27:0159(31)CA - VA, Washington, DC and NFFE -- 1987 FLRAdec CA



[ v27 p159 ]
27:0159(31)CA
The decision of the Authority follows:


 27 FLRA No. 31
 
 VETERANS ADMINISTRATION 
 WASHINGTON, D.C.
 Respondent
 
 and
 
 NATIONAL FEDERATION OF 
 FEDERAL EMPLOYEES, INDEPENDENT
 Charging Party
 
                                            Case No. 3-CA-50147
 
                            DECISION AND ORDER
 
    I.  Statement of the Case
 
    This unfair labor practice base is before the Authority on exceptions
 filed by the Respondent to the attached decision of the Administrative
 Law Judge.  The General Counsel and the Charging Party (the Union) filed
 oppositions to the Respondent's exceptions.  /*/ The complaint alleged
 that the Respondent violated section 7116(a)(1), (5) and (8) of the
 Federal Service Labor-Management Relations Statute (the Statute) by
 failing and refusing to afford the Union adequate prior notice and an
 opportunity to consult regarding a decision to withhold a comparability
 pay increase from employees for whom the Union held national
 consultation rights (NCR) under section 7113 of the Statute.  For the
 reasons stated below, we find that the Respondent violated section
 7116(a)(1), (5) and (8) of the Statute as alleged.
 
    II.  Background
 
    The Union holds national consultation rights under section 7113 of
 the Statute for some of the Respondent's employees, including nurses and
 other employees who provide direct patient care services or services
 related to direct patient care, and who are paid pursuant to Title 38 of
 the United States Code, specifically 38 U.S.C. Section 4107.  Under
 section 4107(g) of Title 38, as amended in 1980, the Administrator of
 the Veterans Administration (VA) may adjust the pay of nurses when
 necessary in order to match the pay of similar employees outside the VA
 to achieve adequate staffing at particular facilities, or to recruit
 personnel with specialized skills.
 
    Since the amendment of Title 38 in 1980, and for about 10 years
 before that, nurses had received the annual comparability wage increases
 granted to federal employees.  The Respondent's policy of automatically
 granting nurses any annual comparability increase was reflected in its
 December 1983 administrative manual.  The manual provided that the
 general pay increase would be passed on to special rate employees, that
 is, employees paid under 38 U.S.C. Section 4107(g), on the effective
 date of the increase.
 
    On December 28, 1984, the Respondent notified the Union that nurses
 would not receive the Government-wide comparability wage increase
 scheduled to take effect on January 6, 1985, and that the Respondent's
 administrative manual had been amended to provide that any revision of
 general schedule pay would no longer have any effect on pay rates under
 38 U.S.C. Section 4107(g).  Previously, the Respondent had normally
 provided the Union with at least 30 days notice of changes in personnel
 practices and conditions of employment for national consultation
 purposes.
 
    The Union official responsible for handling NCR matters did not
 return to work until January 6, 1985.  On January 7, she advised the
 Respondent that the Union wanted to exercise its consultation rights
 regarding the decision to withhold the pay increase prior to the
 decision taking effect or the Union would consider the change an unfair
 labor practice.  The Respondent informed the Union that it had no
 obligation to consult on the substance of its decision, but that it
 would consider Union comments on the impact and implementation of the
 decision.  The Union indicated that it wanted to consult on the decision
 itself and did not submit any comments regarding impact and
 implementation.
 
    III.  Administrative Law Judge's Decision
 
    The Judge concluded that the Respondent failed to provide the Union
 with its national consultation rights as required by section 7113 of the
 Statute and thereby violated section 7116(a)(1), (5) and (8) of the
 Statute.  In reaching that conclusion, the Judge found, contrary to the
 Respondent's position, that the decision to withhold the 1985
 comparability increase for nurses concerned a condition of employment
 within the meaning of section 7103(a)(14) of the Statute.  The Judge
 found that while the basic compensation of nurses is provided for in
 title 38, the Administrator of the VA is authorized to modify those
 rates within the guidelines set forth in 38 U.S.C. Section 4107(g).  The
 Judge further found that the Administrator was vested with substantial
 discretion in increasing the basic pay rates for nurses.  The Judge
 therefore rejected the Respondent's argument that the decision to
 withhold the nurses' pay increase was required by section 4107(g) and
 that the Administrator was without discretion to do otherwise.
 
    The Judge also rejected the Respondent's argument that decisions
 concerning the adjustment of pay rates under section 4107(g) were within
 the exclusive authority of the Administrator and, therefore, that the
 authority may be exercised without regard for any provisions of the
 Federal Service Labor-Management Relations Statute.  Additionally, the
 Judge rejected the Respondent's contentions that consulting on the
 withholding of the pay increase would interfere with its rights under
 section 7106 of the Statute to determine its budget and staffing
 patterns.
 
    As to the Respondent's argument that there was no change because the
 pay of employees was not changed or decreased, the Judge found that the
 Respondent's established practice prior to January 1985 was to
 automatically grant the yearly Government-wide comparability pay
 increase to nurses and that the decision not to grant the nurses the
 1985 increase was a substantive change in a condition of the nurses'
 employment.
 
    The Judge also rejected the Respondent's assertion that the Union was
 afforded sufficient time to consult on the matter but failed to submit
 any comments.  The Judge determined that the Respondent's decision was
 made prior to notifying the Union and that the Union was not given any
 opportunity to consult before the Respondent finalized its decision.
 The Judge found that when the Union was notified of the decision on
 December 28, 1984, the decision, which was effected by the Respondent's
 amendment of the administrative manual and notification to the managers
 of the change, had already been made.  The Judge therefore concluded
 that the Respondent had committed an unfair labor practice, as alleged
 by the General Counsel, by failing to afford the Union an opportunity to
 consult concerning the change.  However, the Judge also concluded,
 contrary to the General Counsel, that the Respondent had afforded the
 Union an adequate opportunity to consult regarding the impact and
 implementation of the decision.
 
    IV.  Positions of the Parties
 
    The Respondent first contends that its decision not to grant the
 annual comparability pay increase to nurses covered by 38 U.S.C. Section
 4107(g) did not give rise to an obligation to consult with the Union
 under section 7113 of the Statute.  In support of that contention, the
 Respondent in essence argues that the decision had little effect on the
 Union because of the number of nurses represented by the Union in
 comparison to the total number of nurses covered by section 4107(g).
 
    Additionally, the Respondent argues that the Judge erred in
 concluding that the Respondent was required to consult with the Union
 concerning the decision not to grant the comparability wage increase to
 nurses.  The Respondent contends that section 7113(b) of the Statute
 only requires that an agency must consult concerning changes in
 "conditions of employment" and that in defining that term, section
 7103(a)(14) of the Statute excludes matters which are "specifically
 provided for by Federal statute." The Respondent maintains that since
 nurses' pay is provided for by 38 U.S.C. Section 4107(g) and the VA
 Administrator had no discretion under that provision to increase their
 pay, the comparability increase is not a condition of employment.
 Further with regard to the question of the Administrator's discretion,
 the Respondent argues that section 4107(g) empowers the Administrator to
 increase the pay rates of covered employees only if an increase is
 necessary to recruit or retain such employees.  The Respondent argues
 that the statutory requirements for a pay increase for the nurses were
 not met in this case and that the Administrator therefore had no
 discretion to grant them an increase.
 
    Additionally, the Respondent contends that pay adjustments under
 section 4107(g) are committed to the exclusive authority of the
 Administrator of the VA and that the Union had no right to be included
 in the decision-making process.  The Respondent also argues that the
 Administrator's authority is an integral part of the exclusive personnel
 system established for Title 38 employees.  The Respondent maintains
 that personnel matters and working conditions of Title 38 employees are
 within the exclusive authority of the Respondent and that allowing the
 Union to consult on pay adjustments under 38 U.S.C. Section 4107(g)
 would compromise the Title 38 personnel system.
 
    The Respondent further contends that there was no change in the
 conditions of employment of the affected employees because their basic
 salary rates did not change.  The Respondent also argues that there was
 no change in the past practice of determining whether to grant the
 affected employees the annual comparability increase.  The Respondent
 reiterates its argument that its practice was to make the determination
 in a yearly review process.  The Respondent maintains that the practice
 was not changed;  only the result of the annual review was different.
 Finally, the Respondent contends that it did not violate the Union's
 national consultation rights because the Union did not submit any
 proposals, but rather, decided to file an unfair labor practice charge.
 The Respondent argues that the decision to withhold the pay increase had
 to be implemented on January 6, 1985, and that it notified the Union as
 soon as the decision was made.  The Respondent asserts that the Union
 waived its rights to consult on the impact and implementation of the
 decision when it chose to challenge the Respondent's position that it
 was not required to consult on the substance of the pay determination
 rather than submitting any proposals concerning the impact and
 implementation of the determination.  The Agency maintains that its
 actions did not constitute an unfair labor practice.
 
    The General Counsel contends that the Judge correctly concluded that
 the Respondent's established practice prior to January 1985 was to
 automatically grant comparability increases to the affected employees
 and that the decision not to grant them the January 1985 increase
 constituted a substantive change in a condition of employment.  The
 General Counsel argues that the record does not support the Respondent's
 argument that previous increases occurred as a result of a yearly review
 process.  The General Counsel also contends that the Respondent
 implemented the change in conditions of employment without affording the
 Union time to present its views and recommendations in accordance with
 section 7113 of the Statute.  The General Counsel argues that the record
 supports the Judge's findings that the Respondent's decision was made
 prior to notifying the Union and that there was a past practice for the
 Respondent to provide the Union with 30 days notice of proposed changes
 in conditions of employment for NCR purposes.
 
    In its opposition to the Respondent's exceptions, the Union contends
 that the Judge properly found that the Respondent changed a condition of
 employment.  The Union argues that annual comparability increases are
 not specifically provided by 38 U.S.C. Section 4107(g) and that section
 4107(g) provides substantial discretion to the VA Administrator in pay
 matters.  The Union also contends that 38 U.S.C. Section 4107(g) does
 not exempt the Respondent from its obligation to consult under section
 7113 of the Statute.  The Union notes that the Respondent's
 administrative manual required that any Government-wide comparability
 pay increase would automatically be passed on nurses.  The Union argues
 that the Respondent's decision to amend that regulation and not grant
 the employees the 1985 increase without consulting with the Union was an
 unfair labor practice.  The Union further contends that the Respondent's
 argument that it did not violate the Union's national consultation
 rights because the Union did not submit any proposals is without merit.
 The Union maintains that the Judge correctly found that on December 28,
 1984, the Union was notified of a decision, not a proposed change.  The
 Union notes that the parties stipulated that the Union had national
 consultation rights under section 7113 of the Statute and that merely
 informing the Union of a decision does not meet the requirements of that
 provision.
 
    V.  Analysis
 
    Section 7113(b) of the Statute requires an agency to inform a labor
 organization with national consultation rights of any substantive
 changes in conditions of employment proposed by the agency and to
 provide the labor organization with reasonable time to present its views
 and recommendations regarding the changes and to consider such views and
 recommendations before taking final action.
 
    In order for the consultation obligation set forth in section 7113(b)
 of the Statute to apply, there must be a substantive change in
 conditions of employment.  See General Services Administration, 6 FLRA
 430 (1981);  National Guard Bureau, 22 FLRA No. 90 (1986).  Section
 7103(a)(14) defines conditions of employment as "personnel policies,
 practices, and matters, whether established by rule, regulation or
 otherwise, affecting working conditions . . . ."
 
    In this case, it is clear that the Respondent's decision to deny
 nurses the 1985 comparability pay increase was a change in a personnel
 policy and practice of automatically granting them the annual
 Government-wide increase.  We agree with the Judge that the record
 establishes that the Respondent's practice for 3 years under Title 38,
 as amended in 1980, and for a longer period prior to 1980, was to
 automatically pass on any comparability pay increase to its nurses.
 Moreover, the Respondent's practice was clearly established as a
 published policy in its 1983 administrative manual.  This situation is
 therefore distinguishable from that in Office of Personnel Management
 and National Federation of Federal Employees, 18 FLRA 659 (1985), where
 the Authority found that the agency was not required to consult with the
 union under section 7116(d) of the Statute when it issued an installment
 to the Federal Personnel Manual (FPM).  The Authority concluded in that
 case that the FPM installment merely restated the provisions of
 applicable regulations and did not effect a substantive change in
 conditions of employment.
 
    Additionally, we find, in agreement with the Judge that while the
 basic compensation for nurses is provided for in Title 38, comparability
 pay increases are not specifically provided for and, further, the
 Respondent has substantial discretion under 38 U.S.C. Section 4107(g) to
 adjust the pay of nurses.  In agreement with the Judge, we also reject
 the Respondent's arguments that the decision to withhold the 1985
 increase was required by section 4107(g) and that the Respondent was
 without discretion to do otherwise.
 
    We therefore agree with the Judge's conclusion that automatically
 granting annual comparability pay increases to nurses had become a
 condition of employment.  We conclude, therefore, that the Respondent
 was obligated to consult with the Union concerning its substantive
 change in that condition of employment.  In reaching that conclusion, we
 reject as without merit the Respondent's argument that it was not
 required to consult because the change would have only a minimal impact
 on the Union.  It is undisputed that the Union had national consultation
 rights under section 7113 of the Statute.  The Respondent was not
 relieved of its concomitant responsibilities under that provision
 because of the asserted extent of impact of the change on the Union.
 
    We also reject as without merit the Respondent's arguments that since
 any determination concerning nurses' pay was within the exclusive
 authority of the Respondent under the Title 38 personnel system, it
 could act without regard for provisions of the Federal Service
 Labor-Management Relations Statute, and that allowing the Union to
 consult on the pay determination in this case would compromise the Title
 38 system.  In Colorado Nurses Association and Veterans Administration
 Medical Center, Ft. Lyons, Colorado, 25 FLRA No. 66 (1987), petition for
 review filed, No. 87-1104 (D.C. Cir. Feb. 25, 1987), we specifically
 held that Title 38 employees are covered by the Statute.  We determined
 that no conflict exists between the provisions of Title 38 and the
 provisions of the Statute, except with regard to disciplinary and
 adverse actions for alleged professional inaptitude, inefficiency, or
 misconduct by Title 38 employees.  Slip op. at 4-8.  Since the dispute
 in this case concerns a failure to consult regarding a change in the
 Respondent's pay policy and practice there is no conflict between the
 Respondent's authority under Title 38 and its obligation to consult with
 the Union under the Statute.
 
    Since the Union had national consultation rights under section
 7113(b) of the Statute, the Respondent was obligated to comply with that
 provision prior to changing the policy and practice of automatically
 granting nurses the annual Government-wide comparability pay increase.
 The Respondent was required to notify the Union of its intention to
 change that condition of employment and provide the Union with the
 opportunity to present its views and recommendations before finalizing
 its decision.  The Respondent failed to do so.  The Respondent presented
 the Union with a decision and denied the Union any opportunity to
 formulate and present views and recommendations for consultation with
 the Respondent.  Therefore, we conclude that the Respondent failed to
 comply with section 7113(b) of the Statute.  Under these circumstances,
 and noting that section 7113 establishes a labor organization's right
 simply "to present its views and recommendations regarding the changes"
 in conditions of employment proposed by the agency, we do not find any
 basis for distinguishing consultation regarding the substance of the
 change and consultation on the impact and implementation of the change.
 We therefore do not adopt the Judge's holdings regarding the Union's
 right to consult on the impact and implementation of the change.  In
 addition, our decision should not be construed to make any ruling
 regarding rights to negotiate impact and implementation matters flowing
 from the change.  That issue was not presented to or decided by the
 Judge.
 
    VI.  Conclusion
 
    We conclude that the Respondent failed to fulfill its obligation to
 consult with the Union pursuant to section 7113(b) of the Statute prior
 to notifying the Union of its decision not to grant nurses the 1985
 Government-wide comparability pay increase.  By so doing, the Respondent
 violated section 7116(a)(1), (5) and (8) of the Statute.
 
                                   ORDER
 
    Pursuant to section 2423.29 of the Rules and Regulations of the
 Authority and section 7118 of the Statute, the Veterans Administration
 shall:
 
    1.  Cease and desist from:
 
    (a) Failing to timely inform the National Federation of Federal
 Employees (NFFE), pursuant to NFFE's national consultation rights under
 section 7113 of the Statute, of proposed substantive changes in
 conditions of employment, and failing to provide NFFE with a reasonable
 period of time to present its views and recommendations regarding the
 proposed changes.
 
    (b) In any like or related manner interfering with, restraining, or
 coercing its employees in the exercise of their rights assured by the
 Statute.
 
    2.  Take the following affirmative action in order to effectuate the
 purposes and policies of the Statute:
 
    (a) Provide the National Federation of Federal Employees, pursuant to
 its national consultation rights under section 7113 of the Statute, a
 reasonable period of time to present its views and recommendations
 concerning the determination not to grant nurses the comparability wage
 increase granted to other government employees as of January 6, 1985,
 including any views and recommendations concerning retroactively
 granting such increase;  and thereafter, comply with the requirements of
 section 7113(b)(2) of the Statute.
 
    (b) Post at all of its facilities where unit employees are located
 copies of the attached Notice on forms to be furnished by the Federal
 Labor Relations Authority.  Upon receipt of such forms, they shall be
 signed by the Administrator and shall be posted and maintained for 60
 consecutive days thereafter, in conspicuous places, including all
 bulletin boards and other places where notices to employees are
 customarily posted.  Reasonable steps shall be taken to ensure that said
 Notices are not altered, defaced, or covered by any other material.
 
    (c) Pursuant to section 2423.30 of the Authority's Rules and
 Regulations, notify the Regional Director, Region III, Federal Labor
 Relations Authority, in writing, within 30 days from the date of this
 Order, as to what steps have been taken to comply with this Order.
 
    Issued, Washington, D.C., May 29, 1987.
 
                                       /s/ Jerry L. Calhoun, Chairman
                                       /s/ Henry B. Frazier III, Member
                                       /s/ Jean McKee, Member
                                       FEDERAL LABOR RELATIONS AUTHORITY
 
 
 
 
 
 
                          NOTICE TO ALL EMPLOYEES
 
  PURSUANT TO A DECISION AND ORDER OF THE FEDERAL LABOR
 RELATIONS
 AUTHORITY AND IN ORDER TO EFFECTUATE THE POLICIES OF CHAPTER 71
 OF TITLE
 5 OF THE UNITED STATES CODE
 
            FEDERAL SERVICE LABOR-MANAGEMENT RELATIONS STATUTE
 
                   WE HEREBY NOTIFY OUR EMPLOYEES THAT:
 
    WE WILL NOT fail to timely inform the National Federation of Federal
 Employees, pursuant to NFFE's national consultation rights under section
 7113 of the Statute, of proposed substantive changes in conditions of
 employment, and to provide NFFE with a reasonable period of time to
 present its views and recommendations regarding the proposed changes.
 
    WE WILL NOT in any like or related manner interfere with, restrain,
 or coerce our employees in the exercise of their rights assured by the
 Statute.
 
    WE WILL provide the National Federation of Federal Employees,
 pursuant to its national consultation rights under section 7113 of the
 Statute, a reasonable period of time to present its views and
 recommendations concerning our decision not to grant nurses the
 comparability wage increase granted to other Government employees as of
 January 6, 1985, including NFFE's views and recommendations concerning
 retroactively granting nurses the increase, and thereafter, comply with
 the requirements of section 7113(b)(2) of the Statute.
                                       (Agency)
 
    Dated:
                                       By:  (Signature) (Title)
 
    This Notice must remain posted for 60 consecutive days from the date
 of posting, and must not be altered, defaced, or covered by any other
 material.
 
    If employees have any questions concerning this Notice or compliance
 with its provisions, they may communicate directly with the Regional
 Director, Region III, Federal Labor Relations Authority, whose address
 is:  1111 - 18th Street, NW., 7th Floor, P.O. Box 33758, Washington,
 D.C. 20033-0758 and whose telephone number is:  (202) 653-8500.
 
 
 
 
 
 
 
 
 
 
 
 -------------------- ALJ$ DECISION FOLLOWS --------------------
 
    Case No. 3-CA-50147
 
    VETERANS ADMINISTRATION, WASHINGTON, D.C.
    Respondent
 
                                    and
 
 
    NATIONAL FEDERATION OF FEDERAL EMPLOYEES, INDEPENDENT
    Charging Party
 
    Thomas J. McKeever, Jr., Esq.
    For the Respondent
 
    G. Phillip Boyer, Esq.
    For the General Counsel
 
    Before:  SALVATORE J. ARRIGO
    Administrative Law Judge
 
                                 DECISION
 
                           Statement of the Case
 
    This case arose under the Federal Service Labor-Management Relations
 Statute, Chapter 71 of Title 5 of the U.S. Code, 5 U.S.C. Section 7101,
 et. seq.
 
    Upon an unfair labor practice charge filed by the National Federation
 of Federal Employees, Independent (herein referred to as the Union)
 against the Veterans Administration, Washington, D.C. (herein referred
 to as Respondent or the VA), the General Counsel of the Authority, by
 the Regional Director for Region III, issued a Complaint and Notice of
 Hearing alleging Respondent violated the Statute by failing and refusing
 to consult in good faith with the Union regarding Respondent's decision
 to withhold a comparability pay increase from various employees for
 which the Union held national consultation rights under section 7113 of
 the Statute.  /1/
 
    A hearing on the Complaint was conducted in Washington, D.C. at which
 Respondent and the General Counsel were represented by counsel and
 afforded full opportunity to adduce evidence, call, examine and
 cross-examine witnesses and argue orally.  Briefs were filed by
 Respondent, /2/ the Union and the General Counsel and have been
 carefully considered.
 
    Upon the entire record in this matter, my observation of the
 witnesses and their demeanor and from my evaluation of the evidence, I
 make the following:
 
                             Findings of Fact
 
    At all times material herein the Union has held national consultation
 rights in accordance with section 7113 of the Statute for various of
 Respondent's employees including various nurses and other employees
 providing services related to patient care who are paid under the
 provisions of 38 U.S.C. 4107(g) (herein referred to Title 38 employees).
  /3/ While the rates of pay of Title 38 employees are set by that
 statute, section 4107(g) of Title 38 essentially provides that
 "notwithstanding any other provision of law", when the Administrator of
 the Veterans Administration (the Administrator herein) determines it to
 be necessary in order to obtain or retain the services of certain
 employees including nurses, he may increase the authorized pay rates for
 covered health personnel fields on an nationwide, local or other
 geographic basis.  However, such authority is granted under section
 4107(g):
 
          ". . . only in order --
 
          "(A) to provide pay in an amount competitive with, but not
       exceeding, the amount of the same type of pay paid to the same
       category of personnel at non-Federal facilities in the same labor
       market;
 
          "(B) to achieve adequate staffing at particular facilities;  or
 
          "(C) to recruit personnel with specialized skills, especially
       those with skills which are especially difficult or demanding."
 
    The above authority granted the Administrator under section 4107(g)
 was provided pursuant to a law passed in 1980 amending Title 38.  Since
 that time, and indeed for at least the past ten years, nurses and nurse
 anesthetists, employees encompassed under section 4107(g), received the
 annual comparability wage increase granted government-wide every year
 until January 1985.  /4/
 
    In the afternoon of Friday, December 28, 1984, Respondent hand
 delivered to the Union correspondence which essentially notified the
 Union that section 4107(g) special rate employees would not receive the
 government-wide comparability wage increase scheduled to take effect
 January 6, 1985.  Part of the correspondence to the Union was a copy of
 a telegram to Respondent's facilities modifying the agency's
 administrative manual and notifying managers, inter alia, ". . . that a
 general revision of the general schedule . . . will no longer have any
 effect on above-minimum entrance rates or special salary rate ranges
 approved under 38 U.S.C. 4107(g)".  The Veterans Administration Manual,
 MP-5, Part II, Chapter 3, Section D, 8 d., dated December 1983, a
 revision of a prior agency regulation, essentially provided that for
 nurses, nurse anesthetists and other named classifications, general pay
 increases would be passed on to the special rate employees on the
 effective date of the increase.  According to the manual revision, that
 provision was deleted and inserted in lieu thereof was, inter alia, the
 statement, "A general revision of pay schedules under 5 U.S.C. 5303 will
 have no effect on rates approved under this section."
 
    According to the testimony of Howard Steinwandel, Respondent's
 Director of Labor-Management Relations, on December 28, prior to
 delivering the correspondence to the Union, the Union was telephoned and
 told of the policy announced in the correspondence.  Steinwandel
 testified that the Union's response was that Elayne Tempel, a Labor
 Relations Specialist for the Union who normally deals with Respondent on
 matters concerning national consultation, was not present but the policy
 would be conveyed to her and if the Union had any comments it would
 contact Respondent.
 
    The record reveals that Respondent normally provides the Union 30 day
 notice of changes in personnel practices or conditions of employment for
 national consultation purposes and Tempel testified she could recall no
 instance since 1981 when less than 30 days notice was provided.  /5/
 However, Steinwandel testified:
 
          "There are times that the NFFE will ask us for more time then
       (sic) the 30-days that we've given them;  and there are times when
       we ask them to review the documents in less time.  Even in those
       instances when in the letter we say that there is 30-days, there
       are times when we call the union in advance of that 30-days and
       ask for their comments . . ." /6/
 
    Tempel testified she was not present in the Union office from
 December 28, 1984 until Monday, January 7, 1985.  On January 7, she
 telephoned Al Wagner, Respondent's Labor Relations Specialist with whom
 Tempel dealt on matters involving national consultation rights, and
 advised him that unless the Union was given an opportunity to respond or
 comment on the substance of the change prior to it taking effect, she
 would consider the change to constitute an unfair labor practice.
 Wagner indicated he'd "get back" to Tempel but did not.  On that same
 day, or the following day, Tempel had a telephone conversation with
 Director of Labor-Management Relations Steinwandel.  During their
 conversation Steinwandel took the position that Respondent had no
 obligation to consult on the decision to not grant the comparability
 wage increase but he would entertain comments on impact and
 implementation since the decision would not impact on employees until
 paychecks were distributed on January 29, 1985.  /7/ Tempel indicated
 the Union wished to consult on the substance of the decision and was not
 interested in consulting on impact and implementation.  Tempel also
 indicated that she considered Respondent's actions to constitute an
 unfair labor practice.
 
    A 3.5 percent government-wide comparability wage increase became
 effective on January 6, 1985 and Title 38 employees, of whom 5 to 6,000
 were in the collective bargaining unit, did not receive the increase.
 /8/
 
    With regard to the decision not to grant Title 38 employees the
 comparability wage increase, Respondent's Director of Salary and Wage
 Administration, Charles Kelley, testified that between mid-October and
 mid-November 1984 his office began to receive data which brought into
 question the need to continue passing on the general comparability wage
 increase to nurses.  Kelley testified that this information was
 ultimately "passed on" through his supervisor to the Administrator "the
 day before or the same day" the Administrator concluded that the 3.5
 percent government-wide comparability wage increase effective in January
 1985 would not be granted to nurses and nurse anesthetists.  /9/
 Although neither the Administrator nor anyone privy to what the
 Administrator specifically considered in coming to his decision
 testified at the hearing, a letter in response to an inquiry by
 Honorable Alan Cranston, Ranking Minority Member, Committee on Veterans
 Affairs, United States Senate, signed by the Administrator, stated,
 inter alia:  /10/
 
          "The Veterans Administration (VA) reviewed its policy of
       automatically passing on Federal comparability pay increases to
       nurses receiving special salary rates authorized under 38 United
       States Code 4107(g).  There was concern that our policy of
       automatically passing on the increases, without fully justifying
       them based on actual pay-related staffing needs, was not in
       compliance with the intent of the law . . . .
 
          "We concluded that our practice could, in certain instances,
       result in the VA paying nurses rates which exceed the competitive
       levels paid to nurses in the community.  This concern became
       greater as the changing local and national patterns of employment
       in both the Federal and non-Federal sectors continued.  There were
       clear indications that the severe national nurse shortage had
       abated and private sector salary increases had moderated.
 
          "After a briefing by my top staff and after carefully
       considering all factors, including potential employee morale
       problems, I determined that it was inappropriate to annually
       increase nurse special rates automatically without examining the
       continued need and justification for them.  This decision was
       concurred in by the Office of the General Counsel.  The policy
       change was implemented on December 27, 1984, and resulted in the
       exclusion of nurses being paid special rates from receiving the
       3.5 percent comparability increase effective January 1985."
 
    The Administrator's letter further stated, inter alia:
 
          A full-scale review of all nurse special rate authorizations is
       now being expedited in Central Office to assure that salary rates
       are sufficient for maintaining well-qualified nurse staffing
       levels.  In the review process, increases will only be granted if
       there is evidence of specific pay-related staffing problems.
       Decreases in special rates will be made in those situations where
       data submitted show that VA rates are higher then surveyed
       community rates.  Terminations of special rates, generally, are
       being made at the specific request of a Medical Center.  The
       initial evaluation has already been completed on over 100 of the
       115 current nurse authorizations with staff recommendations for
       approximately 26 percent of the authorizations to be increased, 63
       percent to continue at current rates, 4 percent to be decreased,
       and 7 percent to be terminated.  Final action on each
       authorization has already been or shortly will be determined by
       the Chief Medical Director.  Current plans call for completion of
       the review by mid-April 1985.  /11/
 
          "The special rate review of the VA's General Schedule
       health-care authorizations has been completed.  Results of the
       review included 30 special rate authorizations increased, 61
       continued at current rates, and 4 terminated.  Twelve of the
       increased authorizations are subject to up to a 90-day Office of
       Personnel Management review before the rates may become effective.
 
          "Veterans Administration policy provides that where special
       rates for either nurses or General Schedule health-care
       occupations are decreased or terminated, employees on the rolls
       shall not have their pay reduced;  the reduced rates apply only to
       new hires.
 
          "Any increases resulting from either review will have
       prospective effect only.  38 United States Code 4107(g) does not
       provide specific authority to adjust rates of basic pay on a
       retroactive basis.  The Comptroller General has ruled in several
       decisions that increases in basic pay resulting from
       administrative action may not have retroactive effect unless
       expressly authorized by statute."
 
             Supplemental Findings, Discussion and Conclusions
 
    The General Counsel and the Union essentially contend that
 Respondent's December 28, 1984 decision to withhold the 1985
 government-wide comparability wage increase constituted a substantive
 change in an established condition of employment and therefore, there
 was a duty to consult with the Union on the decision pursuant to section
 7113 of the Statute and Respondent failed to provide the Union
 reasonable time to present its views and recommendations prior to
 implementation of the change.  The Union further urges that an
 appropriate remedy herein should include a back-pay order.
 
    Respondent contends it was under no obligation to consult with the
 Union concerning the decision to withhold the comparability wage
 increase since the decision concerned a matter specifically provided for
 by law and under section 7103(a)(14)(C) of the Statute, the decision did
 not concern a "condition of employment";  the decision not to grant the
 comparability increase was required by the terms of 38 U.S.C. 4107(g)
 and the Administrator was without discretion to do otherwise;  the
 decision involved a subject which directly affected the agency's budget
 and had a significant effect on staffing, matters concerning which
 Respondent under section 7106 of the Statute is not obligated to consult
 with a labor organization before acting;  no employee's pay was
 decreased or changed;  the Union was provided sufficient notice to
 consult;  and the Union waived its right to consultation when it failed
 to make any proposals.  Respondent also argues that any award for
 backpay would violate the "but for" requirement of the Back Pay Act, 5
 U.S.C. Section 5596.
 
    Section 7103(a)(14)(C) of the Statute states:
 
          "'conditions of employment' means personnel policies,
       practices, and matters, whether established by rule, regulation,
       or otherwise, affecting working conditions, except that such term
       does not include policies, practices, and matters --
 
                       . . . . .
 
 
          "(C) to the extent such matters are specifically provided for
       by statute . . ."
 
    It is true that the basic compensation of nurses is specifically
 provided for by a statute, 38 U.S.C. Section 4107, and that basic
 compensation set forth might not normally be a condition of employment
 within the meaning of section 7103(a)(14)(C) of the Statute.  Cf.
 National Treasury Employees Union and Pension Benefit Guarantee
 Corporation, 9 FLRA 672 (1982).  However, the Administrator is
 authorized by Title 38 to modify those rates, albeit within the
 guidelines enumerated in section 4801(g) of Title 38, i.e., in order to
 provide pay competitive with non-Federal facilities in the same labor
 market;  to achieve adequate staffing at particular facilities;  or to
 recruit personnel with specialized, difficult or demanding skills.  It
 would appear therefore that with regard to increasing the basic rates of
 nurses, the Administrator is vested with substantial discretion since
 the guidelines set forth in 4801(g), above, embrace numerous significant
 non-quantitative terms requiring the exercise of subjective judgment.
 For example, the Administrator must ascertain what is an "amount
 competitive" with pay at non-Federal facilities;  what constitutes the
 "same labor market";  what constitutes "adequate" staffing;  and what
 skills are "specialized" and "especially difficult and demanding".
 Accordingly I reject Respondent's argument that since the Administrator
 is constrained by the express criteria set forth in section 4107(g), he
 has no discretion in this matter.
 
    The legislative history of the Statute addresses the element of
 agency discretion when determining whether a Federal statute exists
 within the meaning of section 7103(a)(14)(C) of the Statute.
 Congressman William Clay had the following comments to make regarding
 this matter:
 
          "Section 7103(a)(14)(D), /12/ removing from subjects of
       bargaining those matters specifically provided for by Federal
       statute, was adopted by the committee and retained in the Udall
       substitute with the clear understanding that only matters
       specifically provided for by statute would be excluded under this
       subsection.  Thus, where a statute merely vests authority over a
       particular subject with an agency official with the official given
       discretion in exercising the authority, the particular subject is
       not excluded by this subsection from the duty to bargain over
       conditions of employment." /13/
 
    Congressman Morris K. Udall, expressed a similar understanding,
 stating:
 
          "Section 7103(a)(14)(D) removes from the definition of
       'conditions of employment' those policies, practices and matters
       to the extent such matters are specifically provided for by
       Federal statute.  The committee print of title VII contained the
       word 'specifically', also found in the compromise version, in
       order to clarify the intention of the committee on the scope of
       this exception to condition of employment.  Where a Federal
       Statute specifically establishes procedures and standards for a
       condition of employment, section 7103(a)(14)(D) bars negotiations
       in contravention of those procedures and standards.  On the other
       hand, where a statute merely provides particular authority for an
       agency official (with that authority to be exercised at the
       official's discretion and in such manner as the official deems
       appropriate), that authority and its exercise is not included
       within the definition in section 7103(a)(14)(D) because it is not
       'specifically provided for by Federal statute.'" /14/
 
    On numerous occasions the Authority has applied the test of
 discretion in deciding negotiability issues and held that although
 limited by statute or regulation, a matter is within the duty to bargain
 to the extent an agency has discretion with respect to a matter
 affecting the working conditions of its employees.  Fort Bragg Unit of
 North Carolina Association of Educators, National Education Association,
 12 FLRA 519 (1983) and cases cited therein;  National Treasury Employees
 Union and Department of the Treasury, Bureau of the Public Debt, 3 FLRA
 769 (1980);  and Defense Contract Administration Services Region,
 Boston, Massachusetts, et al., 15 FLRA No. 143 (1984).  Thus it is clear
 that where, as herein, an agency has discretion in the decision and
 manner of effectuating a pay increase under a statute, the "Federal
 statute" does not serve to remove the matter from being a "condition of
 employment" within the meaning of the Statute.  Accordingly, based upon
 the foregoing and in view of my evaluation of the extent of the
 Administrator's discretion under 38 U.S.C. 4107(g), I conclude the
 decision to withhold the 1985 comparability wage increase from nurses
 concerned a "condition of employment" over which the Administrator had
 discretion within the meaning of the Statute.
 
    Respondent contends that the adjustment of pay rates under 38 U.S.C.
 Section 4107(g) is committed to the sole discretion of the Administrator
 and such discretion may be exercised without regard to the obligations
 imposed by the Federal Labor-Management Relations Statute.  Counsel for
 Respondent relies on the introductory language of section 4107(g)(1)
 which states "Notwithstanding any other provision of law . . ." to
 support this position and argues:
 
          ". . . this authority is an integral part of the exclusive
       personnel system established by Congress for VA health care
       professional(s) in chapter 73 of title 38, United States Code.
       Under that exclusive system, personnel matters and working
       conditions, including pay matters, are within the exclusive
       authority of the Veterans Administration.  See also VA Medical
       Center, Northport, New York v. FLRA, 732 F.2d 1128 (2d Cir. 1984);
        VA Medical Center, Minneapolis, Minnesota v. FLRA, 705 F. 2d 953
       (8th Cir. 1983)."
 
    To begin, the cases cited by counsel for Respondent do not support
 his position.  Indeed, in VA Medical Center, Northport, the Court
 stated:  "The VA concedes that, pursuant to the Civil Service Reform
 Act, it must bargain collectively with its DM&S (Department of Medicine
 and Surgery) personnel." In VA Medical Center, Minneapolis, the Court
 stated:  "The Veterans Administration does not dispute the proposition
 that DM&S professionals are generally covered by the Civil Service
 Reform Act."
 
    Moreover, the legislative history of section 4107(g) is contrary to
 Respondent's position.  Thus, the Senate Report of May 15, 1980
 accompanying S. 2534 states:
 
          "In the area of pay for nursing personnel, including both basic
       pay and additional pay for work outside of the normal workday or
       work week, such as overtime work or work on a Sunday or holiday,
       the Committee bill, in provisions in section 104, would give the
       Administrator new authority to modify such rates of pay.  With
       reference of basic pay, the new authority would give the
       Administrator the ability, after such consultation with exclusive
       representatives of the employees in appropriate collective
       bargaining units in a facility as is required under applicable
       collective bargaining agreement, to modify minimum, intermediate,
       and maximum rates of pay for nursing and other title 38
       health-care personnel . . ." /15/
 
    Although the precise language used in the Senate bill was not
 included in the statute which was enacted, the Explanatory Statement of
 Compromise Agreement on H.R. 7102/S. 2534 of July 31, 1980 contains the
 following statement:
 
          "The Committees note that sections 104, 110, and 111 of the
       Senate amendment contained provisions requiring "such
       consultation" with exclusive representatives of employees "as
       required under any applicable collective bargaining agreements" as
       part of various amendments made by those sections relating to
       personnel issues.  These provisions for such consultation are not
       included in the relevant sections of the compromise agreement.
 
          "It was the Senate's intention, as expressed in the Senate
       Committee report, in including the consultation provisions to
       assure that nothing in the bill could be construed as negating
       recognized collective bargaining rights, including consultation
       rights.  Those provisions are not included in the compromise bill
       in recognition of the Committee's agreement that such a specific
       reference to such rights is unnecessary and could engender
       confusion.  In deleting those provisions, the Committees wishes to
       make clear that they do not intend that any of the changes made by
       the legislation to the VA's health-care personnel authorities
       detract in any way from employee rights under existing collective
       bargaining agreements between the VA and its employees." /16/
 
    Accordingly, in view of the foregoing, I conclude that the language
 relied on by counsel for Respondent does not have the meaning Respondent
 ascribes to it and I reject Respondent's contention.  /17/
 
    I also conclude that the obligation to consult on the decision to
 discontinue automatically granting the government-wide comparability pay
 raises to nurses is not inconsistent with the right of Respondent to
 determine its budget under section 7106(a)(1) of the Statute.  /18/ In
 American Federation of Government Employees, AFL-CIO and Air Force
 Logistics Command, Wright-Patterson Air Force Base, Ohio, 2 FLRA 604
 (1980), enforced as to other matters sub nom.  Department of Defense v.
 Federal Labor Relations Authority, 659 F.2d 1140 (D.C. Cir. 1981), cert.
 denied, 455 U.S. 945 (1982), the Authority, when dealing with the
 negotiability of a union proposal for a child care center, articulated
 its view on the approach to be used when resolving an issue where
 "budget" is raised as a defense.  The Authority held, inter alia, at
 607, 608:
 
          "The agency next alleges that Union Proposal 1 violates the
       right to determine its budget under section 7106(a)(1) of the
       Statute because it would require the agency to bear the cost of
       the space and facilities provided for day care center.  The
       underlying assumption of this position appears to be that a
       proposal is inconsistent with the authority of the agency to
       determine its budget within the meaning of section 7106(a)(1) if
       it imposes a cost upon the agency which requires the expenditure
       of appropriated agency funds.  Such a construction of the Statute,
       however, could preclude negotiation on virtually all otherwise
       negotiable proposals, since, to one extent or another, most
       proposals would have the effect of imposing costs upon the agency
       which would require the expenditures of appropriated agency funds.
        Nothing in the relevant legislative history indicates that
       Congress intended the right of management to determine its budget
       to be so inclusive as to negate in this manner the obligation to
       bargain.
 
          "There is no question but that Congress intended that any
       proposal which would directly infringe on the exercise of
       management rights under Section 7106 of the Statute would be
       barred from negotiation.  Whether a proposal directly affects the
       agency's determination of its budget depends upon the definition
       of "budget" as used in the Statute.  The Statute and legislative
       history do not contain such a definition.  In the absence of a
       clearly stated legislative intent, it is appropriate to give the
       term its common or dictionary definition.  As defined by the
       dictionary, "budget" means a statement of the financial position
       of a body for a definite period of time based on detailed
       estimates of planned and expected expenditures during the period
       and proposals for financing them.  In this sense, the agency's
       authority to determine its budget extends to the determination of
       the program and operations which will be included in the estimate
       of proposed expenditures and the determination of the amounts
       required to fund them.  Under the Statute, therefore, an agency
       cannot be required to negotiate those particular budgetary
       determinations.  That is, a union proposal attempting to prescribe
       the particular programs or operations the agency would include in
       its budget or to prescribe the amount to be allocated in the
       budget for them would infringe upon the agency's right to
       determine its budget under section 7106(a)(1) of the Statute.
 
          "Moreover, where a proposal which does not by its terms
       prescribe the particular programs or amounts to be included in an
       agency's budget, nevertheless is alleged to violate the agency's
       right to determine its budget because of increased cost,
       consideration must be given to all the factors involved.  That is,
       rather than basing a determination as to the negotiability of the
       proposal on increased cost alone, that one factor must be weighed
       against such factors as the potential for improved employee
       performance, increased productivity, reduced turnover, fewer
       grievances, and the like.  Only where an agency makes a
       substantial demonstration that an increase in costs is significant
       and unavoidable and is not offset by compensating benefits can an
       otherwise negotiable proposal be found to violate the agency's
       right to determine its budget under section 7106(a) of the
       Statute." (Footnotes omitted).
 
    In the case herein the issue does not concern a negotiability
 proposal but a right of consultation prior to implementation of an
 agency decision.  However, approaching the issue at bar as an analog to
 a negotiability situation, using the test laid down by the Authority, I
 conclude the decision not to pass on the comparability wage increase
 does not affect the agency's right to determine its budget under section
 7106(a) of the Statute.  Thus, comparability wage increases have not
 been shown to be a new item by program or amount to be included in
 Respondent's budget and it does not appear that a specific budget
 appropriation is necessary for the Administrator to take action under
 section 4107(g) of Title 38.  Rather, the Administrator's authority in
 this matter was a currently existing pay practice which existed for a
 number of years and statutory discretion to utilize it remains with the
 Administrator.  In determining whether granting the comparability
 increase to nurses would involve increased cost to Respondent, as stated
 by the Authority in Wright-Patterson, "consideration must be given to
 all the factors involved." Further, the agency must make a substantial
 demonstration that an increase in costs is significant and unavoidable
 and not offset by compensating benefits.  The only record fact present
 in this case bearing on such consideration consists of testimony that a
 pass-through of the 3.5 percent comparability wage increase would result
 in a cost of six and three-quarter million dollars if given to all Title
 38 employees.  But the record is silent as to what the cost would amount
 to regarding only those nurses for which the Union has consultation
 rights, the total amount of Respondent's budget nor the cost to
 Respondent of its subsequent increase in nurses' rates.  In addition,
 the record does not address the other factors the Authority noted in
 Wright-Patterson which might satisfy Respondent's "substantial
 demonstration" burden.
 
    In view of the foregoing and considering the nature of the
 obligations and limitations which attach to the right of consultation
 under section 7113 of the Statute, I reject Respondent's contention that
 it was not obligated to consult on the substance of its pay adjustment
 determination since such a determination affects its budget.  Cf.  Fort
 Bragg Unit of North Carolina Association of Educators, supra.
 
    Counsel for Respondent also takes the position that a six and
 three-quarter million dollar pass-through of the comparability increase
 ". . . would clearly have a significant effect on the VA's staffing
 which is critical to its medical care mission" and accordingly,
 Respondent's only obligation was to consult on the impact and
 implementation of its decision.  Absent record evidence and legal
 argument to support this position, I reject Respondent's contention.
 /19/
 
    The record clearly establishes that Respondent's established practice
 prior to January 1985 was to automatically grant the yearly
 government-wide comparability increase to nurses without regard to the
 specific requirements of section 4107(g) of Title 38.  The record also
 clearly establishes that the decision not to pass on the increase was
 made prior to notifying the Union and affording it an opportunity to
 request consultation on the matter as prescribed in section 7113 of the
 Statute.  Accordingly, I conclude that since the matter involved a
 substantive change in a condition of nurses' employment and the Union
 was not accorded an opportunity to consult with Respondent before it
 finalized its decision which was effectuated by the manual change and
 notification to managers (and the Union) on December 28, 1984,
 Respondent violated section 7116(a)(1)(5) and (8) of the Statute.
 National Guard Bureau, 18 FLRA No. 62 (1985);  Cf. General Services
 Administration, 6 FLRA 430 (1981).
 
    Respondent takes the position that the Union was provided with
 sufficient notice to consult but failed to make any proposals thereby
 precluding any finding that an unfair labor practice occurred.  The
 first notice the Union received that section 4107(g) employees would not
 receive the comparability increase was on December 28, 1984.  The notice
 was in the form of a copy of a telegraphic message dispatched that same
 day to Respondent's managers changing Respondent's manual which, in
 effect, prevented the increase from taking effect.  Thus, on December 28
 the Union was notified of a fait accompli.  The decision had already
 been made, hence a demand to consult, even if made immediately upon
 being notified of the Administrator's decision, would have come
 subsequent to the decision.  The violation herein was Respondent's
 finalizing the decision supra, prior to consultation.  The Union's
 failure to make proposals thereafter can have no effect on the fact that
 a violation of the Statute had already occurred.
 
    Nevertheless, I do not conclude it has been established that
 Respondent violated the Statute by failing to provide the Union with
 sufficient opportunity to consult on the impact and implementation of
 the decision.  On December 28, 1984 the Union was notified of the
 decision which was to be effectuated on January 6, 1985 and on January 7
 or 8, the Union clearly disavowed any desire to bargain on the impact
 and implementation of the decision.  In these circumstances I conclude
 the Union's conduct removed this issue from consideration as an unfair
 labor practice.
 
    I further reject the Union's contention that a back-pay order would
 be appropriate in this case.  /20/ Since there has been no showing that
 nurses would have received the comparability wage increase had the Union
 been accorded consultation before the decision not to grant the increase
 was put into effect, it cannot be concluded that the increase would have
 been granted "but for" Respondent's conduct found herein to have
 violated the Statute.  Accordingly, I conclude back-pay is not warranted
 herein.  Social Security Administration, 16 FLRA No. 148 (1984);
 Picatinny Arsenal, U.S. Army Armament Research and Development Command,
 Dover, New Jersey and National Federation of Federal Employees, Local
 1437, 7 FLRA 703 (1982).  However, I shall recommend that Respondent be
 required to consult with the Union on the decision not to grant the
 January 1985 government-wide comparability wage increase, including
 considering any Union views and recommendations which might be made
 relative to granting retroactive effect to the January 1985
 comparability increase to the extent consonant with law.  Cf. Veterans
 Administration, Veterans Administration Regional Office (Buffalo, New
 York), 10 FLRA 167 (1982).  In my view, retroactivity is not precluded
 by the Authority's holding in situations involving bargaining order
 cases since, in the case herein, no "impasse" resolvable by recourse to
 the Federal Service Impasses Panel can occur.  See Federal Aviation
 Administration, Washington, D.C., 19 FLRA No. 59 (1985).
 
    In view of the entire foregoing, I conclude Respondent, by the
 conduct described herein, failed to provide the Union with consultation
 rights required by section 7113 of the Statute and thereby violated
 section 7116(a)(1)(5) and (8) of the Statute and recommend the Authority
 issue the following:
 
                                   ORDER
 
    Pursuant to section 2423.29 of the Rules and Regulations of the
 Federal Labor Relations Authority and section 7118 of the Statute, the
 Authority hereby orders that the Veterans Administration shall:
 
    1.  Cease and desist from:
 
          (a) Failing to inform the National Federation of Federal
       Employees (NFFE), pursuant to NFFE's national consultation rights
       under section 7113 of the Statute, of proposed substantive changes
       in conditions of employment, and failing to provide NFFE with a
       reasonable period of time to present its views and recommendations
       regarding the proposed change.
 
          (b) In any like or related manner interfering with,
       restraining, or coercing employees in the exercise of their rights
       assured by the Statute.
 
    2.  Take the following affirmative action in order to effectuate the
 purposes and policies of the Statute:
 
          (a) Provide the National Federation of Federal Employees
       (NFFE), pursuant to its national consultation rights under section
       7113 of the Statute, a reasonable period of time to present its
       views and recommendations concerning providing nurses with the
       government-wide comparability wage increase effective January 6,
       1985 as required by section 7113 of the Statute, including
       considering any NFFE views and recommendations concerning granting
       retroactive effect to the January 1985 government-wide
       comparability wage increase to the extent consonant with law.
 
          (b) Post at all of its facilities copies of the attached Notice
       on forms to be furnished by the Federal Labor Relations Authority.
        Upon receipt of such forms they shall be signed by the Veterans
       Administration Administrator, or a designee, and shall be posted
       and maintained for 60 consecutive days thereafter, in conspicuous
       places, including bulletin boards and other places where notices
       to employees are customarily posted.  Reasonable steps shall be
       taken by the Veterans Administration to insure that such notices
       are not altered, defaced, or covered by any other material.
 
          (c) Pursuant to section 2423.30 of the Authority's Rules and
       Regulations, notify the Regional Director, Region III, Federal
       Labor Relations Authority, in writing, within 30 days of the date
       of this Order, as to what steps have been taken to comply
       herewith.
 
                                       /s/ SALVATORE J. ARRIGO
                                       Administrative Law Judge
 
    Dated:  September 13, 1985
    Washington, D.C.
 
 
 
 
 
                ---------------  FOOTNOTES$ ---------------
 
 
    (*) The Respondent also filed a motion to strike portions of the
 General Counsel's opposition.  The Respondent contends that the General
 Counsel incorrectly asserts that the Respondent did not make certain
 arguments before the Administrative Law Judge and is raising those
 arguments for the first time in its exceptions.  While we do not agree
 with those disputed assertions of the General Counsel, we do not find a
 basis for striking the assertions from the General Counsel's submission.
  The Respondent's motion is therefore denied.
 
    (1) Section 7113 provides:
 
          "(a)(1) If, in connection with any agency, no labor
       organization has been accorded exclusive recognition on an agency
       basis, a labor organization which is the exclusive representative
       of a substantial number of the employees of the agency, as
       determined in accordance with criteria prescribed by the
       Authority, shall be granted national consultation rights by the
       agency.  National consultation rights shall terminate when the
       labor organization no longer meets the criteria prescribed by the
       Authority.  Any issue relating to any labor organization's
       eligibility for, or continuation of, national consultation rights
       shall be subject to determination by the Authority.
 
          "(b)(1) Any labor organization having national consultation
       rights in connection with any agency under subsection (a) of this
       section shall --
 
          "(A) be informed of any substantive change in conditions of
       employment proposed by the agency, and
 
          "(B) be permitted reasonable time to present its views and
       recommendations regarding the changes.
 
          "(2) If any views or recommendations are presented under
       paragraph (1) of this subsection to an agency by any labor
       organization --
 
          "(A) the agency shall consider the views or recommendations
       before taking final action on any matter with respect to which the
       views or recommendations are presented;  and
 
          "(B) the agency shall provide the labor organization a written
       statement of the reasons for taking the final action.
 
          "(c) Nothing in this section shall be construed to limit the
       right of any agency or exclusive representative to engage in
       collective bargaining."
 
    (2) Counsel for Respondent also filed an errata to the brief.
 
    (3) Some nurses and other employees paid under this authority are not
 in the bargaining unit.
 
    (4) In addition to nurses and nurse anesthetists, Title 38 includes
 two other groups of health care employees receiving special pay rates.
 However, both of those groups were not brought under Title 38 authority
 until sometime between March and August 1984 and had not previously
 received comparability wage increases under the authority of section
 4107(g).  Accordingly, as acknowledged by Counsel for the General
 Counsel, this case does not concern comparability pay raises for these
 other health care employees.
 
    (5) Tempel made a random examination of Union files and presented 27
 examples of notices given to the Union of various proposed changes, all
 of which requested Union comments "within 30 days".
 
    (6) Steinwandel did not support his testimony with any specifics.
 
    (7) The pay increase effective January 6 would not show up in
 employees pay until January 29.
 
    (8) Respondent employs approximately 10,000 employees whose wages are
 controlled by the application of Title 38, the majority of whom are
 nurses.  A witness for Respondent testified that a 3.5 percent wage
 increase, if granted to Title 38 special rate employees, would have cost
 six and three-quarter million dollars.  However, the record does not
 reveal the amount of Respondent's total budget nor did the witness
 testify specifically how much of the six and three-quarters million
 dollars would have been passed on only to nurses and nurse anesthetists
 represented by the Union, the subject of this controversy.  A witness
 for the General Counsel testified that approximately 5,000 employees
 represented by NFFE received special rates under Title 38 but no figure
 was given as to the number of nurses and nurse anesthetists within that
 group.
 
    (9) Various other unit employees encompassed within the provisions of
 Section 4107(g), supra, were included in the group of employees not
 granted comparability pay increases at this time.
 
    (10) Director of Salary and Wage Administration Kelley testified that
 the letter dated April 12, 1985 and received in evidence at the hearing,
 represents a fair summary of the considerations which went into the
 decision not to pass on the comparability increase.
 
    (11) Testimony revealed that based upon this review, approximately
 one-half of these "authorizations" were continued at their current
 level;  the rates to nurses in 25 or 30 "authorizations" were increased;
  about 9 were decreased;  and five were cancelled.  However, no one then
 currently employed received a rate decrease.
 
    (12) Subsequently enacted as section 7103(a)(14)(C).
 
    (13) Legislative History of the Federal Service Labor-Management
 Relations Statute, Title VII of the Civil Service Reform Act of 1978, p.
 933 (September 13, 1978).
 
    (14) Id. at 956-957.
 
    (15) 1980 U.S. Code Cong. & Ad. News, 2511, 2512.
 
    (16) Id. at 2563.
 
    (17) Although not raised by Respondent, I further conclude that
 section 4119 of Title 38 is inapplicable to the matter at issue herein
 in view of the above legislative history and my conclusion that the
 right of consultation in this case is not inconsistent with nor does it
 supercede, override or modify the Administrator's authority under
 section 4107(g) of Title 38.
 
    (18) Section 7106(a)(1) of the Statute is directed towards management
 rights and provides:
 
          "(a) Subject to subsection (b) of this section, nothing in this
       chapter shall affect the authority of any management official of
       any agency --
 
          "(1) to determine the mission, budget, organization, number of
       employees, and internal security practices of the agency . . ."
 
    (19) I similarly reject Respondent's arguments that no unfair labor
 practice occurred since no employee's pay was decreased or changed.  The
 change herein was Respondent's failure to automatically pass through the
 government-wide comparability increase which would have inured to the
 benefit of Title 38 nurses represented by the Union.
 
    (20) A full "status quo ante" remedy would be tantamount to a "back
 pay" order in that reverting to conditions in existence prior to the
 unlawful change, i.e., automatically passing through the comparability
 increase, would have the effect of granting unit nurses the 3.5 percent
 increase effective January 6, 1985.
 
 
 
 
 
 
                                 APPENDIX
 
                          NOTICE TO ALL EMPLOYEES
 
  PURSUANT TO A DECISION AND ORDER OF THE FEDERAL LABOR
 RELATIONS
 AUTHORITY AND IN ORDER TO EFFECTUATE THE POLICIES OF CHAPTER 71
 OF TITLE
 5 OF THE UNITED STATES CODE
 
            FEDERAL SERVICE LABOR-MANAGEMENT RELATIONS STATUTE
 
                   WE HEREBY NOTIFY OUR EMPLOYEES THAT:
 
    WE WILL NOT fail to inform the National Federation of Federal
 Employees (NFFE), pursuant to NFFE's national consultation rights under
 section 7113 of the Statute, of proposed substantive changes in
 conditions of employment, or fail to provide NFFE with a reasonable
 period of time to present its views and recommendations regarding the
 proposed changes.
 
    WE WILL NOT in any like or related manner interfere with, restrain,
 or coerce employees in the exercise of their rights assured by the
 Statute.
 
    WE WILL provide the National Federation of Federal Employees (NFFE),
 pursuant to its national consultation rights under section 7113 of the
 Statute, a reasonable period of time to present its views and
 recommendations concerning providing nurses with the government-wide
 comparability wage increase effective January 6, 1985 as required by
 section 7113 of the Statute, including considering any NFFE views and
 recommendations concerning granting retroactive effect to the January
 1985 government-wide comparability wage increase to the extent consonant
 with law.
                                       (Agency)
 
    DATED:
                                       BY:  (Signature) (Title)
 
    This Notice must remain posted for 60 consecutive days from the date
 of posting, and must not be altered, defaced or covered by any other
 material.  If employees have any questions concerning this Notice or
 compliance with any of its provisions, they may communicate directly
 with the Regional Director, Region III, Federal Labor Relations
 Authority, whose address is:  P.O. Box 33758, 1111 18th Street, N.W.,
 7th Floor, Washington, D.C. 20033-0758, and whose telephone number is:
 (202) 653-8500. 
 
 
 


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