Pursuant to G.L.c.32, §16(4), the Petitioner, John O'Callaghan, is appealing the calculation of his accidental disability retirement allowance. Mr. O'Callaghan filed an appeal by letter of September 11, 2006 after determining from a breakdown of his retirement allowance, that certain income items he received through his collective bargaining agreement (CBA) were not included in the calculation of his retirement allowance. (See, Exs. 1, 2, 3, 4 & 5) A hearing was held September 9, 2007, at the offices of the Division of Administrative Law Appeals (DALA), 98 North Washington Street, 4th Floor, Boston, MA 02114, pursuant to G.L.c.7, §4H.
Various documents are in evidence. (Exs. 1 - 8. Exhibit 8 was filed post hearing and is an affidavit with attached letter of Edward J. O'Brien, Jr., the Boston Retirement Board's Manager of Client Services.) One tape was used. The parties entered into some stipulations of facts. ("A") Mr. O'Callaghan testified. The record was held open to find out what income items were included and which ones were excluded from Mr. O'Callaghan's retirement calculation. ("B") This was received by October 26, 2007 when the record closed. Both parties made arguments on the record.
FINDINGS OF FACT
1. John O'Callaghan, d.o.b. 2/9/56, worked as a Correction Officer (CO) for the Suffolk County Sheriff's Department with Boston Retirement System membership from December 1, 1982. He was a CO I, and reached step 9 in his pay grade. He was subject to a CBA. ("A". Exs. 3, 4 & 5. Testimony)
2. Mr. O'Callaghan was injured while in the performance of his duties on September 30, 2002. He received workers compensation for his time lost from work. He thereafter, sought and was successful in receiving an award of accidental disability retirement benefits, with an effective date of retirement of January 4, 2003. He retired under Option C. He had twenty years and two months of creditable service. ("A". Exs. 3, 4, 5 & 6. Testimony)
3. Mr. O'Callaghan's CBA set forth his base salary as a CO-I at step 9, and other income payments he was entitled to receive. The CBA that was pertinent to his retirement calculation was the one covering July 1, 2000 through June 30, 2003. (Ex. 7)
4. The CBA at Article XIX. Compensation, Section 1E, showed that a CO I at Step 9, effective July 6, 2002 had a base pay of $914.67, which annualized was $52,450.84. This was his base pay level at the time he sustained his work injury of September 30, 2002. (Exs. 7 & 8. Testimony)
5. The CBA at Article XIX. Compensation, Section 10. Shift Differential, provided for "$1.05 per hour for all regularly scheduled actual hours work on a night shift." This applied to Mr. O'Callaghan's work schedule, and an annualized amount of this differential was $42.00. (Exs. 5, 7 & 8. Testimony)
6. The CBA at Article XIX. Compensation, Section 8. Longevity, provided for incremental additional pay amounts to the COs based on the number of years of service they had. It was paid annually. The pertinent portion of the provision read: "[T]here shall be a program as follows: … D. Employees with twenty (20) years of service … but less than twenty-five - $700.00." (Exs. 5, 7 & 8. Testimony)
7. The CBA at Article XIX. Compensation, Section 11. Public Safety Differential, provided for "$1.30 per hour for employees in grades CO-1, CO-2, and CO-3 for all regularly scheduled actual hours worked." This applied to Mr. O'Callaghan's work schedule, and an annualized amount of this differential was $52.00. (Exs. 5, 7 & 8. Testimony)
8. The CBA at Article XIX. Compensation, Section 14. Fitness Bonus, provided: "Employees who annually meet the requirements of the Municipal Employer's voluntary 'Wellness and Fitness' program will receive a cash payment of $800.00, payable no later than December 15th each year." Mr. O'Callaghan received this payment before but not after his September 2002 work injury. (Exs. 5, 7 & 8. Testimony)
9. The CBA at Article XIII. Holidays, Sections 1 and 2, listed holidays Mr. O'Callaghan would receive as well as pay he would receive if he worked on them. Group A holidays were: New Year's Day, Thanksgiving Day, and Christmas Day. If he worked a Group A holiday, he received in addition to his regular pay, "compensation or compensation time, … calculated at the rate of time and one-half for each hour worked." If that holiday was on his "regularly scheduled days-off, vacation or other authorized day-off," he received "in addition to … regular weekly compensation, an additional day's pay or an additional day-off." Group B holidays were ten other holidays during the year. If Mr. O'Callaghan worked on such a holiday, or if it fell on his "regular day-off, vacation, or other authorized day-off," he received in addition to his "regular weekly compensation, an additional day's pay or an additional day-off." Nevertheless, Section 3 provided that "the Sheriff reserves and retains the right to determine whether an employee who is called in to work on a holiday shall receive additional time-off or additional pay." Mr. O'Callaghan received holiday pay. (Ex. 7. Testimony)
10. The CBA at Article XVIII. Miscellaneous, Section 2. Uniforms, provided for an allowance, which Mr. O'Callaghan received. The provision stated it was "an annual clothing allowance for the prior calendar year," and was $750.00 per year. (Exs. 5 & 7. Testimony)
11. In connection with his retirement, the Suffolk County Sheriff's Department reported to the Boston Retirement Board that Mr. O'Callaghan had a base pay rate of CO-1, and that on September 30, 2002, the date of injury, he was at step 9 receiving $914.67. The Sheriff's Department reported he received the public safety and night differentials of $52.00 and $42.00, respectively, and the annual longevity payment based on twenty plus years of service of $700.00. The Sheriff's Department reported he received the uniform and fitness annual payments of $750.00 and $800.00, respectively. The additional income items he received totaled $3,258.67. (Ex. 5)
12. The Boston Retirement Board did not accept each of the payments Mr. O'Callaghan received as being regular compensation for use in calculating his retirement allowance. The Board did not include Mr. O'Callaghan's holiday pay, longevity payment, fitness allowance or uniform allowance. (Exs. 3, 4 & 8)
13. The Public Employee Retirement Administration Commission (PERAC) approved the Boston Retirement Board's calculations and award of accidental disability retirement benefits under Option C, effective January 4, 2003. (Ex. 6)
14. Once Mr. O'Callaghan gained knowledge that some of the payments he received through his CBA had not been used in calculating his retirement allowance, he filed an appeal with the Contributory Retirement Appeal Board (CRAB) by letter of September 11, 2006. In making this appeal, he was not responding to any letter issued to him by the Boston Retirement Board that explained these exclusions from his retirement calculation or that contained his appeal rights to CRAB. (Exs. 1, 2 & 3. Testimony)
There are two prior cases on point with Mr. O'Callaghan's circumstances: Robert T. O'Brien v. Boston Retirement Board,CR-06-60 (DALA, 3/2/07) (No CRAB Decision); and, Gary Bolles v. Boston Retirement Board, CR-06-389 (DALA, 9/14/07) (No CRAB Decision). Both Mr. O'Brien and Mr. Bolles were COs in the Suffolk County Sheriff's Department. Both were employed subject to a CBA like Mr. O'Callaghan was. Both retired like Mr. O'Callaghan with accidental disability retirement benefits. Mr. O'Brien retired effective November 30, 2001. Mr. Bolles retired effective February 27, 2004. Both received, like Mr. O'Callaghan did, shift differential additional payments along with holiday pay, longevity pay, uniform allowance, and fitness allowance. The calculations of their retirements by the Boston Retirement Board contained the same exclusions of such payments as Mr. O'Callaghan's did. These exclusions were upheld as valid in both cases other than the failure to include the longevity annual payments and the uniform annual allowances. Mr. O'Callaghan's appeal has the same outcome.
The Boston Retirement Board was correct in using Mr. O'Callaghan's base salary from his CBA on the date of his injury for purposes of his retirement calculation. This is due to the instruction in G.L.c.32, §7(2) which states in pertinent part:
Upon retirement under the provisions of this section
a member shall receive an accidental disability
retirement allowance to become effective on the date
the injury was sustained or the hazard on account of
which he is being retired was undergone, or on the
date six months prior to the filing of the written
application for such retirement with the board and
his respective employer, or on the date for which he
last received regular compensation for his employment
in the public service, whichever date last occurs.
In terms of the various pay differentials Mr. O'Callaghan received, the Boston Retirement Board acted properly in including his annualized night differential as well as his annualized public safety differential. This is consistent with Boston Association of School Administrators and Supervisors v. Boston Retirement Board, 383 Mass. 336 (1981), which explains how such pay differentials have to be routine, regular, repeat, predictable, and automatically given out, and not just to one employee, to be regular compensation. Whether or not retirement deductions were taken from the amounts received for the differentials each year is not dispositive of whether or not the payments were regular compensation. Bower v. CRAB, 393 mass. 427 (1984) The more recent case of Bulger v. CRAB, 447 Mass. 651, 656 and 658 (2006) re-affirms the determinations made in these two cases as to what regular compensation can include, while recognizing how employees may be paid for their work in distinct ways.
These considerations apply as well to Mr. O'Callaghan's annual longevity payments and to his annual uniform allowance. The longevity payment was regular compensation as it was paid out automatically to all COs according to a set system that reflected only their years of service. It was not paid out in a higher amount once the employee gave notice of retirement, and was not a bonus. It was regular compensation because it was routinely and regularly paid, even if paid just annually and not in regular amounts during the year, and even if it was received by COs who were retiring. See, Christenson v. CRAB, 42 Mass.App.Ct. 544 (1997). Likewise, the annual uniform allowance was paid out annually and automatically to all COs on a routine and regular basis. It was not a bonus. It was not triggered by the CO retiring. Both of these payments were regular compensation erroneously excluded from the calculation of Mr. O'Callaghan's retirement allowance.
In contrast were the fitness payments and the holiday payments. The fitness payment was not paid out automatically. Rather, it was only received when the CO passed the annual fitness test. The employee had to earn it. As per G.L.c.32, §1's definition of regular compensation, holiday pay can be regular compensation only for police officers, fire fighters and other employees of municipal departments who work as signal operators or signal maintenance repairmen. CO employees of the Suffolk County Sheriff's Department do not satisfy that very specific criteria. Otherwise, Section 1 treats holiday pay as overtime pay which is excluded from being regular compensation. Mr. O'Callaghan cannot have such holiday pay be part of his retirement calculation.
Consistent with the foregoing determinations, the case is remanded to the Boston Retirement Board to re-calculate Mr. O'Callaghan's accidental disability retirement allowance to include, in addition to what the Board has already included above and beyond his base salary at the time of his accident, his longevity payments and his uniform allowances.
DIVISION OF ADMINISTRATIVE LAW APPEALS
Sarah H. Luick, Esq.
DATED: February 1, 2008