What would you call it when an agency decides to fund the non-supervisory employee awards budget at only 56% of what is needed, while deciding to fund the management awards account at 100% of what was needed?  We call it demeaning, but unfortunately for the members of AFGE Local 788 an arbitrator said it is OK. Here is why and what unions can do to prevent this?

The arbitrator decided that the contract language addressing awards funding was not completely binding on management because the funding obligation was “based on available funding.”  The case is a great example of why unions need airtight contract obligations on management to fund unit employee awards at the same percentage of total annual salary that it provides for non-unit employees.  While the union cannot propose a specific funding percentage or amount, it can propose equity, as we saw in AFGE, Local 3638, 31 FLRA 921, (3/23/88) where the FLRA held the following to be negotiable language:

Performance Award Budget The amount of money allocated by the Agency for distribution as performance awards to employees in the pool. The amount shall not be less than the highest percentage allocated to any other pool.

Under language like that management would be free to pay no one anything for awards, but it could not single out a small group, like managers, and reward only them for above average performance or reward them at a different funding level than unit employees.

Another lesson to be learned from this case is the value of alleging not just a contract violation, but also a unilateral change in working conditions ULP.  When a union only alleges a contract violation and the arbitrator does not agree, the case is over and the union loses.  However, if it had also alleged an illegal unilateral change, the arbitrator could have rejected the alleged contract infraction but still had to deal with the fact that the agency changed its awards funding process without advance notice to and bargaining with the union.  That alone typically would entitle employees to back pay if the arbitrator agreed there was a ULP, as seen in NTEU, 63 FLRA 505 (6/30/09).

A final wrinkle in situations like this is that unions should know what the awarding funding practice is, e.g., does the agency set aside 1% of the total annual aggregate salary for each of various subgroups, e.g., unit employees, supervisors, confidential or policy-making employees.  Or does it have a practice of funding supervisor award programs at half a percentage point more or even budget a specific amount for awards each year.  No matter how it does it, if the agency has a practice and changes that practice the union is entitled to negotiate before the change can be implemented.  Consequently, even if the agency had total discretion over awards, if it tells your local that it is going to change the funding practice—for whatever reason, the union has the right to demand to bargain over at least the impact and implementation issues of that proposal. And management cannot make the change until that bargaining is complete, which could take a long, long time.  If the union has not waived the right or lost it through a “covered-by” situation, it likely can also bargain over the substance of the funding.

Awards are a very big deal.  They can easily return to employees what they paid in union dues and save them from being belittled like this management group did.  A fair system based on equity should be at the top of the union’s bargaining priorities.

About AdminUN

FEDSMILL staff has over 40 years of federal sector labor relations experience on the union as well as management side of the table and even some time as a neutral.
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