38:1359(106)NG - - AFGE Local 48 and Navy, Naval Submarine Base, Bangor, WA - - 1991 FLRAdec NG - - v38 p1359



[ v38 p1359 ]
38:1359(106)NG
The decision of the Authority follows:


38 FLRA No. 106

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES

LOCAL 48

(Union)

and

U.S. DEPARTMENT OF THE NAVY

NAVAL SUBMARINE BASE

BANGOR, WASHINGTON

(Agency)

0-NG-1857

DECISION AND ORDER ON NEGOTIABILITY ISSUE

January 8, 1991

Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This case is before the Authority on a negotiability appeal filed by the Union under section 7105(a)(2)(E) of the Federal Service Labor-Management Relations Statute (the Statute). It concerns the negotiability of one proposal.(1) The proposal seeks to ensure that any change in the time between the end of a pay period and the day on which employees receive their paychecks ("pay lag") does not exceed the current 6 days, rather than the 11 days which the Agency proposes to adopt. For the following reasons, we find that the proposal is negotiable under the Statute.

II. Background

In April 1990, the Naval Hospital, Bremerton, Washington, notified the Union that the civilian payroll function would be transferred from the Naval Supply Center to the Navy Regional Finance Center (NRFC), Great Lakes, Illinois, as of October 1, 1990. The NRFC provides payroll services to approximately 70 Department of the Navy activities throughout the United States. The transfer of the payroll function from the Naval Supply Center to NRFC would result in the increase of pay lag for the unit employees in this case from 6 days to 11 days. 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 work performed during that pay period. In response, the Union proposed that any change in unit employees' paydays not result in more than the current 6-day pay lag.

III. Proposal

Employee pay days may be changed if the change does not delay any employee's pay beyond that established as of 1 June 1990 and provided affected employees have been given at least 14 days advanced written notice.

(Only the underscored portion of the proposal is in dispute.)(2)

IV. Positions of the Parties

A. Agency

The Agency contends that the Union's proposal is nonnegotiable because it interferes with management's rights to: (1) determine its internal security practices under section 7106(a)(1) of the Statute; (2) direct employees and assign work under section 7106(a)(2)(A) and (B) of the Statute; and (3) determine the number of employees assigned to any organizational subdivision and the methods and means of performing work under section 7106(b)(1) of the Statute.

Specifically, the Agency notes that in National Association of Government Employees, Local R14-89 and Headquarters, U.S. Army Air Defense Artillery Center and Fort Bliss, Fort Bliss, Texas, 32 FLRA 392 (1988) (Fort Bliss), the Authority found that completion of various audit procedures before paychecks are issued constituted internal security practices within the meaning of section 7106(a)(1) of the Statute. The Agency argues that because various payroll processing requirements imposed over the past several years have made it increasingly difficult for the Agency to accomplish all actions necessary to pay employees in a short period of time, the Agency is "being forced to devote more and more scarce resources to payroll processing . . . ." Statement of Position at 4. For example, the Agency claims that it can complete these necessary audit processes within a 6-day pay lag only by either "assigning a large amount of overtime work or increasing its staffing." Id. Thus, the Agency contends that negotiation of a 6-day pay lag conditions the Agency's ability to exercise its right to determine its internal security practices, that is, its ability to complete necessary audit procedures prior to issuing paychecks, either on the prior exercise of its right to assign overtime work under section 7106(a)(2)(A) of the Statute or on the prior exercise of its right to determine the number of employees assigned to the payroll office under section 7106(b)(1) of the Statute.

Moreover, the Agency argues that negotiation over the length of pay lag also directly interferes with its rights to direct employees and to assign work under section 7106(a)(2)(A) and (B) of the Statute. According to the Agency, allowing the Union to negotiate the length of pay lag would prohibit management "from extending the pay lag and from assigning additional or miscellaneous duties even if the pay lag is inadequate for the [A]gency to properly fulfill its payroll processing responsibilities." Id. at 15. The Agency claims that if the pay lag remains at 6 days, only the most critical duties necessary to complete the payroll could be assigned. Consequently, according to the Agency, "[m]ost audit assignments would have to be postponed until after the payroll deadline had been met. Thus, management would be prevented from assigning certain work until after completion of the payroll process." Id.

The Agency also notes that in Fort Bliss the Authority found that the functional grouping of personnel in the payroll office to accomplish the payroll audit processes in a systematic manner prior to issuing paychecks constituted the methods and means of performing work under section 7106(b)(1) of the Statute. According to the Agency, however, because other activities whose payrolls are prepared by the Agency would function with an 11-day pay lag, negotiation of a 6-day pay lag would result in multiple pay days with different pay lags. The Agency claims that in order to accommodate multiple paydays with different pay lags the Agency would be obligated to change the functional grouping of personnel in the finance office. Thus, the Agency concludes that "adoption of the proposal would determine the methods and means of performing work under section 7106(b)(1) of the Statute." Id. at 11.

The Agency also contends that the Union's proposal is not an appropriate arrangement for employees adversely affected by the exercise of management rights. The Agency argues that the Union has not fulfilled the requirements set forth in National Association of Government Employees, Local R14-87 and Kansas Army National Guard, 21 FLRA 24 (1986) (Kansas Army National Guard) for determining whether a proposal is intended to be an arrangement for employees adversely affected by management's exercise of its rights. The Agency asserts that the Union "has failed to identify any adverse effect arising from the exercise of management rights." Id. at 17. Further, the Agency asserts that, even if the Authority finds that the proposal is an arrangement within the meaning of section 7106(b)(3) of the Statute, the proposal excessively interferes with management's rights.

B. Union

The Union argues that "none of the disputed language [of the proposal] conflicts with the exercise of a management right." Reply Brief at 1. Specifically, the Union contends that the proposal does not interfere with the Agency's internal security practices because the proposal does not eliminate any of the audits the Agency deems necessary to maintain the security of the Agency's payroll. The Union also contends that the proposal "does not prescribe mandatory options by which the 6-day pay lag period is to be accomplished . . . and does not address the paydays of non-bargaining unit employees. Rather, the very specific and delimited extent of th[e] proposal is that employees receive their paychecks with 'only' a 6-day pay lag; how that is accomplished is entirely up to the employer[.]" Id. at 6 (emphasis in original).

The Union further asserts that "if . . . a conflict [with the exercise of management's rights] is found to exist, that language [in dispute] is, or is part of, an appropriate arrangement for employees adversely affected by the exercise of a management right." Id. at 1.

V. Analysis and Conclusions

Recently, in our decision in American Federation of Government Employees, Local 1698 and U.S. Department of the Navy, Naval Aviation Supply Office, Philadelphia, Pennsylvania, 38 FLRA No. 85 (1990) (Naval Aviation Supply Office), we concluded that a proposed 6-day pay lag was within the agency's duty to bargain under the Statute. In concluding that a proposal to establish a 6-day pay lag was negotiable, we noted first that pay lag affects working conditions of bargaining unit employees, and, therefore, is a condition of employment within the meaning of section 7103(a)(14) of the Statute.

In Naval Aviation Supply Office, the agency claimed, as does the Agency in this case, that a proposal to limit pay lag to 6 days was inconsistent with the Agency's rights to: (1) determine its internal security practices under section 7106(a)(1) of the Statute; (2) direct employees and assign work under section 7106(a)(2)(A) and (B) of the Statute; and (3) determine the number of employees assigned to any organizational subdivision and the methods and means of performing work under section 7106(b)(1) of the Statute.

In rejecting these arguments, we concluded that the agency had not established that the proposal directly interfered with any of the cited management rights, but that the proposal only had indirect effects on management rights. We found that the proposal established only a requirement that the agency accomplish the payroll function in some unspecified manner that allowed the agency to pay employees on the sixth day after the end of a pay period, and significantly, left the choices as to how the agency would accomplish its payroll function to the agency's discretion. We also noted that the record in that case did not confirm the agency's claim that negotiation of a pay lag of less than 12 days would result in either a large increase in overtime or an increase in staffing or obligate the agency to modify the grouping of personnel in its payroll office.

Moreover, we stated that even assuming that negotiation of a 6-day pay lag would result in an increase in overtime, that result did not thereby release the agency from the duty to bargain under the Statute. We noted that if an agency "was released from its duty to bargain whenever it had suffered economic hardship, the [agency's] duty to bargain would practically be non-existent in a large proportion of cases." Naval Aviation Supply Office, slip op. at 10 (quoting American Federation of Government Employees v. FLRA, 785 F.2d 333, 338 (D.C. Cir. 1986)). Finally, we noted that the competing interests involved--the agency's interest in achieving economy and the employees' interest in when they receive their paychecks--were not irreconcilable and presented the sort of questions that collective bargaining was intended to resolve.

Consequently, we concluded that the proposal for a 6-day pay lag did not interfere with the agency's rights to: (1) determine its internal security practices under section 7106(a)(1) of the Statute; (2) direct employees and assign work under section 7106(a)(2)(A) and (B) of the Statute; and (3) determine the number of employees assigned to any organizational subdivision and the methods and means of performing work under section 7106(b)(1) of the Statute.

The Agency in this case raises arguments concerning the proposal's alleged inconsistency with management rights identical to those raised by the agency in Naval Aviation Supply Office. We conclude, therefore, for the reasons more fully set out in Naval Aviation Supply Office, that the proposal in this case does not directly interfere with the Agency's rights to: (1) determine its internal security practices under section 7106(a)(1) of the Statute; (2) direct employees and assign work under section 7106(a)(2)(A) and (B) of the Statute; and (3) determine the number of employees assigned to any organizational subdivision and the methods and means of performing work under section 7106(b)(1) of the Statute. See also National Federation of Federal Employees, Local 2099 and U.S. Department of the Navy, Naval Air Systems Command, Naval Plant Representative Office, St. Louis, Missouri, 38 FLRA No. 95 (1990).

Consequently, we conclude that the proposal is negotiable.

In view of our finding, it is not necessary to address whether the proposal is an appropriate arrangement for employees adversely affected by the exercise of management's rights.

VI. Order

The Agency shall upon request, or as otherwise agreed to by the parties, bargain over the Union's proposal.(3)




FOOTNOTES:
(If blank, the decision does not have footnotes.)
 

1. The Union withdrew its appeal on two additional proposals (Proposals 2 and 3) because the Agency, in its statement of position, stated that "the only proposal alleged to be nonnegotiable by the activity is the [U]nion proposal relating to the change of the pay day." See Statement of Position at 3; Reply Brief at 1. Therefore, we will not consider Proposals 2 and 3.