PANAMA CANAL COMMISSION BALBOA, REPUBLIC OF PANAMA and INTERNATIONAL ORGANIZATION OF MASTERS, MATES, AND PILOTS, PANAMA CANAL PILOTS BRANCH, AFL-CIO

United States of America

BEFORE THE FEDERAL SERVICE IMPASSES PANEL

In the Matter of

PANAMA CANAL COMMISSION

BALBOA, REPUBLIC OF PANAMA

and

INTERNATIONAL ORGANIZATION OF

MASTERS, MATES, AND PILOTS, PANAMA

CANAL PILOTS BRANCH, AFL-CIO

Case No. 96 FSIP 84

 

DECISION AND ORDER

    The Federal Service Impasses Panel (Panel) issued the attached Report and Recommendations for Settlement (Report) on October 3, 1996, concerning an impasse which arose after a grievance- arbitrator found that the Employer had violated §14 of the parties’ October 14, 1994, Memorandum of Agreement (MOU).(1) The parties subsequently advised the Panel that they had conferred with each other but had been unable to reach a settlement.

    With respect to the issues in dispute, we recommended the following:

1. The administrative workweek shall be 40 hours for Regular Plan pilots and 48 hours for 6x4 Plan pilots.

2. The pilot compensation package agreed to in the 1994 MOU shall be adjusted by subtracting the overtime dollar amounts that were folded into the availability bonus. The basis for the adjustment shall be the document presented by the Employer at the informal conference entitled "Average Overtime Hours of 6x4 & Reg. Plan Pilots Included in Current Availability Bonus," dated February 9, 1996.

3. Pilots shall be paid overtime for all hours worked over the 40/48 hour limits, in accordance with their practice prior to 1994.

4. There shall be no retroactive application of the requirements stated above.

THE PARTIES’ RESPONSES TO THE PANEL’S RECOMMENDATIONS

1. The Union’s Response(2)

    The Union rejects the Panel’s recommendations for settlement of the dispute. In essence, its main reasons are the following: (1) their adoption would have a disparate impact primarily on Panamanian pilots(3) by reducing their availability bonus 1and overtime rates to a greater degree than U.S. pilots;(4) (2) contrary to the Panel’s underlying assumption, overtime hours were never folded into the availability bonus, so that "any further reduction in the bonus aspect of the pay structure . . . presents a windfall for the agency;" (3) because the Panel’s recommendation fails to establish a limit on the administrative workweek ("the issue presented to it"), the Union was provided with "nothing . . . that it did not already have;" and (4) the Panel’s recommendations contained "no rational basis for failing to provide a retroactive remedy." Moreover, since "management admitted" at the informal conference with the Panel’s representative that "its violation of §14 resulted in a savings of $2.6 million to date," the Panel’s recommendation not to provide a remedy involving back pay will "create an incentive for the Commission to engage in future contractual violations." Finally, it is unfair for the Panel to recommend a reduction in the availability bonus without also recommending a corresponding reduction in the daily forfeiture rate for nonavailability. In this regard, "an alternative solution to the payment of overtime" more in line with the grievance-arbitrator’s decision would be to order "a limit to the amount of hours that an employee is required to work without suffering a forfeiture of the availability bonus."

2. The Employer’s Response

    The Employer accepts the Panel’s recommendations for settlement, and attaches a document it has prepared "which could serve as a basis for implementing the terms of the Panel’s recommendations, should the Panel decide to impose them." Although an adjustment of the availability bonus consistent with the Panel’s recommendations and its proposal for implementation would lead to some "anomalous results," it concludes that "these wrinkles can all be eliminated through realignment and should not be cause for concern." In this connection, the Employer’s approach is consistent with the parties’ previous practice during the negotiations over pilot compensation which ultimately resulted in the 1994 MOU. The Employer also suggests that "it would be helpful if the Panel retains jurisdiction after issuance of its decision to resolve any issues of interpretation which may arise" between the parties.

    With respect to some of the points raised by the Union in the parties’ most recent discussions, among other things, the Employer disagrees that the Panel’s recommendations would violate the Panama Canal Treaty by having a disparate impact on Panamanian nationals. In this regard, the 15-percent tropical differential is authorized by the Panama Canal Treaty and predates the parties’ 1994 MOU creating an availability bonus. In addition, "the adjusted availability bonus would have materially the same effect on pilots who receive the 15-percent differential, as compared with those who do not, as had been the case under the former pilot pay system." Therefore, "there would be nothing novel about having two bonus structures, depending on the pilot’s eligibility for the 15 percent." As to the Union’s claim that overtime hours were never folded into the availability bonus, the Union "has explicitly acknowledged it agreed to include in the annual bonus a component which represented overtime pay." Thus, "overtime for work performed over 40-48 cannot justifiably be paid unless the amounts folded in are taken out."

CONCLUSIONS

    Having carefully considered the entire record in this case, we are persuaded that a modified version of the Panel’s recommendations for settlement should be imposed to resolve the dispute. The information provided in the parties’ responses has clarified that the recommendations would result in: (1) a dual availability bonus system, one primarily for Panamanian pilots who do not receive the statutorily mandated 15-percent tropical differential, the other for U.S. pilots who do, and (2) a reduction in the availability bonus without a corresponding reduction in the daily forfeiture rate. With respect to the first point, the record indicates that a dual availability bonus system would be inconsistent with the parties’ intent during the negotiations leading to their pilot compensation agreement, and the terms of the 1994 MOU.(5) Such an outcome would also be contrary to the rationale provided in the Report, where we stated that our overall approach was intended to do "as little damage to the parties’ existing agreements as is reasonably possible in the unusual circumstances of this case." Similarly, a reduction in the availability bonus without a reduction in the daily forfeiture rate would be unwarranted, given that the two were directly linked in the parties’ previously negotiated pilot compensation package.

    To avoid such consequences, we find it necessary to modify the recommendations by requiring that there be only one annual bonus table applicable to all pilots, regardless of citizenship or work plan, and by ordering a reduction in the daily forfeiture rate which is proportional to the resulting reduction in the availability bonus. In this regard, the basis for subtracting the overtime dollar amounts that were folded into the availability bonus shall be the average amount of overtime paid to all pilots within each identified grade and step included in the period covered by the February 9, 1996, document.(6) While this method of calculating the overtime dollar amounts to be subtracted from the existing availability bonus appears unscientific, it is nevertheless consistent with the parties’ own approach during previous negotiations.(7) Because we also shall require the parties to implement this decision by using a modified version of the Employer’s "Proposed Implementation of Panel’s Recommendations," we conclude that it is unnecessary to retain jurisdiction over the case.

    While the rationale in the attached Report speaks for itself, we believe that some of the contentions recently raised by the Union merit specific responses. The record is clear that the Union agreed to trade overtime, among other things, for a guaranteed availability bonus and increases in base pay. In addition, the Union’s ironic statement that "the pilots will receive a substantial pay cut as a result of winning the Shearer arbitration case" is misleading because it ignores the fact that our decision will restore the parties’ longstanding practice of paying overtime to pilots based on the actual number of hours worked. In this regard, although it is impossible to predict whether the number of vessels transiting the Panama Canal will continue to increase, as the Union suggested in its previous submissions to the Panel, our decision is directly responsive to its view that "the payment of some manner of compensation" is "a necessary part of a fair and just pay package." Finally, we believe that by failing to award a meaningful remedy at the time he found the underlying contract violation, the grievance-arbitrator tacitly concluded that the type of remedy proposed by the Union in the circumstances of this case would be incommensurate with the offense committed.

ORDER

    Pursuant to the authority vested in it by the Federal Labor-Management Relations Statute, 5 U.S.C. § 7119, and in accordance with the findings set forth above, the Federal Service Impasses Panel hereby orders the following:

1. The parties shall adopt the Panel’s previous recommendations for settling their dispute, modified such that: (a) there shall be one annual bonus table applicable to all pilots, regardless of citizenship or work plan; (b) the basis for subtracting the overtime dollar amounts that were folded into the availability bonus shall be the average amount of overtime paid to all pilots within each identified grade and step, regardless of citizenship or work plan, included in the period covered by the document entitled "Average Overtime Hours of 6x4 & Reg. Plan Pilots Included in Current Availability Bonus;" and (c) there shall be a reduction in the daily forfeiture rate proportional to the reduction in the availability bonus resulting from the application of (b) above.

2. The parties shall adopt the Employer’s "Proposed Implementation of Panel’s Recommendation" as the means for implementing this Order, modified in accordance with (1.) above.

 

By direction of the Panel.

H. Joseph Schimansky

Executive Director

December 17, 1996

Washington, D.C.

 

1.After finding the violation, the grievance-arbitrator ordered the parties to negotiate: (1) a limitation to the maximum number of hours in an administrative workweek; and (2) an appropriate remedy, instead of providing one himself.

2.In his cover letter to the Union’s response to the Panel’s recommendations, the Union’s representative of record requests that the Panel consider supplemental comments of the president of the Union, in addition to its 5-page brief and exhibits. We note that the document containing the comments are directed to the Union’s representative, rather than the Panel. In any event, because consideration of the document would be inconsistent with the Panel’s procedural instructions to the parties, the Union’s request is hereby denied.

3.The Union also alleges that the recommendation would have a disparate impact on seven U.S. citizens hired locally who are similarly ineligible for a 15-percent tropical differential authorized under 22 U.S.C. § 3657.

4.This is because they worked considerably more overtime hours in FY 1993, the period covered by the February 9, 1996, document relied upon by the Panel in its recommendations, and are ineligible to receive the 15-percent tropical differential applied to most U.S. pilots.

5.In this regard, during the grievance-arbitration hearing, the Employer’s chief negotiator testified that one of the main reasons the parties decided to fold overtime into the annual bonus was “to equalize the Panamanian pay with the American pay, the 15-percent differential being the big difference. And we recognized that by putting the overtime into the bonus, we reduced the difference between the two nationalities’ pay.” Moreover, Appendix A, §2(a) of the 1994 MOU states that “the annual [availability] bonus will be paid to . . . pilots regardless of citizenship or work plan . . .”.

6.This process of averaging will require the Employer to look behind the figures provided in the document to obtain the actual dollar amounts of overtime paid to each pilot during FY 1993, at each grade and step level identified. The resulting calculated amounts should represent true averages, as opposed to an “averaging of averages” which would occur if the Employer were only required to rely on the figures provided in its annotated version of the document.

7.See page 4 of the Employer’s response where it states that:

 

The process the parties used to compute the overtime component to arrive at an annual bonus of the same exact amount for each grade and step . . . required more than a simple straight line mathematical process. The process, while not scientific, required adjustments to achieve alignment . . .”.

 

 

United States of America

BEFORE THE FEDERAL SERVICE IMPASSES PANEL

In the Matter of

PANAMA CANAL COMMISSION

BALBOA, REPUBLIC OF PANAMA

and

INTERNATIONAL ORGANIZATION OF

MASTERS, MATES, AND PILOTS, PANAMA

CANAL PILOTS BRANCH, AFL-CIO

Case No. 96 FSIP 84

 

REPORT AND RECOMMENDATIONS FOR SETTLEMENT

      The International Organization of Masters, Mates, and Pilots, Panama Canal Branch (PPCB), AFL-CIO (Union) filed a request for assistance with the Federal Service Impasses Panel (Panel) to consider a negotiation impasse under the Federal Service Labor-Management Relations Statute (Statute), 5 U.S.C. § 7119, between it and the Panama Canal Commission, Balboa, Republic of Panama (PCC, Commission, or Employer).

      After investigation of the request for assistance, the Panel determined that the dispute, which arose after negotiations ordered by a grievance arbitrator, should be resolved on the basis of an informal conference with a Panel representative. The parties were advised that if no settlement were reached, the representative would notify the Panel of the status of the dispute, and would make recommendations for resolving the impasse. After considering this information, the Panel would take whatever action it deemed appropriate to resolve the impasse, including the issuance of a binding decision.

      Pursuant to the Panel’s determination, Assistant Executive Director H. Joseph Schimansky met with the parties on August 15 and 16, 1996, at the Employer’s offices in Balboa, Republic of Panama, but a settlement was not reached. Subsequently, at Mr. Schimansky’s request, each party submitted a written statement addressing the final offers which were submitted during the course of the informal conference. Mr. Schimansky has reported to the Panel on the issues at impasse based on the record developed by the parties. The Panel has now considered the entire record and decided to issue a Report and Recommendations for Settlement.

BACKGROUND

    The Employer’s mission is to manage, operate, and maintain, and to provide for the orderly transit of vessels through, the Panama Canal.(1) The bargaining unit consists of approximately 265 pilots who steer ships through the Canal. The parties are covered by a 1988 collective-bargaining agreement (CBA) which was amended, in part, by a Memorandum of Understanding (MOU) which the parties signed on October 14, 1994, and which became effective on December 11, 1994; the CBA and MOU run concurrently and are due to expire in July 1998.

    The grievance arbitration award which resulted in the instant impasse concerned Paragraph 14 of the MOU.(2) In essence, the arbitrator rejected the Employer’s interpretation that a limitation to the number of hours in an administrative workweek needed to be determined only for the alternative work plans which were the subject of the study referenced in Paragraph 14, and concluded that the wording clearly required that a limit be determined for the two pilot work plans currently in effect.(3) Accordingly, he sustained the Union’s grievance and directed the parties to "undertake, as soon as possible, negotiations to determine the limitation and an appropriate remedy for the violation."

ISSUES AT IMPASSE

    The parties disagree over: (1) what the limitation to the administrative workweek should be, and (2) whether a remedy is warranted and, if so, what it should be.

POSITIONS OF THE PARTIES

1. The Union’s Position

    The Union proposes the following:

1. In accordance with Paragraph 14 of the October 14, 1994, MOU, in an effort to improve overall working conditions, the maximum number of hours in an administrative workweek will be 40 for Regular Work Plan pilots and 48 for 6x4 Plan pilots. Pilots will not be required to work more than this maximum number of hours in an administrative workweek. When a pilot reaches the above assignment limitations, he will be taken off the "duty rotation board" for the remainder of the applicable period. If a pilot exceeds this 40/48 hour per workweek limit, the pilot shall not be available for another assignment, and shall not forfeit any availability bonus for not being available for assignment.

2. However, in the event traffic demands require a pilot to work longer than the maximum number of hours in an administrative workweek, he will be granted 1 ½ hours of compensatory time for each hour worked in excess of the 40/48 hour workweek limit. Each pilot will have a compensatory time balance to be maintained by the Pilot Division. Pilots shall apply for compensatory time using the same guidelines as Regular Plan pilots who apply for leave, with the exception that 6x4 Plan pilots shall also be allowed to use compensatory time in the same manner as Regular Plan pilots. Compensatory time will accrue on an annual basis. The individual pilot’s birthday will be the start and end of the annual period. If all compensatory time has not been used by the end of the applicable annual period, the pilot shall be taken off the duty rotation board for the remainder of the compensatory time balance. However, 6x4 Plan pilots shall have the balance of compensatory time appended to the closest 4 week off-duty period.

3. In the event traffic demands do not permit the granting of compensatory time off, the Commission may, at its option, pay a pilot a bonus double the amount of his/her full daily forfeiture rate for the pilot’s grade level (as set forth in Appendix A, Section 2(b) of the October 14, 1994, MOU) for each 8 hours of compensatory time earned (or prorated share thereof).

4. As an appropriate remedy for the violation of the Collective Bargaining Agreement found by Arbitrator John C. Shearer in his decision and award of December 7, 1995, in FMCS Case No. 95-21375, each pilot who has worked in excess of the maximum number of hours in an administrative workweek established by Paragraph 1 above shall be credited with 1 ½ hours of annual leave for every hour worked in excess of the workweek limitation from December 11, 1994, until the implementation of Paragraphs 2 & 3 set forth above. In accordance with the Back Pay Act, the leave hours granted shall not be counted toward the 760 hour limit referred to in Article 17, Section 25(e), and shall not be subject to forfeit pursuant to PCPM Chapter 630-11, Section 2-1(c).

The workweek limitations in Paragraph 1 of the proposal represent the parties’ practice prior to the 1994 MOU,(4) a practice which "has served the Canal well for many years." They also are consistent with the number of hours worked by pilots currently assigned to office duties, and match the approximate number of hours necessary to give Regular Plan pilots an average of three assignments, and 6x4 Plan pilots an average of four assignments, per administrative workweek. More importantly, its proposal recognizes that limitations are necessary to prevent accidents caused by pilots being "overworked to the point of exhaustion." Not only did 1995 set a record for the number of vessels transiting the Canal, without a corresponding increase in the number of pilots, but vessels are getting larger each year. This has caused longer assignments, and "the difficulty of the transit has increased exponentially." In this regard, its proposed limitations are consistent with the recommendation of the Chief of PCC Occupational Health Division that the PCC "consider shifts not longer than 10 hours for pilots."

    Paragraph 2, which requires the payment of compensatory time for hours worked over the 40/48 limits, "is a necessary part of a fair and just pay package," and would provide a mechanism for ensuring that the Employer’s pilot assignment procedures are not wasteful. During negotiations over the 1994 MOU, the Union made staffing concessions in return for a promise to limit the maximum number of hours in a workweek. The Employer also promised that overtime would no longer be necessary once the number of pilots on large vessels was reduced from three to two. Instead, the average number of pilot assignments actually went up in 1995 and the first 9 months of 1996 due to significant increases in the number of vessels transiting the Canal. Consistent with the arbitrator’s decision, therefore, the payment of compensatory time in the future, and the crediting of annual leave from December 11, 1994, until implementation of the Panel’s order (Paragraph 4), are equitable considerations for the Employer’s broken promises. There is no question concerning the Employer’s ability to afford the costs of the Union’s proposal, given the revenues it is receiving because of the increase in transits.

    Starting the compensatory time accrual periods throughout the year, depending on pilot birth dates, meets the Employer’s interests by guaranteeing that a large number of pilots would not be off the duty rotation list at any one time. In addition to forcing pilots to take a well-deserved rest, Paragraph 2 also would more evenly distribute the workload among pilots, and be less expensive than a direct payment like overtime. Paragraph 3 demonstrates the Union’s sensitivity to the Employer’s mission needs by permitting it to substitute bonus payments for compensatory time off. Moreover, requiring that pilots be paid twice the daily forfeiture rate for hours in excess of 40/48 is consistent with Department of Labor practices for calculating overtime under the Fair Labor Standards Act: it approximates the pilots’ actual daily pay rate by including their availability bonus in calculating their regular rate of pay. Paragraph 4 is a fair remedy for the contractual violation found by the arbitrator. By specifying that any annual leave credited to pilots shall not be counted toward the 760 hour limit referred to in the contract, nor be subject to forfeit under the terms of the Employer’s internal regulations, it is consistent with provisions of the Back Pay Act applicable to other Federal employees in similar circumstances.

    The Employer’s proposal is entirely unacceptable. It sets workweek limits which are 10 hours higher than the parties’ practice prior to 1994, and also would require pilots to work over the specified limits if they have not reached them prior to the beginning of an assignment. The part of the proposal stating that the administrative workweek begins at 0001 hours on Sunday and ends the following Saturday at 2400 hours, and that pilots become available for assignment at 0001 the next day, is an attempt by the Employer to have the Panel sanction its definition of the administrative workweek for use against the Union in an unrelated grievance. Finally, the standard the proposal would apply for determining the success of the test period is self-serving, and guaranteed to give the Employer grounds for unilaterally terminating the test after the 6-month period ends. In this regard, it is a foregone conclusion that pilot availability would be adversely affected, which is, after all, the purpose of setting a limit to the administrative workweek in the first place.

2. The Employer’s Position

    The following wording is proposed by the Employer:

1. Subject to the Preface of Article 17 of the pilots collective bargaining agreement, on a trial basis, for a period not to exceed 6 months, the Commission will take off the pilot rotation list in any administrative workweek:

a Regular Plan pilot when he has completed an assignment that constitutes a minimum of 50 hours of work performed in that administrative workweek; and

a 6x4 Plan pilot when he has completed an assignment that constitutes a minimum of 58 hours of work performed in that administrative workweek.

2. The foregoing rule will be applied by the Commission and will not be at the pilot’s option.

3. The administrative workweek begins at 0001 hours on Sunday and ends the following Saturday at 2400 hours. The pilot will again become available for assignment at 0001 of the next day (Sunday).

4. If at any time in an administrative workweek, the Commission determines that special measures, as prescribed in Article 17, Section 14, of the parties’ collective bargaining agreement, must be implemented to increase pilot availability, the "rule" set forth in Paragraph 1 above will automatically be suspended until such time that the Commission determines that special measures are no longer necessary.

5. This trial will commence at the beginning of the first pay period following November 1, 1996.

6. If at the end of the 6-month trial, the Commission determines that pilot availability has been adversely affected or that there has been unforeseen disruption to Canal operations as a result of the administrative workweek limitation, the administrative workweek limitation will be terminated.

7. If, however, at the end of the 6-month trial, the Commission determines that the administrative workweek limitation prescribed herein has not adversely affected pilot availability, or caused any other unforeseen disruption to Canal operations, the administrative workweek limitation as set forth in Paragraphs 1 through 4 of this document will be implemented until the expiration of the parties’ collective bargaining agreement, consistent with Article 3, Section 3, of that agreement.

8. The Commission will consult with the Panama Canal Pilots Branch in the development of the guidelines to be applied during the trial period. The Commission will also consult with the PCPB in assessing and reviewing the results of the trial.

Overall, its proposal should be adopted because it is consistent with the requirements of the arbitrator’s decision, the parties’ existing agreements, and the performance of the Employer’s mission. The parties’ impasse "is not about reopening the MOU to revisit the pay or time off package," but encompasses only "the narrow arbitrated issue." Its approach addresses this issue by determining a limitation to the administrative workweek without conflicting with the compensation package previously negotiated by the parties. More importantly, it sets work hours which are compatible with the timely transiting of vessels through the Canal. A 6-month test period is both reasonable and necessary for assessing whether the hourly limits would have an adverse affect on pilot availability, or cause any other unforeseen disruption to Canal operations.

    The Union’s proposal is nonnegotiable because it directly interferes with management’s right to assign work.(5) Moreover, it addresses a number of matters which are contained in the CBA and, therefore, is outside the duty to bargain.(6) In this regard, among other things, "it is inconsistent with and in fact a repudiation of" a matter covered by Article 17, "the availability time/paid nonduty time scheme for 6x4 pilots." The proposal also expands upon, and therefore conflicts with, the arbitrator’s award, for example, by permitting pilots to work an unlimited number of hours over 40/48, and giving PCC the option to convert compensatory hours into overtime pay. Further, the Union’s proposed "remedy" is inconsistent with the Back Pay Act because, in essence, it transforms the arbitrator’s finding that the Employer violated Paragraph 14 of the 1994 MOU into "an unwarranted personnel action" without any basis in fact or law.

    Its analysis of workload data shows that from January 8, 1995, to January 6, 1996, more than 5,000 days of availability and 3,000 piloting assignments would have been lost had the Union’s compensatory time proposal been in effect. This would have had a "crippling effect" on the PCC’s ability to carry out its mission by delaying the transiting of vessels and causing severe and unacceptable economic impact on its customers. In the alternative, during the same period, had the Employer exercised the option of paying pilots a bonus instead of granting them compensatory time, its compensation costs would have increased by nearly $3.7 million. Providing compensatory time off or additional bonus pay would be unwarranted for a number of reasons. Pilots are paid "substantial salaries" and "enjoy more time off than any other Federal government employee who holds a full-time job." The record also clearly establishes that the Union agreed to trade overtime for the new pilot compensation package negotiated in the 1994 MOU which led to even greater benefits for the pilots. In this connection, the Union’s reliance on management representations that staffing reductions would eliminate the need for overtime are not credible. The Union’s negotiators were experienced pilots who knew that the number of vessels transiting the Canal during any given period is not within the Employer’s control. Essentially, the Union took a gamble in agreeing to a compensation package that eliminated the payment of overtime for actual hours worked, and substituted higher basic pay and a guaranteed availability bonus. Adoption of the Union’s proposal at this point would permit it to renege on its previous commitments, a resolution to the impasse which is unjustified in light of the violation found by the arbitrator.

    Finally, with respect to the Union’s proposed remedy, "while it seems clear" that it would be "unenforceable as a matter of law," it would cost at least $2.6 million through July 31, 1996. This is further evidence that the Union’s proposal "stands on its head" the National Performance Review objective of creating a government that works better and costs less. In summary, the arbitrator’s award should not be used "to subvert the agreed-to terms which would govern pilot compensation and availability time during the term of the CBA." The arbitrator "left the parties an out," however, by stating that "nothing in [the] award is to be construed as barring the parties from also bargaining to modify Paragraph 14." For all of the reasons stated above, the Panel should either order the elimination of Paragraph 14, or adopt the Commission’s last best offer.

DISCUSSION

    Having carefully considered the totality of the circumstances in this case, we conclude that neither party’s final offer would provide a fair resolution to the dispute. On the one hand, we are persuaded that the adoption of the Union’s proposal would result in enhancements to pilot compensation which are incommensurate with the contractual violation found by the arbitrator. In our view, however, an appropriate balancing of the equities involved requires a compromise solution which goes beyond the approach advocated by the Employer. Accordingly, we recommend that: (1) the administrative workweek be limited to 40 hours for Regular Plan pilots and 48 hours for 6x4 Plan pilots; (2) the pilot compensation package agreed to in the 1994 MOU be adjusted by subtracting the overtime dollar amounts that were included as part of the current availability bonus; and (3) pilots be paid overtime for all hours worked over the 40/48 hour limits, in accordance with their practice prior to 1994. Moreover, we believe that the document presented to the Panel’s representative by the Employer during the informal conference, entitled "Average Overtime Hours of 6x4 & Reg. Plan Pilots Included in Current Availability Bonus," dated February 9, 1996, should be used as the basis for the adjustment to the compensation package outlined above.

    In reaching this decision, the Panel is guided by the following considerations. The parties’ bargaining history clearly demonstrates that the Union agreed to relinquish overtime payments for actual hours worked during the negotiations which led to the 1994 MOU. Further, nothing in the arbitrator’s award requires that limits to the administrative workweek should result in any additional pilot compensation. We also find, however, that it is equally clear that the compensation package must be reopened if the Employer is to be held accountable for its contractual violation. Thus, the compromise resolves this dilemma by doing as little damage to the parties’ existing agreements as is reasonably possible in the unusual circumstances of this case. In addition, the 40/48 hour limits on pilots’ administrative workweeks is consistent with the parties’ practice since at least 1985. The compromise also would ensure that pilot availability and, hence, the Employer’s ability to accomplish its mission, is not adversely affected.

    As to the other issue brought before the Panel, we are convinced that retroactive application of the terms of this recommendation is inappropriate because it would usurp the proper role of the grievance arbitrator. This result is consistent with the delicate balance we are attempting to strike between the parties’ legitimate interests, and our judgment concerning the extent of deference to be accorded the arbitrator’s decision which led to the impasse. Finally, the reason we have decided to take the interim step of issuing this Report and Recommendations for Settlement, rather than simply imposing our compromise solution, is twofold. First, it should provide the parties with an opportunity to work out, in a mutually acceptable manner, the details of how the document presented by the Employer at the informal conference should be applied to resolve the dispute. If, however, during the next 30 days, discussions concerning the proposed resolution do not result in a complete settlement of the matter, it also would permit the parties an opportunity to provide the Panel with valuable additional information concerning the merits of the recommendation before final terms are imposed.

RECOMMENDATIONS

    The Panel makes the following settlement recommendations:

1. The administrative workweek shall be 40 hours for Regular Plan pilots and 48 hours for 6x4 Plan pilots.

2. The pilot compensation package agreed to in the 1994 MOU shall be adjusted by subtracting the overtime dollar amounts that were folded into the availability bonus. The basis for the adjustment shall be the document presented by the Employer at the informal conference entitled "Average Overtime Hours of 6x4 & Reg. Plan Pilots Included in Current Availability Bonus," dated February 9, 1996.

3. Pilots shall be paid overtime for all hours worked over the 40/48 hour limits, in accordance with their practice prior to 1994.

4. There shall be no retroactive application of the requirements stated above.

 

By direction of the Panel.

H. Joseph Schimansky

Acting Executive Director

October 3, 1996

Washington, D.C.

 

1.Because the PCC will cease to exist on December 31, 1999, under the terms of the Panama Canal Treaty of 1977, another significant part of its mission has been to increase the participation of Panamanian nationals in the management and operation of the Canal.

2.Paragraph 14 states that:

 

A limitation to the maximum number of work hours in an administrative week will be determined in the study of an Even Time Work Plan and Regular Work Plan with 2 consecutive non-work days.

3.Currently, pilots may select either the “Regular Work Plan,” where they must be available for duty 6 consecutive workdays during an administrative workweek, with 1 non-duty day, or the “6x4 Work Plan,” where they must be available for duty 6 consecutive administrative workweeks, followed by 4 consecutive non-duty administrative workweeks.

4.The practice was established in 1985 through an Opinion and Decision by the late Robert Howlett, Former Chairman of the Panel, in Panama Canal Commission and International Organization of Masters, Mates, and Pilots, Marine Division,