52:0670(64)AR - - Army Corps of Engineers, North Pacific Division and United Power Trades Organization - - 1996 FLRAdec AR - - v52 p670



[ v52 p670 ]
52:0670(64)AR
The decision of the Authority follows:


52 FLRA No. 64

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

_____

U.S. DEPARTMENT OF THE ARMY

U.S. ARMY CORPS OF ENGINEERS

NORTH PACIFIC DIVISION

(Agency)

and

UNITED POWER TRADES ORGANIZATION

(Union)

0-AR-2727

_____

DECISION

November 29, 1996

_____

Before the Authority: Phyllis N. Segal, Chair; Tony Armendariz and Donald S. Wasserman, Members.

I. Statement of the Case

This case is before the Authority on an exception to an award of Arbitrator Harold G. Wren filed by the Agency under section 7122(a)(1) of the Federal Service Labor-Management Relations Statute (the Statute) and part 2425 of the Authority's Regulations. The Union filed an opposition.

The Arbitrator sustained a grievance alleging that the Agency violated the parties' collective bargaining agreement when, in accordance with a new wage schedule issued by the Department of Defense Wage Fixing Authority (DOD WFA), it discontinued Sunday premium pay.

For the following reasons, we conclude that the award is deficient under section 7122(a)(1) of the Statute. Accordingly, we set the award aside.

II. Background and Arbitrator's Award

Pursuant to a new wage schedule issued by the DOD WFA, the Agency discontinued Sunday premium pay for its prevailing rate employees.(1) The Union filed a grievance claiming that the Agency's action violated section 18.3 of the parties' collective bargaining agreement.(2) According to the Union, the new wage schedule was not a law or Government-wide regulation and, therefore, did not provide the Agency with a basis under the agreement for discontinuing Sunday premium pay. The Agency argued that, because the new wage schedule was issued pursuant to the PRSA as amended by the Supplemental Appropriations Act of 1982 (the SAA), hereinafter "the PRSA-SAA," it had the force of law.

The grievance proceeded to arbitration. The parties did not stipulate the issue, and the Arbitrator did not set forth an issue statement. The Arbitrator determined that the new DOD WFA wage schedule did not constitute a law with respect to Sunday premium pay and, therefore, did not provide the Agency with a basis for discontinuing such pay. In reaching this conclusion, the Arbitrator relied principally on three decisions involving these same parties.(3)

In the Arbitrator's view, although North Pacific Division I and II interpreted the PRSA-SAA as requiring the Agency to apply DOD WFA's wage schedules in their entirety at the time of their promulgation, North Pacific Division III exempted Sunday premium pay from the wage schedules.(4) In this respect, the Arbitrator stated: "Were it not for North Pacific Division III," he "would be constrained to follow the earlier decisions of the FLRA in North Pacific Division I and II." Award at 9. In particular, the Arbitrator construed North Pacific Division III to mean that: (1) DOD WFA wage schedules constitute a law only with respect to "basic wage rates"; and (2) Sunday premium pay is a "perquisite," not a basic wage, and, as such, is exempt from the schedules. Id. at 7, 9. Accordingly, the Arbitrator concluded that "the wage rate schedules had no effect on the Sunday work premium" and that "[o]nce [Sunday premium pay] [was] included within the collective bargaining agreement, [it] could not be changed unilaterally . . . ."  Id. at 10.

The Arbitrator's award ordered the Agency to reinstate Sunday premium pay for the duration of the parties' agreement. The award also ordered the Agency to pay backpay with interest "to any employees who may be entitled thereto."  Id. at 13.

III. Positions of the Parties

A. Agency

The Agency contends that, by ordering the continuation of Sunday premium pay after the DOD WFA revoked the Agency's authority to make disbursements for such pay, the Arbitrator's award is contrary to the PRSA-SAA. According to the Agency, "North Pacific Division I, II, and III clearly establish that DOD WFA's wage schedules are matters of law [because they are] implemented pursuant to the [PRSA-SAA.] The only reason [section] 18.3 of the parties['] collective bargaining agreement was found negotiable in North Pacific Division III is because . . . [section] 18.3 allows for the yearly wage schedule changes promulgated by DOD WFA[.]" Exceptions at 4. In the Agency's view, the Arbitrator mistakenly construed North Pacific Division III as a reversal of North Pacific Division I and II.

B. Union

The Union contends that when it proposed the language contained in section 18.3 of the parties' agreement, it intended to "lock in" Sunday premium pay rates for the life of the contract. Opposition at 2. According to the Union, the Authority was aware of this intention when it determined, in North Pacific Division III, that the proposal was within the duty to bargain. Under these circumstances, the Union asserts, the portion of section 18.3 that sets forth the rate of Sunday premium pay should override, for the duration of the parties' agreement, wage changes made by the DOD WFA. The Union also maintains that the "new wage schedule was [neither] a law [nor] a government-wide regulation" and, therefore, did not provide the Agency with a basis under section 18.3 of the parties' agreement for discontinuing Sunday premium pay. Id.

IV. Analysis and Conclusions

As the exception involves the award's consistency with law, the Authority must review the questions of law raised by the Agency's exception and the Arbitrator's award de novo. National Treasury Employees Union, Chapter 24 and U.S. Department of the Treasury, Internal Revenue Service, 50 FLRA 330, 332 (1995) (citing U.S. Customs Service v. FLRA, 43 F.3d 682, 686-87 (D.C. Cir. 1994)).

The PRSA is based on principles that "there will be equal pay for substantially equal work for all prevailing rate employees who are working under similar conditions of employment in all agencies within the same local wage area" and that "the level of rates of pay will be maintained in line with prevailing [private sector] levels for comparable work within a local wage area[.]" 5 U.S.C.A. § 5341. To effectuate these principles, the PRSA directs the Office of Personnel Management to define geographical wage areas and to designate, for each area, a "lead agency." Id. § 5343(a)(3). Each lead agency is required to conduct wage surveys of private industry in its area and develop wage schedules on the basis of those surveys. Id. § 5343(a)(3), (c)(1). Agency heads are required to apply the wage schedules developed by their respective lead agencies. Id. § 5343(a)(3). In this regard, the PRSA provides that:

the head of each agency having prevailing rate employees in a wage area shall apply, to the prevailing rate employees of that agency in that area, the wage schedules and rates established by the lead agency, or by the Office of Personnel Management, as appropriate, for prevailing rate employees in that area[.]

Id. § 5343(a)(4).

The SAA amends the PRSA by: (1) designating the DOD WFA as lead agency for the U.S. Army Corps of Engineers, and (2) requiring the DOD WFA to base its wage schedules on surveys of the Departments of Energy and the Interior. Specifically, the SAA provides:

Without regard to any other provision of law limiting the amounts payable to prevailing wage rate employees, United States Army Corps of Engineers employees paid from Corps of Engineers Special Power Rate Schedules shall be paid, beginning the effective date of each annual wage survey in the region after the date of enactment of this Act, wages as determined by the Department of Defense Wage Fixing Authority to be consistent with wages of the Department of Energy and the Department of the Interior employees performing similar work in the corresponding area . . . .

Pub. L. No. 97-257, 96 Stat. 832 (codified at 5 U.S.C.A. § 5343 note).

The Authority's decisions in North Pacific Division I, II, and III interpret the PRSA-SAA as requiring the Agency to apply DOD WFA's wage schedules in their entirety at the time of their promulgation. In North Pacific Division I, the Authority held that the Agency properly discontinued a pay practice in order to comply with a new wage schedule issued by the DOD WFA. 21 FLRA at 504. Similarly, the Authority held in North Pacific Division II that proposals to establish shift differentials, premium pay, and environmental pay were "contrary to law" because they represented an attempt to circumvent the DOD WFA. 30 FLRA at 643. Although in North Pacific Division III the Authority held that proposals concerning premium pay were within the duty to bargain, these proposals were distinguishable from those in North Pacific Division II. Whereas the proposals in North Pacific II sought to replace the DOD WFA's wage schedule with negotiated wage rates, the proposals in North Pacific Division III sought to memorialize current rates set by the DOD WFA and allowed for future changes as required by the DOD WFA. In this regard, the Authority stated:

[The proposals] would in no manner affect the wage-setting system established by the PRSA and the [SAA]. The proposals do not attempt to substitute negotiated wage rates for the rates that are determined by the WFA pursuant to surveys of similarly situated employees in the Department of Energy and the Department of [the Interior]. Rather, the proposals merely restate those rates in the contract. Moreover, the proposals do not preclude changes in those rates, including the yearly survey changes, as long as the changes are made through the procedures established by the PRSA and the [SAA].

44 FLRA at 1163.

Consistent with the foregoing, we conclude that the Arbitrator's award is deficient under section 7122(a)(1) of the Statute because it is contrary to the PRSA-SAA. We reach this conclusion for the following reasons.

First, the award is inconsistent with the plain wording of the PRSA-SAA, which provides that "United States Army Corps of Engineers employees . . . shall be paid . . . wages as determined by the Department of Defense Wage Fixing Authority[.]" 5 U.S.C.A. § 5343 note (emphasis added). Because the award requires the Agency to make disbursements for Sunday premium pay even though the DOD WFA revoked the Agency's authority to do so, the award is inconsistent with the provision.

Second, the award is inconsistent with the policy underlying the SAA. The legislative history indicates that the SAA's amendments to the PRSA were intended to "remove the inequity" in pay between employees of the Agency and employees of the Departments of Energy and the Interior. S. Rep. No. 97-516, 97th Cong., 2d Sess. 80 (1982). By awarding Sunday premium pay to employees of the Agency after such pay was no longer provided to employees of the Departments of Energy and the Interior, the Arbitrator created such an inequity.

Third, the award is inconsistent with the Authority's application of the PRSA-SAA. Contrary to the Arbitrator's interpretation, the Authority's decision in North Pacific Division III neither construed premium pay to be a "perquisite" rather than a "wage" nor suggested that premium pay, once memorialized in the parties' agreement, becomes exempt from DOD WFA's wage determinations. In fact, the Authority's decision refers to the premium-pay rates at issue as "wage