[ v25 p837 ]
25:0837(69)NG
The decision of the Authority follows:
25 FLRA No. 69
NATIONAL TREASURY EMPLOYEES UNION
Union
and
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
Agency
Case No. 0-NG-1244
DECISION AND ORDER ON NEGOTIABILITY ISSUES
I. Statement of the Case
This case is before the Authority because of a negotiability appeal
filed under section 7105(a)(2)(E) of the Federal Service
Labor-Management Relations Statute (the Statute) and concerns the
negotiability of three proposals. We find all three proposals to be
negotiable.
II. Proposal 1
The Service shall maintain its current practices of
hand-delivering employees' paychecks, earning statements, etc.
Proposal 2
Employees may designate any address, including the address of
the employees' post-of-duty, (temporary or permanent), for the
mail distribution of paychecks, earning statements, etc.
Proposal 3
Paychecks received in an IRS office's mail will be distributed
immediately if possible. If immediate distribution is not
possible, the employees will be informed that:
a. Their paychecks have arrived in the mail;
b. Distribution is not immediately possible;
c. The reason(s) distribution is not immediately possible;
and
d. Employees desiring to pick up their paychecks, earning
statements etc. from the mail room (or any place designated by
IRS) will receive administrative time to pick up their paychecks,
earning statements, etc.
A. Positions of the Parties
These proposals were submitted by the Union following the Agency's
decision to terminate hand delivery of paychecks and savings bonds to
employees. Under the Agency's new policy employees are to choose
between direct deposit or mail delivery as their method of paycheck and
savings bond delivery. The Agency claims without contravention that the
portions of the proposals concerning the hand delivery of leave and
earnings statements are not in dispute as these statements continue to
be distributed by hand. Agency Statement of Position at 3. As to the
requirement for hand delivery of paychecks, the Agency contends that all
three proposals interfere with its rights to assign work, under section
7106(a)(2)(B) of the Statute, to determine its internal security
practices, under section 7106(a)(1), and to determine its methods and
means of performing work, under section 7106(b)(1). The Agency also
contends that all three proposals conflict with an Agency-wide
regulation for which a compelling need exists under section 7117(a)(2)
of the Statute, and that Proposals 2 and 3 do not constitute appropriate
arrangements for adversely affected employees, under section 7106(b)(3).
The Union states that Proposal 1 is intended to require the Agency to
maintain its practice of allowing its employees to receive paychecks by
hand-delivery at their official work locations. Proposals 2 and 3 were
submitted as interim procedures in the event that Proposal 1 was
declared nonnegotiable. The Union contends that paycheck distribution
is a working condition, under section 7103(a)(14), and does not fall
within any of the statutory exemptions from bargaining under section
7106 of the Statute. It also contends that there is no compelling need
for the Agency's regulation and that the proposals, therefore, are not
barred from negotiations under section 7117(a)(2). Finally, the Union
asserts that in the event the Authority finds that the proposals
interfere with management's rights, Proposals 2 and 3 constitute
appropriate arrangements for employees adversely affected by the
exercise of these rights, under section 7106(b)(3) of the Statute.
B. Analysis
1. Assignment of Work and Methods and Means of Performing
Work
In the Authority's recent Decision and Order on Remand in Federal
Employees Metal Trades Council, AFL-CIO and Department of the Navy, Mare
Island Naval Shipyard, Vallejo, California, 25 FLRA No. 31 (1986) /1/ we
reconsidered and reversed the Authority's prior holding that two
proposals concerning paycheck delivery involved the methods and means of
performing work and, thus, were negotiable only at the election of the
Agency under section 7106(b)(1) of the Statute. In our decision on
remand we determined, among other things, that the manner of paycheck
delivery did not involve the methods and means of performing work under
section 7106(b)(1) but rather, related principally to conditions of
employment under section 7103(a)(14).
The proposals in this case also concern the manner of paycheck
delivery. In addition, the Agency in this case similarly claims that
the proposals involve the methods and means of performing work under
section 7106(b)(1) because they determine the kind of payroll system the
Agency will use. However, based on the reasons fully set forth in Mare
Island Naval Shipyard, we conclude that the proposals in this case do
not interfere with management's right to determine the method and means
of performing work under section 7106(b)(1).
We turn now to the Agency's contention that the proposals interfere
with its right to assign work under section 7106(a)(2)(B). In support,
the Agency claims that these proposals require it to assign specific
duties, namely, duties related to the hand delivery of paychecks, which
duties are no longer performed since the hand delivery of paychecks was
eliminated. Essentially the same argument was raised by the agency in
Mare Island Naval Shipyard. In rejecting the agency's claim in that
case we noted that under the agency's new paycheck delivery policy some
employees would continue to be permitted to have paychecks delivered by
hand. Thus, we found that the proposals in that case did not require
the agency to assign duties that would not otherwise be assigned.
Similarly, in this case, the Agency's regulation contemplates that some
employees will continue to have paychecks delivered by hand. Agency
Statement of Position at 3. Since the proposals in this case likewise
do not require the Agency to assign duties that would not otherwise be
assigned they do not interefere with management's right to assign work
under section 7106(a)(2)(B) of the Statute.
2. Internal Security Under Section 7106(a)(1)
The Agency contends that its policy with respect to hand delivery of
paychecks and savings bonds is part of its plan to secure its physical
property against internal or external risks. In support, the Agency
argues as follows: Checks are like any other property used to satisfy
governmental obligations; if a check issued to a payee is lost or
stolen without the fault of the payee there is a legal obligation to
issue a replacement check; and therefore, the Agency's interest in
securing its obligations in the form of negotiable instruments or checks
is equivalent to its interest in securing any other governmental
property. In our view, these arguments standing alone do not establish
the connection between its policy of terminating hand delivery of
paychecks and savings bonds and the safeguarding of its property against
internal or external risks. For example, the Agency has not established
that its obligation to issue a replacement check depends on whether the
first check was lost in the mail or stolen from an employee's mailbox or
lost or stolen at the employee's worksite. Moreover, as the Union
points out, hand delivery of paychecks may actually reduce the
obligation of the Agency to have replacement checks issued for those
employees who live in areas where mailboxes are frequently vandalized.
Union Reply Brief at 6. Thus, we cannot sustain the Agency's contention
that the proposals interfere with its right to determine its internal
security practices.
3. Compelling Need
As to the Agency's compelling need contention, it asserts that a
compelling need exists under section 2424.11(a) of the Authority's rules
and regulations for a Department of Treasury directive mandating the
mailing of paychecks and savings bonds to employees. In support, the
Agency refers to two independent studies which it claims demonstrate a
saving of over $1.00 per paycheck for a total saving of $297,000
resulting from the elimination of hand delivery of paychecks and an
additional saving of $68,000 resulting from the elimination of hand
delivery of savings bonds. On the basis of these projected savings the
Agency relies on the Authority's decision in National Association of
Government Employees, Local R14-62 and U.S. Army Dugway Proving Ground,
Dugway, Utah, 18 FLRA No. 38 (1985), remanded sub nom. National
Association of Government Employees, Local R14-62 v. FLRA, No. 85-2098
(10th Cir. Order November 19, 1986) where the Authority found a
compelling need under section 2424.11(a) for an agency-wide regulation
requiring employees to take annual leave during periods when the agency
facilities were partially closed. In that case the Authority determined
that the agency had demonstrated that its regulation was a critical
component of the agency's achieving its objective of saving money by
curtailing operations so as to insure the agency's performance of its
mission in an effective and efficient manner.
Essentially the same argument was raised by the agency and rejected
by the Authority in Mare Island Naval Shipyard. In rejecting that
argument we noted that the holding in Dugway Proving Ground had been
reversed in Lexington-Blue Grass Army Depot, Lexington, Kentucky and
American Federation of Government Employees, AFL-CIO, Local 894, and 24
FLRA No. 6 (1986). There we stated that effectiveness and efficiency
are not to be measured solely in monetary terms. Thus, the Agency's
reliance in this case on Dugway Proving Ground is misplaced. Rather,
for the reasons more fully provided in Lexington-Blue Grass Army Depot,
the Agency's contention that there is a compelling need for its
regulation, under section 2424.11(a) of the Authority's regulations,
cannot be sustained.
In addition, we note that the two studies relied upon by the Agency
to support its claim that adoption of the disputed proposals would
result in a substantial increase in costs do not establish this
conclusion. Neither of these studies was limited only to employees in
the bargaining unit but rather, involved all employees of the Agency.
The Agency has not shown what increased costs could be expected from
application of these proposals to bargaining unit employees. Rather, it
appears that the claimed increase in costs is based on the assumption
that employees will elect to have their paychecks and savings bonds
distributed in a manner which entails the most cost. Further, the
Agency has made no demonstration that any increased costs, which it
hypothesizes are unavoidable, will not be offset in other ways such as
by fewer grievances over paychecks lost in the mail or over problems
with electronic fund transfers.
C. Conclusion
Based on the foregoing analysis, Proposals 1, 2 and 3 involve
negotiable conditions of employment within the meaning of section
7103(a)(14) of the Statute. Moreover, because they do not interfere
with management's rights, it is unnecessary to address the issue of
whether Proposals 2 and 3 constitute appropriate arrangements under
section 7106(b)(3) of the Statute.
III. Order
The Agency must upon request (or as otherwise agreed to by the
parties) bargain concerning Proposals 1, 2 and 3. /2/
Issued, Washington, D.C. February 20, 1987.
/s/ Jerry L. Calhoun, Chairman
/s/ Henry B. Frazier III, Member
/s/ Jean McKee, Member
FEDERAL LABOR RELATIONS AUTHORITY
--------------- FOOTNOTES$ ---------------
(1) This decision was issued after the decision of the U.S. Circuit
Court of Appeals for the Ninth Circuit in Federal Employees Metal Trades
Council v. Federal Labor Relations Authority, 778 F.2d 1429 (9th Cir.
1985), reversing and remanding, Federal Employees Metal Trades Council,
AFL-CIO and Department of the Navy, Mare Island Naval Shipyard, Vallejo,
California, 16 FLRA 619 (1984) and American Federation of Government
Employees, Local 1533 and Department of the Navy, Navy Commissary Store
Region, Oakland and Navy Commissary Store, Alameda, California, 16 FLRA
623 (1984).
(2) In finding these proposals to be within the duty to bargain we
make no judgment as to their merits.