26:0140(16)NG - Maritime / Metal Trades Council and Panama Canal Commission -- 1987 FLRAdec NG



[ v26 p140 ]
26:0140(16)NG
The decision of the Authority follows:


 26 FLRA No. 16
 
 MARITIME/METAL TRADES 
 COUNCIL
 Union
 
 and
 
 PANAMA CANAL COMMISSION
 Agency
 
                                            Case No. 0-NG-955
 
                DECISION AND ORDER ON NEGOTIABILITY ISSUES
 
                   I.  Statement of the Case 
       (Footnotes appear in the Appendix to this Decision)
 
    This case is before the Authority because of a negotiability appeal
 filed under section 7105(a)(2)(E) of the Federal Service
 Labor-Management Relations Statute (the Statute) and presents issues as
 to the negotiability of four proposals.  The Authority finds that
 Proposals 1 and 4 are nonnegotiable and Proposals 2 and 3 are
 negotiable.
 
                              II.  Proposal 1
 
          All legal holidays in the United States and the Republic of
       Panama are legal holidays of the Panama Canal Commission for the
       purpose of this agreement, in keeping with the Commission's status
       as an overseas US Government agency and the local practice of the
       US Department of State.
 
                       A.  Positions of the Parties
 
    The Agency argues that this proposal is not within the duty to
 bargain because it pertains to a matter which is specifically provided
 for by the Federal statute -- section 111 of title 1 of the Panama Canal
 Code (C.Z. Code tit. 1, Section 111) and 5 U.S.C. Section 6103.  The
 Union contends that the provisions of C.Z. Code tit. 1, Section 111 are
 no longer binding on the Agency and that under 5 U.S.C. Section 6103,
 agencies have discretion to observe local holidays as well as the
 holidays set forth in that provision.
 
                        B.  Analysis and Conclusion
 
    We find that holidays are a matter specifically provided for by
 Federal statute and, therefore, conclude that this proposal is not
 within the duty to bargain.  Insofar as Federal employees in general are
 concerned, 5 U.S.C. Section 6103 sets forth holidays.  Insofar as the
 "Canal Zone" /1/ is concerned, C.Z. Code tit. 1, Section 111 sets forth
 holidays.  While there is some overlap as to the holidays specified in 5
 U.S.C. Section 6103 and the Panama Canal Code, the holidays set forth in
 those authorities are not identical.  The Canal Zone Code was enacted
 into Federal statute by Public Law No. 87-845 (1962) (76-A Stat. 6).
 Section 3303 of the Panama Canal Act of 1979, 193 Stat. 452, 499,
 repealed portions of the Canal Zone Code and redesignated the remaining
 portions as the Panama Canal Code.  22 U.S.C. Section 3602.  Title 1,
 section 111 was not among the provisions repealed;  nor does it appear
 to be otherwise inconsistent with the Panama Canal Act.  We conclude
 that it is still in force and that the Union's assertion that it is no
 longer binding cannot be sustained.  /2/ It appears that the holidays
 which legally apply to the Agency are those which are set forth in 5
 U.S.C. Section 6103 and in the Panama Canal Code.  Moreover, 5 U.S.C.
 Section 6103 specifically provides for certain holidays.  It does not
 vest agencies with discretion to designate holidays as implied by the
 Union.
 
    In view of the fact that holidays are specifically provided for by
 Federal statutes -- 5 U.S.C. Section 6103 and C.Z. Code tit. 1, Section
 111 -- we find that the proposal concerns a matter which is not a
 condition of employment as defined by section 7103(a)(14) of the
 Statute.
 
                          III.  Proposals 2 and 3
 
    The FLRA Members disagree over the negotiability of these proposals.
 The majority opinion is on page 7 of this decision, Chairman Calhoun's
 dissent is on page 12.
 
                              IV.  Proposal 4
 
          The Commission will make every effort to house Panamanian
       professional employees in Commission housing units, in accordance
       with CC Res. No. 2-81/CCR (R).
 
          Housing and all utilities shall be provided to professional
       unit employees on a gratuitous basis.
 
                       A.  Positions of the Parties
 
    The Agency asserts that this proposal is nonnegotiable because it
 does not concern conditions of employment;  it is inconsistent with
 international agreements implementing the Panama Canal Treaty;  it
 concerns a method and means by which the Agency performs its work within
 the meaning of section 7106(b)(1);  and it covers non-bargaining unit
 employees.  Additionally, insofar as the second sentence would require
 the Agency to pay for telephone service, the Agency argues that it
 conflicts with Federal statute.
 
    The Union disputes the Agency's contentions arguing that, under the
 circumstances, housing is a condition of employment.  It asserts that as
 "key" employees all professionals should be entitled to efforts on the
 part of the Agency to obtain Panamian consent to their occupancy of
 Commission housing.  It argues that this proposal is not inconsistent
 with the Panama Canal Treaty or related agreements.  It asserts that the
 Agency's argument that the proposal concerns a method by which it
 performs its work is inconsistent with its argument that the proposal
 does not concern a condition of employment.  Lastly, it states that it
 intends the proposal to apply only to bargaining unit employees.
 
                       B.  Analysis and Conclusions
 
                1.  The Proposal Conflicts with Federal Law
 
    The issue of housing for employees of the Agency was addressed by the
 Panama Canal Treaty and implementing agreements.  Article XIII of the
 Treaty provided for title to all housing, which prior to the Treaty was
 owned by the Panama Canal Company, to be transferred to the Panamanian
 Government upon the Treaty's entry into force.  Article III of the
 Treaty granted to the U.S. the rights to manage, operate and maintain
 the Panama Canal, its complementary works, installations and equipment.
 An "Agreement in Implementation of Article III of the Panama Canal
 Treaty" was executed which set out in more detail how Article III was
 intended to operate.  Among other things, the Agreement established a
 Coordinating Committee to perform functions specifically designated in
 the Agreement as well as others entrusted to it by the U.S. and
 Panamanian Governments concerning implementation of the Agreement.
 Article II of the Agreement provided that housing areas made available
 to the U.S. by Panama were to be dedicated to the primary purpose of
 housing U.S. citizen employees and dependents.  Article III of the
 Agreement.  /3/ The housing areas were to be administered in accordance
 with Article VI of the Agreement.  Article VI reiterated the provisions
 of Article III regarding the "primary purpose" of the housing areas and
 also provided that:  /4/
 
          (1) the use of housing units beyond those required by the U.S.
       for housing its citizen employees would pass to Panama;
 
          (2) those U.S. employees who were not U.S. citizens and who, on
       the date of the Treaty's entry into force, were occupying housing
       units, the use of which were transferred to Panama, would be given
       the opportunity to lease, rent or purchase such units;
 
          (3) in addition to housing its citizen employees, the U.S.
       could use the housing areas for other purposes related to the
       management, operation and maintenance of the Canal;  and
 
          (4) the Coordinating Committee would serve as the channel for
       consultation and coordination between the U.S. and Panama with
       respect to matters arising under the Agreement.
 
    The Coordinating Committee issued a resolution providing that, with
 prior express authorization by the Government of Panama, it would allow
 use of housing units by Panamanian citizen employees when the Agency
 considered it necessary that they reside near their place of work and
 when the Committee agreed in each specific case.  CC Resolution No.
 2-81/CCR (R).  /5/
 
    We find that the proposal requiring "every effort to house Panamanian
 professional employees in Commission housing" is inconsistent with the
 Treaty and its implementing Agreement which generally do not authorize
 the Agency to provide housing to Panamanian nationals in housing areas
 which pursuant to the Treaty have been made available for the Agency's
 use.  Under the Coordinating Committee's interpretation of the Treaty
 and the Implementing Agreement, an exception may be considered only in
 those instances where it is necessary to the management, maintenance,
 and operation of the Canal that an employee reside near their place of
 work.  However, the proposal as drafted and explained by the Union does
 not recognize this limitation.  Rather, it seeks blanket eligibility of
 all professional employees without regard to whether such residence near
 their place of work is necessary to the management, maintenance, and
 operation of the Canal.  We do not view the Union's assertion that all
 professionals are "key" employees, without more, as establishing a
 relationship between where those employees live and the ability of the
 Agency to accomplish its mission.  Because the proposal seeks to
 circumvent the limitations imposed by the Treaty and its Implementing
 Agreement as to providing housing to Panamanian nationals, it is
 inconsistent with the Treaty.  Compare National Treasury Employees Union
 and Department of the Treasury, Internal Revenue Service, 6 FLRA 508
 (1981) (Proposal 1) which found that a proposal which would require
 reimbursement for training expenses without regard for applicable
 statutory limitations was not within the duty to bargain.  As determined
 previously by the Authority, the Treaty has the force of Federal law.
 International Organization of Masters, Mates and Pilots and Panama Canal
 Commission, 13 FLRA 508 (1983) (Proposal 5).
 
    The second sentence seeks free rent and utilities for those employees
 occupying Agency housing.  The Agency argues that because this would
 require it to pay for telephone service at employee residences, this
 proposal conflicts with Federal statute -- 31 U.S.C. Section 679
 (recodified at 31 U.S.C. Section 1348).  /6/ The Union does not dispute
 the Agency's contention that the proposal would require the Agency to
 provide free telephone service to employees.
 
    31 U.S.C. 1348 explicitly prohibits, with certain specific
 exceptions, the use of appropriated funds to pay for telephone service
 at private residences.  This prohibition applies regardless of whether
 the residence is Government-owned or leased.  /7/ Because the proposal
 here does not fall within one of the exceptions, we find it is
 inconsistent with Federal statute.
 
                              2.  Conclusion
 
    This proposal is inconsistent with Federal law.  Therefore, it is
 nonnegotiable.  In view of this conclusion, we find it unnecessary to
 address the Agency's other contentions as to the negotiability of the
 proposal.
 
                                 V.  Order
 
    Pursuant to section 2424.10 of the Authority's Rules and Regulations,
 the Union's petition for review as to Proposals 1 and 4 is dismissed.
 
    Issued, Washington, D.C., March 12, 1987.
 
                                       /s/ Jerry L. Calhoun, Chairman
                                       /s/ Henry B. Frazier III, Member
                                       /s/ Jean McKee, Member
                                       FEDERAL LABOR RELATIONS AUTHORITY
 
 
 
 
 
                  DECISION AND ORDER ON PROPOSALS 2 AND 3
 
                                Proposal 2
 
          The Cost of Living Allowance contemplated by section 1206 of
       the Panama Canal Act will be determined by the Commission at a
       rate of 60% of an employee's gross salary.  Gross salary for the
       purposes of this section includes all items of basic pay,
       including but not limited to differential, bonuses and other
       compensation.
 
          A union representative from the professional bargaining unit
       shall be included on all boards, study groups or other bodies
       which are tasked with considering and making recommendations
       pertaining to the cost of living allowance.  Furthermore, the
       union shall be consulted on all related matters.
 
                                Proposal 3
 
          The Commission will do everything it can to see that the cost
       of living allowance contemplated by section 1206 of the Panama
       Canal Act will be determined by the Commission at a rate of 60% of
       an employee's gross salary.  Gross items of basic pay, including
       but not limited to differential, bonuses and other compensation.
 
          The Commission will do everything it can to see that a union
       representative from the professional bargaining unit shall be
       included on all boards, study groups or other bodies which are
       tasked with considering and making recommendations pertaining to
       the cost of living allowance.  Furthermore, the union shall be
       consulted on all related matters.
 
          The Commission will make bi-weekly reports to the Union on its
       progress in achieving the goals set forth in this article.
 
                       A.  Positions of the Parties
 
    The Agency contends that these proposals are nonnegotiable.  In
 support, it argues that the legislative history of the Panama Canal Act
 indicates thatCongress intended to bar negotiation over employee
 compensation in the same manner that negotiation over such matters is
 barred by the Statute.  The Agency contends that because the matters
 which the cost of living allowance is designed to replace, i.e.,
 commissary, exchange and postal privileges, are not conditions of
 employment, neither is the cost of living allowance a condition of
 employment.  The Agency asserts that the scope of the proposals is not
 limited to bargaining unit employees.  Last, the Agency argues as to
 that portion of the proposals which requires Union participation on
 bodies responsible for considering and making recommendations concerning
 the cost of living allowance that, because the subject matter of the
 deliberations involved is a nonnegotiable matter, Union participation in
 such deliberations is not negotiable.
 
    The Union contends that the proposals are negotiable as the amount of
 the subject cost of living allowance is a matter which is a condition of
 employment and is within the discretion of the Agency.  It also states
 that these proposals are intended to be applied only with respect to
 determining the cost of living alowance for bargaining unit employees.
 
                         Analysis and conclusions
 
                              1.  Background
 
    The cost of living allowance to which the proposals refer is
 authorized by section 1206 of the Panama Canal Act.  /8/ It is intended
 to compensate certain Agency employees for increased living costs
 resulting from the termination of their eligibility to use various U.S.
 military facilities as a consequence of the terms of the Panama Canal
 Treaty.  /9/ By the specific terms of the Panama Canal Act the
 determination of the actual amount of the cost of living allowance is
 within the discretion of the Agency.
 
            2.  Negotiability of Proposals Relating to Employee
 
                Compensation
 
    Under the Panama Canal Act, the employees in the bargaining unit to
 which these proposals apply are covered by the provisions of the Statute
 insofar as labor-management relations and collective bargaining are
 concerned.  /10/ Consequently, the scope of the duty to bargain which
 applies to these employees is the one established by the Statute.  We
 have recently reaffirmed that nothing in the Statute, or its legislative
 history, bars the negotiation of proposals concerning employee
 compensation insofar as (1) the matters proposed are not specifically
 provided for by law and are within the discretion of the agency and (2)
 the proposals are not otherwise inconsistent with law, Government-wide
 rule or regulation or an agency regulation for which a compelling need
 exists.  American Federation of Government Employees, AFL-CIO, Local
 1897 and Department of the Air Force, Eglin Air Force Base, Florida, 24
 FLRA No. 41 (1986).  Thus, the Agency's argument that the Panama Canal
 Act and the Statute bar negotiations on proposals merely because they
 concern the subject of compensation is rejected.
 
           3.  The Proposals Concern Conditions of Employment of
 
                Bargaining Unit Employees
 
    At the outset we note that the Union specifically states that these
 proposals are intended to be limited in application to bargaining unit
 employees.  This interpretation is compatible with the language of these
 proposals and we adopt it for the purpose of this decision.  We reject
 the Agency's contention to the contrary.
 
    Without passing upon the Agency's blanket assertion that commissary,
 exchange and postal privileges are not conditions of employment, we
 conclude that the cost of living allowance with which the proposals are
 concerned falls within the meaning of conditions of employment.  In this
 regard, the Agency is authorized by law to make monetary payments to
 certain employees based on and because of their status as employees of
 the Agency.  In passing the legislation which became the Panama Canal
 Act, the Congress expressly stated that one purpose of the provisions of
 the Act was to minimize the disruption in the working environment and
 employment conditions of employees of the Panama Canal Company (a
 predecessor organization of the Agency) incident to the transition under
 the Treaty.  /11/ Given the nature and origin of the cost of living
 allowance -- a payment to employees as employees authorized by law and
 for the express purpose of minimizing disruption in their employment
 conditions -- we find that a direct relationship exists between the
 proposal and the employment relationships of bargaining unit employees.
 In view of this relationship and the fact that the proposal is limited
 to bargaining unit employees, we conclude that these proposals concern
 conditions of employment of bargaining unit employees.  See Antilles
 Consolidated Education Association and Antilles Consolidated School
 System, 22 FLRA No. 23 (1986), in which we discussed factors which we
 consider in ruling on whether a proposal involves a condition of
 employment of bargaining unit employees.
 
         4.  Union Participation on Bodies Considering the Cost of
 
                Living Allowance
 
    The Agency claims that, because the cost of living allowance is a
 nonnegotiable matter, Union participation on bodies considering the cost
 of living allowance is not within the duty to bargain under the
 Authority's decision in National Federation of Federal Employees, Local
 1167 and Department of the Air Force, Headquarters, 31st Combat Support
 Group (TAC), Homestead Air Force Base, Florida, 6 FLRA 574, 580 (1981),
 aff'd sub nom. National Federation of Federal Employees, Local 1167 v.
 Federal Labor Relations Authority, 681 F.2d 886 (D.C. Cir. 1982).  That
 decision, however, is inapplicable to the circumstances present here.
 The determination in Homestead that the union's proposed involvement in
 managerial deliberations concerning contracting out was nonnegotiable
 was based on the fact that the deliberations and discussion in question
 were part of the decision-making process with respect to a management
 right under section 7106 of the Statute.  However, the Agency here makes
 no assertion that any management right is involved in these proposals.
 Moreover, neither party has asserted that the "boards, study groups or
 other bodies" referred to in these proposals would encompass purely
 intramanagement meetings held for such purposes as formulating
 management position, strategies, etc.
 
                        5.  Summary and Conclusions
 
    Insofar as these proposals relate to the determination of the amount
 of the cost of living allowance to be paid bargaining unit employees,
 they concern a condition of employment which is within the Agency's
 discretion.  The Agency does not claim nor is it otherwise apparent that
 the proposals in this respect otherwise conflict with law,
 Government-wide rule or regulation or an agency regulation for which a
 compelling need exists.  Thus we find the proposals to be within the
 duty to bargain insofar as they relate to the cost of living allowance
 determination.  In view of this conclusion, we also reject the Agency's
 derivative contention that, because the cost of living allowance is a
 nonnegotiable matter, the portion of the proposals relating to Union
 participation in boards, study groups and bodies charged with
 considering and making recommendations pertaining to the cost of living
 allowance is also negotiable.  Based on all of the above, we conclude
 that these proposals are negotiable.
 
                                 C.  Order
 
    The Agency must upon request, or as otherwise agreed to by the
 parties, negotiate over Proposals 2 and 3.  /12/
 
    Issued, Washington, D.C., March 12, 1987.
 
                                       /s/ Henry B. Frazier III, Member
                                       /s/ Jean McKee, Member
                                       FEDERAL LABOR RELATIONS AUTHORITY
 
 
 
 
 
 
 
                   Separate Opinion of Chairman Calhoun
 
    In my opinion in American Federation of Government Employees,
 AFL-CIO, Local 1897 and Department of the Air Force, Eglin Air Force
 Base, Florida, 24 FLRA No. 41 (1986), petition for review filed sub nom.
 Department of the Air Force, Eglin Air Force Base, Florida v. FLRA,
 87-3073 (11th Cir. February 2, 1987), I stated that in the absence of a
 clear expression of Congressional intent to make wages and money-related
 fringe benefits negotiable, I would find that these matters are not
 within the duty to bargain under the Statute.  As is stated in my
 opinion in District No. 1, Pacific Coast District, Marine Engineers
 Beneficial Association and Panama Canal Commission, 26 FLRA No. 8
 (1987), I find no such expression in the Panama Canal Act of 1979 or its
 legislative history.  Therefore, for the reasons stated in those
 opinions, I do not join the majority decision concerning Proposals 2 and
 3.
 
    Issued, Washington, D.C., March 12, 1987.
 
                                       /s/ Jerry L. Calhoun, Chairman
 
 
 
 
 
                ---------------  FOOTNOTES$ ---------------
 
 
 
    (1) The Panama Canal Act of 1979 defines the Canal Zone as:  "the
 areas and installations in the Republic of Panama made available to the
 United States pursuant to the Panama Canal Treaty of 1977 and related
 agreements . . . . " 22 U.S.C. Section 3602.
 
    (2) In support of its contention that the provisions of C.Z. Code
 tit. 1, Section 111, are no longer binding, the Union alleges that the
 Department of State offices in Panama observe Panamanian holidays.
 However, regardless of whatever practice the Department of State may
 engage in, we cannot conclude that those provisions are no longer
 binding given the terms of the Panama Canal Act.
 
    (3) Article III (Use of Land and Water Areas) of the Agreement
 provided as follows:
 
          2.  Housing Areas:  The areas and installations set forth in
       paragraph 2 of Annex of this Agreement (hereinafter referred to as
       "housing areas") shall be dedicated to the primary purpose of
       housing United States citizens employees and dependents.  The
       housing areas shall be administered in accordance with the regime
       of civil coordination established in Article VI of this Agreement.
 
    (4) Article VI (Regime of Civil Coordination for Housing Areas)
 provides in relevant part:
 
          1.  As provided in Article XIII of the Panama Canal Treaty,
       title to all housing within the housing areas, owned by the Panama
       Canal Company immediately prior to the entry into force of this
       Agreement, is transferred to the Republic of Panama.  The housing
       areas shall, however, continue to be dedicated, for the duration
       of this Agreement, to the primary purpose of housing employees of
       the Commission in accordance with the provisions of this Article.
 
          2.  The Republic of Panama hereby places at the disposal of the
       United States, without cost, the use of such housing, within the
       housing areas, as the United States may deem necessary for United
       States citizen employees and dependents throughout the duration of
       this Agreement.  The United States may continue to manage,
       maintain, improve, rent and assign such housing for United States
       citizen employees and dependents.
 
          3.  The use of housing units beyond those required by the
       United States for housing United States citizen employees and
       dependents at the date of entry into force of this Agreement,
       shall pass to the Republic of Panama on that date . . . .
 
          4.  In order to protect the interests and welfare of employees
       of the United States who are not United States citizen employees
       and who, on the date of entry into force of this Agreement, are
       occupying housing units, the use of which is transferred to the
       Republic of Panama, the Republic of Panama shall give such persons
       the following special treatment:
 
          (a) The opportunity to occupy, by lease or rental, or in the
       event the Republic of Panama decides to sell, to acquire by
       purchase at reasonable prices, the units which they are occupying
       on the date of entry into force of this Agreement;
 
          (b) In cases of purchase, the opportunity to obtain long-term
       financing arrangements.
 
          (c) In cases where continued occupancy of a particular housing
       unit is not feasible, the opportunity to obtain other adequate
       housing within such areas at reasonable cost, on a preferential or
       priority basis.
 
          5.  In addition to housing its United States citizen employees
       and dependents, the United States may use the housing areas for
       other purposes related to the management, operation and
       maintenance of the Canal.  The housing areas may also be used for
       other activities complementary to or compatible with the primary
       purpose of housing employees of the Commission under revocable
       land licenses to be issued in accordance with the procedures set
       forth in Article IV of this Agreement.
 
                       .  .  .  .  .  .  .
 
 
          7.  The Coordinating Committee shall serve as the channel for
       consultation and coordination between the two Parties with respect
       to matters arising under the regime of civil coordination
       established in this Article.
 
    (5) CC Resolution No. 2-81/CCR (R) provided:
 
          Whereas Article VI, paragraph 5 of the Agreement in
       Implementation of Article III of the Panama Canal Treaty provides
       that in addition to housing its United States citizen employees
       and dependents, the United States may use the housing areas for
       other purposes related to the management, operation and
       maintenance of the Canal, and Article VI, paragraph 7 of said
       Agreement provides that the Coordinating Committee shall serve as
       the channel for consultation and coordination between the two
       Parties with respect to matters arising under the regime of civil
       coordination established by this Article;
 
          Resolves that:  After prior express authorization by the
       Government of Panama, the Coordinating Committee may allow the use
       of housing units located within the Panama Canal Commission
       housing areas to Panamanian employees and their dependents, when
       said Commission considers that it is necessary that such employees
       reside near their place of work, as agreed by the Coordinating
       Committee in each specific case.
 
          (This quotation appears as submitted by the Agency;  the Union
       does not contest its accuracy.)
 
    (6) 31 U.S.C. Section 1348 provides:
 
          Section 1348.  Telephone installation and charges
 
          (a)(1) Except as provided in this section, appropriations are
       not available to install telephones in private residences or for
       tolls or other charges for telephone service from private
       residences.
 
          (2) Under regulations of the Secretary of State, appropriations
       may be used to install and pay for the use of the Foreign Service.
        Subsection (b) of this section applies to long-distance calls
       made on those telephones.
 
          (b) Appropriations of an agency are available to pay charges
       for a long-distance call if required for official business and the
       vouchers to pay for the call is sworn to by the head of the
       agency.  Appropriations of an executive agency are available only
       if the head of the agency also certifies that the call is
       necessary in the interest of the Government.
 
          (c) Under regulations prescribed by the Secretary of the Army
       on recommendation of the Chief of Engineers, not more than $30,000
       may be expended each fiscal year to install and use in private
       residences telephones required for official business in
       constructing and operating locks and dams for navigation, flood
       control, and related water uses.
 
          (d) Under regulations prescribed by the Secretary of Defense,
       funds appropriated to the Department of Defense are available to
       install, repair, and maintain telephone wiring in residences owned
       or leased by the United States Government and, if necessary for
       national defense purposes, in other private residences.
 
    (7) Accord Decision of the Comptroller General, 33 Comp. Gen. 28
 (1955).  Compare Decision of the Comptroller General, 53 Comp. Gen. 195
 (1973), in which the Comptroller General in applying the prohibition
 against providing telephone service for the personal benefit of
 employees at Government expense, distinguished between those
 Government-owned residence facilities set apart for exclusive personal
 use of employees and those which could not be considered as set aside
 for exclusive personal use.
 
    (8) Section 1206 of the Panama Canal Act is codified at 22 U.S.C.
 Section 3646 and provides:
 
          Section 1206.  Cost of living allowance
 
          Effective beginning October 1, 1984, each officer and employee
       of the Commission who is a citizen of the United States and was
       employed by the Panama Canal Company or the Canal Zone Government
       on September 30, 1979, or who is an individual of any nationality
       recruited outside the Republic of Panama after September 30, 1979,
       may be paid an allowance to offset any increased cost of living
       which may result from the termination of the eligibility of the
       officer or employee and his dependents to use military postal
       services, sales stores, and exchanges.  The amount of the
       allowance may be determined by the Commission.
 
    (9) See H.R. REP. 98, Part I, 96th Cong., 1st Sess. 52, reprinted in
 1979 U.S. CODE CONG. & AD. NEWS 1034, 1054;  S. REP. NO. 255, 96th
 Cong., 1st Sess. 22-23 (1979);  H.R. REP. NO. 473, 96th Cong., 1st Sess.
 57, reprinted in 1979 U.S. CODE CONG. & AD. NEWS 1034, 1139-40.
 
    (10) Section 1271(a) of the Panama Canal Act which is codified at 22
 U.S.C. Section 3701 provides:
 
          Sec. 1271.  (a) Nothing in this Act shall be construed to
       affect the applicability of chapter 71 of title 5, United States
       Code, relating to labor-management and employee relations, with
       respect to the Commission or the operations of any other Executive
       agency conducted in that area of the Republic of Panama which, on
       September 30, 1979, was the Canal Zone, except that in applying
       those provisions --
 
          (1) the definition of "employee" shall be applied without
       regard to clause (i) of section 7103(a)(2) of such title 5 which
       relates to nationality and citizenship;  and
 
          (2) a unit shall be considered to be appropriate
       notwithstanding the fact that it includes any supervisor if that
       supervisor's position (or type of position) was, before October 1,
       1979, represented before the Panama Canal Company by a labor
       organization that included employees who were not supervisors.
 
    (11) The Report of the Senate Committee on Armed Services which
 accompanied the legislation which became the Panama Canal Act contained
 the following statements:
 
          Third, in arriving at its recommended version of the
       implementing legislation, the committee was very concerned about
       the welfare and security of United States citizens and other
       persons working for the Company and the Department of Defense in
       Panama.  Many of the provisions of the bills before the committee
       relate to these employees;  the disruption in their working
       environment and employment conditions inevitably incident to the
       transfer of control over the Canal Zone to Panama should be kept
       to a minimum.
 
          S. REP. NO. 255, 96th Cong., 1st Sess. 3 (1979).
 
          Section 306 -- Cost of living allowance
 
          Since the time the canal was constructed, United States
       Government agencies building and operating the canal have provided
       sales stores to meet the requirement of employees engaged in the
       operation.  This practice is required to be discontinued by
       Article III of the Treaty and the Annex referred to in paragraph 4
       of Article III.  However,