U.S. Federal Labor Relations Authority

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United States of America



In the Matter of







 Case No. 90 FSIP 64



The International Organization of Masters, Mates, and Pilots, AFL-CIO (Union) filed a request for assistance with the Federal Service Impasses Panel (Panel) to consider a negotiation impasse under section 7119 of the Federal Service Labor-Management Relations Statute (Statute) between it and the Panama Canal Commission, Balboa, Ancon, Republic of Panama (Employer).

The Panel declined to assert jurisdiction over three of the four issues presented by the Union, and determined that the parties' dispute over the remaining issue should be resolved on the basis of written submissions. After considering the entire record, the Panel would take whatever action it deemed appropriate to resolve the impasse. Written submissions were made pursuant to these procedures and the Panel has considered the entire record.


The Employer' s mission is to operate and maintain the Panama Canal. The Union represents 237 employees who pilot vessels through the Canal. In July 1988, the parties agreed to a new 5-year contract.


The current dispute arose from mid-term negotiations in 1982 over the installation of high mast lighting (HML) Which permitted the piloting of large vessels through the Canal in hours of darkness. The issue concerns the amount of premium pay, if any, pilots should receive because of the changes in A (HML) (HML) at 4.

1. The Union's Position

The Union proposes the following wordlng:

A bonus equal to fourteen (14) times the pilots' basic rate of pay will be paid to the pilots of a vessel with an extreme beam of 100 feet or more which arrives or departs a set of locks during hours of darkness.

The additional compensation which would be provided under the Union's proposal is justified essentially because of "the conditions under which pilots work, their professional responsibility, and the stress or pressures involved in the safe lockage of a huge vessel under [HML] conditions. In this regard, the transiting of large vessels through the Panama Canal became even more difficult with the installation of HML because it further complicates the pilots' task of accurately gauging the distance between the vessel and the "unyielding wall" of the chambers of the locks of the Canal. In addition, pilots do not have regularly scheduled hours of work, nor do they operate the same vessels day in and day out, under the same conditions. Pilots who are guilty of a momentary lapse of attention or error in judgment may be subject to a loss of their license. Also significant is the fact that the average transit involves 12 hours "and is frequently longer. n In this regard, a study by the Chief of the Occupational Division of the Panama Canal Commission, issued in 1988, concluded that "the risk of an accident is increased when continuous duty exceeds 10 [to] 12 hours.

The Employer's calculations of the potential costs of the Union's proposal, and its attempt to characterize current pilots' pay as stratospheric," n are misleading. Pilots' pay currently "is less than the compensation of senior pilots in the various ports of the United States." Comparisons also show that their pay "is not greater (if in fact as great) than the purchasing power of the 1982 earnings of the pilots" in spite of the fact that they now perform the more stressful HML of extreme beam vessels. Moreover, the fact that the pilots' skill and care has avoided major accidents in HML lockage is irrelevant to the issue of whether the extra pay at issue is warranted. The Employer also is incorrect in its assertions that an HML bonus would promote inefficiency, has been rejected previously by the Panel, or been overtaken by events. For these reasons, among others, its proposal "is not only reasonable, but is extremely modest." The Panel should either direct the Employer to implement the Union's proposal "or should conduct mediation/arbitration proceedings in Panama."

2. The Employer's Position

The Union should withdraw its proposal because: (1) there is "no correlation" between transiting vessels under HML and the Union's proposal; (2) the use of HML in the transit of large beam vessels has proven to be safe; (3) the substantial increased cost to the Employer is not warranted; and (4) an HML bonus promotes inefficiency, was previously rejected by the Panel, and has been overtaken by events. The Employer's bargaining obligation in this case arose over the impact and implementation of its decision to increase "the beam of certain vessels eligible to transit under HML." In this regard, it is unclear "how a bonus of any amount would remedy or ameliorate the impact" [emphasis in original] of management's decision. Rather, pilots are highly paid employees with gross incomes that more than adequately compensate them for any and all kinds of piloting assignments. In addition to basic, overtime, and various other types of premium pay, pilots currently earn incentive bonuses based on the completion of assignments. Experience has demonstrated that the incentive bonus system "provides the necessary incentive to motivate pilots to perform efficiently without misconduct.

The Employer estimates that adoption of the Union's proposal would cost approximately $5.56 million until the expiration of the parties' current contract in mid-1993, and that the Union has failed to identify any offsetting benefits. In this regard, in the 10 years that HML has been in use, "not a single accident has been attributed to high mast lighting." While it does not dispute that considerable skill is required to maneuver large-beam vessels, not only at night but at any time, this is precisely why only the most senior pilots are given these assignments. Moreover, based on actual experience with a similar HML bonus over a 3-year period in the early 1980's, the Employer discovered that it actually decreased the productive and efficient use of the Canal because pilots would deliberately speed up or delay a transit to accrue the bonus. The potential for abuse is "equally true today if such a bonus were to be adopted."


Having considered the evidence and arguments in this case, we shall order the Union to withdraw its proposal because it has failed to demonstrate that the status quo should be changed. Preliminarily, the record shows that no HML bonus has been paid to pilots since 1984, and that the parties currently are operating under an incentive bonus system, referred to as Pilot Additional Compensation (PAC), which was negotiated in 1985. The purpose of PAC, from the Employer's point of view, was to consolidate "myriad" separate bonuses into a single structure, and to eliminate those aspects of the previous system which led to abuse and inefficiency. The Union's proposal, if adopted, would reintroduce precisely the type of bonus which the Employer contends the current PAC system was designed to replace.

We are unconvinced that additional compensation would alleviate the pilots' stressful working conditions. The Union's proposal, however, would result in substantial costs to the Employer during a period of general economic austerity without apparent justification. In this regard, the Union has provided no specific explanation for why the HML bonus should be 14 times the pilots' basic rate of pay. Moreover, there are no comparability data in the record to support its contention that Panama Canal pilots are paid less than senior pilots in the United States. Finally, we are concerned that reinstituting a bonus based upon arrival and departure times may give rise to problems similar to those which led to the current PAC system which appears to be working effectively.


Pursuant to the authority vested in it by section 7119 of the Federal Service Labor-Management Relations Statute and because of the failure of the parties to resolve their dispute during the course of proceedings instituted pursuant to section 2471.6(a)(2) of the Panel's regulations, the Federal Service Impasses Panel under section 2471.11(a) of its regulations hereby orders the following:

The Union shall withdraw its proposal.

By direction of the Panel.

Linda A. Lafferty

Executive Director

August 31, l990

Washington, D.C.