B-126868, APR. 8, 1963

B-126868: Apr 8, 1963

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THE EMPLOYEES INVOLVED ARE THE MEMBERS OF LODGE 1735 OF THE INTERNATIONAL ASSOCIATION OF MACHINISTS WHICH UNION REPRESENTED SUCH EMPLOYEES IN WAGE NEGOTIATIONS WITH YOUR DEPARTMENT DURING THE PERIOD IN QUESTION. GEN. 538 "WAGE BOARD" EMPLOYEES OF THE ALASKA RAILROAD ARE NOT SUBJECT TO THE PROVISONS OF THE ACT OF SEPTEMBER 2. IN THE EVENT SUCH OFFER WAS REFUSED BY THE UNION. THAT OFFER WAS REJECTED BY THE UNION ON AUGUST 2. THE ADMINISTRATIVE ASSISTANT SECRETARY INFORMED THE UNION THAT HE WAS INSTRUCTING THE GENERAL MANAGER OF THE RAILROAD TO MAKE THE RAISE AGREED UPON EFFECTIVE OCTOBER 9. WAS THE SAME AS THAT WHICH WAS ADOPTED ON JANUARY 10. WE HAVE HELD THAT A TENTATIVE AGREEMENT BETWEEN A COMPETENT WAGE FIXING AUTHORITY AND A UNION WHICH PROSPECTIVELY SETS THE EFFECTIVE DATE FOR WAGE INCREASES MAY BE REGARDED AS AUTHORIZING INCREASED PAYMENTS FROM THAT DATE EVEN THOUGH THE AMOUNT OF THE INCREASE IS NOT DETERMINED OR AGREED TO UNTIL A LATER DATE.

B-126868, APR. 8, 1963

TO THE SECRETARY OF THE INTERIOR:

ON JANUARY 31, 1963, THE ADMINISTRATIVE ASSISTANT SECRETARY REQUESTED OUR DECISION WHETHER RETROACTIVE COMPENSATION MAY BE PAID TO CERTAIN "WAGE BOARD" EMPLOYEES OF THE ALASKA RAILROAD UNDER THE CIRCUMSTANCES DESCRIBED BELOW.

THE EMPLOYEES INVOLVED ARE THE MEMBERS OF LODGE 1735 OF THE INTERNATIONAL ASSOCIATION OF MACHINISTS WHICH UNION REPRESENTED SUCH EMPLOYEES IN WAGE NEGOTIATIONS WITH YOUR DEPARTMENT DURING THE PERIOD IN QUESTION. DETERMINED IN OUR DECISION 38 COMP. GEN. 538 "WAGE BOARD" EMPLOYEES OF THE ALASKA RAILROAD ARE NOT SUBJECT TO THE PROVISONS OF THE ACT OF SEPTEMBER 2, 1958, PUB.L. 85-872, 72 STAT. 1696, 5 U.S.C. 1181-1184, WITH REGARD TO THE EFFECTIVE DATE OF WAGE INCREASES.

ON MAY 7, 1962, THE GENERAL MANAGER OF THE ALASKA RAILROAD WROTE TO THE ASSISTANT SECRETARY OF THE INTERIOR CONCERNING THE NEGOTIATION OF WAGE INCREASES FOR THE MEMBERS OF LODGE 1735. SINCE NO AGREEMENT HAD BEEN REACHED THE GENERAL MANAGER RECOMMENDED THAT AN OFFER BE MADE TO SETTLE THE MATTER ON THE SAME BASIS AS CONTAINED IN THE AGREEMENTS (WHICH APPARENTLY CONTAINED WAGE INCREASES) PREVIOUSLY SIGNED WITH OTHER UNIONIZED EMPLOYEES OF THE ALASKA RAILROAD. IN THE EVENT SUCH OFFER WAS REFUSED BY THE UNION, THE GENERAL MANAGER FURTHER RECOMMENDED THAT "THIS AGREEMENT" BE EFFECTIVE FROM THE DATE OF HIS LETTER (MAY 7, 1962). PRESUMABLY, THE WORDS "THIS AGREEMENT" REFER TO THE WAGE INCREASES AND RELATED PROVISIONS CONTAINED IN THE AGREEMENTS WITH OTHER EMPLOYEES OF THE ALASKA RAILROAD. ON JULY 2, 1962, THE ADMINISTRATIVE ASSISTANT SECRETARY WROTE TO THE PRESIDENT OF DISTRICT NO. 44 OF THE INTERNATIONAL ASSOCIATION OF MACHINISTS OFFERING HIM THE SETTLEMENT RECOMMENDED BY THE GENERAL MANAGER. THAT OFFER WAS REJECTED BY THE UNION ON AUGUST 2, 1962. AGAIN ON OCTOBER 9, 1962, YOUR DEPARTMENT MADE THE SAME OFFER TO THE UNION AND STATED ,WE WOULD BE WILLING TO AUTHORIZE THE GENERAL MANAGER TO INSTALL THOSE RATES EFFECTIVE EDIATELY.' ON OCTOBER 29, 1962, THE UNION ACCEPTED THE WAGE INCREASE OFFERED BUT CONDITIONED THEIR ACCEPTANCE UPON SUCH INCREASE BEING MADE RETROACTIVELY EFFECTIVE TO MAY 7, 1962. ON JANUARY 10, 1963, THE ADMINISTRATIVE ASSISTANT SECRETARY INFORMED THE UNION THAT HE WAS INSTRUCTING THE GENERAL MANAGER OF THE RAILROAD TO MAKE THE RAISE AGREED UPON EFFECTIVE OCTOBER 9, 1962, AND THAT HE WOULD MAKE THE EFFECTIVE DATE OF THE INCREASE MAY 7, IF CONCURRENCE OF OUR OFFICE COULD BE OBTAINED. WE UNDERSTAND THAT THE SETTLEMENT RECOMMENDED BY THE GENERAL MANAGER ON MAY 7, 1962, WAS THE SAME AS THAT WHICH WAS ADOPTED ON JANUARY 10, 1963, EXCEPT WITH RESPECT TO THE EFFECTIVE DATE, AND THAT THE DEPARTMENT'S OFFER REMAINED THE SAME THROUGHOUT THE PERIOD EXCEPT FOR THE QUESTION OF EFFECTIVE DATE.

IN 24 COMP. GEN. 676 WE HELD THAT INCREASES IN THE RATES OF COMPENSATION OF "WAGE BOARD" EMPLOYEES MAY NOT BE MADE EFFECTIVE FOR ANY PERIOD PRIOR TO THE DATE OF FINAL ACTION BY COMPETENT ADMINISTRATIVE AUTHORITY. ALSO, WE HAVE HELD THAT A TENTATIVE AGREEMENT BETWEEN A COMPETENT WAGE FIXING AUTHORITY AND A UNION WHICH PROSPECTIVELY SETS THE EFFECTIVE DATE FOR WAGE INCREASES MAY BE REGARDED AS AUTHORIZING INCREASED PAYMENTS FROM THAT DATE EVEN THOUGH THE AMOUNT OF THE INCREASE IS NOT DETERMINED OR AGREED TO UNTIL A LATER DATE. B-62932, B-75121, JULY 5, 1950. THE REASONING BEHIND THAT RULE IS THAT THE COMPENSATION PAID EMPLOYEES SUBJECT TO SUCH AGREEMENTS AFTER THE DATE SET FOR INCREASE IS MERELY AN ADVANCE AND THAT THE GOVERNMENT KNOWS IT WILL BE REQUIRED TO PAY ADDITIONAL COMPENSATION TO SUCH EMPLOYEES AT A LATER DATE UNDER THE TERMS OF A FINAL AGREEMENT BETWEEN THE EMPLOYEES' UNION AND EITHER THE GOVERNMENT OR PRIVATE INDUSTRY. B-60372, OCTOBER 3, 1946; B-53935, MAY 7, 1946.

THUS, IN ORDER TO INCREASE THE COMPENSATION OF THE MEMBERS OF LODGE 1735 EFFECTIVE PRIOR TO JANUARY 10, 1963, IT MUST BE ESTABLISHED EITHER THAT FINAL ACTION OF A COMPETENT WAGE FIXING AUTHORITY WAS TAKEN ON SOME DATE BEFORE JANUARY 10, OR THAT THE GOVERNMENT AND THE EMPLOYEES UNDERSTOOD THAT FROM A CERTAIN DATE PRIOR TO JANUARY 10, THE COMPENSATION PAID WAS AN ADVANCE AGAINST COMPENSATION TO BE DETERMINED LATER.

PERTINENT EXTRACTS OF THE DEPARTMENT'S LETTERS OF JULY 2, 1962, AND OCTOBER 9, 1962, TO THE PRESIDENT OF THE UNION ARE AS FOLLOWS:

LETTER OF JULY 2, 1962

"REPRESENTATIVES OF THE RAILROAD WILL BE PREPARED TO SIGN AN AGREEMENT WITH REPRESENTATIVES OF YOUR ORGANIZATION, CALLING FOR WAGE INCREASES BASED ON THE GENERAL FORMULA OF EITHER THE AGREEMENT SIGNED WITH THE AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES OR THE AGREEMENT SIGNED WITH REPRESENTATIVES OF THE RAILWAY CARMEN, TRAIN DISPATCHERS, AND THE BOILERMAKERS. BECAUSE THE GENERAL MANAGER OF THE ALASKA RAILROAD, BY LETTER OF MAY 7, HAS INDICATED HIS CONCURRENCE WITH A SETTLEMENT ON THIS BASIS, IT IS OUR CONCLUSION THAT AN AGREEMENT WITH YOUR ORGANIZATION MAY BE MADE EFFECTIVE ON THAT DATE. IT SHOULD ALSO BE POINTED OUT THAT ONLY ON THE BASIS OF SUCH A FORMULA CAN AN EFFECTIVE DATE EARLIER THAN THE DATE OF THE AGREEMENT TO BE REACHED BE USED.'

LETTER OF OCTOBER 9, 1962

"WHETHER OR NOT YOU ACCEPT THE CONCLUSIONS SET FORTH HEREIN, WE WOULD BE WILLING TO AUTHORIZE THE GENERAL MANAGER TO INSTALL THOSE RATES EFFECTIVE IMMEDIATELY. HOWEVER, WE DO NOT CONSIDER IT PROPER TO DO THIS UNILATERALLY IN VIEW OF THE NEGOTIATIONS THAT HAVE BEEN GOING ON. YOUR REACTION TO THIS MOVE WOULD BE APPRECIATED.'

WE DO NOT BELIEVE THAT THE LETTER OF JULY 2, 1962, MAY BE CONSIDERED THE "FINAL ACTION" BY AN OFFICIAL HAVING AUTHORITY TO FIX WAGE RATES. NOR DO WE VIEW THE LETTER OF OCTOBER 9, 1962, AS AN ACTION TO PLACE THE INCREASED RATES INTO EFFECT AS OF THAT DATE. RATHER SUCH LETTER WAS A RENEWAL OF THE JULY 2, 1962, OFFER WITH A LATER EFFECTIVE DATE. THEREFORE, AND AS NO EVIDENCE HAS BEEN FURNISHED SATISFYING THE REQUIREMENTS OF OUR DECISIONS, ABOVE, AS TO AN EARLIER EFFECTIVE DATE, WE MUST CONCLUDE THAT FINAL ACTION TO INCREASE THE WAGE RATES OF EMPLOYEES OF THE ALASKA RAILROAD WHO WERE NEGOTIATING WAGE INCREASES THROUGH LODGE 1835 WAS NOT TAKEN BY AN OFFICIAL OF YOUR DEPARTMENT AUTHORIZED TO DO SO UNTIL JANUARY 10, 1963.

FOR THE REASONS STATED AND ON THE BASIS OF THE PRESENT RECORD, THE RETROACTIVE WAGE INCREASES PAID THE MEMBERS OF LODGE 1735 FOR THE PERIOD OCTOBER 9, 1962, TO JANUARY 10, 1963, SHOULD BE COLLECTED.

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