B-69336, SEPTEMBER 24, 1947, 27 COMP. GEN. 173

B-69336, SEPTEMBER 24, 1947, 27 COMP. GEN. 173

CONTRACTS - COAL - PRICE ADJUSTMENT ON ACCOUNT OF WAGE INCREASES FOR PURPOSES OF PRICE ADJUSTMENTS UNDER POST OFFICE DEPARTMENT COAL CONTRACTS ON ACCOUNT OF INSIDE WORKERS' WAGE RATE CHANGES, THE WAGE RATE INCREASES EFFECTED BY THE NATIONAL BITUMINOUS COAL WAGE AGREEMENT OF 1947 (PROVIDING FOR AN 8-HOUR DAY AT STRAIGHT TIME RATES) OVER THE RATES UNDER THE KRUG-1LEWIS AGREEMENT OF MAY 29, 1946, (PROVIDING FOR A 9-HOUR DAY WITH A STRAIGHT TIME RATE PAYABLE FOR 7 HOURS, AN OVERTIME RATE FOR THE 8TH HOUR AND A SPECIAL RATE FOR THE 9TH HOUR), ARE TO BE REGARDED AS THE DIFFERENCE BETWEEN WAGE RATES PAYABLE FOR THE 8-HOUR DAY UNDER THE 1947 AGREEMENT AND THOSE PAYABLE UNDER THE 1946 AGREEMENT FOR 8 HOURS. AMPLIFIED BY 27 COMP. GEN. 378.)

COMPTROLLER GENERAL WARREN TO THE POSTMASTER GENERAL, SEPTEMBER 24, 1947:

THERE HAS BEEN CONSIDERED YOUR LETTER OF SEPTEMBER 5, 1947, REQUESTING A DECISION AS TO THE PROPER METHOD TO BE USED BY THE PURCHASING AGENT OF YOUR DEPARTMENT IN DETERMINING THE INCREASE TO BE PAID TO CONTRACTORS UNDER COAL CONTRACTS ON ACCOUNT OF THE WAGE INCREASE GRANTED TO MINE WORKERS UNDER THE NATIONAL BITUMINOUS COAL WAGE AGREEMENT OF 1947.

THE PERTINENT WAGE CLAUSE WHICH YOUR LETTER STATES WAS INCLUDED IN THE CONTRACTS INVOLVED PROVIDES AS FOLLOWS:

IN THE EVENT THAT DURING THE CONTRACT PERIOD CHANGES SHOULD OCCUR IN WORKING HOURS, WAGE SCALES, OR OTHER CONDITIONS OF EMPLOYMENT, AND SUCH CHANGES ARE A PART OF A GENERAL REVISION OF SUCH WORKING HOURS, WAGE SCALES, OR CONDITIONS OF EMPLOYMENT WITHIN THE PRODUCING DISTRICT WHERE COAL IS MINED, AND SUCH CHANGES RESULT IN AN INCREASE OR DECREASE IN THE WAGE RATE PAID TO THE PREDOMINANT OCCUPATIONAL CLASS OF LABOR EMPLOYED AT THE MINE (THE PREDOMINANT OCCUPATIONAL CLASS OF LABOR EMPLOYED TO BE THAT STATED IN THE BID), THE CONTRACT PRICE OF THE COAL SHALL BE AUTOMATICALLY INCREASED OR DECREASED FOR DEEP-MINED COAL BY AN AMOUNT WHICH IS THE PRODUCT OF THE F.O.B. MINE PRICE TIMES 10.64, TIMES THE PERCENT OF THE INCREASE OR DECREASE IN THE WAGE RATE OF THE PREDOMINANT OCCUPATIONAL CLASS OF LABOR EMPLOYED AT THE MINE. WHEN A CHANGE OCCURS IN THE WAGE RATE PAID TO THE PREDOMINANT OCCUPATIONAL CLASS OF LABOR EMPLOYED AT THE MINE THE CONTRACTOR SHALL FURNISH TO THE CONTRACTING OFFICER AUTHENTICATED COPIES OF THE NEW WAGE SCALE AND OF THE WAGE SCALE WHICH WAS PREVIOUSLY IN EFFECT. ANY PRICE REVISION UNDER THIS ARTICLE SHALL APPLY ONLY TO SHIPMENTS MADE ON AND AFTER THE EFFECTIVE DATE OF SUCH INCREASE OR DECREASE IN THE WAGE RATE.

IT IS UNDERSTOOD FROM YOUR LETTER THAT, AT THE TIME THE CONTRACTS INVOLVED WERE ENTERED INTO, THE WAGE AGREEMENT IN EFFECT BETWEEN THE MINE OPERATORS AND THE EMPLOYEES WAS THE SO-CALLED KRUG-1LEWIS AGREEMENT EXECUTED MAY 29, 1946, AND EFFECTIVE AS OF THE SAME DATE. WITH RESPECT TO WAGES, ARTICLE 6 (A) OF SAID AGREEMENT STIPULATED THAT:

(A) ALL MINE WORKERS, WHETHER EMPLOYED BY THE DAY, TONNAGE OR FOOTAGE RATE, SHALL RECEIVE $1.85 PER DAY IN ADDITION TO THAT PROVIDED FOR IN THE CONTRACT WHICH EXPIRED MARCH 31, 1946.

THE REFERRED TO CONTRACT WHICH EXPIRED ON MARCH 31, 1946, IS THE NATIONAL BITUMINOUS COAL WAGE AGREEMENT EFFECTIVE APRIL 1, 1945, ARTICLE 1 (A) OF WHICH PROVIDES IN PART AS FOLLOWS:

(A) FOR ALL INSIDE EMPLOYEES A WORK DAY OF NINE HOURS FROM PORTAL TO PORTAL IS ESTABLISHED, INCLUDING A STAGGERED FIFTEEN MINUTES FOR LUNCH, AND WITHOUT ANY INTERMISSION OR SUSPENSION OF OPERATIONS THROUGHOUT THE DAY. OF THESE NINE HOURS, SEVEN HOURS SHALL BE PAID FOR A STRAIGHT RATE, THE EIGHTH HOUR SHALL BE PAID FOR AT TIME AND ONE HALF, AND THE NINTH HOUR SHALL BE PAID FOR AT A FLAT RATE OF $1.50 ($1.00 AT TIME AND A HALF) FOR EACH INSIDE DAY WORKER. * * *

THE NATIONAL BITUMINOUS COAL WAGE AGREEMENT OF 1947, EFFECTIVE JULY 1, 1947, PROVIDES, UNDER WAGES AND HOURS, IN PERTINENT PART, AS FOLLOWS:

(A) FOR ALL INSIDE EMPLOYEES A WORK DAY OF EIGHT HOURS FROM PORTAL TO PORTAL IS ESTABLISHED, INCLUDING A STAGGERED THIRTY MINUTES FOR LUNCH, AND WITHOUT ANY INTERMISSION OR SUSPENSION OF OPERATIONS THROUGHOUT THE DAY. FOR INSIDE DAY WORKERS THESE EIGHT HOURS SHALL BE PAID FOR AT STRAIGHT TIME RATE. OVERTIME BEYOND EIGHT HOURS PER DAY AND FORTY HOURS PER WEEK SHALL BE PAID FOR A TIME AND ONE-HALF WITH NO PYRAMIDING OF OVERTIME. STRAIGHT TIME RATES FOR INSIDE DAY WORKERS SHALL BE THE TOTAL DAILY NORMAL SHIFT EARNINGS FOR EIGHT HOURS DIVIDED BY EIGHT (8) HOURS.

(D) ALL MINE WORKERS, WHETHER EMPLOYED BY THE MONTH, DAY, OR TONNAGE, YARDAGE, DEADWORK OR FOOTAGE RATE, SHALL RECEIVE $3.05 PER DAY IN ADDITION TO THAT PROVIDED FOR IN THE CONTRACT WHICH EXPIRED MARCH 31, 1946.

THUS, IT APPEARS THAT, UNDER THE WAGE AGREEMENT OF 1946, THE DAILY WAGE RATE PROVIDED FOR THEREIN CONSTITUTED PAYMENT FOR A 9-HOUR WORKDAY FOR INSIDE EMPLOYEES WHEREAS, UNDER THE WAGE AGREEMENT OF 1947, THE DAILY RATE TO BE PAID TO INSIDE EMPLOYEES CONSTITUTES COMPENSATION FOR A WORKDAY OF 8 HOURS. HENCE, IT SEEMS APPARENT THAT THE DIFFERENCE BETWEEN THE DAILY WAGE RATES TO BE PAID UNDER EACH AGREEMENT MAY NOT BE SAID TO CONSTITUTE AN ACCURATE REFLECTION OF THE ACTUAL INCREASE IN THE WAGE RATE GRANTED TO INSIDE EMPLOYEES UNDER THE 1947 AGREEMENT. IN CONNECTION WITH THE PROBLEM, THERE HAS BEEN CONSIDERED CAREFULLY THE PRINCIPAL METHOD OF COMPUTING THE WAGE RATE INCREASE DESCRIBED IN YOUR LETTER. THEREUNDER, THE INCREASE IN WAGE COSTS WOULD BE DETERMINED BY REDUCING THE DAILY WAGE RATES PRESCRIBED UNDER THE AFORESAID AGREEMENTS TO AN HOURLY BASIS. THE DAILY WAGE RATE STIPULATED IN THE 1947 AGREEMENT IS DIVIDED BY 8--- THE PRESCRIBED NUMBER OF HOURS IN THE ESTABLISHED WORKDAY FOR STRAIGHT TIME WORK BY INSIDE EMPLOYEES--- TO DETERMINE THE HOURLY WAGE RATE PAYABLE UNDER SAID AGREEMENT, AND IT IS PROPOSED TO DETERMINE THE HOURLY WAGE RATE UNDER THE 1946 AGREEMENT BY DIVIDING THE DAILY WAGE RATE BY 10. THE SAID METHOD OF COMPUTING THE HOURLY WAGE RATE UNDER THE 1946 AGREEMENT IS BASED ON THE PREMISE THAT, WHILE THE WORKDAY FOR INSIDE EMPLOYEES UNDER THE SAID AGREEMENT WAS 9 HOURS FROM PORTAL TO PORTAL, THE SAID EMPLOYEES ACTUALLY RECEIVED PAYMENT FOR 10 HOURS OF STRAIGHT TIME WORK. IN JUSTIFICATION THEREOF, IT IS UNDERSTOOD THAT CONTRACTORS HAVE CITED THE PROVISIONS OF THE 1945 WAGE AGREEMENT, SUPRA, STIPULATING THAT, OF THE WORKDAY OF 9 HOURS PRESCRIBED THEREIN, 7 HOURS SHALL BE PAID FOR AT STRAIGHT TIME, THE 8TH HOUR AT TIME AND ONE-HALF AND THE 9TH HOUR AT A FLAT RATE OF $1.50 ($1 AT TIME AND ONE-HALF), AND HAVE URGED THAT THE DAILY RATE PAID UNDER BOTH THE 1945 AND 1946 AGREEMENTS CONSTITUTED 10 HOURS OF STRAIGHT TIME WAGES.

HOWEVER, NOTHING APPEARS EITHER IN THE 1945 OR 1946 AGREEMENTS WHICH AFFORDS ANY BASIS FOR THE CONCLUSION AS PAYMENT OF 10 HOURS FOR 9 HOURS OF ACTUAL WORK. MOREOVER, THE FACT THAT, IN A BULLETIN ISSUED ON JUNE 7, 1946, THE COAL MINES ADMINISTRATOR INTERPRETED THE $1.85 INCREASE IN THE DAILY WAGE RATE--- PROVIDED FOR IN THE 1946 WAGE AGREEMENT--- AS CONSISTING OF A STRAIGHT TIME INCREASE OF 18 1/2 CENTS PER HOUR AND AN OVERTIME INCREASE OF 27.75 CENTS PER HOUR, IS NOT CONSIDERED TO BE A SUFFICIENT BASIS FOR USING THE DIVISOR OF 10 IN ASCERTAINING THE HOURLY RATE UNDER THE 1946 AGREEMENT. FURTHERMORE, SINCE THE DAILY WAGE RATE PROVIDED FOR UNDER THE 1946 WAGE AGREEMENT CONSTITUTED PAYMENT FOR WORK PERFORMED AT A STRAIGHT TIME RATE, AN OVERTIME RATE AND A SPECIAL RATE (THE 9TH HOUR), IT OBVIOUSLY IS NOT FEASIBLE TO REDUCE SUCH DAILY RATE TO A STRAIGHT TIME HOURLY RATE.

AS APPEARS FROM THE ABOVE, THE DAILY WAGE RATE TO BE PAID UNDER THE 1947 WAGE AGREEMENT CONSTITUTES COMPENSATION TO ALL INSIDE EMPLOYEES FOR A WORKDAY OF 8 HOURS FROM PORTAL TO PORTAL. THEREFORE, ASSUMING THAT THE PREDOMINANT OCCUPATIONAL CLASS OF LABOR NAMED BY A CONTRACTOR IN ITS BID WAS COMPRISED OF INSIDE EMPLOYEES, THE MOST REASONABLY ACCURATE METHOD OF DETERMINING THE INCREASE IN THE WAGE RATE AS A RESULT OF THE CHANGES PROVIDED FOR IN THE SAID AGREEMENT, IS TO COMPUTE THE DIFFERENCE BETWEEN THE WAGE RATE PAYABLE TO THE SPECIFIED CLASS OF EMPLOYEES FOR 8 HOURS UNDER THE 1947 AGREEMENT AND THE WAGE RATE PAYABLE TO SUCH CLASS OF EMPLOYEES FOR 8 HOURS UNDER THE WAGE AGREEMENT OF 1946. SUCH METHOD WOULD BE FOR APPLICATION TO THE ACTUAL WAGE CLAIM OF THE MONRO-WARRIOR COAL AND COKE CO., REFERRED TO IN YOUR LETTER, ON ACCOUNT OF COAL SHIPPED FROM THE NORCO MINE, A DEEP MINE, ON AND AFTER THE EFFECTIVE DATE OF THE 1947 WAGE AGREEMENT AS FOLLOWS:

IT IS UNDERSTOOD THAT THE PREDOMINANT OCCUPATIONAL CLASS OF EMPLOYEES SPECIFIED IN THE CONTRACT BETWEEN THE SAID COAL COMPANY AND YOUR DEPARTMENT WAS "TRACKMEN," WHO ARE INSIDE EMPLOYEES, AND THAT, PRIOR TO THE EFFECTIVE DATE OF THE KRUG-1LEWIS AGREEMENT OF 1946, THE RATE FOR STRAIGHT TIME WORK BY SUCH CLASS OF EMPLOYEES WAS $0.85 5/7 PER HOUR. A RESULT OF THE WAGE INCREASE GRANTED BY THE 1946 AGREEMENT, AS INTERPRETED BY THE COAL MINES ADMINISTRATOR IN HIS BULLETIN OF JUNE 7, 1946, REFERRED TO ABOVE, THE STRAIGHT TIME RATE OF TRACKMEN WAS INCREASED BY 18 1/2 CENTS PER HOUR, RESULTING IN A NEW WAGE RATE OF $1.042 PER HOUR FOR STRAIGHT TIME WORK. ALSO, PRIOR TO THE EFFECTIVE DATE OF THE 1946 WAGE AGREEMENT, SAID CLASS OF EMPLOYEES RECEIVED AN HOURLY RATE OF $1.285 FOR OVERTIME WORK, WHICH RATE, ACCORDING TO THE INTERPRETATION OF THE COAL MINES ADMINISTRATOR, WAS INCREASED UNDER THE 1946 WAGE AGREEMENT BY 27.75 CENTS PER HOUR TO AN OVERTIME RATE OF $1.563. THUS, FOR A WORKDAY OF 8 HOURS UNDER THE 1946 WAGE AGREEMENT, THE CLASS OF EMPLOYEES HERE BEING CONSIDERED WOULD RECEIVE THE SUM OF $8.857 (7 TIMES $1.042 PLUS $1.563). UNDER THE 1947 WAGE AGREEMENT, FOR A WORKDAY OF 8 HOURS, THE SAID CLASS OF EMPLOYEES RECEIVES $3.05 PER DAY IN ADDITION TO THAT PROVIDED FOR IN THE CONTRACT WHICH EXPIRED ON MARCH 31, 1946. IN ACCORDANCE WITH THE WAGE AGREEMENT WHICH EXPIRED ON MARCH 31, 1946, THAT IS, THE NATIONAL BITUMINOUS WAGE AGREEMENT OF 1945, TRACKMEN RECEIVED THE SUM OF $8.785 PER DAY, WHICH, PLUS THE INCREASE OF $3.05 GRANTED UNDER THE 1947 WAGE AGREEMENT, RESULTS IN A DAILY RATE OF $11.835 FOR AN 8-HOUR DAY. HENCE, THE ACTUAL INCREASE IN THE WAGE RATE AS A RESULT OF THE 1947 AGREEMENT IS THE DIFFERENCE BETWEEN $11.835 AND $8.857 OR $2.978, A PERCENTAGE INCREASE OF 33.61 PERCENT. SUCH PERCENTAGE APPEARS TO BE THE CORRECT ONE TO BE USED BY YOUR DEPARTMENT IN COMPUTING THE ACTUAL INCREASE TO BE MADE IN THE PRICES OF COAL SHIPPED BY THE CONTRACTOR FROM ITS NORCO COAL MINE ON AND AFTER THE EFFECTIVE DATE OF THE NATIONAL BITUMINOUS COAL WAGE AGREEMENT OF 1947.