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38 FLRA No. 95

FEDERAL LABOR RELATIONS AUTHORITY

WASHINGTON, D.C.

NATIONAL FEDERATION OF FEDERAL EMPLOYEES

LOCAL 2099

(Union)

and

U.S. DEPARTMENT OF THE NAVY

NAVAL AIR SYSTEMS COMMAND

NAVAL PLANT REPRESENTATIVE OFFICE

ST. LOUIS, MISSOURI

(Agency)

0-NG-1748

DECISION AND ORDER ON NEGOTIABILITY ISSUE

December 28, 1990

Before Chairman McKee and Members Talkin and Armendariz.

I. Statement of the Case

This case is before the Authority on a negotiability appeal filed by the Union under section 7106(a)(2)(E) of the Federal Service Labor-Management Relations Statute (the Statute). The appeal concerns the negotiability of one proposal. The proposal seeks to maintain the time between the end of a pay period and the day on which employees receive their paychecks ("pay lag"), at 6 days, rather than the 11 days which the Agency proposed to adopt. For the following reasons, we find that the proposal is negotiable under the Statute.

II. Background

In April 1988, the Naval Regional Finance Center (NRFC), Great Lakes, Illinois, which provides payroll services to approximately 70 Department of the Navy activities in the Central United States, including the Agency, notified the Agency that it intended to change the pay lag for civilian employees from 6 days to 11 days. Pay lag is the term the parties use to indicate the number of days which elapse between the end of a pay period and the day on which employees are actually paid for work performed during that pay period. In response, the Union proposed that the existing pay lag of 6 days be maintained.

III. Proposal

Payday for employees shall be the first Friday following the close of the pay period.

IV. Positions of the Parties

A. The Agency

The Agency contends that the proposed retention of the current 6-day pay lag interferes with management's rights to: (1) determine its internal security practices under section 7106(a)(1) of the Statute; (2) direct employees and assign work under section 7106(a)(2)(A) and (B) of the Statute; and (3) determine the number of employees assigned to any organizational subdivision and the methods and means of performing work under section 7106(b)(1) of the Statute.

Specifically, the Agency notes that in National Association of Government Employees, Local R14-89 and Headquarters, U.S. Army Air Defense Artillery Center and Fort Bliss, Fort Bliss, Texas, 32 FLRA 392 (1988) (Fort Bliss), the Authority found that completion of various audit procedures before paychecks are issued constituted internal security practices within the meaning of section 7106(a)(1) of the Statute. The Agency argues that because various payroll processing requirements imposed over the past several years have made it increasingly difficult for the Agency to accomplish all actions necessary to pay employees in a short period of time, the Agency is "being forced to devote more and more scarce resources to payroll processing . . . ." Statement of Position at 3. For example, the Agency claims that it can complete these necessary audit processes within a 6-day pay lag only by either "assigning a large amount of overtime work or increasing its staffing." Id. Thus, the Agency contends that negotiation of a 6-day pay lag conditions the Agency's ability to exercise its right to determine its internal security practices, that is, its ability to complete necessary audit procedures prior to issuing paychecks, either on the prior exercise of its right to assign overtime work under section 7106(a)(2)(A) of the Statute or on the prior exercise of its right to determine the number of employees assigned to the payroll office under section 7106(b)(1) of the Statute.

Moreover, the Agency argues that negotiation over the length of pay lag also directly interferes with its rights to direct employees and to assign work under section 7106(a)(2)(A) and (B) of the Statute. According to the Agency, allowing the Union to negotiate the length of pay lag would prohibit management "from extending the pay lag and from assigning additional or miscellaneous duties even if the pay lag is inadequate for the [A]gency to properly fulfill its payroll processing responsibilities." Id. at 16. The Agency claims that if the pay lag remains at 6 days, only the most critical duties necessary to complete the payroll could be assigned. Consequently, according to the Agency, "[m]ost audit assignments would have to be postponed until after the payroll deadline had been met. Thus, management would be prevented from assigning certain work until after completion of the payroll process." Id. at 16-17.

The Agency also notes that in Fort Bliss the Authority found that the functional grouping of personnel in the payroll office to accomplish the payroll audit processes in a systematic manner prior to issuing paychecks constituted the methods and means of performing work under section 7106(b)(1) of the Statute. According to the Agency, however, because other activities whose payrolls are prepared by the Agency would function with a 11-day pay lag, negotiation of a 6-day pay lag would result in multiple pay days with different pay lags. The Agency claims that in order to accommodate multiple pay days with different pay lags, the Agency would be obligated to change the functional grouping of personnel in the finance office. Thus, the Agency concludes that "adoption of the proposal would determine the methods and means of performing work under section 7106(b)(1) of the Statute." Id. at 9.

The Agency additionally contends that the Union's proposal would obligate management to take actions that are inconsistent with portions of Title 6 of the General Accounting Office's Policy and Procedures Manual for Guidance of Federal Agencies (GAO Manual), which the Agency asserts is a Government-wide regulation within the meaning of section 7117 of the Statute. According to the Agency, in order to comply with the Union's proposal to pay employees in 6 days, it would be required to submit time and attendance records before the end of a pay period. The Agency argues, however, that submission of time and attendance records prior to the end of a pay period is inconsistent with section 17.2 of Title 6 of the GAO Manual, which prohibits submission of the time and attendance records prior to the end of a pay period except in circumstances not involved in this case. The Agency also argues that because negotiation of pay lag would "permit various bargaining units at activities serviced by NRFC to negotiate different paydays, even though many of them are located at a given activity or in a single geographic area[,]" the proposal is inconsistent with section 15, Chapter 3 of Title 6 of the GAO Manual, which requires that pay, leave and allowance processing procedures be uniform within an agency or geographic location. Statement of Position at 11.

B. The Union

The Union argues that the proposal does not interfere with the Agency's right to determine its internal security practices because the proposal does not eliminate any of the audits the Agency deems necessary to maintain the security of the Agency's payroll. Further, the Union argues that "[t]he proposal also does not directly determine any other matter incorporated into Section 7106. Management has unfettered discretion to determine its work assignments, organization, methods/means of performing work, and number of employees." Reply Brief at 3 (emphasis in original). According to the Union, "[t]he proposal only requires that the [A]gency distribute pay checks with a pay lag of only six days. The [A]gency retains its rights to accomplish this objective in any manner it feels is appropriate." Id.

The Union also disputes the Agency's contentions that the proposal is inconsistent with the GAO Manual. The Union argues instead that "[e]very citation chosen by the [A]gency clearly shows that the recommmendation is not mandatory." Id. at 4.

Finally, the Union also disagrees with the Agency's contentions that the proposal interferes with the Agency's right to determine the methods and means of performing work and that the proposal would excessively interfere with the Agency's right to direct employees or assign work. The Union claims that "[t]he Agency has not established a nexus between furthering the [A]gency's mission and the limited matter of paylag, since [the Agency] concedes that the work can be accomplished during the six day paylag period." Id.

V. Analysis and Conclusions

Recently, in our decision in American Federation of Government Employees, Local 1698 and Department of the Navy, Navy Aviation Supply Office, Philadelphia, PA, 38 FLRA No. 85 (1990) (Navy Aviation Supply Office), we concluded that a proposed 6-day pay lag was within the agency's duty to bargain under the Statute. In concluding that a proposal to establish a pay lag of 6 days was negotiable, we noted first that pay lag affects working conditions of bargaining unit employees and, therefore, is a condition of employment within the meaning of section 7103(a)(14) of the Statute. In Navy Aviation Supply Office, we also rejected agency claims, identical to the arguments raised by the Agency in this case, that a proposal to limit pay lag to 6 days was nonnegotiable because it was inconsistent with a Government-wide regulation, that is, the GAO Manual, and/or because the proposal was inconsistent with various management rights.

In Navy Aviation Supply Office, the agency claimed, as does the Agency in this case, that a proposal to limit pay lag to 6 days would result in: (1) the submission of time and attendance records prior to the end of a pay period in violation of section 17.2 of the GAO Manual; and (2) the establishment of multiple pay days at a single geographic location in violation of section 15 of Chapter 3 of the GAO Manual.

In rejecting these claims, we noted first that Title 6 of the GAO Manual was revised in 1989. We found that nothing in section 3.2.D.4. of the GAO Manual, which replaced section 17.2, prohibited the submission of time and attendance records prior to the end of a pay period. In fact, we noted that section 3.2.D.4. contemplated that in order to meet established pay days, it might be necessary to submit time and attendance records prior to the end of a pay period. Further, we found that nothing in Chapter 2, section 2.2.A.3 of the GAO Manual, which replaced section 15 of Chapter 3, precluded an agency from establishing different pay days for different activities at a single geographic location. We concluded, therefore, that even assuming that the GAO Manual was a Government-wide regulation, the agency had not established that the proposal to limit pay lag to 6 days obligated the agency to take actions that were inconsistent with the GAO Manual.

As the Agency in this case raises arguments concerning an alleged inconsistency with the GAO Manual identical to those raised by the agency in Navy Aviation Supply Office, we conclude, for the reasons more fully set out in Navy Aviation Supply Office, that the proposal in this case concerns conditions of employment and does not interfere with the GAO Manual.

In Navy Aviation Supply Office, the agency also claimed, as does the Agency in this case, that a proposal to limit pay lag to 6 days was inconsistent with the Agency's rights to: (1) determine its internal security practices under section 7106(a)(1) of the Statute; (2) direct employees and assign work under section 7106(a)(2)(A) and (B) of the Statute; and (3) determine the number of employees assigned to any organizational subdivision and the methods and means of performing work under section 7106(b)(1) of the Statute.

In rejecting these arguments, we concluded that the agency had not established that the proposal directly interfered with any of the cited management rights, but that the proposal only had indirect effects on management rights. We found that the proposal established only a requirement that the agency accomplish the payroll function in some unspecified manner that allowed the agency to pay employees on the sixth day after the end of a pay period, and significantly, left the choices as to how the agency would accomplish its payroll function to the agency's discretion. We also noted that the record in that case did not confirm the agency's claim that negotiation of a pay lag of less than 12 days would result in either a large increase in overtime or an increase in staffing or obligate the agency to modify the grouping of personnel in its payroll office.

Moreover, we stated that even assuming that negotiation of a 6-day pay lag would result in an increase in overtime, that result did not thereby release the agency from the duty to bargain under the Statute. We noted that if an agency "was released from its duty to bargain whenever it suffered economic hardship, the [agency's] duty to bargain would practically be non-existant in a large proportion of cases. . . ." Naval Aviation Supply Office, slip op. at 10 (quoting American Federation of Government Employees v. FLRA, 785 F.2d 333, 338 (D.C. Cir. 1986)). Finally, we noted that the competing interests involved--the agency's interest in achieving economy and the employees' interest in when they receive their paychecks--were not irreconcilable and presented the sort of questions that collective bargaining was intended to resolve.

Consequently, we concluded that the proposal for a 6-day pay lag did not interfere with the agency's rights to: (1) determine its internal security practices under section 7106(a)(1) of the Statute; (2) direct employees and assign work under section 7106(a)(2)(A) and (B) of the Statute; or (3) determine the number of employees assigned to any organizational subdivision and the methods and means of performing work under section 7106(b)(1) of the Statute.

The Agency in this case raises arguments concerning the proposal's alleged inconsistency with management rights identical to those raised by the agency in Navy Aviation Supply Office. We conclude, therefore, for the reasons more fully set out in Navy Aviation Supply Office, that the proposal in this case does not directly interfere with the Agency's rights to: (1) determine its internal security practices under section 7106(a)(1) of the Statute; (2) direct employees and assign work under section 7106(a)(2)(A) and (B) of the Statute; or (3) determine the number of employees assigned to any organizational subdivision and the methods and means of performing work under section 7106(b)(1) of the Statute.

Consequently, the Union's proposal is within the Agency's duty to bargain under the Statute.

VI. Order

The Agency shall upon request, or as otherwise agreed to by the parties, bargain over the Union's proposal.^(*)

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FOOTNOTES:
(If blank, the decision does not have footnotes.)
 

*/ In finding this proposal to be negotiable, we make no judgment as to its merits.

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