A-66228, JANUARY 7, 1936, 15 COMP. GEN. 587

A-66228: Jan 7, 1936

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A CIRCULAR WAS ISSUED BY DIRECTION OF THE GOVERNOR OF THE PANAMA CANAL REQUIRING THAT FORMER EMPLOYEES DISCHARGED ON ACCOUNT OF REDUCTION OF FORCE OR LACK OF WORK BE GIVEN PREFERENCE IN NEW EMPLOYMENTS OVER PERSONS WHO HAD NOT BEEN EMPLOYED PREVIOUSLY. PROVIDED THAT THE FORMER EMPLOYEE WAS FULLY QUALIFIED TO PERFORM THE WORK REQUIRED. IS ENCLOSED. THE INDIVIDUALS DISCHARGED FOR REDUCTION OF FORCE OR THROUGH EXPIRATION OF TEMPORARY EMPLOYMENT WERE ALLOWED TO RETAIN THE METAL IDENTIFICATION CHECKS (ROUND CHECKS NUMBERED BELOW 95. POSSESSION OF SUCH CHECK WAS MADE A REQUISITE FOR AN EMPLOYMENT OR REEMPLOYMENT EXCEPT IN CASES IN WHICH QUALIFIED HOLDERS OF METAL CHECKS OF THE SPECIFIED TYPE WERE NOT AVAILABLE. 2.

A-66228, JANUARY 7, 1936, 15 COMP. GEN. 587

COMPENSATION - FRAUDULENTLY OBTAINED EMPLOYMENT - PANAMA CANAL EMPLOYMENT OBTAINED WITH THE PANAMA CANAL BY FRAUDULENT MISREPRESENTATION AND DECEIT CONFERS NO ENFORCEABLE RIGHT TO COMPENSATION THAT HAS NOT BEEN PAID.

COMPTROLLER GENERAL MCCARL TO THE GOVERNOR, THE PANAMA CANAL, JANUARY 7, 1936:

CONSIDERATION HAS BEEN GIVEN YOUR LETTER OF SEPTEMBER 27, 1935, AS FOLLOWS:

PAYMENT FOR EMPLOYMENT SECURED FRAUDULENTLY

1. AS AN INCIDENT OF THE REDUCTION OF FORCE AMONG EMPLOYEES OF THE PANAMA CANAL OCCASIONED SEVERAL YEARS AGO BY THE DEPRESSION, A CIRCULAR WAS ISSUED BY DIRECTION OF THE GOVERNOR OF THE PANAMA CANAL REQUIRING THAT FORMER EMPLOYEES DISCHARGED ON ACCOUNT OF REDUCTION OF FORCE OR LACK OF WORK BE GIVEN PREFERENCE IN NEW EMPLOYMENTS OVER PERSONS WHO HAD NOT BEEN EMPLOYED PREVIOUSLY, PROVIDED THAT THE FORMER EMPLOYEE WAS FULLY QUALIFIED TO PERFORM THE WORK REQUIRED. A COPY OF THIS CIRCULAR, DATED JANUARY 30, 1932, IS ENCLOSED. ALTHOUGH STATED TO BE A TEMPORARY MEASURE IT HAS REMAINED IN EFFECT. AS EVIDENCE OF FORMER EMPLOYMENT, THE INDIVIDUALS DISCHARGED FOR REDUCTION OF FORCE OR THROUGH EXPIRATION OF TEMPORARY EMPLOYMENT WERE ALLOWED TO RETAIN THE METAL IDENTIFICATION CHECKS (ROUND CHECKS NUMBERED BELOW 95,000) WHICH HAD BEEN ISSUED TO THEM AT THE TIME OF THEIR EMPLOYMENT. POSSESSION OF SUCH CHECK WAS MADE A REQUISITE FOR AN EMPLOYMENT OR REEMPLOYMENT EXCEPT IN CASES IN WHICH QUALIFIED HOLDERS OF METAL CHECKS OF THE SPECIFIED TYPE WERE NOT AVAILABLE.

2. AS A CONSEQUENCE OF THIS REQUIREMENT OF POSSESSION OF THE SPECIFIED TYPE OF METAL CHECK, AN INDIVIDUAL WHO HAS NOT PREVIOUSLY EMPLOYED SECURED SUCH A METAL CHECK FROM AN UNEMPLOYED POSSESSOR OF SUCH CHECK BY LOAN, PURCHASE, THEFT, OR OTHERWISE, AND, PRESENTING HIMSELF AS THE RIGHTFUL POSSESSOR OF THE CHECK AND REPRESENTING HIMSELF AS THAT INDIVIDUAL BY NAME, SECURED EMPLOYMENT. SUBSEQUENTLY, ON CHECK OF RECORDS, INCLUDING THUMB PRINTS OF THE INDIVIDUALS, THE FRAUDULENT NATURE OF THE ENTRY INTO SERVICE WAS DISCOVERED, AND THE PERSON WHO HAD SECURED EMPLOYMENT FRAUDULENTLY WAS DISCHARGED FROM SERVICE, AND OBJECTIONS TO HIS REEMPLOYMENT WERE ENTERED.

3. THERE HAS ARISEN THE QUESTION OF WHETHER AN INDIVIDUAL WHO THUS SECURES EMPLOYMENT THROUGH MISREPRESENTATION, AND THUS EVADES THE REQUIREMENTS OF THE PANAMA CANAL IN ITS SELECTION OF EMPLOYEES, IS ENTITLED TO PAY FOR SERVICES RENDERED DURING THE PERIOD OF SUCH FRAUDULENT EMPLOYMENT. IT MAY BE ASSUMED THAT THE ACTUAL DUTIES OF THE POSITION WERE PERFORMED SATISFACTORILY AND THAT AS FAR AS PERFORMANCE GOES THE GOVERNMENT HAS RECEIVED SERVICES IN PROPORTION TO THE COMPENSATION ESTABLISHED FOR THE WORK IN QUESTION. THE QUESTION IS WHETHER SUCH MISREPRESENTATION AS HAS BEEN OUTLINED, IN SECURING EMPLOYMENT, CONSTITUTES A DEGREE OF FRAUD SUCH AS WOULD WARRANT OR REQUIRE THE WITHHOLDING OF PAY FROM THE INDIVIDUAL CONCERNED FOR WORK WHICH HE HAS PERFORMED.

4. YOUR DECISION IS REQUESTED AS TO WHETHER THE INDIVIDUAL MAY BE PAID UNPAID WAGES DUE FOR SERVICES RENDERED, AND IF SO, WHETHER PAYMENT SHOULD BE MADE UNDER HIS RIGHTFUL NAME OR UNDER THE ASSUMED NAME UNDER WHICH HE WAS CARRIED ON THE PAY ROLL.

IT APPEARS THAT BUT FOR THE FRAUDULENT MISREPRESENTATION AND DECEIT PRACTICED BY THE EMPLOYEE REFERRED TO IN YOUR LETTER, HE COULD NOT HAVE OBTAINED THE EMPLOYMENT, AND THAT, UPON DISCOVERY OF THE FRAUDULENT NATURE OF THE ENTRY INTO SERVICE, THE EMPLOYEE WAS IMMEDIATELY DISCHARGED. UNDER SUCH CIRCUMSTANCES, THE CONTRACT OF EMPLOYMENT CANNOT BE MADE THE BASIS OF A LEGAL CLAIM FOR SERVICES RENDERED THEREUNDER. AT MOST, HE COULD BE REGARDED AS ONLY A DE FACTO EMPLOYEE AND AS SUCH ENTITLED TO RETAIN SUCH PAYMENTS AS MAY HAVE BEEN MADE TO HIM, BUT HAVING NO ENFORCEABLE RIGHT TO COMPENSATION THAT HAD NOT BEEN PAID.

ACCORDINGLY, YOU ARE ADVISED THAT NO PAYMENT TO THIS EMPLOYEE IS AUTHORIZED FOR SERVICE RENDERED UNDER THE FRAUDULENTLY OBTAINED EMPLOYMENT.