B-121070, MAY 3, 1955, 34 COMP. GEN. 561

B-121070: May 3, 1955

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COMPENSATION - REDUCTION - RESTORATION - BACK PAY RIGHTS - PREFERENCE ELIGIBLE EMPLOYEES A DEMOTED EMPLOYEE WHO IS ORDERED RETROACTIVELY RESTORED TO HIS FORMER POSITION AFTER A SUCCESSFUL APPEAL UNDER SECTION 14 OF THE VETERANS' PREFERENCE ACT OF 1944. IS ENTITLED TO COMPENSATION FOR THE PERIOD OF THE UNJUSTIFIED DEMOTION PURSUANT TO THE AMENDATORY ACT OF AUGUST 4. COMPUTED ON THE BASIS OF THE AMOUNT WHICH WOULD HAVE BEEN EARNED FOR THE PERIOD IN THE GRADE FROM WHICH DEMOTED. 33 COMP. UPON SUBMISSION OF THE MATTER TO OUR CLAIMS DIVISION THE ADMINISTRATIVE ACTION WAS AFFIRMED BY SETTLEMENT DATED JULY 20. WAS REDUCED IN GRADE AND COMPENSATION FROM HOSPITAL ATTENDANT. THE COMMISSION FOUND THAT THE EVIDENCE PRESENTED DID NOT ESTABLISH THE CHARGES UPON WHICH THE DEMOTION WAS BASED.

B-121070, MAY 3, 1955, 34 COMP. GEN. 561

COMPENSATION - REDUCTION - RESTORATION - BACK PAY RIGHTS - PREFERENCE ELIGIBLE EMPLOYEES A DEMOTED EMPLOYEE WHO IS ORDERED RETROACTIVELY RESTORED TO HIS FORMER POSITION AFTER A SUCCESSFUL APPEAL UNDER SECTION 14 OF THE VETERANS' PREFERENCE ACT OF 1944, IS ENTITLED TO COMPENSATION FOR THE PERIOD OF THE UNJUSTIFIED DEMOTION PURSUANT TO THE AMENDATORY ACT OF AUGUST 4, 1947, COMPUTED ON THE BASIS OF THE AMOUNT WHICH WOULD HAVE BEEN EARNED FOR THE PERIOD IN THE GRADE FROM WHICH DEMOTED. 33 COMP. GEN. 192 AND 28 COMP. GEN. 489, MODIFIED.

COMPTROLLER GENERAL CAMPBELL TO THE ADMINISTRATOR, VETERANS ADMINISTRATION, MAY 3, 1955:

MR. SHALMER L. AVITT, AN EMPLOYEE OF THE VETERANS ADMINISTRATION HOSPITAL, KNOXVILLE, IOWA, HAS REQUESTED RECONSIDERATION OF HIS CLAIM FOR BACK PAY COVERING THE PERIOD JULY 19, 1953, TO FEBRUARY 14, 1954. THE ADMINISTRATIVE OFFICIALS OF THE HOSPITAL PREVIOUSLY REFUSED PAYMENT OF THE CLAIM AND, UPON SUBMISSION OF THE MATTER TO OUR CLAIMS DIVISION THE ADMINISTRATIVE ACTION WAS AFFIRMED BY SETTLEMENT DATED JULY 20, 1954.

THE RECORD DISCLOSES THAT, EFFECTIVE JULY 19, 1953, MR. AVITT, A PREFERENCE-ELIGIBLE EMPLOYEE OF THE VETERANS ADMINISTRATION HOSPITAL, KNOXVILLE, IOWA, WAS REDUCED IN GRADE AND COMPENSATION FROM HOSPITAL ATTENDANT, GS-2, $3,230 PER ANNUM, TO KITCHEN HELPER, CPC-3, AT $3,032 PER ANNUM, ON THE BASIS OF CHARGES PREFERRED AGAINST HIM. UPON HIS APPEAL TO THE CIVIL SERVICE COMMISSION UNDER SECTION 14 OF THE VETERANS' PREFERENCE ACT OF 1944, AS AMENDED, 5 U.S.C. 863, THE COMMISSION FOUND THAT THE EVIDENCE PRESENTED DID NOT ESTABLISH THE CHARGES UPON WHICH THE DEMOTION WAS BASED, AND ORDERED HIS RETROACTIVE RESTORATION TO HIS FORMER POSITION. PURSUANT TO SUCH ORDER, MR. AVITT WAS RESTORED AND HE RESUMED ACTIVE DUTY IN THAT POSITION ON FEBRUARY 14, 1954. HIS CLAIM IS FOR COMPENSATION REPRESENTING THE DIFFERENCE IN THE TWO RATES OF PAY MENTIONED ABOVE FOR THE PERIOD OF HIS DEMOTION.

IN REPLY DATED MAY 27, 1954, TO A REQUEST FROM OUT CLAIMS DIVISION FOR A REPORT AND RECOMMENDATION WITH RESPECT TO MR. AVITT'S CLAIM, THE MANAGER, VETERANS ADMINISTRATION HOSPITAL, KNOXVILLE, IOWA, STATED THAT THE CLAIM HAD BEEN DISAPPROVED BECAUSE OF OUR DECISION OF OCTOBER 27, 1953, 33 COMP. GEN. 192, THAT A DEMOTION OR REDUCTION IN GRADE OR COMPENSATION MAY NOT BE REGARDED AS A REMOVAL OR SUSPENSION WITHOUT PAY SO AS TO PROVIDE THE BASIS FOR A CLAIM FOR BACK-PAY UNDER THE PROVISIONS OF THE ACT OF AUGUST 24, 1912, AS AMENDED BY THE ACT OF JUNE 10, 1948, 62 STAT. 354, 5 U.S.C. 652. THAT DECISION EXTENDED TO PREFERENCE-ELIGIBLE EMPLOYEES THE CONCLUSION STATED IN 28 COMP. GEN. 200, THAT BACK PAY PROVISIONS OF THE AMENDATORY ACT OF JUNE 10, 1948, DO NOT APPLY IN THE CASE OF DEMOTIONS. THE ACTION BY OUR CLAIMS DIVISION IN DENYING MR. AVITT'S CLAIM WAS GROUNDED UPON THE SAME BASIS.

IN CONSONANCE WITH THE VIEW EXPRESSED IN OUR DECISIONS THAT THE BACK PAY PROVISIONS OF THE 1948 AMENDATORY STATUTE DO NOT APPLY TO DEMOTION CASES, TOGETHER WITH THE HOLDING IN 28 COMP. GEN. 489, THAT THE PROVISIONS OF THE ACT OF AUGUST 4, 1947, 61 STAT. 723, AMENDING SECTION 14 OF THE VETERANS' PREFERENCE ACT OF 1944, TO MAKE MANDATORY THE CORRECTIVE ACTION RECOMMENDED BY THE CIVIL SERVICE COMMISSION, DO NOT INCLUDE AN AUTHORIZATION FOR BACK PAY, WE HAVE CONSISTENTLY DISALLOWED CLAIMS FOR PAYMENT IN SUCH CASES. IN THE CASE OF GREGORY V. UNITED STATES, 123, C.1CLS. 794, THE COURT AFFIRMED THE VIEW THAT THE 1948 STATUTORY PROVISIONS RESPECTING BACK PAY DID NOT COVER INSTANCES OF DEMOTIONS IN GRADE OR COMPENSATION. ALSO, IN ITS OPINION, THE COURT STATED THAT AN ORDER BY THE CIVIL SERVICE COMMISSION, UNDER THE MANDATORY PROVISIONS OF SECTION 14 OF THE VETERANS' PREFERENCE ACT OF 1944, IS AMENDED BY THE ACT OF AUGUST 4, 1947, FOR THE RETROACTIVE RESTORATION OF AN EMPLOYEE TO THE POSITION FROM WHICH DEMOTED, CARRIED WITH IT NO RIGHT TO BACK PAY FOR THE PERIOD OF SUCH DEMOTION. THUS, IT WILL BE SEEN THAT THE DISALLOWANCE OF MR. AVITT'S CLAIM WAS IN ACCORD WITH THE HOLDING IN THE CITED CASES.

HOWEVER, IN GOODWIN V. UNITED STATES, 127 C.1CLS. 417, DECIDED FEBRUARY 2, 1954, THE COURT--- WHILE SUSTAINING THE POSITION THAT DEMOTIONS WERE NOT COVERED BY THE JUNE 10, 1948 STATUTE--- REJECTED AS UNWARRANTED DICTUM THE VIEWS EXPRESSED IN THE GREGORY CASE THAT THE AMENDATORY ACT OF AUGUST 4, 1947, TO SECTION 14 OF THE VETERANS' PREFERENCE ACT OF 1944, DID NOT CARRY WITH IT THE RIGHT TO BACK PAY, AND HELD THAT THE MANDATORY RESTORATION RECOMMENDATION BY THE CIVIL SERVICE COMMISSION UNDER THE 1947 STATUTE GAVE THE EMPLOYEE A RIGHT TO BACK PAY FOR THE PERIOD OF HIS DEMOTION. THAT DECISION WAS RELIED UPON IN SMITH V. UNITED STATES, 127 C.1CLS. 706, DECIDED MARCH 4, 1954, AS AUTHORITY FOR THE PAYMENT OF BACK PAY IN A SIMILAR CASE INVOLVING THE DEMOTION OF A PREFERENCE-ELIGIBLE EMPLOYEE. BOTH THE GOODWIN AND SMITH CASES WERE CITED WITH APPROVAL IN ADLER V. UNITED STATES, C.1CLS. 266 53, DECIDED JULY 13, 1954, ALSO INVOLVING DEMOTIONS OF PREFERENCE ELIGIBLE EMPLOYEES BUT RESULTING FROM REDUCTION-IN-FORCE ACTIONS.

THE DECISIONS OF THE COURT OF CLAIMS IN THE GOODWIN AND SMITH CASES ARE CONSIDERED BY US AS REPRESENTING THE VIEW OF THE COURT THAT THE AMENDATORY STATUTE OF AUGUST 4, 1947, AUTHORIZES THE PAYMENT OF COMPENSATION FOR THE PERIOD OF AN UNJUSTIFIED OR UNWARRANTED DEMOTION AS ONE OF THE ELEMENTS INCLUDED IN THE MANDATORY RESTORATION ORDER OF THE CIVIL SERVICE COMMISSION. CONSEQUENTLY, THAT PART OF OUR DECISIONS OF MARCH 2, 1949, 28 COMP. GEN. 489, AND OCTOBER 27, 1953, 33 COMP. GEN. 192, WHICH REACHED CONTRARY CONCLUSIONS RESPECTING THE BACK PAY ASPECTS OF THE 1947 STATUTORY PROVISION, NO LONGER WILL BE FOLLOWED.

IN LINE WITH THE HOLDING IN OUR DECISIONS AND IN THOSE OF THE COURT OF CLAIMS THAT DEMOTIONS ARE NOT COVERED BY THE 1948 STATUTE, IT FOLLOWS THAT THE FORMULA PRESCRIBED IN THAT STATUTE FOR COMPUTING BACK PAY IS NOT APPLICABLE IN THOSE DEMOTION CASES IN WHICH THE RIGHT TO BACK PAY IS GROUNDED UPON THE PROVISIONS OF THE ACT OF AUGUST 4, 1947, AS DETERMINED BY THE COURT OF CLAIMS IN THE CASES DISCUSSED ABOVE. RATHER, IN SITUATIONS COMING WITHIN THE PURVIEW OF THE CITED COURT OF CLAIMS DECISIONS THE COMPUTATION OF BACK PAY SHOULD ACCORD WITH THE METHOD FOLLOWED BY THE COURT IN SUCH CASES; THAT IS, BACK PAY SHOULD BE COMPUTED ON THE BASIS OF THE AMOUNT WHICH THE EMPLOYEE WOULD HAVE EARNED FOR THE PERIOD OF HIS DEMOTION IN THE GRADE FROM WHICH DEMOTED, RATHER THAN ON THE BASIS OF THE RATE OF COMPENSATION RECEIVED ON THE DATE OF DEMOTION.

A SETTLEMENT OF MR. AVITT'S CLAIM ON THE BASIS DESCRIBED ABOVE WILL ISSUE PROMPTLY BY OUR CLAIMS DIVISION.