Definition

The Master Executive Council (MEC) has received several questions regarding the Quarterly Productivity Premium (Section 21.R). The first Quarterly Productivity Premium (QPP) of our new contract for the first quarter of 2015 (Q1 2015) is due to be paid out May 5^th. A flight attendant will receive the QPP of $500 if her/his Worked TFP (Section 5 Definitions) during Q1 2015 exceeds the TFP equivalent of her/his combined monthly PBS bid award in that calendar quarter. Taxes on QPP will be withheld at the flight attendant’s personal tax rate just like regular wages; this is in contrast to Performance Based Pay (PBP), which has taxes withheld at the IRS “supplemental rate” (or “bonus rate”).

Worked TFP is all paid TFP exclusive of sick leave and vacation/Longevity PTO. That is, Worked TFP includes but is not limited to regular TFP, deadhead, Minimum Pay Rules, pay protection, training, et cetera. As long as vacation/Longevity PTO and sick leave TFP is “made up” at some point in the quarter, usage of these benefits will not in and of themselves disqualify a flight attendant from achieving QPP.

QPP was a “take it or leave it” management proposal

As we explained at the roadshows, QPP was a management proposal. Management offered it at the end of the negotiations. Our Negotiating Committee told management at the time that the proposal had some problems. Management, however, told us we could take it as is or leave it. Since the Negotiating Committee understood that QPP would definitely put money in the pockets of many flight attendants, of course we took it.

Example

To illustrate the language, let’s assume a flight attendant was awarded 82 TFP in January, 79 TFP in February and 67 TFP in March. His combined monthly PBS award over the quarter would equal 228 TFP (82 + 79 + 67). If the flight attendant were to be paid at least 228.1 TFP (228 + 0.1) not counting sick leave and vacation/Longevity PTO (the definition of “Worked TFP”), he would receive the QPP. If he were to be paid 228 or fewer TFP not counting sick and vacation/Longevity PTO, he would not receive it.

Simple trip trading does not directly affect QPP eligibility, only “downtrading”

There is no requirement to exceed the PBS bid award each month, only the combined amount of each month over the entire quarter. Please note you do not actually have to work your awarded schedule but rather the equivalent amount of TFP. Therefore trading in no way affects QPP unless you “downtrade” as measured against your combined monthly bid awards across the quarter.

Worked TFP excludes vacation/Longevity PTO (and sick leave)

Unfortunately, Worked TFP excludes vacation/Longevity PTO. Vacation/Longevity PTO TFP is part of the PBS award. So a flight attendant with a week of vacation has a deficit in that quarter. Assume the flight attendant was awarded the same schedule as in the previous example. Her combined monthly PBS bid awards over the quarter still equals 228 TFP. But 28 of those TFP (7 days of vacation x 4 TFP vacation credit/day) does not count as Worked TFP. In order to qualify for the QPP, she would have to work the 200 TFP from her bid award (228-vacation of 28), PLUS at least 28.1 additional TFP. Lack of vacation/Longevity PTO credit was a major problem we pointed out to management during negotiations but AFA knew there were several.

Dispute over QPP eligibility

Now our concerns have been realized. AFA and management disagree about how QPP should be paid out. So far we anticipate the dispute to be focused around flight attendants who have not received a full line at some point in the quarter (such as those on various leaves). AFA believes that the language is unambiguous and that a flight attendant who works one-tenth (0.1) TFP more than the total TFP equivalent of her/his PBS monthly bid awards over the quarter should receive it.

Quickly approaching deadline to pay QPP on time

Despite multiple requests by AFA over the past several weeks, management still has not articulated in writing exactly what their problem is with QPP. Management has also not provided an explanation of how they expect to pay QPP. In order for QPP to be paid on time on May 5^th the issue must be resolved by around April 10^th, which is the deadline for programming the payroll system to pay out QPP.

As of late last week, AFA’s understanding is that the payroll system is currently programmed to correctly pay out QPP exactly as the language indicates. Interestingly, the Information Technology (IT) department programmed the payroll system based on rules supplied by none other than the Alaska Airlines management negotiating team. Only after management had time to contemplate the implications of what they agreed to did they lodge objections.

It’s really too bad that management didn’t heed AFA’s concerns and take more time to fully vet QPP prior to signing the deal. In fairness to management, both parties were under pressure to conclude the deal in Chicago. However, that being said, management was under no obligation to pursue this provision. In our opinion it seems a little late to dispute the details after the fact simply because they don’t like what they negotiated.

AFA will file a grievance if QPP is paid any other way than according to the clear and unambiguous language

If management pays the QPP any way other than according to the clear and unambiguous language, AFA will file a grievance. We are certainly amenable to further discussions with management to resolve the issue short of taking this to arbitration since both sides stand to gain from a mutually beneficial agreement. Management has promised to provide us with an update this coming week. As soon as AFA has more information, we will also keep you posted on any other developments.

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In solidarity,

Your MEC—Jeffrey Peterson, Brian Palmer, Yvette Gesch, Becky Strachan, Laura Masserant, Cathy Gwynn, Sandra Morrow and Stephen Couckuyt; MEC Grievance chairperson Jennifer Wise MacColl; and AFA Senior Staff Attorney Kimberley Chaput