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The decision of the Authority follows:
26 FLRA No. 8 DISTRICT NO. 1, PACIFIC COAST DISTRICT, MARINE ENGINEERS BENEFICIAL ASSOCIATION Union and PANAMA CANAL COMMISSION Agency Case No. 0-NG-749 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)(D) and (E) of the Federal Service Labor-Management Relations Statute (the Statute) and concerns the negotiability of eight proposals. All eight proposals relate to negotiation of premium pay and other pay practices for employees of the Panama Canal Commission. The question generally is whether premium pay for such employees is a condition of employment, and if so, whether Union Proposals 1-5, which require the payment of various types of bonuses and premium pay, are inconsistent with applicable Government-wide rules and regulations, and if not, whether they are inconsistent with internal Agency regulations for which a compelling need exists. As to proposals 6-8, the second question is whether the proposals are inconsistent with Federal law, and thus nonnegotiable. Footnotes are set forth in the Appendix. II. Premium Pay for Panama Canal Commission to Employees is a Condition of Employment. A. Positions of the Parties The Agency states as to the subject matter of all eight proposals generally that the legislative history of the Panama Canal Act of 1979 (Pub. L. 96-70, 93 Stat. 455) indicates Congress intended to preclude negotiation of wages by unions representing employees of Federal agencies subject to the Act in the same manner that such negotiations are precluded by the Statute. /1/ B. Analysis and Conclusions The relevant provision of the Statute is section 7103(a)(14)(C) which excludes from the duty to bargain matters specifically provided for by Federal statute. /2/ That is, wages are not negotiable in the Federal sector because, and to the extent that, they are matters specifically provided for by Federal statute, for example, wage rates for General Schedule employees are provided for in 5 U.S.C. Section 5332 and for prevailing rate employees in 5 U.S.C. Sections 5341-5349; premium pay for Federal employees in 5 U.S.C. Sections 5541-5551. See National Treasury Employees Union and Pension Benefit Guaranty Corporation, 9 FLRA 692 (1982) (employees subject to General Schedule and thus proposal for salary adjustments concerns a matter specifically provided for by Federal statute and excluded from duty to bargain under section 7103(a)(14)(C); International Brotherhood of Electrical Workers, Local 2080, AFL-CIO-CLC and Department of the Army, U.S. Corps of Engineers, Nashville, Tennessee, 10 FLRA 222 (1982) (employees subject to prevailing rate law and thus proposals establishing overtime rates excluded from duty to bargain under section 7103(a)(14)(C). However, the Authority has expressly held and recently reaffirmed that substantive proposals regarding compensation of employees are negotiable if they do not concern matters specifically provided for by law and are otherwise consistent with applicable law and regulations. American Federation of Government Employees, AFL-CIO, Local 1897 and Department of the Air Force, Eglin Air Force Base, Florida, 24 FLRA No. 41 (1986). As to this case, the establishment of the basic pay of employees of the Panama Canal Commission is a matter which is specifically provided for by Federal statute. 22 U.S.C. Section 3655. /3/ International Organization of Masters, Mates and Pilots and Panama Canal Commission, 13 FLRA 508 (1983) (Union proposals 7 and 8). There is no similar provision of the Panama Canal Act of 1979 concerning premium pay for such employees. As distinguished from basic pay, therefore, premium pay for these employees is not a matter specifically provided for by Federal statute and is not excluded from the duty to bargain pursuant to section 7103(a)(14)(C) of the Statute. /4/ Thus, if otherwise negotiable, the proposals at issue are within the Agency's duty to bargain. III. Proposals 1-5 Proposal 1 Incentive pay shall be paid at a rate of ten percent ("10%") or $2.50 per hour to licensed watchstanding engineers when assigned to a watch which includes an apprentice for training. Proposal 2 A night differential of 10% is to be paid for regularly scheduled work between the hours of 6:00 P.M. and 6:00 A.M. Proposal 3 Employees called in to work outside of and unconnected with their basic work week shall be paid a minimum of four (4) hours of overtime pay regardless of whether the employee is required to work the entire four (4) hours. Proposal 4 An employee shall be paid eight (8) hours overtime where less than seventy-two (72) hours notice was given in any schedule change, etc. Proposal 5 A bonus of five (5) times the hourly wage will be paid to all licensed marine engineers ordered to work on non U.S. flag vessels or on any vessel not flying a national ensign. A. Positions of the Parties The Agency contends that Proposals 1-5, which require the payment of various types of bonuses and premium pay, are inconsistent with applicable Government-wide rules and regulations and, thus, are nonnegotiable under section 7117(a)(1) of the Statute. /5/ Specifically, as to Proposals 1 and 5, the Agency contends that these proposals are inconsistent with the Panama Canal Employment System in that they require the payment of bonuses which are not provided for or authorized by the regulations constituting that System. /6/ As to Proposals 2, 3, and 4, the Agency contends that the provisions regarding night differential and overtime set forth therein conflict with the requirements of 5 U.S.C. Section 5544 as made applicable to the Panama Canal Commission by the regulations which constitute the Panama Canal Employment System. /7/ The Agency primarily asserts that these regulations, constituting a portion of the Panama Canal Employment System, are Government-wide rules and regulations within the meaning of section 7117(a)(1). Further, the Agency contends, in the alternative, that the regulations at issue are agency regulations for which a compelling need exists to bar negotiation of the Union's proposals under section 7117(a)(2) and (3) of the Statute /8/ and section 2424.11(a) of the Authority's Rules and Regulations. /9/ An agency regulation can bar negotiation on union proposals if an agency can establish a compelling need for the regulation. In this regard, the Agency argues that a compelling need exists for 35 CFR 251.71 and 251.73 under section 2424.11(a) in that the restrictions on premium pay contained therein are essential to the accomplishment of the Agency's mission in a manner consistent with the requirements of an effective and efficient government. Specifically, the Agency contends that such restrictions are necessary to preclude the additional operating costs which would result from implementation of the Union's proposals. The Union contends generally that these proposals do not conflict with law or regulation, and that the matters covered are within the discretion of the Agency. As to Proposal 5, the Union simply says that the Agency does not allege conflict with any law or regulation and that to the extent the proposal is neither required nor precluded by law, it is negotiable. B. Analysis and Conclusions 1. Proposals 1-5 are not inconsistent with Government-wide rules and regulations The regulations relied on by the Agency are set forth in 35 CFR Part 241. They were issued pursuant to section 1212 of the Panama Canal Act, 22 U.S.C. Section 3652. Under the law, pay practices established by these regulations are mandatorily applicable only to employees of the Panama Canal Commission. While other agencies may elect to be covered under such systems when conducting operations in Panama, they are not required to do so. Thus, we find that the regulations at issue are not Government-wide rules or regulations in that they are not generally applicable throughout the Federal Government. International Organization of Masters, Mates and Pilots and Panama Canal Commission, 13 FLRA 508 (1983). Therefore, the cited regulations do not constitute a bar to negotiation under section 7117(a)(1) of the Statute. 2. A compelling need has not been shown to exist to bar negotiation of the proposals. The Agency has failed to demonstrate that the cited regulations are essential, as distinct from merely helpful or desirable, in the achievement of its objectives regarding costs since it does not indicate why the goal of limiting operational costs could not be achieved through means other than the regulations pertaining to premium pay. That is, the Agency has not shown that its costs are so fixed as to preclude adjustments in other areas of its operations or that it cannot find ways to avoid the situations set forth in the proposals so as to preclude the necessity of paying the required premium pay. Thus, in failing to demonstrate that, in the absence of its regulation, the Agency would be unable to limit its operational costs, it must be concluded that the Agency has not met its burden of demonstrating that the cited regulations are essential to the accomplishment of that objective. Compare Lexington-Blue Grass Army Depot, Lexington, Kentucky and American Federation of Government Employees, AFL-CIO, Local 894, 24 FLRA No. 6 (1986) (monetary savings alone will not be a basis for a finding of compelling need); American Federation of Government Employees, AFL-CIO, Local 2875 and Department of Commerce, National Oceanic and Atmospheric Administration, National Marine Fisheries Service, Southeast Fisheries Center, Miami Laboratory, Florida, 5 FLRA 441, 446-50 (1981) (agency contention as to costs of modification of comprehensive system of record keeping not sufficient to establish compelling need for its regulation). We determine, therefore, that the Agency has not shown that the cited regulations are supported by a compelling need. Accordingly, such regulations do not bar negotiation on Proposals 1-5. /10/ IV. Proposal 6 is inconsistent with Federal law. Proposal 6 All licensed marine engineers shall be paid a recruitment and retention bonus of 25% for the duration of the treaty. A. Positions of the Parties The Agency contends that Proposal 6 is inconsistent with Federal law in that it would require a recruitment and retention bonus for certain employees expressly excluded by Statute. The Union asserts that as the Agency has discretion under the Panama Canal Employment System Regulation, 35 C.F.R. Section 251.32 to grant the bonus, the proposal is negotiable. B. Analysis and Conclusions Section 1217 of the Panama Canal Act of 1979, 22 U.S.C. Section 3657, authorizes the payment of a recruitment and retention bonus of up to 25% of an employee's basic pay if, in the discretion of the agency head, it is determined that recruitment or retention of that employee is essential. The payment of such a bonus is limited to individuals who meet certain criteria as to date and place of employment for service in the former Canal Zone, which criteria exclude, among others, employees recruited within the Republic of Panama on or after October 1, 1979. /11/ Proposal 6 provides that all licensed marine engineers shall receive a recruitment and retention bonus. By its terms, therefore, the proposal would prescribe payment of the bonus to any unit employee who is a licensed marine engineer and who had been recruited in the Republic of Panama after October 1, 1979. That is, the proposal would include individuals expressly excluded by statute. Thus, Proposal 6 is inconsistent with Federal law and, under section 7117(a)(1) of the Statute, is outside the Agency's duty to bargain. /12/ Compare International Organization of Masters, Mates and Pilots and Panama Canal Commission, 13 FLRA 508, 523 (1983) (proposal which required that certain employees be given the option to continue to choose the Union pension plan as their retirement system is inconsistent with Federal law); National Federation of Federal Employees, Local 1745 and Veterans Administration, 13 FLRA 543 (1983) (proposal which required unconditional disclosure of information is inconsistent with restrictions of the Privacy Act and nonnegotiable under section 7117(a)(1)). V. Proposals 7 and 8 are inconsistent with Federal law. Proposal 7 For each nonwatchstanding licensed engineer rating (including the Chief Engineer) on each class of vessel, the monthly nonwatch allowance shall be increased as set forth in the wage tables. The nonwatch monthly allowance shall be established in accordance with the following formula: it shall be the daily wage rate times 6.067 (monthly base divided by 21-2/3 times 6.067). This allowance will be included in the monthly base pay for all purposes including computation of pensions or the applicable overtime rate. The same formula will be used to compute the nonwatch equivalent for the watchstanding licensed engineers, which amount will be added to the monthly base pay for the purposes of computing vacations, unearned wages and bonuses. A monthly nonwatch allowance shall be paid to the Chief Engineer and to each Assistant Engineer who does not stand watch and whose normal hours of work are forty (40) hours per week. This monthly nonwatch allowance shall not be lost by virtue of a change in duties. Proposal 8 In the event the Consumer Price Index -- United States City Average for Urban Wage Earners and Clerical Workers or its agreed upon successor published by the Bureau of Labor Statistics of the United States Department of Labor (1967 equals 100) increases by one percent or more between October 1982 and April 1983, then effective July 1, 1983 a cost-of-living bonus of two-thirds of each full one percent increase shall be added to the base wage, nonwatch, and overtime rates. Any remaining fraction in the Consumer Price Index in any period shall be carried over to the next period and used in computing the percentage increase in the Consumer Price Index for said later period. Further increases, if applicable, shall be granted under the same formula at six month intervals based upon cost-of-living increases, if any, between July 1, 1983 and December 31, 1983 to be effective on December 31, 1983. The cost-of-living adjustment provided herein shall not be included in the base wage for the purpose of computing pension benefits. A. Positions of the Parties The Agency contends that as proposal 7 would provide a special remuneration for not working, and as Proposal 8 provides for cost-of-living adjustments based on the Consumer Price Index, both proposals are beyond the authority of the Agency to establish. It claims in this connection that while it has discretion to consult with other U.S. Government agencies in Panama, and can make recommendations to the Panama Area Personnel Board under the Panama Canal Act and 35 CFR 251, it has no authority to establish an allowance by itself. (Agency brief, pp. 7-8). Moreover, the Agency asserts that there is a compelling need for the Panama Canal Employment System because it is essential to the effective and efficient functioning of the government. (Agency brief, pp. 8-9). The Union argues that it is within the Agency's discretion to pay the proposed allowance raised by Proposal 7, and to pay in accordance with practices in the maritime industry in regard to Proposal 8. B. Analysis and Conclusions Proposal 7 provides for a nonwatch allowance to be paid to unit employees, which allowance constitutes a part of the basic pay of those employees for all purposes relating to employee compensation. Proposal 8 provides for a 10% cost of living increment to be paid, effective July 1, 1983, to unit employees, which increment, by the terms of the proposal, constitutes a part of the basic pay of such employees for all purposes other than computing pension benefits. /13/ In thus providing for adjustments to the basic pay of unit employees, Proposals 7 and 8 herein have the same effect as Proposal 13 in International Organization of Masters, Mates and Pilots and Panama Canal Commission, 13 FLRA 508 1983), which provided for a 10% increase in the base pay of unit employees. The Authority held that the proposal at issue in that case was inconsistent with Federal law, namely, section 1215 of the Panama Canal Act of 1979, 22 U.S.C. Section 3655. /14/ Specifically, the Authority found that 22 U.S.C. Section 3655(c) required that any adjustments in the rates of basic pay only be made "in amounts not to exceed the amounts of the adjustments made from time to time by or under statute in the corresponding rates of basic pay for the same or similar work" performed in the United States or in such areas outside the United States as may be designated by regulation. Since the record in that case contained no evidence that the proposed 10% adjustment was based upon, e.g., similar adjustments for the same or similar work in the United States, the Authority found that the proposal did not conform to the statutory procedures governing such matters as set forth in 22 U.S.C. Section 3655. Similarly, there is no evidence in the record of the instant case that the proposed nonwatch allowance and 10% cost of living adjustment are based upon or are intended to be applied in accordance with the requisite statutory procedures. In this regard, the cost of living increment provided for in Proposal 8 is clearly distinct from and independent of the cost of living allowance prescribed in 22 U.S.C. Section 3646, which took effect October 1, 1984, and was intended to offset the increased expenses resulting from termination of employee eligibility to use, e.g., military exchanges. Thus, for the reasons set forth in the Panama Canal Commission decision cited above, Proposals 7 and 8 are inconsistent with Federal law and, under section 7117(a)(1) of the Statute, /15/ are outside the Agency's duty to bargain. /16/ VI. Summary Proposals 1-5 have been found to be within the duty to bargain. /17/ Proposals 6-8 have been found to be inconsistent with Federal law and are outside the duty to bargain. VII. Order The Agency must upon request, or as otherwise agreed to by the parties, bargain concerning Proposals 1-5. The petition for review as to Proposals 6-8 is dismissed. Issued, Washington, D.C., March 9, 1987. /s/ Henry B. Frazier III, Member /s/ Jean McKee, Member FEDERAL LABOR RELATIONS AUTHORITY Separate Opinion of Chairman Calhoun In my opinion in American Federation of Government Employees, AFL-CIO, Local 1897 and Department of the Air Force, Eglin Air Force Base, Florida, 24 FLRA No. 41 (1986), petition for review filed sub nom. Department of the Air Force, Eglin Air Force Base, Florida v. FLRA, 87-3073 (11th Cir. February 2, 1987), I stated that in the absence of a clear expression of Congressional intent to make wages and money-related fringe benefits negotiable, I would find that these matters are not within the duty to bargain under the Statute. I find no such expression in the Panama Canal Act of 1979. Therefore, I would find that the proposals in this case are outside the duty to bargain. In addition, the legislative history of the Panama Canal Act leads me to elaborate on my opinion in Eglin Air Force Base. As originally proposed, Section 381 of the Act provided: Sec. 381. The provisions of chapter 71 of title 5, United States Code shall not apply to the Panama Canal Commission or to its personnel. In lieu thereof, the President shall establish a form of collective bargaining, applicable to the Commission's employees; into which is incorporated the substance of sections 7102, 7106, 7116, 7120, and 7131. The form of collective bargaining so established shall contain such other necessary provisions, and shall be administered, so as to provide the Commission's employees with the right to bargain collectively under the same conditions and with respect to the same subject matter that obtains where that right is exercised generally in the Federal service within the continental United States. See 125 Cong. Rec. S10,587 (daily ed. July 29, 1979). After hearings at which many individuals testified concerning both the then-existing labor relations climate in the Panama Canal Zone and the need for protection and stabilization of employee interests in Panama, the following substitute provision was adopted as section 1271(a) of the Act. Sec. 1271. (a) Nothing in this Act shall be construed to affect the applicability of chapter 71 of title 5, United States Code, relating to labor-management and employee relations, with respect to the Panama Canal Commission or the operations of any other Executive agency conducted in that area of the Republic of Panama which, on September 30, 1979, was the Canal Zone, except that in applying those provisions -- (1) the definition of "employee" shall be applied without regard to clause (i) of section 7103(a)(2) of such title 5 which relates to nationality and citizenship: and (2) a unit shall be considered to be appropriate notwithstanding the fact that it includes any supervisor if that supervisor's position (or type of position) was, before October 1, 1979, represented before the Panama Canal Company by a labor organization that included employees who were not supervisors. Thus, employees of the Commission and other Executive agencies operating in the Republic of Panama, including certain supervisors and Panamanian nationals, are clearly covered by the Statute in the conduct of their labor-relations. The majority references the remarks of Representative Schroeder cited by the Agency and referred to in footnote 1 of the majority opinion. Representative Schroeder stated: Furthermore, the committee assured that the employees of the United States in Panama would be covered by the same groundrules for labor-management relations that are applicable to Federal employees in the United States. We applied the provisions of title VII of the Civil Service Reform Act of 1978 . . . Title VII lays out the rules under which labor-management relations are conducted; it imposes only one obligation on the employer and the employees -- the obligation to talk to one another. Title VII provides a very limited scope of bargaining: Wages cannot be negotiated, . . . . 125 Cong. Rec. H3,519 (daily ed. May 21, 1979). This statement, in context, is a post-enactment reference to the Statute, and is of the same nature and effect as the statements of various Members of Congress I cited in my dissenting opinion Eglin Air Force Base. I find it significant, however, that the general perception and understanding of the non-negotiability of these matters was specifically reiterated in the context of the Panama Canal Act. Moreover, there are other indications of Congressional understanding that Commission employees were not entitled to negotiate over wages. During hearings before the Committee on Post Office and Civil Service, House of Representatives, Ninety-Sixth Congress, on then-pending legislation to implement the Panama Canal Treaty of 1977 (H.R. 1716 and H.R. 111), Federal-sector labor leaders and others familiar with the Panama Canal labor relations situation testified concerning coverage of Commission employees under the Statute. Following conclusion of the hearings, Representative James M. Hanley, then Chairman of the Committee, received answers to a series of questions posed by Representative Schroeder. H.R. Parfitt, Governor of the Canal Zone Government, was asked the following question: "What would be the impact of allowing employee bargaining representatives to have the right to bargain collectively over wages with the Panama Canal Commission?" Governor Parfitt responded that "Wage bargaining would invariably result in substantial increases in wage costs. To meet these additional costs, the Commission would inevitably have to revise its toll rates upward." Implementation of the Panama Canal Treaty of 1977: Hearings on H.R. 1716 and H.R. 111 before the Committee on Post Office and Civil Service of the House of Representatives, 96th Cong., 1st Sess. 294-95 (1979) (statement of H.R. Parfitt, Governor of the Canal Zone Government) (hereinafter House Hearings at . . . ). Representative Schroeder also posed the following question: "Title VII of the Civil Service Reform Act does not allow unions and management to bargain collectively over wages. What differences are there in the situation in Panama which would warrant wage bargaining here and not for Federal employees elsewhere?" Talmadge E. Simpkins, Executive Director, AFL-CIO Maritime Committee responded in relevant part that: Full-scale collective bargaining is one of the goals of organized labor in the United States. However, there are unusual circumstances existing in Panama which could make bargaining for wages detrimental to some of the workers. We firmly believe that wage bargaining at this time in Panama could well obscure and endanger the wage position of non-U.S. citizen workers who have been historically lumped into the same economic mold as other overseas host countries where the United States has established bases. This would provide DOD management and that of the Panama Canal Commission the necessary ready-made machinery and leverage to parade its inapplicable prevailing wage philosophy before U.S. public opinion and thus obscure and effectively camouflage the stark reality of a U.S.-created cost-of-living economy in Panama which is significantly higher than that presently existing for U.S. citizens in the Canal Zone and in all of the major cities in the continental United States. House Hearings at 297-98. Alfred J. Graham, President, Canal Zone Central Labor Union and Metal Trades Council, AFL-CIO, stated, "We believe that all persons should be able to organize and collectively bargain on all aspects of their terms and conditions of employment including wages." House Hearings at 301. William H. Sinclair, on behalf of the American Federation of State, County and Municipal Employees, stated: It is presumed that 'Federal employees elsewhere' means federal employees within the Continental United States or working in areas under US political jurisdiction. As indicated in AFSCME testimony before the House Subcommittee on Post Office and Civil Service, Title 7 may be tolerable in the United States where labor unions are able to exert considerable pressure in Congress to attain wage increases and other fringe benefits, which, in essence, is a form of "collective bargaining." However, the Panama Canal Commission and DOD agencies in Panama, will be playing a new ball game, under different rules after entry into force of the treaties of 1977. Consequently, . . . wage bargaining is a must for our unions, either under a special system devised by the Congress, direct negotiation between management and labor or in accordance with the general principles of the Panama Labor Code. There are several successful precedents related to wage bargaining in the U.S. federal service, i.e., the St. Lawrence Waterway, U.S. Postal Corporation, Tennessee Valley Authority and probably other areas not known to us at this time. House Hearings at 302-03. Jules Kolodny, Vice President, American Federation of Teachers, AFL-CIO stated, "I believe that all employees should have the right to organize and bargain collectively on the terms and conditions of their employment . . . . We would have problems with Title 7 with the alien exclusion clause deleted if bargaining on salaries was not included." House Hearings at 307-08. S.V. Faulkner of the International Organization of Masters, Mates and Pilots of America stated: The retention incentives for employees to remain with the Canal enterprise after the next five years are going to be hard to come by with the elimination of side benefits such as APO mailings, commissary and exchange privileges. These side benefits are shared by all U.S. Government Agency employees stationed overseas. It might be noted here that the State Department and other non-Panama Canal Federal Agency employees in Panama have and will continue to enjoy these side benefits. The past practices of the Panama Canal organization have been cradle-to-grave care. The Carter-Torrijos Treaties are mandating the employees to take care of themselves. What other retention incentives are there for the Canal employees other than wages? House Hearings at 308. I conclude from these responses that it was generally acknowledged that no ability to negotiate concerning wage-related matters either existed in the Canal Zone before passage of the Panama Canal Act of 1979, or under the Statute if Commission employees were included in its coverage. The support expressed for such bargaining was premised on an understanding that Congressional action was needed to provide for it. Such action never occurred. Until it does, I cannot find proposals like those in this case negotiable. Issued, Washington, D.C., March 9, 1987. /s/ Jerry L. Calhoun, Chairman --------------- FOOTNOTES$ --------------- (*) Chairman Calhoun dissents for the reasons set forth in his separate opinion. (1) Agency Brief at 5-6, citing the statement of Rep. Patricia Schroeder at 125 CONG. REC. H3519 (daily ed. May 21, 1979). (2) Section 7103(a)(14)(C) provides: Section 7103. Definitions; application (a) For the purpose of this chapter -- . . . . . . . (14) 'conditions of employment' means personnel policies, practices , and matters, whether established by rule, regulation, or otherwise, affecting working conditions, except that such term does not include policies, practices, and matters -- . . . . . . . (C) to the extent such matters are specifically provided for by Federal statute(.) (3) See the disposition of Union Proposals 7 and 8, infra. See also 35 CFR 251.13 and 25. (4) Under 5 U.S.C. Section 5541(2)(xii) marine engineers employed by the Panama Canal Commission are not subject to the provisions of title 5, chapter 55, subchapter V of the United States Code which authorize and establish the conditions governing the payment of premium pay to Federal employees generally. Rather, those provisions apply only through the regulations of the Panama Canal Employment System. See note 7, infra. (5) Section 7117(a)(1) of Statute provides as follows: Section 7117. Duty to bargain in good faith; compelling need; duty to consult (a)(1) Subject to paragraph (2) of this subsection, the duty to bargain in good faith shall, to the extent not inconsistent with any Federal law or any Government-wide rule or regulation, extend to matters which are the subject of any rule or regulation only if the rule or regulation is not a Government-wide rule or regulation. (6) Agency Brief at 6-7. (7) The Agency relies specifically on 35 CFR 251.71 and 251.73 which provide, respectively, as follows: Section 251.71 Environmental and night shift differentials for manual-type positions. The head of each agency, in coordination with the heads of other agencies, may authorize payment of environmental differentials for manual-type positions to compensate for exposure to hazards, physical hardships, and working conditions of an unusually severe nature which have not been considered in determining the base rate of pay for the position in question. Differentials for night work may also be established for manual-type positions. Any differential prescribed under this section shall conform with like differentials established under the Federal Wage System to the extent that it is practicable under local conditions. Such differential shall be treated as part of the basic compensation for the position to the extent it is so treated in the Federal Wage System. Section 251.73 Premium pay. (a) Premium pay for Manual-type positions shall be established in accordance with the provisions of 5 U.S.C. 5544 and Supplement 532-1 of the Federal Personnel Manual; Provided, However, That any rule concerning premium pay established prior to the effective date of these regulations may be continued for the type of position to which the rule applied before the said effective date. (b) Premium pay and compensatory time for positions, other than positions subject to paragraph (a) of this section, shall be established in accordance with the provisions of subchapter V of chapter 55 of Title 5, United States Code; Provided, however, That any rule concerning premium pay or compensatory time established prior to the effective date of these regulations may be continued for the type of position to which the rule applied before the said effective date. (Emphasis in original.) (8) Section 7117(a)(2) and (3) provides as follows: Section 7117. Duty to bargain in good faith; compelling need; duty to consult . . . . . . . (a)(2) The duty to bargain in good faith shall, to the extent not inconsistent with Federal law or any Government-wide rule or regulation, extend to matters which are the subject of any agency rule or regulation referred to in paragraph (3) of this subsection only if the Authority has determined under subsection (b) of this section that no compelling need (as determined under regulations prescribed by the Authority) exists for the rule or regulation. (3) Paragraph (2) of the subsection applies to any rule or regulation issued by any agency or issued by any primary national subdivision of such agency, unless an exclusive representative represents an appropriate unit including not less than a majority of the employees in the issuing agency or primary national subdivision, as the case may be, to whom the rule or regulation is applicable. (9) Section 2424.11(a) of the Authority's Rules and Regulations provides as follows: Section 2424.11 Illustrative criteria. A compelling need exists for an agency rule or regulation concerning any condition of employment when the agency demonstrates that the rule or regulation meets one or more of the following illustrative criteria: (a) The rule or regulation is essential, as distinguished from helpful or desirable, to the accomplishment of the mission or the execution of functions of the agency or primary national subdivision in a manner which is consistent with the requirements of an effective and efficient government. (10) The Agency states, in outlining the impact of the disputed proposals, that in the interest of equity it would need to extend the bonuses set forth therein to all Agency employees, thus increasing its costs beyond what is required for the unit alone. However, in this regard, the circumstances of the instant case are distinguishable from National Treasury Employees Union, Chapter 207 and Federal Deposit Insurance Corporation, Washington, D.C., 14 FLRA No. 84 (1984), appeal docketed sub nom. National Treasury Employees Union v. Federal Labor Relations Authority, No. 84-1286 (D.C. Cir. July 6, 1984). In that case, based on the record before it, the Authority held that a compelling need existed under section 2424.11(a) of its Rules and Regulations for an agency regulation establishing a wage schedule for employees. The Authority found that the agency had established an overriding need for a uniform pay setting system in order to operate effectively and efficiently to accomplish its mission. The Authority reaffirmed its decision upon remand of the record in the case to consider certain additional matters which arose during the pendency of the appeal before the court. 21 FLRA No. 36 (1986). In that case, however, the proposal at issue was intended to raise the basic wage rate of unit employees over that established by the agency regulation. In this case, the proposals concern premium pay, that is, additional compensation, for specific work situations involving additional duties or difficulties confronting marine engineers alone and not applicable to other Agency employees, which additional compensation is not already provided for by regulation. Moreover, as claimed by the Union and not disputed by the Agency, such bonuses are common practices in the maritime industry and thus are within the Agency's discretion under 5 U.S.C. Section 5348(b). Thus, the law governing the wage policies of the Agency with respect to the employees represented by the Union herein expressly permits the Agency to prov ide for premium pay which varies from that set forth in the Federal Wage System and 5 U.S.C. Section 5544 and required by 35 CFR 251.71 and 251.73. See American Federation of Government Employees, AFL-CIO, Local 2670 and Army and Air Force Exchange Service, Keesler Air Force Base Exchange, Mississippi and American Federation of Government Employees, AFL-CIO, Local 1504 and Departments of the Army and Air Force, Army and Air Force Exchange Service, Northwest Area Exchange Service, Ft. Lewis, Washington, 10 FLRA 71 (1982). (11) 22 U.S.C. Section 3657 provides as follows: Section 3657. Recruitment and retention remuneration Determination by head of agency (a) In addition to basic pay, additional compensation may be paid, in such amounts as the head of the agency concerned determines, as an overseas recruitment or retention differential to any individual who -- (1) before October 1, 1979, was employed by the Panama Canal Company, by the Canal Zone Government, or by any other agency in the area then known as the Canal Zone; (2) is an employee who was recruited on or after October 1, 1979, outside of the Republic of Panama for placement in the Republic of Panama; or (3) is a medical doctor employed by the Department of Defense in the Republic of Panama or by the Commission; if, in the judgment of the head of the agency concerned, the recruitment or retention of the individual is essential. Restriction (b) Any employee described in more than one paragraph of subsection (a) of this section may qualify for a recruitment or retention differential under only one of those paragraphs. Limit on compensation (c) Additional compensation provided under this section may not exceed 25 percent of the rate of basic pay for the same or similar work performed in the United States by individuals employed by the Government of the United States. Applicability of subchapter III of chapter 59 of Title 5 (d) Subchapter III of chapter 59 of Title 5, relating to overseas differentials and allowances, shall not apply with respect to any employee whose permanent duty station is in the Republic of Panama and who is employed by an agency. See also 35 CFR 251.32. (12) See note 5, supra. (13) Compare 22 U.S.C. Section 3658 which provides: Section 3658. Benefits based on basic pay For the purpose of determining -- (1) amounts of compensation for disability or death under chapter 81 of Title 5, relating to compensation for work injuries; (2) benefits under subchapter III of chapter 83 of Title 5, relating to civil service retirement; (3) amounts of insurance under chapter 87 of Title 5, relating to life insurance; (4) amounts of overtime pay or other premium pay; (5) annual leave benefits; and (6) any other benefits related to basic pay; the basic pay of each employee shall include the rate of basic pay established for his position under section 3655 of this title plus the amount of any additional compensation provided under section 3657 of this title. (14) 22 U.S.C. Section 3655 provides: Section 3655. Basic pay Establishment and revision of rates (a) The head of each agency, in accordance with the provisions of this subpart, shall establish, and from time to time may revise, the rates of basic pay for positions and employees in the agency. Relationship of same or similar work performed in United States or certain other areas outside United States (b) The rates of basic pay may be established and revised in relation to the rates of basic pay for the same or similar work performed in the United States or in such areas outside the United States as may be designated in the regulations prescribed under section 3663 of this title. Adjustments in rates; limits (c) The head of each agency may make adjustments in rates of basic pay established under subsection (b) of this section in amounts not to exceed the amounts of the adjustments made from time to time by or under statute in the corresponding rates of basic pay for the same or similar work referred to in such subsection (b) of this section. The head of the agency may designate the effective date of any such adjustment, except that that date may not be earlier than the effective date of the adjustment in the corresponding rate of basic pay. (15) See note 5, supra. (16) Contrary to the Union, the fact that the bonuses provided for in Union Proposals 7 and 8 constitute common wage practices in the maritime industry within the meaning of 5 U.S.C. Section 5348(b) does not affect the fact that they are inconsistent with law, 22 U.S.C. Section 3655, and, hence, nonnegotiable under section 7117(a)(1) of the Statute. (17) In finding that Proposals 1-5 are within the duty to bargain, we make no judgment as to their merits.