United States of America

BEFORE THE FEDERAL SERVICE IMPASSES PANEL

    The mission of the Employer is to provide medical care to veterans in the western half of South Dakota. The facility, located in Fort Meade, South Dakota, is one of two facilities which comprise the Black Hills Health Care System (BHHCS); the other facility is located in Hot Springs, South Dakota, some 90 miles away. Prior to 1996, Fort Meade and Hot Springs were independently operated. The facilities were merged in July 1996 to eliminate duplicative services and staffing. The BHHCS has, since that time, operated under one budget. The Union represents six firefighters at the local level who are part of a nationwide bargaining unit represented by AFGE. The firefighters range in grade from GS-5, Step 7 ($40,213 per year) to GS-7, Step 9 ($52,551 per year).⁽¹⁾ The parties are governed by the terms of a master agreement which is effective from March 21, 1997, to March 20, 2000.

    Firefighters at the facility currently work 72 hours per week in three 24-hour shifts, 24-hours on, 24 (or 48) -hours off, and are paid pursuant to the Federal Employees Pay Act (FEPA), 5 U.S.C. § 5501, et seq., and the Federal Firefighters Pay Reform Act of 1998 (Pay Reform Act), 5 U.S.C. § 5545b. The Fort Meade facility is 1 of 3 VA fire departments out of 28 in the Nation which still utilizes a 72-hour tour of duty. Prior to October 1998, firefighters were paid a base rate of pay for the first 53 hours per week (106 hours bi-weekly), supplemented by a 25-percent premium.⁽²⁾ Firefighters were also paid overtime pursuant to the Fair Labor Standards Act; the overtime rate is approximately 50 percent less per hour than the hourly base pay/premium rate.

    The sole issue in dispute is when the firefighters’ tours of duty will be reduced from 72 to 56 hours per week.⁽³⁾

1. The Employer’s Position

    The Employer proposes that the 56-hour tours of duty be implemented immediately, or at least by December 19, 1999, prior to the last pay period in 1999, so affected firefighters will be eligible for a two-step, within-grade increase pursuant to the Pay Reform Act.⁽⁴⁾ The change will also enable the facility to begin to realize annual savings of approximately $24,000. BHHCS presently faces a budget deficit of approximately $89,942 for personnel plus a projected shortfall of $180,000 from the 4.8 percent Federal wage increase for FY 2000 and must, therefore, immediately reduce its costs. Previously, savings were realized by eliminating numerous vacant positions and eliminating the night differential for housekeepers. While a determination regarding increases or decreases in funding levels at the facility is dependent on the allocation of funds received by BHHCS from the VISN⁽⁵⁾ and has not yet been made, the budgetary picture is bleak; the facility may be forced to request reduction-in-force authority on account of the deficit.

    The Union’s proposal that the 56-hour tours of duty be phased-in over a 4-year period is both fiscally irresponsible and unwarranted. The employees were first notified of the proposed change in December 1998 and, as such, have already had 1 year in which to prepare for and adjust to the salary reduction. The Union’s claim of salary losses are also exaggerated: With the two-step within-grade increase, employees’ actual pre-Pay Reform Act reduction in salary is 14 percent. Employees’ salary expectations should not include the 9 percent Pay Reform Act increase, as the Employer notified the Union in December 1998 of the proposed reduction in tours of duty which will necessarily temper the effect of that increase.

    The two-step within-grade increase under the Pay Reform Act will offset, in part, firefighters’ salary losses. Since firefighters will have 22 percent less work time, they may use these significant blocks of time off to obtain other employment and offset their reduced income levels. The 1994 Hot Springs settlement agreement, under which implementation of 56-hour tours of duty was delayed for 5 years, is distinguishable from the situation here; at that time, there was no deficit and thus no budgetary impact in continuing 72-hour tours of duty at that facility. As to the "agreement" the Union refers to between the White House, agencies, and AFGE, under which the VA purportedly pledged not to reduce firefighters’ tours of duty in response to the Pay Reform Act, if such an agreement exists it is oral and non-binding, and has no effect on management’s right to seek this change. Finally, the 1988 Most Efficient Organization determination for Fort Meade sanctioning 72-hour tours of duty is not a bar to the Employer’s decision to convert to 56-hour tours of duty.

2. The Union’s Position

    The Union’s proposal is as follows:

Firefighters will be given a 4-year phase-in period from the date of [an agreement] to adjust and to find alternate income sources to compensate for the reduction in pay resulting from the 72-hour to 56-hour tour conversion. New employees could be placed on whatever tour management chooses. At the end of the 4-year phase-in period, there would be an opportunity to revisit the composition of the 56-hour tour (i.e., 24 hours on, 48 hours off, 48-56-64 hour rotation).

Under the circumstances, 4 years is an appropriate phase-in period. Implementation of 56-hour tours of duty will result in a 29.4 percent reduction in firefighters’ annual income and cause them significant hardship. In this regard, a GS-5, Step 7 firefighter will suffer a loss in annual income of $11,838; a GS-7, Step 9 firefighter will suffer a loss in annual income of $15,455. Given the lack of economically meaningful employment opportunities in the area, the proposal will allow employees a sufficient period of time in which to secure other employment and adjust their lifestyles in anticipation of the salary reduction.

    The Employer’s budgetary concerns are exaggerated and do not support its claim that immediate implementation is necessary. Minutes from an October 1999 BHHCS Staff Meeting indicate that BHHCS’s FY 2000 budget is presently "$80,000 to the good." The Employer’s attempt to reduce any budget deficit by drastically cutting the salaries of firefighters is unfair; the only other salary reduction measure undertaken by the Employer was the elimination of night differential pay for housekeepers; such action resulted in only a 7 percent decrease in those employees’ salaries. No compelling reason exists for treating Fort Meade firefighters differently than those in Hot Springs, who were given a total adjustment period of 5 years (based on a settlement agreement in a previous Panel case, and a 1-year extension of the settlement). Moreover, the Employer, at the national level, made a commitment to the White House and AFGE that it would not change tours of duty or alter staffing if the rationale for making such changes was based on the cost of implementing the Pay Reform Act. Finally, the Panel previously has ordered various phase-in periods where an employer’s proposal resulted in a significant reduction in employees’ annual salary.⁽⁶⁾

CONCLUSIONS

    Having reviewed the evidence and arguments provided by the parties, we conclude that a compromise solution would balance the equities better than either of their proposals. Under the compromise, 2 years from the date of this Decision and Order the Employer may convert firefighters’ tours of duty from 72 to 56 hours. In the circumstances presented, we are persuaded that the $11,000 to $15,000 pay loss, and the difficulty of securing comparable employment, justifies such an adjustment period. Similarly, we agree with the Union that, proportionally, the two-step within-grade increase available until the end of the year under the Pay Reform Act would not ease the salary decrease to the same extent as maintaining the 72-hour tour. The compromise also takes into account that the firefighters have benefitted from a continuation of the 72-hour tours of duty since the Employer notified the Union in December 1998 of its decision to reduce the tours of duty. With respect to the Union’s proposal for a longer adjustment period, in our view management’s legitimate need to control personnel costs, and the fact that Fort Meade is only one of three VA fire departments still utilizing a 72-hour tour of duty, are significant factors weighing against its position. For these reasons, we shall order the adoption of a 2-year phase-in period.

ORDER

    Pursuant to the authority vested in it by the Federal Service Labor-Management Statute, 5 U.S.C. § 7119, and because of the failure of the parties to resolve their dispute during the course of proceedings instituted under the Panel’s regulations, 5 C.F.R. § 2471.6(a)(2) the Federal Service Impasses Panel under § 2471.11(a) of its regulations hereby orders the adoption of the following:

The 72-hour tours of duty presently in effect for firefighters at the Black Hills Health Care System facility located at Fort Meade, South Dakota, will be maintained for a period of 2 years from the date of this Decision and Order. At the end of that 2-year period, the Employer may convert to 56-hour tours of duty. Upon the issuance of this Decision and Order, newly-hired firefighters at the facility may be placed on whatever tours of duty the Employer chooses.

By direction of the Panel.

H. Joseph Schimansky

Executive Director

December 13, 1999

Washington, D.C.

1.The employees are subject to legislation mandating retirement at age 55. All of the employees will reach the mandatory retirement age of 55 within the next 8 years, although retirement at that age is not “mandatory” if the employee has “not yet completed 20 years of service.”

2.In passing the Pay Reform Act in October 1998, Congress eliminated the 25-percent “premium” and adopted the time-and-one-half overtime provision set forth in FEPA, 5 U.S.C. § 5542, for all work performed in excess of 106 hours bi-weekly. Affected employees thus began receiving, in the first full pay period after October 1, 1998, base pay for their first 53 hours of work each week, and time-and-one-half for the remaining 19 hours. Employees’ annual salaries increased by approximately 9 percent under the Pay Reform Act.

3.The parties are in agreement that newly-hired firefighters may be placed on whatever tour the Employer chooses.

4.Eligibility for the two-step increase expires on December 31, 1999.

5.“VISN” is an acronym for “Veterans Integrated Services Network.” For organizational purposes, the VA consists of 16 separate VISNs.

6.Department of Agriculture, Animal and Plant Health Inspection Service, Plant Protection and Quarantine, Baltimore, Maryland and Local 006, National Association of Agriculture Employees, Case No. 98 FSIP 33 (April 7, 1998)(ordering a 2-year phase-in of the employer’s plan to convert evening operations from overtime to straight time); Department of Agriculture, Animal and Plant Health Inspection Service, Plant Protection and Quarantine, Detroit, Michigan and Local 20, National Association of Agriculture Employees, Case No. 97 FSIP 72 (July 29, 1997)(ordering a 3-year phase-in of the employer’s plan to enlarge the workweek and thereby eliminate overtime for work performed on Saturday).