THE STUDY COMMISSION

The issue that commanded the most extended discussion by the Carriers is their proposal for the establishment of a "Joint Productivity Commission with finality." The Carriers urge that the Commission be tripartite in nature and be a mechanism for intensive review and negotiation of basic pay concepts and work rules. These include the basis of pay, the whole range of arbitraries, interchange service, and the road-yard division of work. The Carriers also contemplate that the Commission would deal with protection of employees and additional benefits, such as supplemental sickness and disability pay.

The proposal for the establishment of a Study Commission (as we refer to it) , does not break new ground. As both parties testified, such a device occupies a venerable position in the history of railroad labor relations. The new element would be the introduction of "finality" into the Commission's determinations. That is, where the Carriers and the Organization fail to resolve their differences, the issues in dispute would be settled by final and binding arbitration.

The Carriers' argument for linking the Study Commission to binding arbitration is based on three elements.

First, they assert that the record is clear that without "finality", the most searching review of pay provisions and work rules is unlikely to result in contract changes which are required in the new technological and market environment. And if the changes are forthcoming, the process is excruciatingly slow so that serious economic harm will be inflicted on the industry in the interim. In particular, the Carriers cite experience with the Presidential Railroad Commission (PRC) in 1960-62, and the Standing Committees set up on the recommendation of Emergency Board No. 178. According to the Carriers, most of the recommendations of the PRC have not been implemented and the Standing Committees have not had a perceptible impact on the web of work rules and pay practices in the railroad industry. They further assert that this glacial pace of change can no longer be accepted in the face of heightened competition engendered by deregulation.

Second, the Carriers state that existing pay practices are broadly obsolete and give rise to severe inefficiencies in the utilization of manpower and equipment. Also, the current system of relating pay to mileage and the arbitraries leads to an irrational relationship between actual work performed by the operating employees and the distribution of individual earnings. In other words, the stakes involved in a revision of pay practices and work rules are sufficiently large to justify resort to final, binding arbitration in resolving interest disputes.

Third, the Carriers argue that the threatened imposition of binding arbitration will create incentives for the parties to reach agreement on a voluntary basis so that, in most cases, the final step will not be utilized. They note experience with the resolution of disputes involving interdivisional runs and pooled cabooses to support the notion that the primary effect of building "finality" into a system of dispute resolution is to induce the parties to avoid its imposition rather than to create a framework for widespread compulsion. In other words, the threat of final and binding arbitration will advance, rather than retard, voluntary agreement.

The Organization counters these assertions with traditional arguments against undermining free collective bargaining, embellished by recognition of the special history of labor relations in the railroad industry. It states that most of the arbitraries were negotiated voluntarily by the Carriers and were put into effect as the quid pro quo for settling existing disputes. For example, the air hose coupling arbitrary was introduced to resolve work jurisdiction disputes between carmen and trainmen. Similarly, lonesome pay for the locomotive engineer was adopted when the fireman was removed from most freight and yard service.

The Organization also contends that the Carriers are not blameless with respect to the limited achievements of prior study commissions. That is, sharp policy differences among the Carriers, which reflect different economic and operating conditions, have thwarted the development of the consensus that is necessary to carry out fruitful negotiations with the Organization. Moreover, the administration of the basis of pay and the system of arbitraries are both complicated and varied so that effective negotiations on these issues are best carried out at the local, rather than the national, level.

In our judgment, the question of imposing "finality", or binding arbitration, on the procedures of a Study Commission has the most serious implications for the nature of collective bargaining in the railroad industry. Undoubtedly, some of the work rules and arbitraries have outlived their usefulness and are not conducive to a modern, efficient railroad system. The dual basis of pay, which relates earnings to a combination of mileage traveled and elapsed time, has remained substantially the same for sixty-five years, resisting sweeping changes in motive power, traffic control systems, and other key elements of railroad operation. And, as the Carriers assert, when adjustments in work rules and pay practices are introduced, they are generally the outcome of negotiations that extend far beyond the practical time frame of managerial requirements and most bargaining relationships. Progress on this front is likely to be seriously impeded by political considerations that play on both parties, the sheer complexity of the issues under consideration, and a multi-tiered bargaining structure that diffuses decision-making authority.

The key issue then, is whether these considerations justify a recommendation by the Board that the parties adopt, over the strong opposition of the Organization, a Study Commission approach which embraces final, binding arbitration. We do not believe that this course of action would be constructive or desirable. It may be true that binding arbitration is necessary in those situations where the parties are denied the usual forms of self-help associated with collective bargaining. Such is not the case in this industry. The Railway Labor Act imposes elaborate procedural requirements on the parties, but in the end both the Carriers and the Organizations are free to invoke a wide range of sanctions as part of the bargaining process. The substantive concerns expressed during the course of the formal hearings are themselves the product of collective bargaining. The fundamental principles of this institution should not be set aside because one of the parties finds the results to be onerous or perceives a chronic tactical disadvantage in negotiations. Binding arbitration is, of course, a widely accepted element in contract administration. It is quite another matter, however, to endorse the concept of "finality" in vital interest disputes. Indeed, a reasonable conclusion may be reached that the problems of collective bargaining in the railroad industry arise, in a large measure, because of the parties' excessive reliance on intervention by the Government and third-parties.

On weighing all of the arguments, we endorse the desirability of the broad Study Commission concept proposed by the Carriers. The testimony presented to the Board clearly demonstrated that an intensive review should be conducted by the parties of various work rules and pay practices in light of the new technological and economic circumstances of the industry. Lectures on the virtues of free collective bargaining, no matter how stern, will not change the present character of railroad collective bargaining. Accordingly, we recommend a set of guidelines that go beyond past experiences while stopping short of binding arbitration, which we believe would further weaken the bargaining process. These recommendations reflect our judgment that a more detailed structure should be specified for the Study Commission, while creating both incentives and the opportunity for resolving differences through mutual agreement.

We recommend that a Study Commission be established by the parties in accordance with the following guidelines:

1. The Study Commission should be organized on a tripartite basis. It should be composed of an equal number of Carrier and Organization representatives. The chairman should be a neutral who should be selected by mutual agreement of the parties within 45 days after the ratification of the new labor agreement. In the event that the parties fail to agree on a selection of a neutral within 30 days, the parties shall confer with the Chairman of the National Mediation Board regarding the selection.

2. The chairman shall confer promptly with the parties to establish the agenda of the Study Commission. If the parties fail to agree on the agenda in 30 days, it shall be determined by the neutral. In any case, the agenda should be restricted to a limited number of items. Drawing on the concerns expressed by the parties in their testimony, the Board recommends that the Commission's agenda should be limited to the following issues: the basis of pay and related alternatives, initial and final terminal delay, the air hose coupling arbitrary, the exchange of engines arbitrary, road/yard restrictions, supplemental sick pay, disability pay, personal leave, and principles and procedures for stablizing the pay structure of the operating crafts in response to earnings adjustments arising from crew consist agreements.

3. In consultation with the parties, the neutral shall establish a time table for bilateral negotiations between the Organization and Carrier representatives on the designated issues. In general, this period of bilateral negotiations should not exceed 90 days. If the parties fail to reach agreement or demonstrate evidence of substantial progress in resolving the issues within the specified time period, the neutral shall convene hearings on the matter in dispute and formulate substantive guidelines to further advance negotiations. The parties will then negotiate within these guidelines for a period not to exceed 60 days.

4. If, at the end of this second negotiating period, no agreement is reached, the neutral shall exercise the right to publish a non-binding recommendation concerning the unresolved issue or issues.

5. On or before December 1, 1983, the chairman shall issue recommendations. If, after 60 days, the parties have not been able to resolve the matters at issue, either party may serve proposals within the framework of the recommendations, and pursuant to Section 6 of the Railway Labor Act.

6. Most of the issues proposed for the agenda are equally applicable to the other organizaton of operating crafts. Therefore, the Board strongly recommends that active consideration be given to establishing a combined Study Commission or insuring that there is effective coordination between the two Commissions through the appointment of the same neutral for both Commissions.

We believe that the structure and operating guidelines of the proposed Study Commission will facilitate progress by the parties in resolving many important and complex problems. The need to modify long-established work rules and practices to conform to changing conditions is overdue. As in all such experiments, success or failure will depend, in a large measure, on the good faith of the parties and their commitment to make the procedures work. We fully expect that future Emergency Boards will, as we have done, carefully weigh the experience of the Study Commission concept in developing their recommendations if subsequent disputes arise over the same set of issues that we have addressed here.