NATIONAL SECURITY PERSONNEL SYSTEM & THE DEFENSE APPROPRIATIONS ACT

1. NATIONAL SECURITY PERSONNEL SYSTEM & THE DEFENSE APPROPRIATIONS ACT

2. AFGE Special MeetingsAtlanta, GA December 5-6, 2003Las Vegas, NV December 12-14, 2003 Phil Kete Director, Office of Labor-Management Relations, AFGE

3. Legislative History • Introduced by Rumsfeld in April 2003. • Expectation of walking through Congress • AFGE got in the way and brought Rummy a long, hot summer • Collins amendment • It took political blackmail and threats of lost work. • Collins & Levin held firm and retained some improvements.

4. What NSPS Does • Things NSPS Will Change • Staffing (hiring, assignment, advancement, removal, reduction in force) • Job classification, pay (including certain premium pay), and performance management (includes General Accounting Office recommended criteria) • Labor management relations • Discipline, adverse actions, and appeals

5. Who it effects • NSPS allows the department to apply to 300,000 employees of the Departments 740,000 employees. Can be expanded once the Secretary establishes that the system meets the criteria for pay for performance. • Does not impact on employees in current Personnel Demonstration Projects (10 specific laboratories)

6. Personnel System • Allows for the creation of a new personnel system. • Allows significant protections to be waived. • Likely significant changes; internal, external and on-the-spot hiring, changes in probationary periods, RIF retention and processes, assignment to theater operations, pay, appeals processes, etc.

7. Personnel System • (b) the personnel system is subject to the following constraints: • * it must be flexible and contemporary. • * it may not waive sections 2301, 2302, any law referred to or implementing 2302(b)(1), (8), or (9), or any regulation implementing any of these laws. • * it must ensure that employees may bargain collectively. • * it must include a pay-for-performance evaluation system, linking individual pay to performance and providing an equitable method for appraising and compensating employees.

8. Personnel System • (d) the following provisions of title 5 are expressly waivable: • chapters 43, 51, 53, 75 and 77; and • sections 5541 to 5549, except 5545(b). • [NOTE: Chapter 71 is listed as non-waivable, but that is changed by subsection (m), below. Chapters 31, 33, 34, and 35 are listed as non-waivable, but that is changed by subsection (k), below).

9. Personnel System • (k) * the new personnel system can waive laws or regulations regarding qualifications requirements for positions, appointments, and methods of assigning, reassigning, detailing, transferring, or promoting employees. • * the new personnel system can create a new reduction in force system, changing the weights given to veterans preference, longevity, tenure, and management’s view of the employees’ performance.

10. Requirements in Developmentof a New Personnel System • (f) The following project must be used in developing the new personnel system (or, later, changing it). • * the secretary and director provide the unions with a written description of the proposed system, including the reasons why it is considered necessary; • * the unions have 30 days to make recommendations; • * the secretary and director give the union recommendations full and fair consideration; • * where the union recommendations are not adopted, the secretary and director must so inform congress, and meet and confer with the unions (with the assistance of the FMCS) for at least 30 days in an attempt to reach agreement; • * where there are still disagreements, the secretary and director can implement management’s last offer, but only after 30 days notice to congress; • * the union participation in this system will be at the national rather than local level.

11. Pay for Performance • a pay-for-performance evaluation system to better link individual pay to performance, and provide and equitable method for appraising and compensating employees. • Under any new DOD pay system, the total DOD payroll cannot be less than it would have been under the old system. [subsection (e)].

12. New Labor Relations System • Allows for the creation of a new labor relations system notwithstanding (in spite of) Chapter 71. • Does not change any existing collective bargaining agreement at this time. • Allows for national level collective bargaining at the discretion of the Secretary of Defense. • Agreements reached or not reached through bargaining above the level of recognition will supercede collective bargaining agreements.

13. Labor Relations System • 4. The new labor relations system must allow for a collaborative issue-based approach to labor-management relations [subsection (m), paragraph (2)]. The system must address the unique role that the department’s civilian workforce plays in supporting the department’s national security mission [subsection (m), paragraph (1)]. • The new labor relations system may incorporate and, in fact, may not abrogate or modify, the authority under section (g) to bargain at a level above the level of recognition [subsection (m), paragraph (5)]. • The new labor relations system shall provide for independent third party review of decisions, but the system will determine who the third party will be, what the standards for review are, and what decisions are reviewable [subsection (m), paragraph (6). • The new law does not expand the scope of bargaining [subsection (m), paragraph (7)]. • The new labor relations system is binding on all bargaining units, unions, and managers, and can supersede existing contracts [subsection (m), paragraph (8)] • The new labor relations system shall expire on November 24, 2009, at which time the provisions of chapter 71 will apply, unless the new system is extended by law.

14. Labor Relations System Developed in collaboration with employee representatives • Based on collaborative, issue-based approach to labor relations • Provides for third party review of disputes • Sunsets in six years (unless extended in law)

15. Labor Relations System • (m) In addition to the overall new personnel system, the secretary and director can create a new labor relations system for DOD, not bound by chapter 71. • * they must follow the same sort of collaboration process in creating the labor relations system as for creating the overall system, except that the first step for creating the labor relations system must begin no later than January 22, 2004. • * the labor relations system must provide for independent third party review of decisions.

16. How Bargaining Is Affected • (g) effective immediately, the Secretary of Defense may bargain with a union at an organizational level above the level of exclusive recognition. Any such bargaining shall: • * be binding on all subordinate units of the union and the DOD and its subcomponents; • * supersede existing contracts; • * not be subject to further negotiations at the local level; • * be subject to third party review.

17. Things NSPS Cannot Change • Merit system principles (including veterans’ preference provisions) • Rules against prohibited personnel practices (political favoritism, nepotism) • Anti-discrimination laws • Leave and attendance; travel and subsistence • Pay for political executives, firefighters • Training • Health insurance and retirement benefits • Safety and drug abuse programs

18. POSITIVES • Money from the fund counts as base pay and, unlike bonuses, boosts retirement and insurance benefits. • Will not impact on 2004 pay raise. • Provides 22 days a year for military reservists if called to duty overseas. Will receive the higher rate of pay (civil service or military). This is in addition to their 15 days paid military leave. • Directs agencies to pick up the tab for flexible spending accounts up to a maximum of $75 per year.