Can Christmas bonuses be eliminated unilaterally?

By Raymond Dreyfack -- Plant Engineering, 12/1/1999

Anyone can be mistaken, and that goes for arbitrators as well as ordinary mortals.

Business had been in the doldrums for months. Still, when an announcement appeared on the bulletin board the first week in December that Christmas bonuses would be discontinued this year, the workforce was up in arms.

"The company can't unilaterally discontinue the bonuses," Shop Steward Mark Richards protested to Plant Manager Ralph Gifford. "They've been handed out continuously for 12 yr. They are part of the wage package."

Gifford disagreed. "A Christmas bonus is a fringe benefit awarded at management's election. If business is lousy, the company is under no obligation to continue it."

"We're not giving in that easily," Richards replied. "The crew has come to expect the Christmas bonus as part of their regular income. A clause in the contract states specifically that any change in wages or production standards must be submitted to arbitration."

"If that's what you want, that's what you'll get," Gifford said.

The case was submitted to arbitration with a ruling made in favor of the company.

"That doesn't mean it's right," Richards persisted. "We're going to appeal that ruling to the National Labor Relations Board."

Question: Do you think the NLRB will be likely to uphold or knock down the decision?

NLRB's ruling: The appeal judge decreed, "The bonuses must be paid. The arbitrator goofed. Bonuses handed out repeatedly become a condition of employment. The clause prohibiting a unilateral change in wages is part of the contract."