17:1058(143)AR - NTEU and IRS -- 1985 FLRAdec AR

 17 FLRA No. 143
 
 NATIONAL TREASURY EMPLOYEES UNION 
 Union 
 
 and 
 
 INTERNAL REVENUE SERVICE 
 Agency
 
                                            Case No. 0-AR-769
 
                                 DECISION
 
    This matter is before the Authority on exceptions to the award of
 Arbitrator John Kagel filed by the Agency under section 7122(a) of the
 Federal Service Labor-Management Relations Statute and part 2425 of the
 Authority's Rules and Regulations.  The Union filed an opposition.
 
    The grievance in this case involved the determination that the
 grievant was not performing at an acceptable level of competence (the
 negative determination) and the Agency's denial to her of a within-grade
 increase.  The grievant's requested reconsideration of the negative
 determination was denied, and the grievance was thereafter filed and
 submitted to arbitration.  The Arbitrator found that the file required
 to be prepared when an employee requests reconsideration was not fully
 prepared as required and was not prepared in a fashion which allowed the
 grievant to appropriately present her defense.  He ruled that these
 actions by the Agency constituted a violation of the parties' collective
 bargaining agreement and that under decisions of the Merit Systems
 Protection Board (MSPB) applying 5 U.S.C. 7701(c)(2)(A) /1/ to this type
 of case, these actions constituted harmful error requiring the
 overturning of the denial of the increase to the grievant.  Accordingly,
 the Arbitrator directed that the grievant be granted her within-grade
 increase retroactively.
 
    In its exceptions, the Agency contends, among other things, that the
 award is contrary to law.  The Authority agrees.
 
    The Authority has uniformly held that in order for an award of
 backpay to be authorized under the Back Pay Act, 5 U.S.C. 5596, there
 must be not only a determination that the aggrieved employee was
 affected by an unwarranted personnel action, but also a determination
 that such unwarranted action directly resulted in the withdrawal or
 reduction in the pay, allowances, or differentials that the employee
 would otherwise have earned or received.  E.g., American Federation of
 Government Employees, Local 51 and U.S. Department of the Mint, Old Mint
 Building, Customer Service Division, 15 FLRA No. 164 (1984).  In
 addition, with respect to the denial or withholding of a within-grade
 increase, the Authority has recognized under 5 U.S.C. 5335(a) that in
 order for an employee to be entitled to the increase, the work of the
 employee must be determined to be at an acceptable level of competence.
 Social Security Administration and American Federation of Government
 Employees, AFL-CIO, 16 FLRA No. 76 (1984).  Thus, in order for an award
 by an arbitrator of a retroactive within-grade increase to be
 authorized, the arbitrator must find that agency action in connection
 with the denying or withholding of the increase was unwarranted and that
 but for the unwarranted action, the grievant otherwise would have
 received the within-grade increase.  In this regard the arbitrator must
 find either that the negative determination was not sustained or that
 due to some action or failure to take action on the part of the agency,
 the work of the grievant was determined not to be at an acceptable level
 of competence when it otherwise would have been.  See id. at 2.  In
 terms of this case, although the Arbitrator found that the Agency's
 actions violated the collective bargaining agreement, constituting the
 unwarranted action, the Arbitrator did not find that but for this
 violation, the grievant's work otherwise would have been determined to
 have been at an acceptable level of competence which would have resulted
 in the granting of the within-grade increase.  Consequently, the award
 is contrary to the Back Pay Act and 5 U.S.C. 5335(a).  Furthermore, the
 award is not authorized by 5 U.S.C. 7701(c).  Contrary to the finding of
 the Arbitrator and the argument of the Union in opposition to the
 Agency's exceptions, the grievant's showing of harmful error within the
 meaning of section 7701(c)(2)(A) did not authorize the Arbitrator's
 overturning of the Agency's denial of the within-grade increase and did
 not authorize his granting of that increase retroactively.  In this
 regard, the Authority has previously held that section 7701(c) expressly
 pertains only to the appellate procedures of MSPB in reviewing agency
 decisions in any action appealed to MSPB and that accordingly section
 7701(c) is not applicable to grievances submitted to arbitration.  E.g.,
 Naval Weapons Station, Yorktown, Virginia and National Association of
 Government Employees, Local R4-96, 13 FLRA 133 (1983).  At the same
 time, the Authority recognized that under section 7121(e)(2) of the
 Statute, /2/ an arbitrator in certain matters is governed by the
 standards set forth in section 7701(c).  Id. at 134.  However, that
 section of the Statute does not pertain to the denying or withholding of
 within-grade increases, and therefore neither that section nor the
 standards set forth in section 7701(c) apply in this case.
 Consequently, the Authority concludes that the Arbitrator was not
 authorized under the terms of section 7701(c)(2)(A) or otherwise to
 overturn the Agency's action solely on finding harmful error.  Thus, the
 Arbitrator's granting of a retroactive within-grade increase is
 deficient as contrary to 5 U.S.C. 5335(a) and Sec. 5596 and is not
 otherwise authorized by 5 U.S.C. 7701(c)(2)(A).
 
    Accordingly, the award is modified by striking the granting of the
 increase.  /3/ Issued, Washington, D.C., May 13, 1985
                                       Henry B. Frazier III, Acting
                                       Chairman
                                       William J. McGinnis, Jr., Member
                                       FEDERAL LABOR RELATIONS AUTHORITY
 
 
 
 
 
 
 --------------- FOOTNOTES$ ---------------
 
 
    /1/ Section 7701(c)(2)(A) pertinently provides that MSPB may not
 sustain the agency's decision in any action appealed to MSPB if the
 employee shows harmful error in the application of the agency's
 procedures in arriving at such decision.
 
 
    /2/ Section 7121(e)(2) provides:  "In matters covered under sections
 4303 and 7512 of (title 5) which have been raised under the negotiated
 grievance procedure in accordance with this section, an arbitrator shall
 be governed by section 7701(c)(1) of (title 5), as applicable."
 
 
    /3/ In view of this decision, it is not necessary that the Authority
 address the other exceptions to the award.