[ v26 p140 ]
26:0140(16)NG
The decision of the Authority follows:
26 FLRA No. 16
MARITIME/METAL TRADES
COUNCIL
Union
and
PANAMA CANAL COMMISSION
Agency
Case No. 0-NG-955
DECISION AND ORDER ON NEGOTIABILITY ISSUES
I. Statement of the Case
(Footnotes appear in the Appendix to this Decision)
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 presents issues as
to the negotiability of four proposals. The Authority finds that
Proposals 1 and 4 are nonnegotiable and Proposals 2 and 3 are
negotiable.
II. Proposal 1
All legal holidays in the United States and the Republic of
Panama are legal holidays of the Panama Canal Commission for the
purpose of this agreement, in keeping with the Commission's status
as an overseas US Government agency and the local practice of the
US Department of State.
A. Positions of the Parties
The Agency argues that this proposal is not within the duty to
bargain because it pertains to a matter which is specifically provided
for by the Federal statute -- section 111 of title 1 of the Panama Canal
Code (C.Z. Code tit. 1, Section 111) and 5 U.S.C. Section 6103. The
Union contends that the provisions of C.Z. Code tit. 1, Section 111 are
no longer binding on the Agency and that under 5 U.S.C. Section 6103,
agencies have discretion to observe local holidays as well as the
holidays set forth in that provision.
B. Analysis and Conclusion
We find that holidays are a matter specifically provided for by
Federal statute and, therefore, conclude that this proposal is not
within the duty to bargain. Insofar as Federal employees in general are
concerned, 5 U.S.C. Section 6103 sets forth holidays. Insofar as the
"Canal Zone" /1/ is concerned, C.Z. Code tit. 1, Section 111 sets forth
holidays. While there is some overlap as to the holidays specified in 5
U.S.C. Section 6103 and the Panama Canal Code, the holidays set forth in
those authorities are not identical. The Canal Zone Code was enacted
into Federal statute by Public Law No. 87-845 (1962) (76-A Stat. 6).
Section 3303 of the Panama Canal Act of 1979, 193 Stat. 452, 499,
repealed portions of the Canal Zone Code and redesignated the remaining
portions as the Panama Canal Code. 22 U.S.C. Section 3602. Title 1,
section 111 was not among the provisions repealed; nor does it appear
to be otherwise inconsistent with the Panama Canal Act. We conclude
that it is still in force and that the Union's assertion that it is no
longer binding cannot be sustained. /2/ It appears that the holidays
which legally apply to the Agency are those which are set forth in 5
U.S.C. Section 6103 and in the Panama Canal Code. Moreover, 5 U.S.C.
Section 6103 specifically provides for certain holidays. It does not
vest agencies with discretion to designate holidays as implied by the
Union.
In view of the fact that holidays are specifically provided for by
Federal statutes -- 5 U.S.C. Section 6103 and C.Z. Code tit. 1, Section
111 -- we find that the proposal concerns a matter which is not a
condition of employment as defined by section 7103(a)(14) of the
Statute.
III. Proposals 2 and 3
The FLRA Members disagree over the negotiability of these proposals.
The majority opinion is on page 7 of this decision, Chairman Calhoun's
dissent is on page 12.
IV. Proposal 4
The Commission will make every effort to house Panamanian
professional employees in Commission housing units, in accordance
with CC Res. No. 2-81/CCR (R).
Housing and all utilities shall be provided to professional
unit employees on a gratuitous basis.
A. Positions of the Parties
The Agency asserts that this proposal is nonnegotiable because it
does not concern conditions of employment; it is inconsistent with
international agreements implementing the Panama Canal Treaty; it
concerns a method and means by which the Agency performs its work within
the meaning of section 7106(b)(1); and it covers non-bargaining unit
employees. Additionally, insofar as the second sentence would require
the Agency to pay for telephone service, the Agency argues that it
conflicts with Federal statute.
The Union disputes the Agency's contentions arguing that, under the
circumstances, housing is a condition of employment. It asserts that as
"key" employees all professionals should be entitled to efforts on the
part of the Agency to obtain Panamian consent to their occupancy of
Commission housing. It argues that this proposal is not inconsistent
with the Panama Canal Treaty or related agreements. It asserts that the
Agency's argument that the proposal concerns a method by which it
performs its work is inconsistent with its argument that the proposal
does not concern a condition of employment. Lastly, it states that it
intends the proposal to apply only to bargaining unit employees.
B. Analysis and Conclusions
1. The Proposal Conflicts with Federal Law
The issue of housing for employees of the Agency was addressed by the
Panama Canal Treaty and implementing agreements. Article XIII of the
Treaty provided for title to all housing, which prior to the Treaty was
owned by the Panama Canal Company, to be transferred to the Panamanian
Government upon the Treaty's entry into force. Article III of the
Treaty granted to the U.S. the rights to manage, operate and maintain
the Panama Canal, its complementary works, installations and equipment.
An "Agreement in Implementation of Article III of the Panama Canal
Treaty" was executed which set out in more detail how Article III was
intended to operate. Among other things, the Agreement established a
Coordinating Committee to perform functions specifically designated in
the Agreement as well as others entrusted to it by the U.S. and
Panamanian Governments concerning implementation of the Agreement.
Article II of the Agreement provided that housing areas made available
to the U.S. by Panama were to be dedicated to the primary purpose of
housing U.S. citizen employees and dependents. Article III of the
Agreement. /3/ The housing areas were to be administered in accordance
with Article VI of the Agreement. Article VI reiterated the provisions
of Article III regarding the "primary purpose" of the housing areas and
also provided that: /4/
(1) the use of housing units beyond those required by the U.S.
for housing its citizen employees would pass to Panama;
(2) those U.S. employees who were not U.S. citizens and who, on
the date of the Treaty's entry into force, were occupying housing
units, the use of which were transferred to Panama, would be given
the opportunity to lease, rent or purchase such units;
(3) in addition to housing its citizen employees, the U.S.
could use the housing areas for other purposes related to the
management, operation and maintenance of the Canal; and
(4) the Coordinating Committee would serve as the channel for
consultation and coordination between the U.S. and Panama with
respect to matters arising under the Agreement.
The Coordinating Committee issued a resolution providing that, with
prior express authorization by the Government of Panama, it would allow
use of housing units by Panamanian citizen employees when the Agency
considered it necessary that they reside near their place of work and
when the Committee agreed in each specific case. CC Resolution No.
2-81/CCR (R). /5/
We find that the proposal requiring "every effort to house Panamanian
professional employees in Commission housing" is inconsistent with the
Treaty and its implementing Agreement which generally do not authorize
the Agency to provide housing to Panamanian nationals in housing areas
which pursuant to the Treaty have been made available for the Agency's
use. Under the Coordinating Committee's interpretation of the Treaty
and the Implementing Agreement, an exception may be considered only in
those instances where it is necessary to the management, maintenance,
and operation of the Canal that an employee reside near their place of
work. However, the proposal as drafted and explained by the Union does
not recognize this limitation. Rather, it seeks blanket eligibility of
all professional employees without regard to whether such residence near
their place of work is necessary to the management, maintenance, and
operation of the Canal. We do not view the Union's assertion that all
professionals are "key" employees, without more, as establishing a
relationship between where those employees live and the ability of the
Agency to accomplish its mission. Because the proposal seeks to
circumvent the limitations imposed by the Treaty and its Implementing
Agreement as to providing housing to Panamanian nationals, it is
inconsistent with the Treaty. Compare National Treasury Employees Union
and Department of the Treasury, Internal Revenue Service, 6 FLRA 508
(1981) (Proposal 1) which found that a proposal which would require
reimbursement for training expenses without regard for applicable
statutory limitations was not within the duty to bargain. As determined
previously by the Authority, the Treaty has the force of Federal law.
International Organization of Masters, Mates and Pilots and Panama Canal
Commission, 13 FLRA 508 (1983) (Proposal 5).
The second sentence seeks free rent and utilities for those employees
occupying Agency housing. The Agency argues that because this would
require it to pay for telephone service at employee residences, this
proposal conflicts with Federal statute -- 31 U.S.C. Section 679
(recodified at 31 U.S.C. Section 1348). /6/ The Union does not dispute
the Agency's contention that the proposal would require the Agency to
provide free telephone service to employees.
31 U.S.C. 1348 explicitly prohibits, with certain specific
exceptions, the use of appropriated funds to pay for telephone service
at private residences. This prohibition applies regardless of whether
the residence is Government-owned or leased. /7/ Because the proposal
here does not fall within one of the exceptions, we find it is
inconsistent with Federal statute.
2. Conclusion
This proposal is inconsistent with Federal law. Therefore, it is
nonnegotiable. In view of this conclusion, we find it unnecessary to
address the Agency's other contentions as to the negotiability of the
proposal.
V. Order
Pursuant to section 2424.10 of the Authority's Rules and Regulations,
the Union's petition for review as to Proposals 1 and 4 is dismissed.
Issued, Washington, D.C., March 12, 1987.
/s/ Jerry L. Calhoun, Chairman
/s/ Henry B. Frazier III, Member
/s/ Jean McKee, Member
FEDERAL LABOR RELATIONS AUTHORITY
DECISION AND ORDER ON PROPOSALS 2 AND 3
Proposal 2
The Cost of Living Allowance contemplated by section 1206 of
the Panama Canal Act will be determined by the Commission at a
rate of 60% of an employee's gross salary. Gross salary for the
purposes of this section includes all items of basic pay,
including but not limited to differential, bonuses and other
compensation.
A union representative from the professional bargaining unit
shall be included on all boards, study groups or other bodies
which are tasked with considering and making recommendations
pertaining to the cost of living allowance. Furthermore, the
union shall be consulted on all related matters.
Proposal 3
The Commission will do everything it can to see that the cost
of living allowance contemplated by section 1206 of the Panama
Canal Act will be determined by the Commission at a rate of 60% of
an employee's gross salary. Gross items of basic pay, including
but not limited to differential, bonuses and other compensation.
The Commission will do everything it can to see that a union
representative from the professional bargaining unit shall be
included on all boards, study groups or other bodies which are
tasked with considering and making recommendations pertaining to
the cost of living allowance. Furthermore, the union shall be
consulted on all related matters.
The Commission will make bi-weekly reports to the Union on its
progress in achieving the goals set forth in this article.
A. Positions of the Parties
The Agency contends that these proposals are nonnegotiable. In
support, it argues that the legislative history of the Panama Canal Act
indicates thatCongress intended to bar negotiation over employee
compensation in the same manner that negotiation over such matters is
barred by the Statute. The Agency contends that because the matters
which the cost of living allowance is designed to replace, i.e.,
commissary, exchange and postal privileges, are not conditions of
employment, neither is the cost of living allowance a condition of
employment. The Agency asserts that the scope of the proposals is not
limited to bargaining unit employees. Last, the Agency argues as to
that portion of the proposals which requires Union participation on
bodies responsible for considering and making recommendations concerning
the cost of living allowance that, because the subject matter of the
deliberations involved is a nonnegotiable matter, Union participation in
such deliberations is not negotiable.
The Union contends that the proposals are negotiable as the amount of
the subject cost of living allowance is a matter which is a condition of
employment and is within the discretion of the Agency. It also states
that these proposals are intended to be applied only with respect to
determining the cost of living alowance for bargaining unit employees.
Analysis and conclusions
1. Background
The cost of living allowance to which the proposals refer is
authorized by section 1206 of the Panama Canal Act. /8/ It is intended
to compensate certain Agency employees for increased living costs
resulting from the termination of their eligibility to use various U.S.
military facilities as a consequence of the terms of the Panama Canal
Treaty. /9/ By the specific terms of the Panama Canal Act the
determination of the actual amount of the cost of living allowance is
within the discretion of the Agency.
2. Negotiability of Proposals Relating to Employee
Compensation
Under the Panama Canal Act, the employees in the bargaining unit to
which these proposals apply are covered by the provisions of the Statute
insofar as labor-management relations and collective bargaining are
concerned. /10/ Consequently, the scope of the duty to bargain which
applies to these employees is the one established by the Statute. We
have recently reaffirmed that nothing in the Statute, or its legislative
history, bars the negotiation of proposals concerning employee
compensation 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. 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). Thus, the Agency's argument that the Panama Canal
Act and the Statute bar negotiations on proposals merely because they
concern the subject of compensation is rejected.
3. The Proposals Concern Conditions of Employment of
Bargaining Unit Employees
At the outset we note that the Union specifically states that these
proposals are intended to be limited in application to bargaining unit
employees. This interpretation is compatible with the language of these
proposals and we adopt it for the purpose of this decision. We reject
the Agency's contention to the contrary.
Without passing upon the Agency's blanket assertion that commissary,
exchange and postal privileges are not conditions of employment, we
conclude that the cost of living allowance with which the proposals are
concerned falls within the meaning of conditions of employment. In this
regard, the Agency is authorized by law to make monetary payments to
certain employees based on and because of their status as employees of
the Agency. In passing the legislation which became the Panama Canal
Act, the Congress expressly stated that one purpose of the provisions of
the Act was to minimize the disruption in the working environment and
employment conditions of employees of the Panama Canal Company (a
predecessor organization of the Agency) incident to the transition under
the Treaty. /11/ Given the nature and origin of the cost of living
allowance -- a payment to employees as employees authorized by law and
for the express purpose of minimizing disruption in their employment
conditions -- we find that a direct relationship exists between the
proposal and the employment relationships of bargaining unit employees.
In view of this relationship and the fact that the proposal is limited
to bargaining unit employees, we conclude that these proposals concern
conditions of employment of bargaining unit employees. See Antilles
Consolidated Education Association and Antilles Consolidated School
System, 22 FLRA No. 23 (1986), in which we discussed factors which we
consider in ruling on whether a proposal involves a condition of
employment of bargaining unit employees.
4. Union Participation on Bodies Considering the Cost of
Living Allowance
The Agency claims that, because the cost of living allowance is a
nonnegotiable matter, Union participation on bodies considering the cost
of living allowance is not within the duty to bargain under the
Authority's decision in National Federation of Federal Employees, Local
1167 and Department of the Air Force, Headquarters, 31st Combat Support
Group (TAC), Homestead Air Force Base, Florida, 6 FLRA 574, 580 (1981),
aff'd sub nom. National Federation of Federal Employees, Local 1167 v.
Federal Labor Relations Authority, 681 F.2d 886 (D.C. Cir. 1982). That
decision, however, is inapplicable to the circumstances present here.
The determination in Homestead that the union's proposed involvement in
managerial deliberations concerning contracting out was nonnegotiable
was based on the fact that the deliberations and discussion in question
were part of the decision-making process with respect to a management
right under section 7106 of the Statute. However, the Agency here makes
no assertion that any management right is involved in these proposals.
Moreover, neither party has asserted that the "boards, study groups or
other bodies" referred to in these proposals would encompass purely
intramanagement meetings held for such purposes as formulating
management position, strategies, etc.
5. Summary and Conclusions
Insofar as these proposals relate to the determination of the amount
of the cost of living allowance to be paid bargaining unit employees,
they concern a condition of employment which is within the Agency's
discretion. The Agency does not claim nor is it otherwise apparent that
the proposals in this respect otherwise conflict with law,
Government-wide rule or regulation or an agency regulation for which a
compelling need exists. Thus we find the proposals to be within the
duty to bargain insofar as they relate to the cost of living allowance
determination. In view of this conclusion, we also reject the Agency's
derivative contention that, because the cost of living allowance is a
nonnegotiable matter, the portion of the proposals relating to Union
participation in boards, study groups and bodies charged with
considering and making recommendations pertaining to the cost of living
allowance is also negotiable. Based on all of the above, we conclude
that these proposals are negotiable.
C. Order
The Agency must upon request, or as otherwise agreed to by the
parties, negotiate over Proposals 2 and 3. /12/
Issued, Washington, D.C., March 12, 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. As is stated in my
opinion in District No. 1, Pacific Coast District, Marine Engineers
Beneficial Association and Panama Canal Commission, 26 FLRA No. 8
(1987), I find no such expression in the Panama Canal Act of 1979 or its
legislative history. Therefore, for the reasons stated in those
opinions, I do not join the majority decision concerning Proposals 2 and
3.
Issued, Washington, D.C., March 12, 1987.
/s/ Jerry L. Calhoun, Chairman
--------------- FOOTNOTES$ ---------------
(1) The Panama Canal Act of 1979 defines the Canal Zone as: "the
areas and installations in the Republic of Panama made available to the
United States pursuant to the Panama Canal Treaty of 1977 and related
agreements . . . . " 22 U.S.C. Section 3602.
(2) In support of its contention that the provisions of C.Z. Code
tit. 1, Section 111, are no longer binding, the Union alleges that the
Department of State offices in Panama observe Panamanian holidays.
However, regardless of whatever practice the Department of State may
engage in, we cannot conclude that those provisions are no longer
binding given the terms of the Panama Canal Act.
(3) Article III (Use of Land and Water Areas) of the Agreement
provided as follows:
2. Housing Areas: The areas and installations set forth in
paragraph 2 of Annex of this Agreement (hereinafter referred to as
"housing areas") shall be dedicated to the primary purpose of
housing United States citizens employees and dependents. The
housing areas shall be administered in accordance with the regime
of civil coordination established in Article VI of this Agreement.
(4) Article VI (Regime of Civil Coordination for Housing Areas)
provides in relevant part:
1. As provided in Article XIII of the Panama Canal Treaty,
title to all housing within the housing areas, owned by the Panama
Canal Company immediately prior to the entry into force of this
Agreement, is transferred to the Republic of Panama. The housing
areas shall, however, continue to be dedicated, for the duration
of this Agreement, to the primary purpose of housing employees of
the Commission in accordance with the provisions of this Article.
2. The Republic of Panama hereby places at the disposal of the
United States, without cost, the use of such housing, within the
housing areas, as the United States may deem necessary for United
States citizen employees and dependents throughout the duration of
this Agreement. The United States may continue to manage,
maintain, improve, rent and assign such housing for United States
citizen employees and dependents.
3. The use of housing units beyond those required by the
United States for housing United States citizen employees and
dependents at the date of entry into force of this Agreement,
shall pass to the Republic of Panama on that date . . . .
4. In order to protect the interests and welfare of employees
of the United States who are not United States citizen employees
and who, on the date of entry into force of this Agreement, are
occupying housing units, the use of which is transferred to the
Republic of Panama, the Republic of Panama shall give such persons
the following special treatment:
(a) The opportunity to occupy, by lease or rental, or in the
event the Republic of Panama decides to sell, to acquire by
purchase at reasonable prices, the units which they are occupying
on the date of entry into force of this Agreement;
(b) In cases of purchase, the opportunity to obtain long-term
financing arrangements.
(c) In cases where continued occupancy of a particular housing
unit is not feasible, the opportunity to obtain other adequate
housing within such areas at reasonable cost, on a preferential or
priority basis.
5. In addition to housing its United States citizen employees
and dependents, the United States may use the housing areas for
other purposes related to the management, operation and
maintenance of the Canal. The housing areas may also be used for
other activities complementary to or compatible with the primary
purpose of housing employees of the Commission under revocable
land licenses to be issued in accordance with the procedures set
forth in Article IV of this Agreement.
. . . . . . .
7. The Coordinating Committee shall serve as the channel for
consultation and coordination between the two Parties with respect
to matters arising under the regime of civil coordination
established in this Article.
(5) CC Resolution No. 2-81/CCR (R) provided:
Whereas Article VI, paragraph 5 of the Agreement in
Implementation of Article III of the Panama Canal Treaty provides
that in addition to housing its United States citizen employees
and dependents, the United States may use the housing areas for
other purposes related to the management, operation and
maintenance of the Canal, and Article VI, paragraph 7 of said
Agreement provides that the Coordinating Committee shall serve as
the channel for consultation and coordination between the two
Parties with respect to matters arising under the regime of civil
coordination established by this Article;
Resolves that: After prior express authorization by the
Government of Panama, the Coordinating Committee may allow the use
of housing units located within the Panama Canal Commission
housing areas to Panamanian employees and their dependents, when
said Commission considers that it is necessary that such employees
reside near their place of work, as agreed by the Coordinating
Committee in each specific case.
(This quotation appears as submitted by the Agency; the Union
does not contest its accuracy.)
(6) 31 U.S.C. Section 1348 provides:
Section 1348. Telephone installation and charges
(a)(1) Except as provided in this section, appropriations are
not available to install telephones in private residences or for
tolls or other charges for telephone service from private
residences.
(2) Under regulations of the Secretary of State, appropriations
may be used to install and pay for the use of the Foreign Service.
Subsection (b) of this section applies to long-distance calls
made on those telephones.
(b) Appropriations of an agency are available to pay charges
for a long-distance call if required for official business and the
vouchers to pay for the call is sworn to by the head of the
agency. Appropriations of an executive agency are available only
if the head of the agency also certifies that the call is
necessary in the interest of the Government.
(c) Under regulations prescribed by the Secretary of the Army
on recommendation of the Chief of Engineers, not more than $30,000
may be expended each fiscal year to install and use in private
residences telephones required for official business in
constructing and operating locks and dams for navigation, flood
control, and related water uses.
(d) Under regulations prescribed by the Secretary of Defense,
funds appropriated to the Department of Defense are available to
install, repair, and maintain telephone wiring in residences owned
or leased by the United States Government and, if necessary for
national defense purposes, in other private residences.
(7) Accord Decision of the Comptroller General, 33 Comp. Gen. 28
(1955). Compare Decision of the Comptroller General, 53 Comp. Gen. 195
(1973), in which the Comptroller General in applying the prohibition
against providing telephone service for the personal benefit of
employees at Government expense, distinguished between those
Government-owned residence facilities set apart for exclusive personal
use of employees and those which could not be considered as set aside
for exclusive personal use.
(8) Section 1206 of the Panama Canal Act is codified at 22 U.S.C.
Section 3646 and provides:
Section 1206. Cost of living allowance
Effective beginning October 1, 1984, each officer and employee
of the Commission who is a citizen of the United States and was
employed by the Panama Canal Company or the Canal Zone Government
on September 30, 1979, or who is an individual of any nationality
recruited outside the Republic of Panama after September 30, 1979,
may be paid an allowance to offset any increased cost of living
which may result from the termination of the eligibility of the
officer or employee and his dependents to use military postal
services, sales stores, and exchanges. The amount of the
allowance may be determined by the Commission.
(9) See H.R. REP. 98, Part I, 96th Cong., 1st Sess. 52, reprinted in
1979 U.S. CODE CONG. & AD. NEWS 1034, 1054; S. REP. NO. 255, 96th
Cong., 1st Sess. 22-23 (1979); H.R. REP. NO. 473, 96th Cong., 1st Sess.
57, reprinted in 1979 U.S. CODE CONG. & AD. NEWS 1034, 1139-40.
(10) Section 1271(a) of the Panama Canal Act which is codified at 22
U.S.C. Section 3701 provides:
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 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.
(11) The Report of the Senate Committee on Armed Services which
accompanied the legislation which became the Panama Canal Act contained
the following statements:
Third, in arriving at its recommended version of the
implementing legislation, the committee was very concerned about
the welfare and security of United States citizens and other
persons working for the Company and the Department of Defense in
Panama. Many of the provisions of the bills before the committee
relate to these employees; the disruption in their working
environment and employment conditions inevitably incident to the
transfer of control over the Canal Zone to Panama should be kept
to a minimum.
S. REP. NO. 255, 96th Cong., 1st Sess. 3 (1979).
Section 306 -- Cost of living allowance
Since the time the canal was constructed, United States
Government agencies building and operating the canal have provided
sales stores to meet the requirement of employees engaged in the
operation. This practice is required to be discontinued by
Article III of the Treaty and the Annex referred to in paragraph 4
of Article III. However, paragraph 3 of Article XIII of the
Agreement in Implementation of Article III of the Treaty permits
the United States to furnish similar services to U.S. employees of
the Commission in military commissaries and post exchanges for a
period of five years after entry into force of the Treaty. On the
expiration of that five-year period such employees will be
required to buy exclusively from Panamanian sources and a sharp
increase in their cost of living at that time is anticipated.
Section 306 authorizes the payment of a cost of living
allowance beginning October 1, 1984, to offset any increased cost
of living which may result from the expiration of eligibility to
buy from U.S. military facilities. The allowance may be paid to
U.S. citizens who are employed by the Panama Canal Commission
prior to October 1, 1979, and to persons of any nationality who
are recruited outside the Republic of Panama on or after that
date. The amount of the allowance may be determined by the
Commission.
Id. at 22-23.
(12) In finding those proposals negotiable, we make no judgment as to
their merits.