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The decision of the Authority follows:
26 FLRA No. 106 NATIONAL ASSOCIATION OF GOVERNMENT EMPLOYEES, LOCAL R7-23 Union and DEPARTMENT OF THE AIR FORCE HEADQUARTERS 375th AIR BASE GROUP (MAC), SCOTT AIR FORCE BASE, ILLINOIS Agency Case No. 0-NG-933 DECISION AND ORDER ON NEGOTIABILITY ISSUES I. Statment of the Case This case comes 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 presents issues as to the negotiability of two proposals. II. Proposal 1 The FLRA Members disagree over the negotiability of this proposal. The decision and order on Proposal 1 and Chairman Calhoun's dissent immediately follow this decision. III. Proposal 2 RIF principles will apply whenever an employee is scheduled for separation or downgrade through no fault of his/her own. A. Positions of the Parties The Agency argues that the proposal is inconsistent with management's rights under section 7106(a)(2)(A) of the Statute to assign and lay off employees to the extent that the proposal would apply RIF (reduction-in-force) principles to the termination of temporary and intermittent employees. The Agency asserts that AFR 40-7 allows it to designate which temporary and intermittent employees it will lay off when a RIF is conducted and that the proposal would interfere with that designation. The Agency also argues that the application of RIF principles to employees downgraded because of the issuance of new classification standards interferes with the Agency's right to determine whether or not to conduct a RIF and is inconsistent with AFR 40-7 for which a compelling need exists under section 2424.11(b) of the Authority's Rules and Regulations. The Union argues that its proposal does not interfere with the exercise of management's rights under section 7106(a)(2)(A) and disputes the Agency's assertion of compelling need. The Union argues instead that the proposal is within the duty to bargain under section 7106(b)(2) and (3) of the Statute. B. Analysis and Conclusions 1. Management Rights The Agency's RIF regulation, AFR 40-7, defines a RIF as "the release of an employee from a competitive level, because his or her position has been abolished or because he or she has been displaced by a senior individual." /1/ The regulation furthers outlines the circumstances under which RIFs may be required such as: if a NAF instrumentality is dissolved; an installation is deactivated; a function is transferred; a reorganization takes place; a position is reclassified due to a change in duties; or there is a need to place an employee with reemployment or restoration rights. The Union's proposal would apply the RIF principles -- apparently, RIF principles -- set forth in the regulation whenever an employee is scheduled for separation or downgrade through no fault of his or her own. The Union indicates that the cited regulation does not allow for this for all employees or for employees who have had classification standards applied. The Agency points to two situations where application of the RIF principles would be inconsistent with the exercise of management's rights. First, the Agency claims that AFR 40-7 allows it to designate which temporary or intermittent employee will be laid off when a RIF is conducted. By replacing the Agency's designation of an employee with a designation resulting from the application of the RIF procedures, the Agency argues that the proposal would violate its right to remove employees and to determine who will be removed under section 7106(a)(2)(A) of the Statute. Second, the Agency states that AFR 40-7, Chapter 10-9(a) provides that RIF procedures do not apply when employees are affected by the application of new classification standards. /2/ The Agency argues that the proposal would require that a RIF be conducted, which would result in the least senior employee being affected by the application of the new classification standard rather than the incumbent of the affected position. Thus, according to the Agency, this is contrary to the Agency's right to assign employees under section 7106(a)(2)(A). For the reasons set forth below, we find that the proposal is a negotiable procedure under section 7106(b)(2) of the Statute. In our view, the Union is seeking to apply the Agency's own procedures governing RIF, as set forth in AFR 40-7, to certain situations -- that is, where the Agency determines to separate or downgrade an employee through no fault of the employee. As in any RIF situation after an agency has determined which positions will be reduced in grade or abolished, formulas or procedures are used that will identify the employees who will ultimately be affected. Here, the Agency established procedures that are used in various situations. The procedures rank employees based on factors that take into account such matters as seniority and performance. The proposal essentially provides that when the Agency decides to take one of the specified actions, the established procedures will be used to determine which employees will be affected. The proposal does not require the Agency to lay off employees and it does not interfere with the Agency's rights under section 7106(a)(2)(A) to determine whether positions will be abolished or which positions will be abolished since those determinations will already have been made by the Agency. It is only after the Agency has made the determinations that the proposal would require the application of the Agency's own procedures for determining which employees will be affected. In like manner, the proposal does not interfere with the Agency's rights to determine whether and/or which positions will be downgraded as a result of new classification standards. The proposal does not affect in any way the actual classification of the position. Furthermore, it does not prevent the Agency from determining what qualifications are necessary to perform any given job and whether employees affected by the downgrading possess the necessary qualifications to perform the job. In other words, the proposal would not result in the reassignment of an employee to a position that the employee could not qualify for. Thus, the proposal does not violate the Agency's right under section 7106(a)(2)(A) to assign employees. In sum, the proposal would simply apply a procedure, established by the Agency, when the Agency takes action that results in the separation or downgrade of an employee when the employee is not at fault. 2. No compelling need has been shown to bar negotiations The Agency argues that as the proposal applies to employees downgraded as a result of a new classification, the proposal is also inconsistent with AFR 40-7 which preserves the merit principle of equitable treatment of employees. As was previously argued, the proposal would affect not just the incumbent of the position that was downgraded but would also affect employees with the least amount of seniority thereby creating inequity for the least senior employees. In response, the Union claims that the use of the RIF procedures would create greater equality among employees than would otherwise exist since the proposal would ensure that objective standards and procedures are available when such action is taken. We find that the Agency has failed to establish that a compelling need exists for the regulation so as to bar negotiations on the proposal. While the Agency has demonstrated that the proposal would conflict with AFR 40-7, Chapter 10-9(a), to the extent that the regulation now precludes its application to downgrading based on new classification standards, the Agency has not substantiated its contentions by reference to any specific merit principle which its regulation assertedly implements, nor has it demonstrated how the proposal would require it to act in a manner that is inconsistent with basic merit principles. IV. Order The Agency must bargain, upon request, or as otherwise agreed to by the parties, over the proposal. /3/ Issued, Washingtion, D.C., April 30, 1987 /s/ Jerry L. Calhoun, Chairman /s/ Henry B. Frazier III, Member /s/ Jean McKee, Member FEDERAL LABOR RELATIONS AUTHORITY DECISION AND ORDER ON PROPOSAL 1 Proposal 1 When an employee changes grade for whatever reason, their total hours of accrued annual leave will not be changed. A. Positions of the Parties The Agency argues that the proposal is outside the duty to bargain for two reasons. First, the Agency contends that section 7103(a)(14) of the Statute does not authorize bargaining on wages and fringe benefits for the non-appropriated fund (NAF) employees involved here. Second, the Agency argues that the proposal would conflict with an agency regulation for which there is compelling need under section 2424.11(b) of the Authority's Rules and Regulations. More specifically, the Agency claims that AFR 40-7, which governs annual leave, treats all NAF employees in a uniform manner with respect to the transfer of accrued leave. /4/ The proposal, the Agency argues, would violate basic merit principles of treating employees in a uniform manner, free from capricious judgment and discriminatory treatment. The Union argues that it is not seeking to bargain over wages and fringe benefits but, rather, is seeking to bargain over the procedures to be used in transferring accrued hours of annual leave. The Union indicates that its intent behind the proposal is to allow an employee who has been promoted to carry over into the new position the same amount of accrued annual leave that the employee had in the position from which promoted. The Union further argues that the Agency has failed to support its assertion of compelling need for AFR 40-7 to bar negotiations. B. Analysis and Conclusions 1. The proposal is a negotiable condition of employment 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, No. 87-3037 (11th Circ. Feb. 2, 1987), we held that nothing in the Statute or its legislative history bars negotiation of proposals relating to pay and fringe benefits insofar as: (1) the matters proposed are not specifically provided for by law and are within the discretion of the agency, and (2) the proposals are not otherwise inconsistent with law, Government-wide rule or regulation or an agency regulation for which a compelling need exists. Based on that analytical framework, we held that the proposal in that case, which required the agency to pay up to a certain percentage of the premium cost of health insurance for NAF employees, was within the duty to bargain. We noted in that case also that in the Federal sector, wages and fringe benefits of most employees are established and controlled by law. However, there are exceptions where matters concerning the nature or amount of the wages and fringe benefits are left to the discretion of the employing agencies. See also American Federation of Government Employees, AFL-CIO, Local 997 and Department of the Air Force, Maxwell Air Force Base, Alabama, 24 FLRA No. 51 (1986), petition for review filed sub nom. Department of the Air Force, Maxwell Air Force Base, Alabama, v. FLRA, No. 87-7102 (11th Cir. Feb. 11, 1987) (proposal concerning payment by the employer for various other types of insurance, including health insurance, was found to be within the scope of bargaining). The case before us also involves NAF employees and, more particularly, concerns their accrued annual leave. In Service Employees International Union, Local 556, AFL-CIO and Department of the Navy, Marine Corps Exchange 0911, Marine Corps Air Station, Kaneohe Bay, Hawaii, 26 FLRA No. 47 (1987), we found that leave benefits for NAF employees are governed not be Federal law, but by agency regulations. See also American Federation of Government Employees, AFL-CIO, Local 1786 and U.S. Marine Corps, Marine Corps Exchange, Henderson Hall, Arlington, Virginia, 26 FLRA No. 54 (1987). The Agency here has not argued that the Union's proposal concerns a matter that is specifically provided for by Federal law. Rather, the Agency cites to its own regulation, AFR 40-7, as governing leave for the NAF employees. Since matters relating to leave are not specifically provided for by Federal law, but are within the agency's discretion, the matter is not excepted from bargaining under section 7103(a)(14) of the Statute, as alleged. 2. No compelling need has been shown to bar negotiations To establish that a proposal is nonnegotiable on the basis of compelling need, an agency must: (1) identify a specific agency-wide regulation; (2) show that there is a conflict between its regulation and the proposal; and (3) demonstrate that its regulation is supported by a compelling need with reference to the Authority's illustrative standards set forth in section 2424.11 of the Aurhtority's Rules and Regulations (5 CFR Section 2424.11). Generalized and conclusionary reasoning does not support a finding of compelling need. American Federation of Government Employees, AFL-CIO, Local 3804 and Federal Deposit Insurance Corporation, Madison Region, 21 FLRA No. 104 (1986) (Proposal 7). Here, the Agency claims that a compelling need exists for AFR 40-7 to bar negotiations on the proposal because the regulation implements basic merit principles. Specifically, the Agency states that its policy is designed in part to treat all NAF employees "equitably and fairly and according to Federal law, Executive Orders, and regulations that apply" and to "(p)rovide a basis for achieving greater uniformity among NAFIs in nonappropriated fund personnel management." Agency Statement of Position at 2-3. Adherence to the proposal, the Agency argues without elaboration, would violate "the basic merit principle of treating employees in a uniform manner free from capricious judgment and discriminatory treatment." Agency Statement of Position at 13-14. The Agency's argument cannot be sustained. The Agency does not cite a specific merit system principle, see 5 U.S.C. Section 2301, and it is thus unclear on what merit principle the Agency is attempting to rely. Moreover, as to the Agency's specific contentions as to the need for "uniform" treatment of employees, those contentions appear to be based on the premise that nothing short of absolute uniformity will prevent arbitrary or discriminatory treatment. If this were the case, then an agency could free itself of the obligation to bargain simply by claiming it needs to maintain a uniform policy with respect to any particular condition of employment. We do not view such an outcome as being either consistent with the purposes and policies of the Statute or required by "basic merit principles." Therefore, we find that the Agency has not sustained its claim that a compelling need exists for its regulation so as to bar negotiations on the proposal. See also American Federation of Government Employees, AFL-CIO, Local 1928 and Department of the Navy, Naval Air Development Center, Warminster, Pennsylvania, 2 FLRA 451 (1980). C. Order The Agency must upon request, or as otherwise agreed to by the parties, bargain on Proposal 1. /5/ Issued, Washington, D.C., April 30, 1987. /s/ Henry B. Frazier III, Member /s/ Jean McKee, Member FEDERAL LABOR RELATIONS AUTHORITY Separate Opinion of Chairman Calhoun As in American Federation of Government Employees, AFL-CIO, and Department of the Air Force, Eglin Air Force Base, Florida, 24 FLRA No. 41 (1986), petition for reivew filed sub nom. Department of the Air Force, Eglin Air Force Base, Florida v. FLRA, No. 87-3073 (11th Cir. February 2, 1987), the bargaining unit in this case is composed of Non-appropriated Fund Instrumentality (NAFI) employees. In my opinion in that case, 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. Proposal 1 in this case concerns the rate at which employees are paid for accrued annual leave: a money-related fringe benefit. For the reasons stated in my opinion in Eglin Air Force Base, therefore, I do not join the majority opinion. I also stated in Eglin Air Force Base that I would find a compelling need for the NAFI regulatory scheme under section 2424.11(a) of the Authority's Regulations. See also Service Employees International Union, Local 556, AFL-CIO and Department of the Navy, Marine Corps Exchange 0911, Marine Corps Air Station, Kaneohe Bay, Hawaii and Department of the Army, U.S. Army Support Command, Fort Shafter, Hawaii, 26 FLRA No. 47 (1987). In my view, this overall regulatory scheme as it relates to wages and money-related fringe benefits is necessary to maintain the uniformity of treatment of NAFI employees which is, in turn, essential to the accomplishment of the Agency's worldwide missions. In this case, Proposal 1 is inconsistent with AFR 40-7, section 8-3(e), which concerns the method by which employees who transfer from one Air Force NAFI to another are paid for accrued annual leave. The Agency argues that a compelling need exists for this regulation on a different basis (section 2424.11(b) of our regulations) than argued in previous cases. Consistent with my previous opinions, however, I would find that the regulation bars negotiation on the Union's proposal under section 2424.11(a). Issued, Washingtion, D.C. April 30, 1987. /s/ Jerry L Calhoun, Chairman --------------- FOOTNOTES$ --------------- (1) AFR 40-7, Chapter 5-5(b) (2) That section provides, in part, as follows: This paragraph appllies when a position needs to be downgraded, because of a change in classification standards, or a misclassification needs to be corrected. This includes correcting a tentatively classified position changed by a higher headquarters final classification decision. RIF procedures do not apply. (3) In finding the proposal to be within the duty to bargain, the Authority makes no judgment as to its merits. (4) Section 8-3.e. of AFR 40-7 addresses the transfer of accrued annual leave and provides as follows: When a regular employee moves to another Air Force NAFI, he or she is paid for all accrued and accumulated annual leave. However, if the employee elects, and the gaining and losing NAFIs agree, annual leave credit and the money to cover its cost may be transferred from the losing to the gaining NAFI. Dollar liability is transferred by the losing NAFI to the gaining NAFI by a transfer of funds and is converted by the gaining NAFI to leave credit based on the new pay rate. For example, 12 hours at $4 an hour, fund transfer is $48. If the new rate is $6 an hour, the leave credit is 8 hours; 300 hours at $4 an hour, fund transfer is $1,200. If the new rate is $6 an hour, the leave credit is 200 hours. (5) In deciding that Proposal 1 is within the Agency's duty to bargain, we make no judgment as to its merits.