Opinion ID: 2366694
Heading Depth: 1
Heading Rank: 1

Heading: wage and fringe benefit

Text: In its original report and order, the commission allowed the company to include in its operating expenses only 5.5 percent ($568,000) of a 12.3 percent ($1,244,000) annual increase in wage and fringe benefits which the company has been paying to its employees in compliance with a collective bargaining agreement because of certain unidentified Presidential Price Commission regulations. We remanded this question to afford the commission an opportunity to provide us with the pertinent regulations or, if the circumstances required, to alter its decision and order since the only potentially sound bases for the disallowance of the claimed operating expense were regulations which the commission had not identified. Rhode Island Consumers' Council v. Smith, supra ; United Transit Co. v. Nunes, 99 R.I. 501, 504-05, 209 A.2d 215, 217-18 (1965). The commission's supplementary report and order found that:    it is now clear that the limitation of 5.5% did not apply to wage increases contracted prior to November 8, 1971. The wage increases involved resulted from collective bargaining agreements entered into before that date, and accordingly, the full amount of such wage increases must now be reflected in our decision. The same collective bargaining agreements also provided for increases effective in 1972 and scheduled in 1973 which are also unaffected by the 5.5% limitation. Subsequent phases of the Economic Stabilization Program appear to require restoration of the amounts we disallowed even if the wage increases had been pursuant to agreements entered into subsequent to November 8, 1971. The council now argues that [a]djustment for productivity improvements has been a continuing requirement of Price Commission Cost of Living Council regulations   . Accordingly, the commission's supplemental report suffers the same defect as the Court found in its original decision. That is, it has provided no specific basis for allowing the full amount of the claimed increase. This court disposed of this contention in our earlier decision wherein we stated that while a utility rate increase may be permitted only if it reflects productivity gains, it is not mandated with respect to wage and fringe benefit increases and is without relevance in this proceeding. Rhode Island Consumers' Council v. Smith, supra . The council asked that the increase in wages be offset at least in part by the productivity gain attributable to that increase, but the commission found no probative evidence of any such gain and the council in its brief points to none. The only potentially sound bases for the disallowance of this claimed operating expense were regulations which it is now apparent are non-existent. Thus, the commission's action in reversing its earlier partial disallowance of the company's wage and fringe benefit increases is in accord with the authorities and consistent with this court's mandate.