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The decision of the Authority follows:
11 FLRA No. 58 NATIONAL TREASURY EMPLOYEES UNION AND NTEU CHAPTER 72 Union and INTERNAL REVENUE SERVICE, AUSTIN SERVICE CENTER Agency Case No. O-NG-54 DECISION AND ORDER ON NEGOTIABILITY ISSUES The petition for review in this case comes before the Authority pursuant to section 7105(a)(2)(E) of the Federal Service Labor-Management Relations Statute (the Statute) and raises issues concerning the negotiability of two Union proposals. Union Proposal 1 Attainment and maintenance by an employee of a cumulative effectiveness of at least 80% of the current peer group rate is prima facie evidence of satisfactory performance for the purpose of making within-grade increase and grade retention decisions. Question Before the Authority The question is whether Union Proposal 1 is inconsistent with management's rights to direct employees and assign work under section 7106(a)(2)(A) and (B) of the Statute, as alleged by the Agency. Opinion Conclusion and Order: Union Proposal 1 is inconsistent with management's rights to direct employees and assign work under section 7106(a)(2)(A) and (B) of the Statute. /1/ Accordingly, pursuant to section 2424.10 of the Authority's Rules and Regulations (5 CFR 2424.10), IT IS ORDERED that the petition for review as to Union Proposal 1 be, and it hereby is, dismissed. Reasons: Based on the Union's stated intent, /2/ which is consistent with the language of the proposal, Union Proposal 1 would establish the level of output which the Agency must accept as satisfactory performance with respect to the quantity of work produced when determining whether to retain unit employees at their present grade level and to grant them a within-grade increase. In thus prescribing what quantity of output will be satisfactory, Union Proposal 1 is not materially distinguishable from the proposal at issue in National Treasury Employees Union and Department of the Treasury, Bureau of the Public Debt, 3 FLRA 769 (1980), affirmed sub nom. National Treasury Employees Union v. Federal Labor Relations Authority, . . . F.2d . . . (D.C. Cir. 1982). In that case, the Authority held that a proposal which established a quantitative standard for job retention directly interfered with the agency's rights to direct employees and assign work under section 7106(a)(2)(A) and (B) by prescribing the level of output which the agency could require of employees for such purposes. Thus, for the reasons more fully stated in Bureau of the Public Debt, Union Proposal 1 is outside the Agency's duty to bargain under section 7106(a)(2)(A) and (B) of the Statute. The Authority reaches this conclusion notwithstanding the Union's argument in the present case that, since the proposal makes accomplishment of the standard only prima facie evidence of satisfactory overall performance, it preserves the Agency's discretion regarding retention and promotion decisions. As the Union itself concedes, /3/ however, the accomplishment of the proposed standard would be conclusive as to the requirements for satisfactory quantitative output. Thus, the proposal is nonnegotiable under Bureau of the Public Debt. Union Proposal 2 Attainment and maintenance by an employee of a quantity rate of 85% cumulative effectiveness with respect to the next highest grade level is prima facie evidence of good performance for the purpose of making promotion decisions. Question Before the Authority The question is whether Union Proposal 2 is inconsistent with law, i.e., 5 U.S.C. 4302 and section 7106(a)(2) of the Statute, as alleged by the Agency. Opinion Conclusion and Order: Union Proposal 2 is consistent with law. Accordingly, pursuant to section 2424.10 of the Authority's Rules and Regulations (5 CFR 2424.10), IT IS ORDERED that the Agency shall upon request (or as otherwise agreed to by the parties) bargain concerning Union Proposal 2. /4/ Reasons: The record indicates that the disputed proposal would apply only to employees in career ladder positions. Among the factors which an agency may consider in evaluating an employee's promotion potential in a career ladder is his or her ability to meet the quantitative output requirements of the higher grade. See, e.g., Federal Personnel Manual (FPM) Supplement 335-1, Appendix B, Guidelines for Evaluating Employees for Promotion and Internal Placement, section B-4.b.(2) and section B-8.b.(1). In this connection, Union Proposal 2 would establish a criterion for evaluating an employee's ability to perform higher-grade duties for use in making such a promotion decision by providing that maintenance of an 85% cumulative effectiveness rate as to quantity of higher graded work produced is prima facie evidence of good performance for career ladder promotion potential. /5/ Thus, under the proposal, insofar as an employee's ability to meet the output requirements of the higher grade may be at issue in connection with a decision to promote to that grade, performance which meets the criterion would be sufficient to make an employee eligible for promotion but would not compel the Agency to promote the employee. The Agency contends that the proposal would require the application to employees of performance standards for higher grades in career ladder positions. It claims, therefore, that the proposal is inconsistent with 5 U.S.C. 4302 which requires that only performance standards for the position currently occupied may be applied to an employee. /6/ Contrary to the Agency's contentions, section 4302 does not prohibit the development of separate criteria for use in evaluating employees for purposes of promotion. Indeed, the FPM specifically contemplates such separate criteria and cautions agencies that performance appraisal under chapter 43 of title 5 of the United States Code and evaluation of an employee's promotion potential are related but distinct activities which should be conducted separately. /7/ Thus, Union Proposal 2 is not inconsistent with 5 U.S.C. 4302. Further, the Agency contends that Union Proposal 2 violates management's right to make selections for promotion under section 7106(a)(2)(C) of the Statute. /8/ This argument, however, assumes that a decision to promote an employee to the next grade in a career ladder position constitutes making a selection for appointment within the meaning of section 7106(a)(2)(C). To the contrary, the Authority held in American Federation of Government Employees, AFL-CIO, Local 32 and Office of Personnel Management, Washington, D.C., 8 FLRA No. 97 (1982) (Union Proposal III) that a career ladder promotion is merely a "ministerial act" implementing a prior decision to select an employee for appointment. Thus, section 7106(a)(2)(C) does not bar negotiation on Union Proposal 2. Finally, the Agency's claims that Union Proposal 2 violates management's rights to direct employees and assign work under section 7106(a)(2)(A) and (B) of the Statute are not persuasive. The criterion established in the proposal merely would serve as a guideline for predicting employee performance at the higher grade level rather than as a standard of productivity for the current level. /9/ Thus, it is distinguishable from the proposal at issue in National Treasury Employees Union and Department of the Treasury, Bureau of the Public Debt, 3 FLRA 769 (1980), which directly interfered with the right of the Agency to determine the amount of work an employee will be required to produce in his or her current position. Union Proposal 2 would have no such limiting effect. Therefore, Union Proposal 2 would not directly interfere with management's rights to direct employees or assign work. Issued, Washington, D.C., February 3, 1983 Ronald W. Haughton, Chairman Henry B. Frazier III, Member Leon B. Applewhaite, Member FEDERAL LABOR RELATIONS AUTHORITY --------------- FOOTNOTES$ --------------- /1/ Section 7106 of the Statute provides, in relevant part, as follows: Sec. 7106. Management rights (a) Subject to subsection (b ) of this section, nothing in this chapter shall affect the authority of any management official of any agency-- . . . . (2) in accordance with applicable laws-- (A) to . . . direct . . . employees in the agency . . . ; (B) to assign work(.) /2/ The Union states that the proposal is "concerned with only one facet of employee performance-- quantity of work produced-- and hence must be examined strictly in terms of establishing production expectations." Union Response to Agency Statement of Position at second unnumbered page of text. /3/ Union Response to Agency Statement of Position at third unnumbered page of text. /4/ In deciding that Union Proposal 2 is within the duty to bargain, the Authority makes no judgment as to its merits. /5/ In elaborating on the effect of its proposal, the Union states that it is intended to provide a basis for, e.g., comparing an employee's performance at his or her current grade level with the performance of employees at the next higher grade, where the work is "reasonably similar in both grade levels," so as to assess whether the employee is qualified to perform the work of the higher grade. Union Response at fourth unnumbered page of text. It is noted, in this regard, that nothing in the proposal as explained by the Union would require the assignment of higher graded work to employees. Cf. National Treasury Employees Union and Department of the Treasury, U.S. Customs Service, 9 FLRA No. 138 (1982) (wherein the Authority held a proposal compelling assignment of higher graded work to be outside the duty to bargain.) /6/ 5 U.S.C. 4302 provides as follows: Sec. 4302. Establishment of performance appraisal systems (a) Each agency shall develop one or more performance appraisal systems which-- (1) provide for periodic appraisals of job performance of employees; (2) encourage employee participation in establishing performance standards; and (3) use the results of performance appraisals as a basis for training, rewarding, reassigning, promoting, reducing in grade, retaining, and removing employees; (b) Under regulations which the Office of Personnel Management shall prescribe, each performance appraisal system shall provide for-- (1) establishing performance standards which will, to the maximum extent feasible, permit the accurate evaluation of job performance on the basis of objective criteria (which may include the extent of courtesy demonstrated to the public) related to the job in question for each employee or position under the system; (2) as soon as practicable, but not later than October 1, 1981, with respect to initial appraisal periods, and thereafter at the beginning of each following appraisal period, communicating to each employee the performance standards and the critical elements of the employee's position; (3) evaluating each employee during the appraisal period on such standards; (4) recognizing and rewarding employees whose performance so warrants; (5) assisting employees in improving unacceptable performance; and (6) reassigning, reducing in grade, or removing employees who continue to have unacceptable performance but only after an opportunity to demonstrate acceptable performance. /7/ FPM, chapter 430, Appendix A, Guidance on Improving Performance Appraisal, section A-6.b.(2) provides as follows: A.6. Improving Appraisals of Performance . . . . (2) Appraisals for different purposes and some cautions on multipurpose appraisals. The performance appraisal required by chapter 43 of title 5 United States Code is based on an appraisal of an employee's performance in the current job. Performance appraisal for merit promotion purposes, however, involves predicting an employee's future performance of job duties, some of which may not be part of the present job. Appraisals for different purposes may require different kinds of information. Therefore, appraisals for different purposes should be distinct from each other and prepared separately unless appraisals require the same kinds of information or the system provides sufficiently in-depth appraisals to achieve all the desired purposes. If an agency does use a multipurpose appraisal system, it is important for its system to provide a means of identifying and differentiating among the performance elements which will be used as a basis for the performance appraisal required by chapter 43, title 5, United States Code, and the performance elements which are important for success in higher level work, i.e., used for merit promotion purposes. /8/ Section 7106(a)(2)(C) provides: Sec. 7106. Management rights (a) Subject to subsection (b) of this section, nothing in this chapter shall affect the authority of any management official of any agency-- . . . . (2) in accordance with applicable laws-- . . . . (C) with respect to filling positions, to make selections for appointments from-- (i) among properly ranked and certified candidates for promotion; or (ii) any other appropriate source(.) /9/ See FPM, chapter 430, Appendix A, section A-6.b.(2), at note 7, supra, wherein it is stated: "Performance appraisal for merit promotion purposes . . . involves predicting an employee's future performance of job duties, some of which may not be part of the present job."