ARBITRATION
DECISION NO.:
389
UNION:
OCSEA, Local 11, AFSCME, AFL-CIO
EMPLOYER:
Department of Health
DATE OF
ARBITRATION:
September 26, 1991
DATE OF
DECISION:
October 30, 1991
GRIEVANT:
Norman Gambill
OCB
GRIEVANCE NO.:
14-00-(89-11-24)-0079-01-07
ARBITRATOR:
Anna D. Smith
FOR THE
UNION:
Brian J. Eastman
John P. Feldmeier
FOR THE
EMPLOYER:
Michael P. Duco
KEY WORDS:
Longevity Pay
Rehire After Retirement
Contract Supersedes Statute
ARTICLES:
Article 36 - Wages
§36.07-Longevity Pay
Article 43 - Duration
§43.01-Agreement
§43.02-Preservation
of Benefits
FACTS:
The grievant was employed by the
Ohio State Highway Patrol until his retirement, with 29 years of service, on
September 9, 1988. He was hired as a
new employee on September 12, 1988 by the Department of Health. The Department of Health determined,
pursuant to Ohio Revised Code section 124.181, that the grievant was not
entitled to longevity pay because the Ohio Revised Code now excludes retirees
from receiving longevity pay based on prior State service. The agency did not credit the grievant's
service with the Highway Patrol for the purposes of calculating the longevity
pay supplement. Longevity pay begins in
an employee's fifth year, therefore, he received no longevity pay
supplement. The employee believed that
his prior service should have been credited for the purpose of calculating the
longevity pay supplement and he grieved its non-payment as a violation of
section 36.07 of the contract.
UNION'S
POSITION:
Section 36.07 of the contract
directly conflicts with state law and supersedes ORC section 124.181. Longevity pay as negotiated in 1989 is the
same as that negotiated in 1986, which was consistent with ORC section 124.181
which controls longevity pay. State law
allowed retirees, prior service to be used in the calculation of longevity pay
until the 1989 revision. The contract
was not changed, therefore, later changes in state law cannot reduce the
grievant's contractual benefits. The
contract is clear and not ambiguous and there is no reason to look to the Ohio
Administrative Code for interpretation.
Section 36.07 contains no continuous service requirement. It refers only to total state service. Classification changes such as retirement
and subsequent rehire do not affect longevity pay. Longevity pay is an employment benefit, not a retirement benefit,
therefore, ORC section 4117.10(A) does not operate to remove this grievance
from the arbitrator's jurisdiction.
EMPLOYER'S
POSITION:
The grievance is not arbitrable
because ORC section 4117.10(A) deems retirement non-contractual and this
grievance concerns a retired employee.
Thus, ORC section 124.181 supersedes contract section 36.07. Alternatively, section 36.07 does not
conflict with ORC section 124.181 because the issue of the effect of retirement
on longevity pay is not addressed in section 36.07. The contract does not require the employer to credit retirees,
prior service when calculating longevity pay.
ARBITRATOR'S
OPINION:
The longevity pay supplement is a
pay benefit, not a retirement benefit.
For that reason, ORC section 4117 does not operate to prevent the
arbitrator's jurisdiction. Longevity
pay is conferred by virtue of employment status, not retirement, therefore, ORC
section 124.181 is not a law governing retirement. Contract section 36.07 does supersede ORC section 124.181 in
spite of its silence on the effect of retirement on the longevity pay
calculation. Section 36.07 of the
contract is not ambiguous. The only
condition to receive longevity pay is attaining five years total state service
and is based solely on length of service.
Changes in classification do not effect longevity pay under section
36.07. The grievant did experience a
change in classification by retiring and being rehired by another agency. However, section 36.07 does not require
continuous service and the cause of the classification change does not alter
its effect. The grievant possessed benefits
acquired during his prior employment with the Highway Patrol and the contract
did not operate to take the benefits of section 36.07 from him.
AWARD:
Grievance sustained.
TEXT OF
THE OPINION:
In the
Matter of Arbitration
Between
OHIO CIVIL SERVICE EMPLOYEES
ASSOCIATION, LOCAL 11,
A.F.S.C.M.E., AFL/CIO
and
STATE OF OHIO,
DEPARTMENT OF HEALTH
OPINION and AWARD
Anna D.
Smith, Arbitrator
Case:
14-00-(891124)-79-01-07
Norman
Gambill, Grievant
Longevity Pay
Appearances by Brief
For OCSEA Local 11, AFSCME:
Brian J.
Eastman
John P.
Feldmeier
OCSEA/AFSCME
Local 11
1680
Watermark Drive
Columbus,
Ohio 43215
For the State of Ohio:
Michael P.
Duco
Office of
Collective
Bargaining
65 East
State Street
Columbus,
Ohio 43215
I. Background
On November 24,
1989, grievance #14-00-891124-0079-01-07 was filed by Norman Gambill alleging
he was improperly denied longevity pay in violation of the Collective
Bargaining Agreement in effect at the time of his employment and the subsequent
Agreement, which is currently in effect.
The matter being unresolved in lower steps of the grievance procedure,
the case was appealed to arbitration for final determination pursuant to the
terms of the Collective Bargaining Agreement.
By mutual agreement of the parties
oral hearing was waived and the matter was submitted to the Arbitrator on
briefs. Briefs and replies being timely
filed, the record was closed on September 26, 1991. This opinion and award is based solely on the record as described
herein.
II. Stipulations
The parties
agreed to the following stipulations of the issue, facts, and pertinent
Contract provisions:
Issue
"Is a state employee who retired from one state agency,
and who was then rehired by another state agency, eligible to receive longevity
payments?"
Facts
1. Norman Gambill was employed with the Ohio
State Highway Patrol from September 1, 1959 to September 9, 1988.
2.
On September 9, 1988, he retired from the Ohio Highway Patrol.
3.
On September 12, 1988, he was hired as a new employee at the Department
of Health.
Pertinent Contract Provisions
ARTICLE 36 - WAGES
§36.07 -
Longevity Pay
Beginning on the first day of the
pay period within which an employee completes five (5) years of total state
service, each employee will receive an automatic salary adjustment equivalent to
one-half percent (1/2%) times the number of years of service times the first
step of the pay rate of the employee's classification up to a total of twenty
(20) years. This amount will be added
to the step rate of pay.
Longevity adjustments are based
solely on length of service. They shall
not be affected by promotion, demotion or other changes in classification.
Effective July 1, 1986, only service
with state agencies, i.e. agencies whose employees are paid by the Auditor of
State, will be computed for the purpose of determining the rate of accrual for
new employees. Service time for
longevity accrual for current employees will not be modified by the preceding
sentence.
ARTICLE 43 - DURATION
§43.01 -
Agreement
To the extent that this Agreement
addresses matters covered by conflicting State statutes, administrative rules,
regulations or directives in effect at the time of the signing of this
Agreement, except for Ohio Revised Code Chapter 4117, this Agreement shall take
precedence and supersede all conflicting State laws.
§43.02 -
Preservation of Benefits
To the extent that State statutes,
regulations or rules promulgated pursuant to Ohio Revised Code Chapter 119 or
Appointing Authority directives provide benefits to state employees in areas
where this Agreement is silent, such benefits shall continue and be determined
by those statutes, regulations, rules or directives.
III. Arguments of the Parties
Argument of the Union
The Union states
that the longevity pay provision as originally negotiated for the 1986-89
Agreement is essentially the same as that in the current (1989-91)
Agreement. It further says that when
originally negotiated, the provision was consistent with the
Ohio Administrative Code Section 123:1-37-03 and Ohio Revised Code Section
124.181(E) in their pertinent parts:
Those employees who have completed a
minimum of five years of total service with the state or any of its political
subdivisions shall receive the longevity pay supplement which shall be a
percentage equal to one-half of one percent for each year of such service. This percentage shall be an automatic pay
supplement administered by the Department of Administrative Services, and shall
be applicable to the entire pay period in which that date occurs. A maximum accumulation of ten percent shall
be applicable after twenty years of total service.
O.A.C. 123:1-37-03 (Union Ex. D)
Beginning on the
first day of the pay period within which the employee completes five years of
total service with the state government or any of its political subdivisions,
each employee in positions paid under salary schedules A and B of section
124.15 of the Revised Code shall receive an automatic salary adjustment
equivalent to two and one-half per cent of the classification salary base, to
the nearest whole cent. Each employee
shall receive thereafter an annual adjustment equivalent to one-half of one per
cent of his classification salary base, to the nearest whole cent, for each
additional year of qualified employment until a maximum of ten per cent of the
employee's classification salary base is reached. The granting of longevity adjustments shall not be affected by
promotion, demotion, or other change in pay range for his class. Longevity pay adjustments shall become
effective at the beginning of the pay period within which the employee
completes the necessary length of service.
Time spent on authorized leave of absence shall be counted for this
purpose.
O.R.C. 124.181(E) (Union Ex. E, but cf. Union Br., 5)
However, in 1987, the Revised Code was changed by Amended
Substitute House Bill 178 (Union Ex. F) which, in relevant part, eliminated
retirees' prior service in the calculation of longevity pay upon re-employment
by the State or political subdivision.
The Contractual longevity pay provision, however, was not amended to
conform to the Revised Code in the 1989 negotiations. The parties therefore intended to give the 1989 language the same
meaning as the 1986 provision, argues the Union. Thus, since 1987, the language of the
Contract and the Revised Code have been in conflict with respect to longevity
pay. The resolution of this conflict is
the problem before the Arbitrator.
The Union rejects the Employer's
argument that §124.181(E) O.R.C. (as amended) applies by incorporation through
4117.10(A) O.R.C. It states that
§124.181(E) is not applicable because it addresses longevity pay provided under
the Code, not longevity pay provided under the Contract:
An employee who has retired in accordance with the provisions
of any retirement system offered by the state and who is employed by the state
or any political subdivision of the state on or after June 24, 1987, shall not
have his prior service with the state...counted for the purpose of determining
the amount of the salary adjustment provided under this division.
(Emphasis added in Union Reply at 1)
It points out that the grievant's longevity pay is derived
not from the Code, but from §36.07 of the Collective Bargaining Agreement,
which does not reference the Code. The
parties might have incorporated Code language for longevity pay, as they did in
other sections of the Contract, but they did not do so. Hence, §124.181 has no significance in this
case.
The Union further urges that
§124.181 is not a law governing retirement of state employees, but a law
regarding computation of employees' supplemental pay. Therefore, it is not a retirement law superseding contractual
provisions pursuant to §4117.10(A).
In the Union's view, because the
Contract does address longevity pay, it prevails over the Revised Code
according to Section 43.01 of the Collective Bargaining Agreement. In support of
this position, it cites Arbitrator Pincus’s Evans decision (Parties’
Grievance No. G87-0285, Union Ex. H), which held that clear and unambiguous
contractual language prevents an arbitrator from looking to the Administrative
Code. The Contract, it maintains, is clear: Section 36.07 of the 1989 Agreement, like
§36.06 of the 1986 Agreement, states eligibility for longevity pay solely in
terms of "total state service" and further provides that adjustments
shall be unaffected "by promotion, demotion or other changes in
classification." Contrary to the
Employer's position, the Grievant did experience a change in classification
from his position with the Highway Patrol, and his longevity pay should be
unaffected by this change. Also, the
Contract does not specify that longevity pay is based on continuous state
service or that retirement causes a break in total state service. It clearly and unambiguously says
"total state service." The
Union goes on to argue that the Employer’s use of OCSEA and Shockley v.
state of Ohio, Grievance No. 17-00-880204-0008-01-09 is misplaced, because
that case involved the rate of pay, which is impacted by classification change
while longevity payments are not.
Since the language is clear, the
Employer's proposition that the Contract is silent must be rejected, as must
the conclusion that the Revised Code should apply pursuant to O.R.C. 4117.10(A). The Union distinguishes the Feldman case
cited by the Employer from the instant one on the basis that the section of the
Contract pertinent here does contain specific language on eligibility
requirements unlike the provision in dispute before Arbitrator Feldman. Similarly, the subject contract, unlike that
in State, ex rel. Clark v. Greater Cleveland Transit, 48 Ohio St. 3d 19
(1990), does address the issue of prior service credits through "other
changes in classification" and its statement that longevity adjustments
"are based solely on length of service."
If, however, the Arbitrator
determines that the Contract is silent with respect to the facts of this case,
the Grievant would have been eligible for longevity pay under the 1986
Agreement because Section 43.02 incorporates external State benefits. Clearly the parties meant longevity benefits
and eligibility to continue in the 1989 Agreement, since they did not change
the provision to conform to the Revised Code amendment.
The Union further asserts that it is
improper for an arbitrator to correct negotiation mistakes or to otherwise
grant benefits previously negotiated away, citing Section 25.03 of the Contract
and the parties’ Grievance No. 27-01-880127-0001-01-03. The Union urges the conclusion that the
language is clear and that the Grievant is entitled to receive longevity pay.
Argument of the Employer
The
Employer first contends that this case is not substantively arbitrable because
§43.01 makes Agreement conflicts with Chapter 4117, Ohio Revised Code, an
exception to the precedence of the Agreement.
O.R.C. 4117.10(A), which supersedes the Contract, states that "Laws
pertaining to civil rights, affirmative action, unemployment compensation,
workers' compensation, the retirement of public employees ... prevail over conflicting
provisions of agreements between employee organizations and public
employers." Therefore, House Bill
178, which amended §124.181(E), governs this case because the legislation and
this case address the retirement of public employees. Since retirement is a prohibited subject of bargaining and
§124.181(E) prevails, the Arbitrator has no authority to decide the issue.
However, if the Arbitrator
determines that the matter is arbitrable, the Employer asserts that §124.181
should govern anyway, because it does not conflict with the Contract. Section 36.07 says that "promotion,
demotion or other changes in classification" shall not affect longevity
adjustments. Retirement is not a change
in classification, but a change in employment status. Thus, the Agreement is silent with respect to rehired retirees
and, pursuant to 4117.10(A), the Code applies:
"Where an agreement makes no specification
about a matter, the public employer and public employees are subject to all
ordinances pertaining to wages, hours and terms and conditions of employment
for public employees."
In support of this position, the Employer cites
Arbitrator Feldman in the parties' case G87-72, who held that the Code prevails
where the Contract makes no specification about a matter. The Employer also directs the Arbitrator's
attention to State, ex rel. Clark v. Greater Cleveland Transit, 48 Ohio
St. 3d 19 (1990), in which the Court held that the Code prevails where there is
no conflict between a contractual provision that makes no specification about
prior service credit, while the Code does.
The Employer counters the Union's
use of §25.03 to constrain the Arbitrator by stating that the Arbitrator is not
barred from applying
Chapter 4117 and other external laws because of their incorporation through
Sections 43.01 and 43.02. The State
further asks the Arbitrator to adopt the generally held arbitral assumption
that the parties intended to negotiate a valid contract and thus would not
negotiate a prohibited subject. It
disputes the Union's contention that the Grievant is eligible under the 1989
Agreement by virtue of his eligibility under the 1986 Agreement, saying that he
was not eligible under the earlier contract.
He was ineligible, the Employer claims, because the 1986 Collective
Bargaining Agreement's provision was superseded by a law pertaining to
retirement of public employees, namely House Bill 178.
The Employer contends that the
Union’s reliance on the Pincus Evans case is misplaced because it was
decided before Clark. The
question left open by Clark is how much contract specificity is required
for 4117.10(A) to apply. The Employer's
contention is that since there is no reference to working retirees in the
Contract, the law applies, not the Contract.
The Employer goes on to argue that
the exemption of retirement from collective bargaining is good public policy
because it prevents double-dipping from the public well and allows the
Legislature to monitor retiree issues without interference from public employers
and employee organizations. It further
asserts that the Union cannot show that the Collective Bargaining Agreement
requires the Employer to give credit for prior State employment, and cites OCSEA
and Shockley v. State of Ohio, Grievance No. 17-00-880204-0008-01-09. The Union, says the State, has the burden of
proof
here and can prove neither that the matter is arbitrable nor that the Employer
has violated the Contract. It
additionally implores the Arbitrator not to consider as established facts the
matters alleged in the written grievance, Union Ex. A. In conclusion, the Employer requests that
the grievance be denied and the legislative bar upheld.
IV. Opinion of the Arbitrator
The
arguments of the parties can be simply summarized as follows: The Union would have the Arbitrator apply
the Contract, saying that it is neither silent, unclear, ambiguous, nor in
conflict with external law. On the
other hand, the Employer urges application of external law, saying that there
are two ways in which the Arbitrator might do wo. For one, the Arbitrator might hold that the Contract is silent on
the matter and that external law therefore applies per §43.02. For the other, she might hold that the
Contract is not silent but is in conflict with external law and that the
law should apply by virtue of §43.01's Chapter 4117 exception.
The first matter to be dealt with is
substantive arbitrability, which is raised by the Employer. The Employer's position assumes two things,
first that the Agreement conflicts with ORC 4117 and, second, that it does so
because the matter is one concerning the retirement of public employees. Thus, validity of the Employer's position
ultimately depends on whether longevity supplemental pay is a retirement
benefit. Whether granted by law as in
§124.181(E) or by the Collective Bargaining Agreement as in §36.07,
I think not. If a worker-retiree is due
longevity benefits, it is by virtue of his status as an employee because the
benefit was legislated or negotiated as a right of employment, not a right of
retirement. As the Union points out,
§124.181 is not a law governing retirement of state employees. Neither does §36.07 govern retirement, but
employment. I therefore hold the issue
to be within my jurisdiction.
The second way in which the Employer
attempts to supplement the Contract with the Code is with the assertion that
the Contract is silent on the subject of pre-retirement service. It is true that the provision in dispute
does not appear to deal specifically with the factual situation presented. In such cases, an arbitrator might declare
the Contract silent and therefore that §43.02 applies, thus getting to
124.181(E). Alternatively, the arbitrator
could give meaning to the subject provision by applying its terms and
principles to the facts at hand. In any
event, the analysis must begin with the language as negotiated. The first mention of a condition for
receiving longevity pay is the completion of five years of "total
state service" (emphasis added).
No exceptions or conditions being named, this creates the presumption
that there are none. The next paragraph
confirms and clarifies this presumption:
"Longevity adjustments are based solely on length of service. They shall not be affected by promotion,
demotion or other changes in classification." The Grievant here did experience a change in classification, as
the Union argues, upon his re-employment post-retirement. Surely re-employment to a different job in a
different agency, whether it follows retirement or other
separation, is of the same type of classification change as promotion and
demotion in the context of this section of the Contract. Until the last paragraph, the section
contains only inclusive or no modifiers to length of service as the basis for
computation. It is either "total
state service" or simply "service," never "continuous"
service or some other adjective disqualifying pre-retirement or other
pre-separation time. The plain words
mean to include all state service in the calculation. Finally, the last paragraph provides an exclusion for certain
employees: only service with agencies
whose employees are paid by the Auditor of State is counted for employees hired
after July 1, 1986. It is apparent that
had the parties intended to provide for the exception of pre-retirement
service, they would have done so as they did for public services not
compensated by the State. One is left
with the plain meaning of "total state service" as the sole basis for
calculation of longevity supplemental pay.
Although the words "working retirees" (Employer Reply Br., p.
4) are not present in the section, the provision contemplates their eligibility
for longevity pay: they, like all
bargaining unit members, are eligible when they complete five years of state
service and all service is to be counted, subject to the last paragraph. To hold otherwise is to adopt the view that
"total" somehow means less than total. I conclude that the Contract's §36.07 is not silent with respect
to pre-retirement state service as it is encompassed in the phrase "total
state service." Therefore, §43.02
does not apply and 124.181(E) is not incorporated. It is evident that the parties negotiated a
different longevity benefit from that provided employees subject to §124.181.
The State relies upon the Clark
decision in much of its argument. That
case deals with rights granted by law, which the Court held do not disappear by
virtue of collective bargaining unless specifically excluded in the contract. The case before this arbitrator is
distinguished by the source of the benefits at issue. The source here is the Collective Bargaining Agreement, not the
law. To borrow the Court's analogy (48
Ohio St. 3d at 23), the Grievant came to the Ohio Department of Health with his
pockets filled with benefits to which he was entitled under the Ohio-OCSEA
Contract. The Collective Bargaining
Agreement failed to specifically take the benefits provided by §36.07
away. He thus retained his entitlement
to them.
V. Award
The
answer to the question submitted to arbitration is yes, a state employee who
retired from one state agency, and who was then rehired by another state
agency, is eligible to receive longevity payments. The grievance is sustained.
Anna D. Smith
Arbitrator
Shaker Heights, Ohio
October 30, 1991