Vacation No legal entitlement to vacation – Employee vacation a negotiated benefit Vacation Fundamentals – A benefit accrued during the contract for time previously worked – Deferred compensation for work performed – Vacation earned to be paid even if agreement has expired – “R & R” rationale less relevant 1

Vacation (cont.) Eligibility determined by collective agreement Length of service – Usually one year minimum – Usually a minimum number of hours worked in the base period (1 year) » Some hours considered “time worked” for vacation purposes when not worked - Jury duty, union business, vacations in previous year, lost hours for discharged employees who are reinstated » Hours usually not considered “time worked” for vacation purposes when not worked unless agreement specifies they count – injury, illness, layoff, disciplinary suspension, FMLA leave – Active status at time vacation is requested » Arbitrators will rule that employees who quit or are discharged are entitled to earned vacation in accordance with the CBA Vacation anniversary date – January 1 – Employee’s date of hire 2

Vacations (cont.) Generally increase with length of service, although not linearly – Example Years of Service Weeks of Vacation Source: CBA, ADM and PACE (now Steelworkers), 2/1/01 – 2/1/04 Years of Service Weeks of Vacation Source: CBA, Frito-Lay and Teamsters Local 337, 10/16/06 – 10/16/11 3

Vacations (cont.) Pay is usually specified – Example: “Vacation pay for full vacations will be based on 40 times the employee’s straight time hourly rate times the number of weeks of vacation. The straight time rate used shall be the employees current rate of pay and if applicable, shall include the shift differential premium.” 4

Vacations (cont.) Vacation for less than one year of service – Generally must be explicitly stated in the collective agreement Example: “An employee with less than one year of service shall receive one straight time hour of vacation for each week in which the employee was actively at work in the previous calendar year up to a maximum of 40 straight time hours.” – If not explicitly stated, arbitrators will normally assume employee ineligible 5

Vacations (cont.) Pro-rata vacation for employees with more than one year of service but who work less than full-time, as defined – Must be specified in the agreement Example: “An employee who has completed one or more years of continuous service who worked less than 1500 hours in the previous calendar year will be eligible for prorated vacation on the basis of 1/10 of an employee’s full vacation pay for each full 150 hours the employee worked in the calendar year prior to the calendar year in which the vacation allowance is taken” 6

Vacation Scheduling (cont.) Arbitrators have generally ruled that company has ultimate discretion on vacation scheduling consistent with needs of the enterprise Secondarily, based on agreement – Usually seniority – Advance request requirements Accumulation limitations 7

Vacations and FMLA Unless agreement prevents it, FMLA regulations permit employer to require an employee to use accrued vacation pay prior to using FMLA leave (Smith and Loveless, 119 LA 1444, James P. O’Grady, 2004 ( From FMLA Regulations) d) Relationship to paid leave. – (2) Substitution of paid leave. (A) In general. An eligible employee may elect, or an employer may require the employee, to substitute any of the accrued paid vacation leave, personal leave, or family leave of the employee for leave provided under subparagraph (A), (B), (C), or (E) of subsection (a)(1) of this section for any part of the 12-week period of such leave under such subsection. (B) Serious health condition. An eligible employee may elect, or an employer may require the employee, to substitute any of the accrued paid vacation leave, personal leave, or medical or sick leave of the employee for leave provided under subparagraph (C) or (D) of subsection (a)(1) of this section for any part of the 12- week period of such leave under such subsection, except that nothing in this title shall require an employer to provide paid sick leave or paid medical leave in any situation in which such employer would not normally provide any such paid leave. An eligible employee may elect, or an employer may require the employee, to substitute any of the accrued paid vacation leave, personal leave, family leave, or medical or sick leave of the employee for leave provided under subsection (a)(3) for any part of the 26-week period of such leave under such subsection, except that nothing in this title requires an employer to provide paid sick leave or paid medical leave in any situation in which the employer would not normally provide any such paid leave. 8

Vacations (cont.) FMLA Reg 2652 – Effect on existing employment benefits (a) More protective. Nothing in this Act or any amendment made by this Act shall be construed to diminish the obligation of an employer to comply with any collective bargaining agreement or any employment benefit program or plan that provides greater family or medical leave rights to employees than the rights established under this Act or any amendment made by this Act. See – SCA North America, 119 LA 1797, 2004, Cohen individual choice language in agreement supercedes er right under FMLA to substitute vacation for FMLA – Dura Convertible Systems, 119 LA 1700, 2004, Allen employee right to choose in CBA supersedes right of employer to required vacation use in lieu of FMLA leave – Alcoa Printing Company, 119 LA 565, 2004 Neigh letter of agreement permits employer to use vacation for FMLA-type leave 9

Holidays No legal right to holidays, paid or unpaid Holiday benefits part of CBA Holiday Pay – Generally there are attendance requirements for holiday pay – Employee must work the day before and the day after a holiday Rationale – to deter holiday stretching “last scheduled day” or “last day” Holiday falling on a nonwork day if not addressed in agreement – “Level pay” theory – no extra pay – Bargained for compensation – holiday pay received Holiday Work – Depends on contract – Employer generally has right to schedule employees to work on holidays, Which employees per agreement Pay for holiday? 10

Sick Leave Often linked to attendance policies Issues – Abuse of sick leave Discipline generally upheld by arbitrators If agreement does not give company right to require proof of illness, company generally must have reason to investigate – Catlettsburg Refining LLC, 124 LA 1073, 2007 (anonymous tip that disabled employee working on roof his home) – PPG Industries, Inc., 120 LA 491, 2004 (grievant’s separate business activities publicized in local area – FMLA Requirements Sick leave for illness of covered persons may be governed by FMLA require 11

Health Insurance Issues addressed are – Types of insurance Medical Dental Vision – Who Is Covered Usually employee and legal dependents under a specified age (often early 20’s) – Services Covered – Costs Cost-Sharing (for premiums) Co-Pays for Services 12

Health Insurance (cont.) Sample Language for including a corporate medical plan in an agreement covering a facility but with no changes for the period of the contract – Section 14.1 Major Medical Bargaining employees will be able to participate in NRG's corporate health and welfare plans, including health, dental, vision, life, short and long term disability and flexible spending accounts in accordance with the terms of the plans and at the same cost-sharing rate as other corporate employees. There shall be no change in the current benefits or premium contribution levels (80%-20%) for the term of the contract without mutual agreement between the parties. (Louisiana Generating LLC, 125 LA 417, 2008) 13

Health Insurance (cont.) Company obligations determined by collective agreement, not be insurance policy purchased – Carnegie Mellon University, 121 LA 723, 2005 Employer is only obligated to provide insurance agreed upon (Louisiana Generating LLC, 125 LA 417, 2008) Employer only obligated to provide insurance (and pension contributions) to employees to whom it agreed to provide insurance (see pension example) 14

Pensions Three Models – Defined Benefit ERISA minimum funding levels – Defined Contribution (to employee account) – Hourly Contribution to third party administered fund Eligibility issues similar to health insurance (Safeway Stores, 92 LA 1285, 1989) 15