Performance Awards & Negotiable Aspects

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The short answer is yes- a Union can negotiate performance awards.  But you also already knew it is more complicated than a simple yes or no answer.  During the last two months we fielded many inquiries from labor organizations at the local levels concerning this subject.  We were surprised by many of the wide ranging views held by local union’s in that they believed they could not bargain over any aspect of performance awards.

In general, awards in the federal service are not considered an entitlement.  That statement is the prevailing guiding principle.  However, in 1997 the Office of Personnel Management (OPM), issued significant rules deregulating performance management systems and related awards as well as eliminating the requirement for higher level review of performance ratings (note- while eliminating the need for such, agencies are still free to implement their own regulations continuing the practice).  This change made it easier for union’s to negotiate over performance awards as reflected by a review of post 1997 case-law.

Negotiating Performance Awards

Negotiating over aspects of performance awards comes in many variations and thus, recommendations are fact and circumstance dependent and no single recommendation or example can apply to every situation.  Each situation is unique in other words.  Some methods or variations in negotiations over performance awards include:

  • All union proposals for awards related to performance must be performance based.  See, DVA Medical Center, Asheville, N.C. (FLRA 2003).
  • Joint labor-agency committees making recommendations on awards do not interfere with management rights.  See, Customs and Border Protection (FLRA 2009).
  • Employees may select the type of award, if otherwise eligible for more than one award, is not inconsistent with law.  See, Fish and Wildlife Service, Hadley, Mass. (FLRA 1999).
  • Union’s may negotiate to split a single source of award money into more than one pool of money. See, Naval Underwater Systems Center, Newport, R.I.(FLRA 1990).
  • The determination of an amount of a performance award does not constitute the exercise of a management right.  See, NTEU v. FLRA (D.C. Cir. 1986).
  • The “Improper denial” of a performance award could constitute an “unjustified personnel action”. See, Social Security Administration, New York Region (FLRA 1993).
  • Arbitrators have the authority to award a retroactive performance award, provided such a program already exists. See, FDIC, Division of Supervision and Consumer Protection, San Francisco Region (FLRA 2010).
  • An arbitrator may order an agency to reinstate an awards program provided the order does not unlawfully impact the agency’s right to determine its budget.  For example, if the agency already had funds budgeted.  See, National Labor Relations Board (FLRA 2005).
  • Quality Step Increases (QSI) are not excluded from bargaining by Statute. See, K.I. Sawyer Air Force Base (FLRA 1988).
  • A violation of the Collective Bargaining Agreement (CBA) could constitute an unwarranted or unjustified personnel action under the Back Pay Act.  For example, if performance award provisions of the CBA were violated.  See, U.S. Department of Defense, Department of Defense Dependents Schools and Federal Education Association (FLRA 1998).
  • Once management exercises its discretion setting a grievant’s appraisal at a level justifying an award, management’s discretion to approve or disapprove an award under the then-controlling regulation. See, 5 CFR 430.504 (d).
  • The amount of a performance award is a subject for review, provided it does not exceed agency guidelines.  See, Dept. of Treasury, IRS, Brookhaven Serv. Ctr. and NTEU Chap. 99 (FLRA 1990).

Influencing Factors

It is important to remember a number of other factors can influence the question of whether a union can bargain over performance awards.  Influencing factors include Master Agreements, local or national MOU’s, past practice, agency budget, agency regulations, local agency practices that may deviate from national practices, changes in law, union interest in negotiating, and even the personalities of key union and agency personnel.

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