U.S. Federal Labor Relations Authority

Search form


United States of America



In the Matter of






Case No. 95 FSIP 139




    District 1, Marine Engineers Beneficial Association, AFL-CIO (MEBA or Union) filed a request for assistance with the Federal Service Impasses Panel (Panel) to consider a negotiation impasse under the Federal Service Labor-Management Relations Statute (Statute), 5 U.S.C. § 7119, between it and the Panama Canal Commission, Balboa, Republic of Panama (PCC or Employer).

   After investigation of the request for assistance, the Panel determined that the dispute, which concerns penalty pay for licensed marine engineers for performing unlicensed work, should be resolved through written submissions from the parties, with the Panel to take whatever action it deemed appropriate to resolve the impasse. Written submissions were made pursuant to this procedure, and the Panel has now considered the entire record.


    The Employer assists vessels in transiting the Panama Canal. The Union represents approximately 130 licensed marine engineers. The parties recently reached agreement on a new collective-bargaining agreement (CBA), with the exception of the penalty pay issue, which affects assistant engineers (AEs). The Panel’s decision on the matter will be incorporated into the new CBA.


    The parties essentially disagree over whether penalty pay is warranted if AEs perform lower graded maintenance duties.


1. The Union’s Position

    The Union proposes the following wording:

If licensed engineers are required to perform the duties of work commonly assigned to the unlicensed personnel (such as being required to soogie, paint, scrape, chip, scale paint, clean grease extractors, polish brightwork, blow boiler tubes, clean purifiers, strainers, filters or smoke detectors, or perform any cleaning up work in the engine department), when the unlicensed personnel are not available for such work, the licensed engineers shall receive, in addition to their regular compensation, the premium rate while such work is being performed. The premium pay for such work shall be $11.29 an hour. The rate shall be adjusted annually on the anniversary date of this agreement in accordance with the Premium/Penalty rate paid to licensed engineers employed by the Military Sealift Command. If work for which premium pay is authorized is performed when overtime is in effect, the higher rate is applicable.

Its proposal should be adopted because "it is a standard provision in both private sector and government maritime contracts."(1) In this regard, since the parties last negotiated their CBA in 1988, the Employer has "substantially reduced" the number of unlicensed engine room personnel performing less-skilled maintenance duties on its vessels, and has "routinely scheduled" AEs to complete such duties on many shifts. This practice is "in contravention of work standards throughout the maritime industry." The proposal also is consistent with Congressional intent in enacting 5 U.S.C. § 5348(b) that the pay of Canal vessel employees be guided by prevailing practices in the U.S. maritime industry. This position was supported by the Federal Labor Relations Authority (FLRA) in its analysis of the negotiability of a previous Union proposal regarding wage rates.(2)

    With respect to the Employer’s "core" argument, there is no merit to its position that the Union ostensibly endorsed the 1984 manning study which called for replacing lower graded "oilers" with AEs, and therefore "somehow agreed" that they should perform unlicensed work as part of their normal duties. Although the Union’s representative at the time supported the hiring of additional AEs, "there is no evidence that the Union agreed that it was a good idea to remove oilers from the vessels." In this regard, the position descriptions (PDs) on which the PCC relies "did not accurately reflect the duties of the licensed engineers." The Panel should also reject the Employer’s attempt to distinguish its situation in Panama from the rest of the U.S. maritime industry. The fact that MSC operates deep sea vessels which do not return to port at the end of a shift, while unit employees leave their vessels every day, "has nothing to do with the issue of whether they should be compensated with penalty pay when they perform unlicensed work." Finally, the Employer can entirely control the costs of the proposal by staffing its vessels so that licensed personnel are not performing unlicensed work. This would provide an incentive for the Employer to eliminate the "perverted bureaucratic practice, rampant throughout the Federal government" of regularly assigning less skilled duties to higher graded personnel.

2. The Employer’s Position

    The Panel should order the Union to withdraw its penalty pay proposal for a number of reasons. By way of background, the Employer completed a study of towboat engineers and maintenance requirements in 1984 which concluded that significant improvements would occur by manning the engine rooms of the towboats with a single individual with a skill level higher than an oiler but less than a chief engineer. It was subsequently determined that AEs would satisfy the requirement. MEBA "fully endorsed the study’s conclusion to replace oilers with AEs, and it was always known that AEs would perform oiler duties." The Union also "participated in and was fully apprised of the development" of the new PD for AEs reflecting the additional duties. Thus, its prior endorsement of the study’s recommendations, which have now been implemented, provides one reason for rejecting the Union’s proposal.

    In addition, the pay practices set forth in the private and government maritime contracts cited by the Union provide no basis for adopting its proposal. In this connection, neither of the statutory authorities governing the pay practices of Federal sector maritime employees, 5 U.S.C. § 5348(a) or 5 U.S.C. § 5348(b), are applicable to PCC.(3) Moreover, "there is a universe of difference" between the conditions of employment of the AEs who would be affected by the Union’s proposal, and those covered by the private and Federal sector contracts upon which the Union relies. For example, in the case of MSC, Congress mandated that its licensed engineers be compensated in accordance with the pay practices in the maritime industry under 5 U.S.C. § 5348(a). Such engineers "all work on ocean-going vessels and the minimum ‘tour of duty’ at sea (without leave) is 6 months" (emphasis in original). PCC engineers, on the other hand, work aboard floating equipment which is "always within close sight of the Canal’s 50-mile shoreline, and are home after every 8-hour shift" (emphasis in original). An examination of PCC engineer licensing requirements clearly shows that "there is no similarity here to wage and employment practices of the maritime industry." Paying additional compensation for lower graded duties also "would stand on its head" those position classification principles which the PCC has always applied to its employees.

    The more appropriate pay practices with which to compare PCC employees are those in the Republic of Panama. A PCC AE’s entry salary is $39,187, and in 1994, gross wages were as high as $72,800 for those AEs at the top step of the wage scale. In contrast, engineers employed by Smit International Harbor Towage (Panama, Inc.,) which operates tugs in the ports located at either end of the Canal, have an entry salary with overtime of $12,787 per year. The fact that there are 89 qualified applicants currently on file seeking employment with PCC as AEs "is a clear message PCC is a highly desirable employer."

    Finally, the Union’s proposal would significantly increase PCC’s costs. In this regard, a "conservative estimate" of the additional costs already incurred by PCC since it "traded" the lower paid oilers for the higher paid AEs is $827,800 per year. The Union’s proposal would add at least another $89,600 per year, assuming the oiler work force remains at existing levels, and the number of assigned tasks on which the estimate is based remains fixed.


    Having carefully reviewed the evidence and arguments presented by the parties in this case, we conclude that the Union should withdraw its penalty pay proposal. Preliminarily, there is ample evidence in the record to persuade us that the Union acquiesced in the changes the Employer intended to make as a result of the 1984 manning study, including requiring assistant engineers to perform lower graded duties without additional compensation. Of particular note in this regard, the record reflects that in late 1989 the parties settled a Union grievance involving a disagreement over, among other things, the PD of AEs. Significantly, the disagreement did not involve the PD’s clear wording that AEs would be required to perform lower graded maintenance duties, nor is there any evidence that the Union raised any concerns regarding the Employer’s intentions at any time before the removal of oilers from watchstanding duties began in 1993. It was only after the changes were made, and a significant number of AEs were hired, that the Union raised the issue of penalty pay for the first time.

    In addition to rejecting the Union’s position on the basis of the historical circumstances surrounding the penalty pay issue, we believe that adoption of the Union’s proposal would be inconsistent with the Congressional intent expressed in 5 U.S.C. § 7101 that the Statute be interpreted in a manner consistent with the requirement of an effective and efficient Government. In our view, the Employer’s uncontested estimates of the overall costs of the proposal, including the sums already invested in the hiring of the additional AEs which the Union fully supported, outweighs the Union’s private and Federal sector comparability data. For these reasons, we shall order the Union to withdraw its proposal.


    Pursuant to the authority vested in it by section 7119 of the Federal Service Labor-Management Relations Statute, 5 U.S.C. § 7119, and because of the failure of the parties to resolve their disputes during the course of proceedings instituted under the Panel's regulations, 5 C.F.R. § 2471.6(a)(2), the Federal Service Impasses Panel under § 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

December 20, 1995

Washington, D.C.


1.In support of the comparability of its proposal, the Union submitted relevant sections of a number of private and Federal sector contracts, among them, the private sector multi-employer “Dry Cargo Agreement” with MEBA, the Military Sealift Command (MSC)-MEBA collective bargaining agreement, and the National Oceanic and Atmospheric Administration (NOAA)-MEBA contract covering licensed marine engineers employed aboard NOAA’s oceanographic research vessels. It also submitted a copy of MSC’s Civilian Marine Personnel Instruction 610, which contains a penalty pay provision nearly identical to that found in the MEBA Dry Cargo agreement.

2.The Union cites District No. 1, Pacific Coast District, MEBA and Panama Canal Commission, 26 FLRA 390 (1987)(MEBA and PCC) in support of this point.

3.In support of its contention, the Employer supplies a brief history of the origins of 5 U.S.C. § 5348(b) and “the vessel employee issue” as it pertains to the Panama Canal. “After extensive research into the vessel employee issue,” the Employer argues that the Panel should accept its conclusion that licensed marine engineers are not “Canal vessel employees” as contemplated under 5 U.S.C. § 5348(b), and that the FLRA “was incorrect” to the extent that it implied otherwise in MEBA and PCC.