B-100413, FEBRUARY 20, 1951, 30 COMP. GEN. 356

B-100413: Feb 20, 1951

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COMPENSATION - MEMBERS OF CREWS OF VESSELS - AREA BONUS ENTITLEMENT "AREA BONUS" PAYABLE TO MEMBERS OF CREWS OF VESSELS WHILE BEING IN THE NATURE OF ADDITIONAL RATHER THAN BASIC COMPENSATION IS NEVERTHELESS AN ELEMENT OF COMPENSATION WITHIN THE PURVIEW OF SECTION 202 (8) OF THE CLASSIFICATION ACT OF 1949 TO BE ADMINISTRATIVELY FIXED AND ADJUSTED FROM TIME TO TIME AS NEARLY AS IS CONSISTENT WITH THE PUBLIC INTEREST IN ACCORDANCE WITH THE PREVAILING RATES AND PRACTICES IN THE MARITIME INDUSTRY. WHICH WAS ARRIVED AT THROUGH COLLECTIVE BARGAINING BETWEEN THE MARITIME UNIONS AND SHIPPING OPERATORS. WAS PREMISED UPON A DETERMINATION THAT IT WOULD NOT BE "CONSISTENT WITH THE PUBLIC INTEREST" TO COMMENCE PAYMENT AS OF AN EARLIER DATE.

B-100413, FEBRUARY 20, 1951, 30 COMP. GEN. 356

 

COMPENSATION - MEMBERS OF CREWS OF VESSELS - AREA BONUS ENTITLEMENT "AREA BONUS" PAYABLE TO MEMBERS OF CREWS OF VESSELS WHILE BEING IN THE NATURE OF ADDITIONAL RATHER THAN BASIC COMPENSATION IS NEVERTHELESS AN ELEMENT OF COMPENSATION WITHIN THE PURVIEW OF SECTION 202 (8) OF THE CLASSIFICATION ACT OF 1949 TO BE ADMINISTRATIVELY FIXED AND ADJUSTED FROM TIME TO TIME AS NEARLY AS IS CONSISTENT WITH THE PUBLIC INTEREST IN ACCORDANCE WITH THE PREVAILING RATES AND PRACTICES IN THE MARITIME INDUSTRY. AN AGREEMENT TO MAKE RETROACTIVE PAYMENTS OF AREA BONUS TO MEMBERS OF CREWS OF VESSELS, FOLLOWED GENERALLY IN THE MARITIME INDUSTRY, WHICH WAS ARRIVED AT THROUGH COLLECTIVE BARGAINING BETWEEN THE MARITIME UNIONS AND SHIPPING OPERATORS, MAY BE REGARDED AS A PRACTICE OF THE MARITIME INDUSTRY WHICH MAY BE FOLLOWED BY THE MILITARY SEA TRANSPORTATION SERVICE, IF ADMINISTRATIVELY DETERMINED TO BE IN THE PUBLIC INTEREST. WHERE AN ADMINISTRATIVE DETERMINATION TO RESUME AREA BONUS PAYMENTS TO MEMBERS OF CREWS OF VESSELS PROSPECTIVELY EFFECTIVE, RATHER THAN RETROACTIVELY, WAS PREMISED UPON A DETERMINATION THAT IT WOULD NOT BE "CONSISTENT WITH THE PUBLIC INTEREST" TO COMMENCE PAYMENT AS OF AN EARLIER DATE, IT WOULD NOT BE PROPER FOR THE ADMINISTRATIVE OFFICER TO REVIEW OR RECALL SUCH DETERMINATION SO AS TO RETROACTIVELY CHANGE RIGHTS VESTED AS A RESULT OF THE EXERCISE OF THE ADMINISTRATIVE DISCRETION CONFERRED BY SECTION 202 (8) OF THE CLASSIFICATION ACT OF 1949.

ACTING COMPTROLLER GENERAL FISHER TO THE SECRETARY OF THE NAVY, FEBRUARY 20, 1951:

THERE HAVE BEEN CONSIDERED YOUR LETTER OF DECEMBER 22, 1950, AND ENCLOSURES, SUBMITTING FOR DECISION CERTAIN QUESTIONS HEREINAFTER SET FORTH RELATIVE TO THE VALIDITY OF RETROACTIVE PAYMENT OF "AREA BONUS" TO OFFICERS AND MEMBERS OF CREWS OF VESSELS OPERATED BY THE MILITARY SEA TRANSPORTATION SERVICE.

THE FACTUAL SITUATION, AS STATED IN YOUR LETTER, GIVING RISE TO THE QUESTIONS PRESENTED MAY BE OUTLINED BRIEFLY AS FOLLOWS:

BY MARITIME WAR EMERGENCY BOARD DECISION, DATED APRIL 28, 1950, THERE WERE VOIDED AFTER SEPTEMBER 30, 1950,"AREA BONUS" PAYMENTS WHICH HAD BEEN ESTABLISHED BY THE BOARD'S DECISION 2-D, BONUS, DATED OCTOBER 1, 1945, FOR OFFICERS AND MEN SERVING ON SHIPS OF THE AMERICAN MERCHANT MARINE OPERATING FULL OR PART TIME IN CERTAIN DEFINED WATERS. SUCH DECISION OF APRIL 28, 1950, PROVIDED, HOWEVER, THAT THE BONUS COULD BE EXTENDED THROUGH COLLECTIVE BARGAINING AGREEMENTS; AND BY MARITIME INDUSTRY COLLECTIVE BARGAINING AGREEMENTS WHICH WERE RATIFIED DURING OCTOBER 1950 "AREA BONUS" PAYMENTS WERE EXTENDED WITHOUT INTERRUPTION FROM OCTOBER 1 THROUGH DECEMBER 31, 1950. IN PARTICULAR REFERENCE TO THE MILITARY SEA TRANSPORTATION SERVICE, YOU STATE THAT FOLLOWING THE MARITIME WAR EMERGENCY BOARD DECISION OF APRIL 28, 1950, THE SERVICE CEASED MAKING THE BONUS DECISION OF APRIL 28, 1950, THE SERVICE CE CEASED MAKING THE BONUS PAYMENTS AFTER SEPTEMBER 30, 1950, BUT IN LINE WITH THE COLLECTIVE BARGAINING AGREEMENTS JUST MENTIONED AND IN VIEW OF SECTION 202 (8) OF THE CLASSIFICATION ACT OF 1949, INFRA, SUCH PAYMENTS WERE RESUMED EFFECTIVE NOVEMBER 15, 1950, BY ORDER OF THE ACTING SECRETARY OF THE NAVY CONTAINED IN A DISPATCH DATED NOVEMBER 14, 1950, TO THE AFFECTED COMMANDS.

THE QUESTIONS PRESENTED ARE QUOTED FROM YOUR LETTER AS FOLLOWS:

THE FIRST QUESTION IS CAN THE MILITARY SEA TRANSPORTATION SERVICE FOLLOW PREVAILING PRACTICES IN THE MARITIME INDUSTRY AND APPROVE A RETROACTIVE "AREA BONUS" PAYMENT COVERING THE PERIOD FROM 1 OCTOBER 1950 TO 15 NOVEMBER 1950?

IF THE RE-INSTITUTION OF THE "AREA BONUS" AS OF A DATE CERTAIN RENDERS ILLEGAL THE AUTHORIZATION OF A RETROACTIVE BONUS PAYMENT FOR THE PERIOD PRIOR TO 15 NOVEMBER 1950, THEN YOUR DECISION ON THE FOLLOWING QUESTION IS REQUESTED. IN A SUBSEQUENT SIMILAR SITUATION WOULD PAYMENTS BE APPROVED SHOULD MILITARY SEA AUTHORITY OF 5 U.S.C. 1082 (S) AND IN ACCORDANCE WITH ,MARITIME PRACTICES" AUTOMATICALLY TELL ITS FISCAL OFFICERS TO PAY "AREA BONUS" CONTINUOUSLY?

IT IS ALSO REQUESTED THAT A DECISION BE GIVEN ON THE LEGALITY OF MAKING RETROACTIVELY EFFECTIVE VARIOUS KINDS OF PAY ADJUSTMENTS TO CORRESPOND TO ADJUSTMENTS MADE IN THE MARITIME INDUSTRY, SO AS TO BE EFFECTIVE THE SAME DATE AS IN INDUSTRY.

THE COMPENSATION OF OFFICERS AND MEMBERS OF CREWS OF VESSELS IS REQUIRED TO BE FIXED ADMINISTRATIVELY BY SECTION 202 OF THE CLASSIFICATION ACT OF 1949, 63 STAT. 954, 955, 5 U.S.C. 1082 (8), WHICH PROVIDES, IN PERTINENT PART, THAT---

THIS ACT (EXCEPT TITLE XII) SHALL NOT APPLY TO---

(8) OFFICERS AND MEMBERS OF CREWS OF VESSELS, WHOSE COMPENSATION SHALL BE FIXED AND ADJUSTED FROM TIME TO TIME AS NEARLY AS IS CONSISTENT WITH THE PUBLIC INTEREST IN ACCORDANCE WITH PREVAILING RATES AND PRACTICES IN THE MARITIME INDUSTRY;

PRELIMINARILY, IT MUST BE DETERMINED WHETHER "AREA BONUS"--- BEING IN THE NATURE OF ADDITIONAL RATHER THAN BASIC COMPENSATION--- IS WITHIN THE PURVIEW OF SECTION 202 (8) OF THE 1949 STATUTE, SUPRA. IN THAT CONNECTION, IT WAS STATED IN DECISION OF OCTOBER 16, 1950, B-98054, 30 COMP. GEN. 158, 161, AS FOLLOWS:

SINCE THE CLASSIFICATION ACT OF 1949 DEALS PRIMARILY WITH THE FIXING OF BASIC RATES OF COMPENSATION, IT MIGHT BE SAID THAT THE PROVISIONS OF SECTION 202 (8) ALSO RELATE ONLY TO BASIC COMPENSATION, AND THAT OTHER ELEMENTS OF COMPENSATION, SUCH AS PREMIUM RATES FOR OVERTIME SERVICES, WERE NOT INTENDED TO BE AFFECTED THEREBY. HOWEVER, IN CONTRADISTINCTION TO SECTION 202 (7), 63 STAT. 955, RELATIVE TO EMPLOYEES IN RECOGNIZED TRADES OR CRAFTS, ETC., WHICH USES THE EXPRESSION "IN ACCORDANCE WITH PREVAILING RATES," WITHOUT MORE, SECTION 202 (8) USES THE EXPRESSION "IN ACCORDANCE WITH PREVAILING RATES AND PRACTICES IN THE MARITIME INDUSTRY.' (ITALICS SUPPLIED.) THE ADDITION OF THE UNDERSCORED WORDS IS SIGNIFICANT AND IF THOSE WORDS ARE TO BE GIVEN FULL EFFECT, THEY MUST BE HELD TO REQUIRE THE FIXING OF ALL ELEMENTS OF COMPENSATION, INCLUDING OVERTIME COMPENSATION, IN ACCORDANCE WITH "PRACTICES" IN THE MARITIME INDUSTRY, AS NEARLY AS IS CONSISTENT WITH THE PUBLIC INTEREST. * * *

IN CONSONANCE WITH THAT HOLDING WITH RESPECT TO OVERTIME COMPENSATION, IT REASONABLY MAY BE HELD THAT "AREA BONUS" IS AN ELEMENT OF COMPENSATION CONTEMPLATED BY SAID SECTION 202 (8) AND MAY BE PAID IF IT IS A PREVAILING PRACTICE OF THE MARITIME INDUSTRY AND PROVIDED SUCH PAYMENT IS ADMINISTRATIVELY DETERMINED TO BE "CONSISTENT WITH THE PUBLIC INTEREST.'

TURNING NOW TO YOUR QUESTION AS TO WHETHER "AREA BONUS" MAY BE PAID FOR THE PERIOD OCTOBER 1 THROUGH NOVEMBER 14, 1950, IT APPEARS FROM YOUR LETTER THAT THE AGREEMENT TO MAKE RETROACTIVE PAYMENTS OF THE BONUS FROM OCTOBER 1 WAS ARRIVED AT THROUGH COLLECTIVE BARGAINING BETWEEN THE MARITIME UNIONS AND SHIPPING OPERATORS AND, IT IS ASSUMED, THE RETROACTIVE FEATURE OF THE AGREEMENT HAS BEEN FOLLOWED GENERALLY IN THE MARITIME INDUSTRY. IF SUCH BE THE CASE, IT SEEMS REASONABLE TO CONCLUDE THAT RETROACTIVE PAYMENT OF THE BONUS TO OCTOBER 1, 1950, BECAME A "PRACTICE" OF THE MARITIME INDUSTRY WHICH SECTION 202 (8) AUTHORIZES YOU TO FOLLOW WITH RESPECT TO THE MILITARY SEA TRANSPORTATION SERVICE, PROVIDED YOU DETERMINE IT TO BE CONSISTENT WITH THE PUBLIC INTEREST TO DO SO. YOUR FIRST QUESTION IS ANSWERED ACCORDINGLY, SUBJECT TO WHAT IS HEREINAFTER SAID CONCERNING THE OTHER CONSIDERATIONS SUGGESTED BY YOU.

REFERRING TO THE FIRST SENTENCE OF THE SECOND PARAGRAPH QUOTED ABOVE FROM YOUR LETTER, I DO NOT REGARD THE FACT THAT THE DISPATCH OF NOVEMBER 14, 1950, AUTHORIZED RESUMPTION OF "AREA BONUS" PAYMENTS EFFECTIVE ON A DATE CERTAIN ( NOVEMBER 15, 1950) AS PRECLUDING, IN AND OF ITSELF, RETROACTIVE PAYMENT AT THE PRESENT TIME FOR THE OMITTED PERIOD. HOWEVER, IF THE DETERMINATION TO RESUME THE PAYMENTS AS OF THE MENTIONED DATE WAS PREMISED UPON A DETERMINATION THAT IT WOULD NOT BE "CONSISTENT WITH THE PUBLIC INTEREST" TO COMMENCE PAYMENT AS OF AN EARLIER DATE, THEN IT WOULD NOT BE PROPER FOR YOU NOW TO REVIEW OR RECALL SUCH DETERMINATION SO AS RETROACTIVELY TO CHANGE RIGHTS WHICH HAVE VESTED AS A RESULT OF THE EXERCISE OF THE DISCRETION CONFERRED BY SECTION 202 (8). 67 C.J.S., OFFICERS, SEC. 103 (C). IN VIEW OF THE FOREGOING DISCUSSION, IT IS NOT BELIEVED THAT SPECIFIC ANSWER IS REQUIRED TO THE QUESTION IN THE LAST SENTENCE OF THE SECOND PARAGRAPH QUOTED FROM YOUR LETTER.

YOUR LAST QUESTION IS TOO BROADLY STATED AND TOO HYPOTHETICAL TO PERMIT OF A DECISION AT THIS TIME. HOWEVER, IT IS BELIEVED THAT THE GENERAL CONSIDERATIONS STATED ABOVE IN CONNECTION WITH THE RETROACTIVE PAYMENT OF THE "AREA BONUS" HERE INVOLVED MAY SERVE AS A GUIDE TO FUTURE CASES OF RETROACTIVE COMPENSATION ADJUSTMENTS OF VESSEL EMPLOYEES UNDER YOUR JURISDICTION.