32:0392(60)NG - - NAGE Local R14-89 and HQ, Army Air Defense Artillery Center and Fort Bliss, Fort Bliss, TX - - 1988 FLRAdec NG - - v32 p392



[ v32 p392 ]
32:0392(60)NG
The decision of the Authority follows:


32 FLRA No. 60

UNITED STATES OF AMERICA

BEFORE THE

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

NATIONAL ASSOCIATION OF GOVERNMENT

EMPLOYEES, LOCAL R14-89

Union

and 

HEADQUARTERS, U.S. ARMY AIR

DEFENSE ARTILLERY CENTER AND

FORT BLISS, FORT BLISS, TEXAS

Agency

Case No. 0-NG-1468

DECISION AND ORDER ON NEGOTIABILITY ISSUES

I. Statement of the Case

This case is before the Authority because of a negotiability appeal filed by the Union under section 7105(a)(2)(D) and (E) of the Federal Service Labor-Management Relations Statute (the Statute). The appeal concerns the negotiability of one Union proposal. The proposal seeks to maintain the "pay lag," the time between the end of a pay period and the day on which employees are actually paid, at 6 days, rather than the 12 days which the Agency proposes to adopt. We find the proposal to be nonnegotiable because the proposal conditions the Agency's right to determine its internal security practices under section 7106(a)(1) on the prior exercise of either the Agency's right to assign work under section 7106(a)(2)(B) or the Agency's rights under section 7106(b)(1) to determine the number, types and grades of employees assigned, and the methods and means of performing work.

II. Background

In June 1987, the Department of the Army modified Army Regulation 37-105, Chapter 2-2, Finance and Accounting for Installations, Civilian Pay Procedures. The modification required all Department of the Army installations to adopt a 12-day "pay lag" for their civilian employees. Pay lag is the term the parties use to indicate the number of days which elapse between the end of a pay period and the day on which employees are actually paid for their work during that pay period. At Fort Bliss, the pay lag was 6 days. The Union's proposal to maintain the 6-day pay lag was submitted in response to the Agency's announcement that it was going to change to a 12-day pay lag in order to conform with Department of the Army Regulation 37-105, Chapter 2-2.

III. Proposal

The Employer will maintain status quo on payday lag which has been/is six days after the end of the pay period.

IV. Positions of the Parties

The Agency contends that the proposal is nonnegotiable because the proposal interferes with: (1) Management's rights under section 7106(a)(1) to determine its organization and budget; (2) the requirement of section 7101(b) that the Statute be interpreted in a manner consistent with an effective and efficient Government; (3) the requirements of Title 6 of the General Accounting Office's (GAO) Policy and Procedures Manual for Guidance of Federal Agencies, which the Agency asserts is a Government-wide regulation within the meaning of section 7117 of the Statute; (4) management's rights under section 7106(a)(2)(A) and (B) to direct employees and to assign work; (5) management's rights under section 7106(b)(1) to determine the number of employees assigned and the methods and means of performing its payroll function; (6) management's right to determine its internal security practices under section 7106(a)(1); and (7) a Department of the Army regulation establishing the 12-day pay lag because the regulation is essential to the accomplishment of the mission or the execution of functions of the Agency in a manner which is consistent with the requirements of an effective and efficient Government. Finally, the Agency contends that the proposal is outside the duty to bargain because it would impose a 6-day pay lag on nonunit employees.

The Union did not file a response to the Agency's statement of position. In its petition for review, the Union contended that the Agency has consistently treated paydays as a condition of employment. The Union also claimed that no compelling need exists for the Agency's modified regulation concerning pay lag.

V. Analysis

We find that the proposal directly affects conditions of employment of bargaining unit employees. Nevertheless, we find that the proposal is nonnegotiable because it conditions the exercise of the Agency's right to determine its internal security practices under section 7106(a)(1) on the prior exercise of the Agency's rights (1) to assign work under section 7106(a)(2)(B); (2) to determine the methods and means of performing work under section 7106(b)(1); and (3) to determine the numbers, types, and grades of employees or positions assigned to an organizational subdivision or work project under section 7106(b)(1).

A. Conditions of Employment

Under section 7103(a)(14), a condition of employment is defined as a personnel policy, practice or matter affecting working conditions. The determination of whether a proposal pertains to a condition of employment involves the application of two factors set forth by the Authority in Antilles Consolidated Education Association and Antilles Consolidated School System, 22 FLRA 235 (1986). These factors are:

(1) Whether the matter proposed to be bargained pertains to bargaining unit employees; and

(2) The nature and extent of the effect of the matter proposed to be bargained on working conditions of those employees.

For the following reasons, we conclude that the proposal satisfies both prongs of the Antilles test.

1. The Proposal Pertains to Unit Employees

In Antilles, 22 FLRA at 237, we set forth the following guidelines to determine whether a proposal involves conditions of employment of unit employees and, thus, whether the first element of the test is met:

For example, as to the first factor, the question of whether the proposal pertains to bargaining unit employees, a proposal which is principally focused on nonbargaining unit positions or employees does not directly affect the work situation or employment relationship of bargaining unit employees. But, a proposal which is principally focused on bargaining unit positions or employees and which is otherwise consistent with applicable laws and regulations is not rendered nonnegotiable merely because it would have some impact on employees outside the bargaining unit. (Citations omitted.)

In determining whether a proposal's impact on nonunit employees is sufficient to make the proposal nonnegotiable, the Authority balances the union's right to negotiate over conditions of employment of unit employees is balanced against the agency's right to determine the conditions of employment of nonunit employees. American Federation of Government Employees, Local 32, AFL-CIO and Office of Personnel Management, 22 FLRA 478 (1986) (OPM), petition for review filed sub nom. American Federation of Government Employees v. FLRA, No. 86-1447 (D.C. Cir. Aug. 11, 1986). A proposal which has only an indirect effect on the working conditions of nonunit employees is negotiable. Federal Union of Scientists and Engineers, National Association of Government Employees, Local R1-144 and Naval Underwater Systems Center, Newport, Rhode Island, 28 FLRA 352, 352 (1987) (Proposal 1). A proposal which has a direct and significant effect on the vital interest of nonunit employees is nonnegotiable. American Federation of Government Employees, Local 12, AFL-CIO and Department of Labor, 25 FLRA 979 (1987) (Member Frazier dissenting).

There is no indication in the record that the proposal is intended to apply to any employees other than members of the bargaining unit. Further, the Union states that it is seeking to represent the interests of the employees in its bargaining unit. Petition for Review at 1. Thus, we find that the proposal is focused on unit employees.

The Agency contends that the proposal is outside the duty to bargain because the practical effect of the proposal would be to determine the payday for the Agency's nonunit employees. The Agency asserts that unless the paydays for nonunit employees were changed to coincide with the paydays for unit employees, multiple paydays would exist at Fort Bliss. According to the Agency, the maintenance of various paydays at one installation would not be an effective and efficient method of conducting business. Thus, the Agency claims that the negotiation of the Union's proposal would have a significant impact on the working conditions of nonunit employees.

In our view, nothing in the Union's proposals would require the Agency to adopt a uniform payday for both its unit and nonunit employees. Nothing in the record indicates that the Union is attempting to negotiate for nonbargaining unit employees, nor do we find that the proposal has this effect. Any decision as to whether the payday negotiated with the Union should be adopted for all of the Agency's employees would remain the Agency's prerogative. See Federal Employees Metal Trades Council, AFL-CIO and Department of the Navy, Mare Island Naval Shipyard, Vallejo, California, 25 FLRA 465, 468-70 (1987) (Mare Island Naval Shipyard). Thus, we conclude that the Agency has not established any link to, or effect on, pay practices for nonunit employees which would put the proposal outside the duty to bargain.

2. The Proposal Directly Affects Working Conditions of Unit Employees

As to the second factor, in Mare Island Naval Shipyard we examined the question of whether the method of paycheck delivery was a matter concerning conditions of employment. In concluding that it was, we stated that:

The receiving of paychecks is the culmination of the employment contract between the employee and the employer. It consummates an agreement to exchange compensation for work performed, and therefore, it is inextricably bound to a fundamental condition of employment: pay. Id. at 469.

We concluded that the elimination of the option of having pay checks hand-delivered rather than having pay mailed directly to a home or to a bank account directly affects employee concerns such as where and how quickly pay will be received.

In Federal Union of Scientists and Engineers, National Association of Government Employees, Local R1-144 and U.S. Department of the Navy, Naval Underwater Systems Center, 25 FLRA 615, 617 (1987), we found to be negotiable a proposal concerning the method of paycheck delivery which also provided that paychecks would be mailed "before Wednesday noon, payday week." In so doing, we found the proposals in that case to be to the same effect as the proposals in Mare Island Naval Shipyard. See also Overseas Education Association, Inc. and Department of Defense Dependents Schools, 29 FLRA 734, 770-72 (1987) (Proposals 32-34), petition for review filed sub nom. Overseas Education Association, Inc. v. FLRA, No. 87-1576 (D.C. Cir. Oct. 14, 1987), where we applied the Mare Island Naval Shipyard holding and concluded that proposals providing that teachers could have the option of receiving their pay on a school-year or a 12-month basis, and should be paid by separate check for each form of income (regular pay, extracurricular activity pay, and retroactive pay or adjustments in pay) were negotiable.

We conclude that the pay lag which is at issue in this case also concerns conditions of employment of employees in the bargaining unit. Paycheck delivery involves how an employee is to be paid. Pay lag, which is the time between the end of a pay period and the date on which an employee is paid, involves when an employee is to be paid. Both paycheck delivery and pay lag are of significant importance to all employees. Thus, we conclude that pay lag falls within the definition of a condition of employment.

B. Management Rights

1. The Right to Determine Internal Security Practices Under Section 7106(a)(1)

The Agency notes that in National Treasury Employees Union, Chapter 52 and Internal Revenue Service, Austin District, 9 FLRA 685, 686 (1982), the Authority stated that an "agency's right to determine its internal security practices pursuant to section 7106(a)(1) of the Statute includes the right to establish rules to safeguard the agency's property." The Agency argues that included within its internal security practices are measures to safeguard its payroll. The Agency contends, without contravention by the Union, that its payroll must be subject to such internal security measures as balancing, verifying, reconciling and other auditing functions prior to paychecks being distributed. According to the Agency, the completion of these audit procedures is a time consuming process which results in a 12-day lag between the end of a pay period and the issuance of paychecks.

The Agency claims that the requirement to pay employees only 6 days after the end of a pay period would result in the Agency being unable to completely perform the necessary audit procedures before paychecks are issued. The Agency states that the failure to perform all the necessary audits before paychecks are issued increases the possibility of overpayment errors. The Agency states further that overpayment errors discovered after paychecks have been issued may result in extensive procedures to garnish an employee's pay if the employee does not voluntarily return the overpayment. In support, the Agency cites instances in which Department of the Army facilities working with a 6-day pay lag have made auditing errors which could have resulted in substantial monetary losses to the Agency if the mistakes had not been caught after incorrect checks had been issued to employees.

In our view, the Agency has shown a link between its goal of safeguarding its payroll and its chosen practice of requiring the completion of various audit procedures before paychecks are issued. The proposal, however, does not require the Agency to eliminate any of the audits which it deems are necessary to maintain the security of its payroll. Moreover, the Agency has conceded that (1) it has accomplished these necessary audits within 6 days, albeit with the use of overtime, and (2) it could continue to maintain a 6-day pay lag with increased overtime usage or by modifying its organization by increasing the number of personnel assigned to the payroll function. In light of the Agency's concession that the audit procedures that are necessary to maintain the security of its payroll could be achieved within the proposal's time frame, we do not agree with the Agency's contention that the proposal interferes with the Agency's right to determine its internal security practices.

Nevertheless, we find the proposal to be nonnegotiable because it conditions the Agency's right to determine its internal security practices under section 7106(a)(1) on the prior exercise of either its right to assign work under section 7106(a)(2)(B) or its rights under section 7106(b)(1) to determine (1) the number of employees assigned to an organizational subdivision or work project, and (2) the methods and means of performing work.

2. The Right to Assign Work under Section 7106(a)(2)(B)

Management's right to assign work under section 7106(a)(2)(B) includes the discretion "to determine when the work which has been assigned will be performed." National Treasury Employees Union and Department of the Treasury, Bureau of the Public Debt, 3 FLRA 769, 775 (1980), aff'd sub nom. NTEU v. FLRA, 691 F.2d 553 (D.C. Cir. 1982). The proposal in this case does not expressly require the Agency to assign overtime work to employees. The Agency, however, has stated, without contravention by the Union, that there are only two ways it could complete all the audits deemed necessary to assure the integrity of its payroll within the 6-day limit on pay lag mandated by the proposal: (1) assign overtime work to employees in the finance and accounting office, or (2) increase the number of payroll clerks in that office. If the Agency chose to comply with the proposal by assigning overtime to the employees in the finance and accounting office, the Agency's right to determine its internal security practices would be conditioned on the prior exercise of its right to determine when assigned work would be performed.

Consequently, to the extent that this proposal would obligate management to assign overtime to employees in the finance and accounting office in order to exercise its right under section 7106(a)(1) to determine its internal security practices, the proposal is nonnegotiable because it would eliminate management's discretion under section 7106(a)(2)(B) to determine when work which has been assigned will be performed. See, for example, American Federation of Government Employees, AFL-CIO, Local 1738 and Veterans Administration Medical Center, Salisbury, North Carolina, 27 FLRA 52, 58-60 (1987) (Proposal 7).

3. The Right to Determine the Numbers, Types, and Grades of Employees or Positions Assigned to any Organizational Subdivision or Work Project within the Meaning of Section 7106(b)(1)

Proposals which concern the numbers, types and grades of employees assigned to an organizational subdivision or work project are negotiable only at the election of the agency. See District No. 1, Pacific Coast District, Marine Engineers Beneficial Association and Panama Canal Commission, 26 FLRA 390, 391-92 (1987) (Section 3); American Federation of Government Employees, AFL-CIO and Air Force Logistics Command, Wright-Patterson Air Force Base, Ohio, 2 FLRA 604, 620-621 (1980) (Proposal X), enforced as to other matters sub nom. Department of Defense v. FLRA, 659 F.2d 1140 (D.C. Cir. 1981), cert. denied sub nom. AFGE v. FLRA, 455 U.S. 945 (1982).

This proposal does not expressly concern the numbers, types, or grades assigned to an organizational subdivision or work project. However, as noted previously, the Agency has stated, without contravention by the Union, that there are only two ways it could complete all the audits necessary to assure the integrity of its payroll within the 6-day limit on pay lag mandated by the proposal: (1) assign overtime work to employees in the finance and accounting office, or (2) increase the number of payroll clerks assigned to that office. If the Agency chose to comply with the proposal's mandate of a 6-day pay lag by increasing the personnel assigned to the finance and accounting office, the Agency's right to determine its internal security practices would be conditioned on the prior exercise of its right to determine the number of employees or positions assigned to an organizational subdivision or work project.

Consequently, to the extent that this proposal would require the Agency to alter or change its determination regarding the number of employees or positions assigned to the finance and accounting office, it is inconsistent with management's right under section 7106(b)(1). Since the Agency has elected not to bargain, the proposal is outside the duty to bargain.

4. The Right to Determine the Methods and Means of Performing Work Within the Meaning of Section 7106(b)(1)

The Agency argues that the proposal interferes with management's right to determine the methods and means of performing its payroll function within the meaning of section 7106(b)(1) of the Statute. The Agency contends that the term "performing work" in section 7106(b)(1) is not to be limited to mission-related activities to the exclusion of such support activities as the payroll function.

In the context of section 7106(b)(1), "means" refers to any instrumentality, including an agent, tool, device, measure, plan or policy used by an agency for the furthering or accomplishing of the performance of its work. National Treasury Employees Union and U.S. Customs Service, Region VIII, San Francisco, California, 2 FLRA 255, 258 (1979). "Methods" refers to the way in which an agency performs its work. National Federation of Federal Employees, Local 541 and Veterans Administration Hospital, Long Beach, California, 12 FLRA 270 (1983). The term "performing work" which appears in section 7106(b)(1) of the Statute is intended to include those matters which directly and integrally relate to the agency's operations as a whole. Mare Island Naval Shipyard.

The Agency argues, without contravention by the Union, that in accomplishing the various balancing, verifying, reconciling and other audits the Agency has determined must be performed prior to issuance of employee paychecks, the payroll office functions as a cohesive unit. The Agency states that in order for accurate paychecks to be distributed, employees in the payroll office must perform sequential tasks in a specific order during the time between the end of a pay period and issuance of paychecks. The Agency states further that since the other activities on Fort Bliss would function with a 12-day pay lag as required by the Agency's regulation, adoption of the Union's proposal for a 6-day pay lag would result in multiple paydays. According to the Agency, multiple paydays with different pay lags would prevent the employees in the payroll office from operating as a team since they would not be able to perform the same sequential tasks at the same time.

We find that the payroll process is directly and integrally related to the Agency's operations as a whole and is included within the meaning of the term "performing work" under section 7106(b)(1). The process by which the Agency determines employee entitlements to pay and allowances, including night differentials, overtime, allotments for health insurance, life insurance, union dues, and savings bonds, among others, ensures the presence of a workforce whose purpose is to effectuate the agency's overall mission. Further, we conclude that the functional grouping of the personnel in its payroll office to accomplish those audits in a systematic manner constitutes the methods and means of performing work under section 7106(b)(1).

As we previously noted, the Agency conceded that it could comply with the 6-day pay lag requirement by either increasing overtime usage or by increasing the number of payroll clerks assigned to the finance and accounting office. However, regardless of whether the Agency assigns overtime to current employees in the finance and accounting office or increases the number of employees assigned to the finance and accounting office, the functional grouping of employees in the finance and accounting office would be changed to accommodate multiple paydays with different pay lags. Thus, in either case, the adoption of the proposal would determine the methods and means of performing work under section 7106(b)(1). Since the Agency has not elected to bargain on the matter, the proposal is outside the duty to bargain.

In finding this proposal to be inconsistent with management's right to determine the methods and means of performing work, we distinguish our holding in Mare Island Naval Shipyard. In that case, we concluded that the manner in which an agency delivers paychecks to its employees was not a methods and means of performing work within the meaning of section 7106(b)(1) of the Statute. We stated that while there may be aspects of the function of paying employees that would fall within the scope of section 7106(b)(1), the agency had not established the required nexus between furthering the agency's mission and the limited matter of how paychecks are delivered to employees. In Mare Island Naval Shipyard, we noted, among other things, that since the agency's own regulations permitted the mailing of pay and leave and earning statements to an employee's work address, the requirement to hand deliver paychecks was consistent with the agency's current organizational structure and did not contemplate the assignment of new or changed duties to employees. In this case, however, we find that the Agency has established the required nexus between furthering the Agency's mission and the length of pay lag. Under this proposal, the Agency would be required to change the way in which the finance and accounting office operates.

In contrast to the manner in which an agency delivers paychecks to employees, a ministerial event which occurs after the payroll determination process is completed, the proposal in this case to change the length of pay lag is directly determinative of the payroll process itself. Thus, the proposal in this case is inconsistent with the Agency's right to determine the methods and means of performing work under section 7106(b)(1) of the Statute.

VI. Conclusion

In summary, we find that the proposal concerns conditions of employment of bargaining unit employees. However, we find that the proposal conditions the Agency's right to determine its internal security practices under section 7106(a)(1) on the prior exercise of either its right under section 7106(a)(2)(B) to assign work or its rights under section 7106(b)(1) to determine the numbers, types, and grades of positions or employees assigned to an organizational subdivision or work project and to determine the methods and means of performing work. The proposal, therefore, interferes with those rights separately and collectively. In view of this decision, we need not reach the Agency's additional arguments that the proposal is nonnegotiable.

VII. Order

The petition for review is dismissed.

Issued, Washi