State labor board
denies city complaint
against union
wage plan

The UPW's deferred compensation
plan amounts to an extra
1 percent raise

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By Gordon Y.K. Pang
gpang@starbulletin.com

The Hawaii Labor Relations Board has thrown out a complaint by the city that challenged the legality of United Public Workers' deferred compensation plan, apparently ending the threat of a strike.

The board concluded the complaint was filed too late.

The plan was negotiated as part of the union's last settlement with the state and four counties at the end of last year. The plan amounts to about an extra 1 percent raise, which is not collected by the workers until they leave their jobs. It is to be administered by the UPW.

The board said the city had 90 days from the December signing of the contract to file the challenge.

Jeffrey S. Harris, an attorney hired by the city, questioned whether the plan fell under retirement benefits, which are not negotiable under state bargaining laws. He also questioned whether a new retirement system could be set up with government funds separate from the Hawaii Employee Retirement System. The Honolulu City Council approved the four-year UPW contract last month with the stipulation that the $1 million set aside for the deferred compensation plan would not be paid until the matter was settled by the Labor Board or court.

Gary Rodrigues, UPW state director, threatened a statewide strike over the issue, arguing that rejection of the plan constituted rejection of the entire contract.

UPW attorney Herbert Takahashi argued that deferred compensation is legally negotiated.

City Corporation Counsel David Arakawa said he was disappointed that the union and the state chose to bring up the timing issue and "block the ruling" rather than argue the legality of negotiating deferred compensation.

Arakawa said the city is not adverse to paying employees directly and letting them put the money into an existing deferred compensation account. He said that is one of the options now being considered, along with appealing the Labor Board decision to state Circuit Court. A third option, he said, is, "we can just wait until the union or the state to ask for the money to be funded."

Takahashi said the Labor Board's ruling speaks for itself, and declined further comment.