on July 2, 1979 of such performance
 expectations for said Taxpayers Service Division without negotiating
 with the Union regarding the latter's proposals concerning said
 standards.  Accordingly, I recommend the complaint in Case No. 23-CA-194
 be dismissed in its entirety.
 
                                       WILLIAM NAIMARK
                                       Administrative Law Judge
 
    Dated:  February 26, 1982
    Washington, D.C.
 
 
 
 
 
 
 --------------- FOOTNOTES$ ---------------
 
 
    /1/ Section 7116(a)(1) and (5) provides:
 
          Sec. 7116.  Unfair labor practices
 
          (a) For the purpose of this chapter, it shall be an unfair
       labor practice for an agency--
 
          (1) to interfere with, restrain, or coerce any employee in the
       exercise by the employee of any right under this chapter;
 
                                  * * * *
 
          (5) to refuse to consult or negotiate in good faith with a
       labor organization as required by this chapter(.)
 
 
    /2/ See, e.g., Internal Revenue Service (District, Region and
 National Office Unit and Service Center Unit), 10 FLRA 326 (1982).
 
 
    /3/ See General Services Administration, 15 FLRA No. 6 (1984).
 
 
    /4/ The Authority disagrees with the Judge's findings that the delay
 Respondent would incur in removing employees could prevent it from
 acting at all.  In this regard, it is well established that delay does
 not prevent management from ultimately taking removal actions against
 employees.  American Federation of Government Employees, AFL-CIO, Local
 1999 and Army-Air Force Exchange Service, Dix-McGuire Exchange, Fort
 Dix, New Jersey, 2 FLRA 153 (1979), enf'd sub nom. Department of Defense
 v. Federal Labor Relations Authority, 659 F.2d 1140 (D.C. Cir. 1981),
 cert. denied sub nom. AFGE v. FLRA, 455 U.S. 945 (1982).
 
 
    /5/ The charge in Case No. 3-CA-368 also named the Philadelphia
 Service Center as the particular location involved.
 
 
    /6/ Subsequent to the hearing Respondent's counsel notified the
 undersigned in writing that a significant error appeared on page 109 of
 the transcript:  Line 12 on page 109 should reflect the correct date as
 June 11, 1979 and not July 11, 1979.  The undersigned will treat the
 notification as a motion to correct the transcript.  Accordingly, the
 motion is granted, and the transcript is corrected as follows:  The date
 July 11, 1979 appearing on Line 12 of page 109 is changed to June 11,
 1979.
 
 
    /7/ Article 34 contains a detailed procedure for arbitration of
 decisions which may be so appealed.
 
 
    /8/ The performance expectations for the Data Conversion Branch were,
 in fact, implemented on November 27, 1978.
 
 
    /