BEFORE THE ARBITRATOR
In the Matter of the Arbitration of a Dispute Between
OCONTO FIRE FIGHTERS ASSOCIATION, LOCAL
CITY OF OCONTO
(Wage Parity Grievance)
Mr. Jon R. Schnell, State Labor Representative, International
Association of Fire Fighters, on behalf
of the Union.
Davis & Kuelthau, S.C., by Attorney James M. Kalny, on
behalf of the City.
At all times pertinent hereto, the Oconto Fire fighters Association, Local 2739, IAFF
the Union) and the City of Oconto (herein the City) were parties to a collective bargaining
dated August 27, 2001, and covering the period January 1, 2000, to December 31, 2003, and
providing for binding arbitration of certain disputes between the parties. On July 30, 2002,
filed a request with the Wisconsin Employment Relations Commission (WERC) to initiate
arbitration over an alleged violation of the collective bargaining agreement as a result of the
contract settlement with the Oconto Professional Police Association, and requested the
of a member of the WERC staff to arbitrate the issue. The undersigned was designated to
dispute and a hearing was conducted on January 22, 2003. The proceedings were transcribed
the transcript was filed on February 21, 2003. The parties filed briefs by April 16,
2003, and reply
briefs by May 12, 2003, whereupon the record was closed.
The parties stipulated to the following framing of the issues:
Did the City violate Article XXIII,
paragraph 2, of the collective bargaining agreement?
If so, what is the appropriate remedy?
ARTICLE XXIII NO OTHER AGREEMENT
The City will not give greater benefits to the Police Department
on salary, holiday pay or
insurance. The City will proceed to arbitration rather than give greater benefits for the life
The City and the Union have been parties to a series of collective bargaining
the years. In the past, the wages and benefits of the fire fighters were in line with those of
officers, represented by the Wisconsin Professional Police Association. In recent years,
disparity developed between the units, particularly in the areas of health insurance and
At the end of the previous collective bargaining agreement, which expired October 31, 2000,
fighters were paying $30.00 more per month than the police officers for health insurance.
although the members of both units were paid a daily stipend of $95.47 for each of ten paid
police officers were paid for all hours actually worked on holidays at 1½ times their
rate, but the fire fighters were not. Largely due to these issues, the fire fighters entered into
negotiations over the successor agreement determined to address these discrepancies.
In contract negotiations, the parties agreed to contract language providing the fire
the same compensation for holidays worked as the police officers. The parties also agreed to
language providing for the fire fighters to pay 10% of the premiums for health insurance,
additional wage increase representing the difference between the 10% premium and the
members were already paying, which the City was also proposing in negotiations with the
The fire fighters also received an additional .22¢ per hour in wages to make up the
premium contribution between themselves and the police officers. Having resolved these
Union agreed to the City's wage proposal of 3% across the board in each of three years,
City was also offering the police unit.
In an effort to prevent the problem of wage and benefit disparity from arising again,
also sought a security provision to prevent the City from providing the police unit better
terms in the
future. This was of particular interest to the Union inasmuch as the City had not yet
negotiations with the police unit on a successor agreement. Initially, the Union proposed a
provision to guarantee that any superior benefit negotiated by the police unit would be passed
fire fighters, as well. The City would not agree to this, but did agree to add an additional
to Article XXIII, as follows:
The City will not give greater benefits to the Police Department
on salary, holiday pay or insurance.
The City will proceed to arbitration rather than give greater benefits for the life of the
This language was accordingly incorporated into the successor agreement, which was
ratified by the
parties and signed on April 25, 2001.
Subsequently, the City concluded its negotiations with the police unit and ratified a
agreement. Thereafter, the fire fighters discovered that the police contract contained a new
in the form of a .25¢ per hour shift differential to be paid to police officers working
the 8:00 p.m. to
6:00 a.m. shift. This benefit was to be paid to all officers in the unit in the form of an
sum payment of $125.00 included in the first paycheck issued in July of each year. The
a grievance over the language, arguing that, inasmuch as the fire fighters did not receive a
commensurate shift differential, the provision violated Article XXIII of the fire fighters
City denied the grievance and the matter proceeded through the contractual steps to
Additional facts will be referenced, as needed, in the discussion section of the award.
POSITIONS OF THE PARTIES
The Union contends that the shift differential provided in the police officers'
contract is a violation of Article XXIII of the City's contract with the fire fighters and the
should be sustained. Going into the 2000-2003 contract negotiations, the Union was
about maintaining wage parity with the police officers and correcting inequities in the areas
pay and insurance. Due to greater holiday pay and a lower health insurance contribution, the
officers were each receiving an average of $1,369.20 per year more than the fire fighters,
City representatives acknowledged during negotiations. As a result, negotiations focused on
issues and were resolved successfully. With respect to wages, the City had already settled
with two bargaining units for a 3% across the board wage increase in each year and was
same to the police unit. Because the offer would maintain parity with the police officers,
the Union agreed to accept it.
The members were also concerned about the possibility of the disparity being
recreated in the
future. As a result, the Union negotiated protection language, contained in Article XIII,
the City from voluntarily giving the police unit greater benefits on salary, holiday pay, or
Having accomplished this goal, the Union was satisfied with the agreement and ratified the
On November 30, 2001, the City and police unit ratified their contract, whereupon
learned that the contract included a .25¢ shift differential to be paid out to each officer
annually in a
$125.00 dollar lump sum. The differential is stated to be for the 8:00 p.m. to 6:00 a.m.
averaged over the year, but the work schedule shows that at least two officers work the day
exclusively, yet receive the annual differential payment. Clearly, the differential payment is
upon working the night shift, but only upon being a police officer. Contracts of comparable
have a shift differential require that the officer actually work the designated shift in order to
the premium; Oconto does not.
The police officers are considered salaried employees by the City, as are the fire
because they receive fixed compensation for services on a biweekly basis. The City argues
that a shift
differential is not appropriate in a unit, such as the fire fighters, where the employees work
shifts. By the same token, the Union is at a loss to understand a shift differential that does
an employee to work the designated shift in order to receive the premium. The differential
is, in fact,
no more than additional compensation for the police officers in direct violation of the
language of the
fire fighters' contract. The Union was unable to bargain for parity with respect to the shift
differential, because it didn't exist previous to this contract. In effect, the City has attempted
circumvent the language of Article XXIII by creating a new benefit and calling it something
than salary. It has failed to prove that distinction, however, and the grievance should be
The ordinary usage of the word "salary" is an employee's base compensation for
rendered. Thus, various courts have distinguished salary from other benefits and items of
compensation, such as overtime, college credit, holiday pay, reimbursement for travel
leave and vacation (citations omitted.) Therefore, the general rule is that, unless specifically
otherwise, salary is base compensation.
It is also generally held that a contract term must be construed consistently
contract. In this case, the word "salary" appears in the disputed language of Article XXIII:
The City will not give greater benefits to the Police Department
on salary, holiday pay or
The word "salary" also appears in Exhibit A, setting forth the pay schedule, and in
Article V, dealing
with salary and overtime. In these sections, the term is synonymous with "wages" and in
the reference is to base compensation with no suggestion that any other form of
compensation is to
be included in the definition of salary.
The evidence shows that there was no discussion of salary in the negotiation of the
contract that would lend it any other meaning than as base compensation. The Union now
term "monetary benefit," which is much broader, but when the language of Article XXIII
upon the Union used "salary," not "monetary benefits." Salary was the term used and it was
the sense of base wages. The Union, itself conceded as much in Mr. Schnell's June letter to
Belongia, wherein he uses the term "monetary benefit," not "salary" to describe the shift
It is also hard to believe the fire fighters were unaware that the police were negotiating over
differential inasmuch as they work in the same building and the fire fighters demonstrated
knowledge of other aspects of the police contract. It should also be noted that shift
not common to fire fighter contracts. Indeed, only one other instance of it was identified by
Union at the hearing. Given that fact, it is not unusual that it didn't come up in the Oconto
In the police contract, the shift differential is paid out annually, similar to longevity
also is not salary. The fact that the differential is paid in a lump sum also distinguishes it
It is also noteworthy that in negotiations with the police unit, the shift differential was clearly
distinguished from salary as the association made the argument that the comparables all had
form of shift differential. The reason the differential was to be paid out annually was merely
the bookkeeping easier and it was referenced separately on Exhibit A specifically to
The fire fighters are asking for the same shift differential, but they are only entitled
it if it
constitutes salary. The bargaining history indicates it is not salary, but a separate benefit.
a shift differential is not appropriate under the fire fighters' contract. The fire fighters'
makes little reference to shifts, making it difficult to know for what hours a differential
paid. The fire fighters also did not present any evidence on what the rate of such a
be or for what hours. There is no stated 8:00 p.m. to 6:00 a.m. shift, as there is in the
to provide guidance.
It is irrelevant to the issue how the differential is paid. Various communities pay
differentials differently, but they do not lose their character for that reason. The fact that the
made annually, therefore, has no meaning in determining the nature of the benefit. It is also
that the payment is an average of shift hours worked, rather than an exact payout. Some
work more late shift hours in a given year, and some less, but all get paid the same,
over the course of time schedules change, so the compensation will eventually roughly even
is satisfactory to the police unit and should be of no concern to the fire fighters. In sum, the
is attempting to obtain a benefit never discussed in negotiations. The assurance language in
XXIII is specific and does not include shift differential. The grievance should be denied.
The Union in Reply
The Union does not disagree with the City's definition of "salary" as "fixed
regularly for services." The shift differential is fixed compensation ($125.00) paid regularly
for performing services (police officer duties) and so is salary. The Union did not raise the
during negotiations because it didn't exist in the police unit at the time and the Union was
concerned with achieving parity. What the Union did or did not know about the
police negotiations is speculative and irrelevant, because bargaining positions and even
agreements can change. Had the Union known about it, however, it would not have settled
negotiating a comparable increase.
The shift differential is a monetary benefit, because it impacts other aspects of the
such as computing holiday pay and retirement contribution, which it does because it is a part
officer's salary. Also, although shift differentials are unusual in fire fighter contracts, it
be noted that it never existed in the police contract before, either.
The shift differential is not similar to longevity pay, which is paid variably,
of hire and months of service. The shift differential is a fixed some, which is paid
whether the officer ever works the 8:00 6:00 shift. Also, the argument that the
yearly payout was
determined for ease of bookkeeping is questionable. The City has to document the time
anyway for other purposes and the other record keeping involved in operating the payroll is
more complicated. Further, it is pointless that the fire fighter contract doesn't have defined
since clearly working a specified shift is not a requirement of receiving the premium. The
contracts in evidence that contain differentials clearly make working the specified shift a
for receiving the premium. Oconto does not.
The City in Reply
There is no support for the Union's position that the flat dollar amount of the shift
makes it salary. The only evidence regarding the nature of the shift differential was offered
City, wherein the City's negotiator testified to the bargaining history behind the provision.
showed that the shift premium language was drafted to reflect an average to be paid out
provide the members the benefit without having to calculate exact amounts on each payroll.
if the amounts weren't exactly reflective of the time worked, the payment was clearly
intended to be
shift differential, not salary.
The premium is similar to longevity pay, which is paid out annually, even though it
monthly and is not rolled into salary for police or fire employees. The payment of the
upon an average of hours worked, rather than actual hours is the same as how holiday pay is
calculated. Police and fire employees receive holiday pay based upon a
formula, regardless of whether they work the holidays or not, because over the course
of time it evens
out. According to the Union's argument, holiday pay, because it is based on an average,
actual hours, should be treated as salary, but this is not the reality.
The Union's arguments based upon other contracts are entitled to little weight. The
Bay fire fighters' contract, which contains a shift differential, clearly distinguishes between
premium and regular pay. Further, the language taken from other contracts is not on point.
contracts from Algoma, Peshtigo, Niagara and Kewaunee either provide for shift posting or
on the subject, thus they cannot be compared to Oconto, which has rotating shifts. Because
officers rotate, they will all work the late shift from time to time, so averaging the premium
makes sense in the context of Oconto's system. The parties' intent in the police contract was
create a shift differential separate from salary. This is not covered by Article XXIII of the
fighters' contract and the grievance should be dismissed.
The issue in this case is whether, in the context of the 2000-2003 contract
shift differential added to the police association's collective bargaining agreement is properly
characterized as salary. If it is, then the City violated Article XXIII of the fire fighters'
giving the police unit a salary increase in excess of that given the fire fighters and an
remedy is warranted. If it is not, then no violation has occurred and the grievance must be
For the reasons set forth below, I conclude that the shift differential is salary and the
To begin with, most collective bargaining agreements address compensation in terms
calculated on an hourly basis. Exhibit A of the City's collective bargaining agreements with
fighters and police officers, however, contain monthly wage schedules. The fire fighters'
further explains that the employees are paid biweekly at 1/26 of the fire fighters' annual
Article V, however, discusses payment for overtime and makes it clear that the overtime rate
upon the employee's hourly wage. Thus, as the parties agree, the terms "wages" and
used interchangeably in the agreement and are virtually synonymous.
To go on, the parties are in essential agreement as to the basic meaning of the terms.
is, they agree that salary is comprised of "fixed compensation paid regularly for services."
they disagree is whether the shift differential meets this definition the Union asserts
that it does,
whereas the City argues it does not. The City's position is buttressed by case law
salary from other forms of compensation, such as overtime, college credits, holiday pay, sick
vacation and reimbursement for travel expenses. Shift differential pay, however, is
from these other forms. Holiday pay, sick leave and vacation are benefits are forms of
which extend beyond pay
specifically for services performed, are usually tied to the fact of employment or length
employment, rather than the actual time worked or work performed and, thus are more
characterized as fringe benefits. Mileage expense reimbursement is merely the return of
by the employee for work related travel and, thus, is not synonymous with wages or salary
performed. Overtime pay, while compensation for work performed, is not fixed, but, by
is only paid for work beyond the contractually prescribed workday or workweek. Shift
like salary, is compensation directly resulting from the performance of regularly scheduled
albeit at specified times.
The City also relies on the usage of the word salary in other parts of the fire fighter
to support its argument. The term is used in Article V, Article XXIII and Exhibit A as
stated, and, as the City points out, refers to base salaries in Article V, which, it contends,
be its presumed meaning in Article XXIII. Thus, the reasoning runs that the language of
XXIII only refers to base pay when it refers to salary and not any additional increments,
such as shift
premium. There are some difficulties with this logic, however. In the first place, the use of
"base salary" in Article V is apparently intended to distinguish the regular fire fighter pay
takeseffect 18 months after employment, from the probationary rate,
which starts at 10% below the
"base salary" and increase to 5% below after 6 months. Thus, theterm "base" in this sense is
intended not to restrict the definition of salary to just regular wages, but to set the baseline
which probationary rates are established. Also, there are no other forms of pay in the fire
contract beyond the regular salary that the term base salary could refer to were it intended to
exclusionary because the fire fighters' contract contains no forms of premium pay other than
overtime, which obviously could not have been intended. Further, it certainly could not have
in the Union's mindset that the word salary in Article XXIII was intended to exclude shift
pay in the police contract, since the benefit did not at that time exist. Thus, I do not find
that the use
of the word "salary" elsewhere in the fire fighters' contract excludes a shift differential from
The City argues that shift differential or any other monetary benefit was not
when the word "salary" was added to Article XXIII, as testified by Mr. Rader. Again, this
surprising since the benefit did not then exist so, from the Union's perspective, it was
an issue. The City also asserts that the shift differential was clearly distinguished from
salary in the
police negotiations and thus should not be equated with it. What the parties to the police
thought or meant, however, is irrelevant to the fire fighters' agreement, since the fire
not parties to it and had no input. What is relevant is whether under objective standards the
differential has the distinguishing characteristics of salary as opposed to some other form of
The City likens the shift differential to longevity pay. In reality, however, the only
is the fact that they are both paid out annually. Longevity pay is compensation for time of
separate from compensation for actual time worked. Shift differential, however, regardless
it is paid out, is intended to be compensation for time actually
worked during the 8:00 p.m. to 6:00 a.m. shift. As the City, concedes, the reason the
set up to be paid in a lump sum was to ease the bookkeeping process, not because of the
of the benefit.
Finally, the City notes, with some merit, that the fire fighters do not work shifts per
se, as the
police do, so a shift differential does not make sense in the context of the fire fighters'
argument might have carried more weight under other circumstances, but the unique features
differential here undercut it. The fact is, as revealed by the evidence, not all police officers
designated 8:00 to 6:00 shift, but all receive the premium payment alike. The City
officers may work the shift in other years, so the shifts and payments will average out, but
speculation. What is fact is that at least two officers who are only scheduled to work the day
receive the premium along with all the others. In this sense, if the sine qua non of a shift
is the requirement of working the specified shift, the lump sum payment is really a payment
in lieu of
shift differential. Having determined that working the designated time period is not
receive the premium payment eliminates the difficulty of the fire fighters' schedule, because
could either receive a premium payment on the basis that they all work 8:00 p.m. to 6:00
their work periods, or that the payment is really in lieu of a shift differential to alleviate the
bookkeeping problems of paying the premium each pay period. In either event, there is
impediment to providing the fire fighters the same premium payment as the police officers.
For the foregoing reasons, and based upon the record as a whole, the Arbitrator
The City violated Article XXIII, paragraph 2, of the collective bargaining agreement
it agreed to add a shift differential payment to the police association collective bargaining
As and for a remedy, the City is ordered to pay each fire fighter in the bargaining unit back
$375.00, representing shift differential payments to the police officers in 2001, 2002 and
in the future, to make payments to the fire fighters in the same amount and manner as shift
payments made to the police officers.
The Arbitrator will retain jurisdiction of this award for a period of sixty (60) days in
resolve any issues arising with the implementation of the award.
Dated at Fond du Lac, Wisconsin, this 5th day of September, 2003.
John R. Emery, Arbitrator