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Title: Tubetech and United Steelworkers of America
Date: August 19, 2002
Arbitrator: 
N. Eugene Brundige
Citation: 2002 NAC 150

OPINION AND AWARD

In the matter of Voluntary Arbitration

Between 

The United Steelworkers of America, Local 14765

And

Tubetech, Inc.

Regarding

Case Number 010906 –15900-6
Grievance No. 9-02A and 9-02B

 

APPEARANCES:
FOR THE UNION:
Joe Holcomb, Staff Representative
Joe Ratkovich, Local 14765 President 
Jackie McKay, Financial Secretary
Steve Reckner, Operator
Ed Lackner, Recording Secretary
Brian Mulch, Treasurer
Terry Fugle, Vice President
FOR THE EMPLOYER:
James L. Phillis, Vice President
Jon Roscoe, Sales
Debra Johnston, Adm. Asst.



An arbitration hearing was conducted June 25, 2002 at East Liverpool, Ohio.  There were two issues presented to the arbitrator for resolution. The first represented by grievance 09 and the second by grievance 23.  The first issue deals with the payment of bonuses to the maintenance department, coordinators, and associates.  The second issue relates to what hours should be counted in calculating the 75% requirement in order to qualify for the bonus program.

            Both parties were given full opportunity to examine and cross- examine witnesses, pose arguments and present their respective cases.  Both advocates presented their respective cases competently and professionally.  Both parties submitted post-hearing briefs, which convincingly summarized the positions of the respective parties.  All evidence, arguments and views were considered by the Arbitrator in reaching the decision stated herein.

            At the hearing the parties agreed that the matter was properly before the arbitrator for determination.

            In that this grievance deals with a matter of contract interpretation, the union presented its case first.

            Relevant provisions of the Collective Bargaining Agreement include:

ARTICLE VIII

HOURS OF WORK AND RATES OF PAY

Section 3. In addition to any other wages specified in this agreement the COMPANY will pay Tube Mill Operators an uptime bonus as set forth in Appendix A attached to this Agreement. The COMPANY will also pay Cutting Department Employees a bonus as set forth in Appendix B to this Agreement. 

APPENDIX B

CUTTING DEPARTMENT BONUS PROGRAM

This bonus program is established pursuant to Article VIII, Section 3 and is designed to improve overall Plant efficiency by providing an increasing monthly bonus for all fulltime employees per shift working in the Cutting Department upon the attainment of improved levels of in-house and field rejections at less than 1/2% of 1% of tons produced per machine.

If the level is attained in one month the employees working on

the machine and shift meeting the level will receive a $50.00 bonus. If the level is maintained for six consecutive months the employees will receive an additional $50.00 bonus. If the level is maintained for nine consecutive months, the employees will receive

an additional $100.00 bonus.

After nine consecutive months the bonus program-will repeat the additional increases as stated in the preceding paragraph.

Maintenance Department employees and Associates will receive 3.5% of the Cutting Department Quality bonus earned on any machine on any shift. Coordinators will receive a 6.5% of the Cutting Department Quality bonus earned on any machine on any shift.

To be eligible for the bonus an employee must work a minimum of 75% of the scheduled hours on the shift and equipment during the month.

APPENDIX A  (selected parts)

Eligibility

Bonus will be paid to all employees working on the shift and on. The specific Mill and who have worked a minimum of 75% of the scheduled hours on the shift and equipment during the month.

Maintenance employees and Associates will receive 8.5% of the all earned bonus received by the TubeMill Department. (Uptime Bonus).

Group Leaders, Setup Person and Inventory Control employees will receive ~7% of all earned bonus received by the TubeMill

Department. (Uptime Bonus).

Requirements

This program is designed to increase uptime while keeping other factors under control as well.

The percentage of scrap has been historically below 4%. The level of scrap must be maintained at that level. If scrap is not below 4% but the uptime is at the level per each Mill (ie Mill# 1-60%; Mill#3-50%j Mill#4-48%) or above, the bonus will be reduced 10% for each % point in higher scrap. For example: If the uptime is at 50% on Mill#3 but the scrap is at 6%, the bonus will be reduced

ARTICLE VIII

HOURS OF WORK AND RATES OF PAY

Section 7. Following the probationary period, employees receive pay for periods when they may be otherwise absent from work for, including but not limited to, lack of work except in layoff situations, UNION business, vacation, holiday, jury duty, or bereavement, as provided for in this Agreement.

Section 8. All employees shall be entitled to five (5) days of personal leave with pay per calendar year. In order to receive paid personal leave the employee must notify the COMPANY prior to using the personal leave. In the event of illness, an employee may use a personal leave day provided he/she notifies the COMPANY prior to his/her scheduled shift.

BACKGROUND:

            During the negotiations for the 1999 contract the parties discussed the inclusion of a Bonus Program.  The Union proposed a program based upon a per piece bonus.  The Company rejected that idea and proposed the program that is included in the contract as Appendix B for the Cutting Department and Appendix A for the Mill.

            Computation and distribution of bonuses to direct workers seems to work correctly.  Computation of bonuses for “support Staff”[1] has been more problematic.

            The program is based upon improving “uptime” and quality.  The issues in this case relate to how bonuses are calculated for “support staff.”  The agreement is clear that maintenance employees receive 3.5%.  The 3.5% refers to work done in the Mill and the Cutting Department.  The disagreement is over 3.5% of what.  Likewise coordinators receive 6.5% of something within the cutting department.

            The Union argues the 3.5% and the 6.5% should be calculated on the total bonuses paid to the entire operation, in the case of the maintenance employees, and on the total bonuses earned in the Cutting Department for the coordinators.  This would most likely result in the support staff getting the maximum bonus.

            Management explained how they read the language and pay the bonuses.  The employer follows four steps in determining the appropriate bonus. 

            The first step is to calculate the bonus for each machine-shift based upon achieved production, less rejects and any applicable six and nine month additional bonuses.

            The second is to calculate the support people’s applicable percentage of the total amount due in step 1.

            The third step requires determining the support staff members who meet the 75% work requirement.

            The fourth step is to pay the bonuses.

The Second issue before this arbitrator relates to how the 75% work eligibility is calculated.

The union contends that the requirement is for scheduled hours and should include time spent on union business, sick leave, personal leave and other paid leaves.

Management contends the 75% refers to actual time worked.  It is management’s belief that the union argues, “the 75% rule only applies to direct workers.” [2]

UNION POSITION:

            The Union believes the contract requires that support staff bonuses be based on the total bonuses paid in the cutting department on all machines and all shifts.  They note that Rick Downey issued a grievance answer dated December 16, 2000, which, in their view, is a correct interpretation of the Collective Bargaining Agreement. 

            They point out that the company is not using that method to calculate the bonuses.

            Regarding the 75% requirement, the union asserts that the 75% of scheduled hours on the shift means any paid hours.  To support their position they note that the Union succeeded in negotiating out the wording “worked hours.”

            They point the arbitrator to the principle of contract interpretation that requires that an ambiguous contract provision should be construed against the party that proposed it and cite the relevant section of Elkouri and Elkouri that discusses this concept.

MANAGEMENT POSITION:

            Management believes they are properly implementing the bonus program and note they have consistently applied it since it’s beginning.  They note that support staff does get the same percentage of the additional ($50 and $100) bonuses and they do of the basic bonus.

            Regarding the 75% requirement, they believe it applies to all employees and is properly being implemented utilizing the hours actually worked to determine the 75% threshold.

            Union witness Jon Roscoe testified as to the internal discussion of the management team regarding how this program would be implemented.

DISCUSSION:

At some point or other in this case each party wishes the arbitrator to rule on the intent of the parties as well as the language of the agreement.  While history and intent are instructive in deciding a case it can be controlling only if the language is unclear and ambiguous.

Arbitrator Rhonda Rivera, in a State of Ohio, Department of Natural Resources case, comments on the role of the arbitrator in such situations.

“The task of an Arbitrator is to apply the words of the Contract. If the words are clear and unambiguous on their face, the interpretation consistent with that clarity and unambiguity is accepted” [3].

     The question in the instant cases is whether the language is clear and unambiguous. 

     Let us turn first to the question of calculation of bonuses for support staff.

     APPENDIX B states:

This bonus program is established pursuant to Article VIII, Section 3 and is designed to improve overall Plant efficiency by providing an increasing monthly bonus for all fulltime employees per shift (emphasis added) working in the Cutting Department upon the attainment of improved levels of in-house and field rejections at less than 1/2% of 1% of tons produced per machine.

If the level is attained in one month the employees working on the machine and shift meeting the level will receive a $50.00 bonus. If the level is maintained for six consecutive months the employees will receive an additional $50.00 bonus. If the level is maintained for nine consecutive months, the employees will receive

an additional $100.00 bonus.

            Clearly direct workers bonuses are determined on a per shift basis. 

            Appendix B goes on the explain how support staff will receive their bonuses.

“Maintenance Department employees and Associates will receive 3.5% of the Cutting Department Quality bonus earned on any machine on any shift. Coordinators will receive a 6.5% of the Cutting Department Quality bonus earned on any machine on any shift. (emphasis added)

          Another principle of contract interpretation informs us that the specific always prevails over the general.  This section clearly states that the appropriate percentage (either 3.5% or 6.5%) is applied to the bonuses earned on “any machine on any shift.”

          I do not find the language to be unclear or ambiguous and thus the plain and ordinary meaning of the words shall be applied.

           Let us examine the second issue:

           Appendix B states:

“To be eligible for the bonus an employee must work a minimum of 75% of the scheduled hours on the shift and equipment during the month.”

            It must first be noted that there is no qualification of “employees.”  Everyone who receives a bonus is covered by this provision.

            Article VIII, Section I explains what are the scheduled hours an employee can expect:

            “A normal work week shall consist of 45 hours scheduled (emphasis added) within a seven (7) day period…..”

            The answer to Issue No. 2 lays within section 7 or the same Article:

Section 7. Following the probationary period, employees receive pay for periods when they may be otherwise absent from work (emphasis added) for, including but not limited to, lack of work except in layoff situations, UNION business, vacation, holiday, jury duty, or bereavement, as provided for in this Agreement.

            This section clearly states that union business, vacation, holidays, jury duty, or bereavement are not “work.”

            Therefore an employee must “work” at least 75% of the time to be eligible for a bonus.

AWARD:

            For the reasons herein stated the grievances are granted in part and denied in part.

1.      Support Staff bonuses shall be calculated at the appropriate percentage (either 3.5% or 6.5%) of the total bonuses paid that month on all machines and shifts.  This shall include the additive bonuses paid at the six and nine month levels.

2.      The 75% participation requirement applies to all employees including direct and support workers and includes only hours actually worked.

3.      To the extent support employees may not have been compensated pursuant to the methodology listed above, their bonuses shall be recalculated back to the date of the grievance and employees shall receive any adjusted amount due them. [4]

            Issued at London, Ohio this 19th  day of August 2002.

_____________________________ 
N. Eugene Brundige, Arbitrator


[1] For purposes of this decision, “support staff” includes maintenance workers, associates and coordinators.

[2] This arbitrator did not hear this position asserted in the hearing nor do the Union’s documents, with the exception of the verbage in one of the grievances, reflect that view.

[3] In re OHIO DEPARTMENT OF NATURAL RESOURCES and FRATERNAL ORDER OF POLICE OF OHIO, INC., OHIO LABOR COUNCIL, INC., UNIT 2, 90 LA 1049, March 18, 1988, Rhonda R. Rivera

[4] In that neither party requested the arbitrator to retain jurisdiction regarding the implementation of this award, I have not done so.  Because of the complexity of the issues raised, I am willing to provide clarification regarding the implementation of this award upon a mutual request from the parties.

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