B-231061, Jan 26, 1989

B-231061: Jan 26, 1989

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CIVILIAN PERSONNEL - Compensation - Compensation retention - Administrative regulations CIVILIAN PERSONNEL - Compensation - Retirement plans - Reinstatement DIGEST: A grade GS-12 employee of the Department of the Air Force stationed overseas was subject to a reduction in force. We are unaware of any authority that would permit reinstatement of his retirement. We are not aware of any authority to reinstate Mr. Since there was no erroneous overpayment in this case. Zervas was employed by the Department of the Air Force as a Recreation Services Manager. When he was notified in July 1984 of a pending reduction in force (RIF). Was separated from the Department of the Air Force on October 4. Zervas was initially granted and received grade and pay retention at the grade GS-12 level plus living quarters allowance until December 1985.

B-231061, Jan 26, 1989

CIVILIAN PERSONNEL - Compensation - Compensation retention - Administrative regulations CIVILIAN PERSONNEL - Compensation - Retirement plans - Reinstatement DIGEST: A grade GS-12 employee of the Department of the Air Force stationed overseas was subject to a reduction in force, and he refused a grade GS 9 position and chose to go on discontinued service retirement. Approximately 6 months later, he accepted a grade GS-9 position with the Department of the Army in the same area. The Army committed an unjustified and unwarranted personnel action when it erroneously denied him grade retention, pay retention, and living quarters allowance on the basis of his previous denial of a grade GS-9 position. We are unaware of any authority that would permit reinstatement of his retirement.

John T. Zervas - Reduction-in-Force - Retained Grade and Pay:

Mr. John T. Zervas, an employee of the Department of the Army, Darmstadt, West Germany, through counsel, requests a decision that would allow him to reinstate his retirement on the basis that he received erroneous advice when he accepted reemployment after a brief period of time spent in discontinued service retirement. In the alternative, Mr. Zervas requests reinstatement of his grade and pay retention plus living quarters allowance that he initially received when he accepted reemployment. Further, if neither of the two alternatives enumerated above can be granted, then Mr. Zervas requests that the amount he allegedly owes the Department of the Army for erroneous overpayments be considered for waiver under the provisions of 5 U.S.C. Sec. 5584 (Supp. IV 1986).

We are not aware of any authority to reinstate Mr. Zervas's retirement status; however, for the reasons that follow, we find that the Army's denial of grade and pay retention to Mr. Zervas constitutes an unjustified or unwarranted personnel action which entitles him to relief under the Back Pay Act, 5 U.S.C. Sec. 5596 (1982). Since there was no erroneous overpayment in this case, we need not consider the waiver issue.

BACKGROUND

Mr. Zervas was employed by the Department of the Air Force as a Recreation Services Manager, grade GS-12, step 7, at the Rhein-Main Air Force Base, West Germany, when he was notified in July 1984 of a pending reduction in force (RIF). The RIF notice offered Mr. Zervas a position as a Supervisory Recreation Specialist, grade GS-9, with retained grade and pay under the provisions of 5 U.S.C. Secs. 5362, 5363 (1982). Mr. Zervas declined the offer, accepted discontinued service retirement, and was separated from the Department of the Air Force on October 4, 1984.

Mr. Zervas later applied for and accepted a grade GS-9 position on April 8, 1985, with the Department of the Army, Darmstadt Military Community. Mr. Zervas was initially granted and received grade and pay retention at the grade GS-12 level plus living quarters allowance until December 1985, when the agency discovered that he had declined a grade GS-9 position at the Rhein-Main Air Force Base. The Army then determined that since Mr. Zervas declined the first grade GS-9 position offered to him, he was ineligible for reemployment priority at the grade GS-9 level, in accordance with provisions of the Federal Personnel Manual (FPM), chapter 351, subchapter 8. Mr. Zervas's salary was then reduced to grade GS-9, step 10, his living quarters allowance was terminated, and he was notified of his indebtedness for the amount he allegedly was overpaid.

Since Mr. Zervas was advised improperly in regard to his salary and entitlements, the Army forwarded to the Office of Personnel Management (OPM) a request for reinstatement of his retirement. Although not part of the record, counsel for Mr. Zervas states that OPM denied his request for reinstatement of retirement. However, counsel states that our Office has authority to grant Mr. Zervas reinstatement of his retirement on the basis of our decisions which hold that failure of the agency to submit the question of voluntary retirement to OPM for an advance decision constitutes administrative error which would justify retroactive relief. Duane E. Messmer, B-200256, May 20, 1981; Ziegler and Rebo, B-199774, Nov. 12, 1980.

OPINION

Reinstatement of Retirement

At the outset we note that OPM has jurisdiction to administer the retirement program. 5 U.S.C. Sec. 8347 (1982). Our response to Mr. Zervas's request for reinstatement of his retirement will be limited to an inquiry whether he suffered an unjustified or unwarranted personnel action under the Back Pay Act, 5 U.S.C. Sec. 5596 (1982).

Our Office has made exceptions to the general rule against retroactive personnel actions where administrative or clerical error (1) prevented a personnel action from being effected as originally intended, (2) resulted in nondiscretionary administrative regulations or policies not being carried out, or (3) has deprived the employee of a right granted by statute or regulation. Frank A. Fishburne, B-199667, Oct. 7, 1980, affirmed on reconsideration, B-199667, Mar. 2, 1981.

We fail to see where any of the three exceptions are applicable in Mr. Zervas's case. Mr. Zervas accepted a discontinued service retirement and received an annuity for approximately 6 months before he applied for and was granted a new position with the Department of the Air Force. There is no indication in the record that he intended to do anything other than that which he did, i.e., retire rather than accept a lower graded position and later seek a different position in the area. Further, Mr. Zervas's new position was with the Department of the Army, and we are unaware of any obligation that agency would have to inquire into his retirement from the Air Force. The fact that Mr. Zervas actually retired renders the cases cited by counsel inapposite, Duane F. Messmer, B-200256, and Ziegler and Rebo, B-199774, supra, since those cases involve employees who continued their federal employment beyond the date they would have been eligible for discontinued service retirement and who were later granted a retroactive retirement date.

Accordingly, we are not aware of any authority to grant Mr. Zervas's request to be placed back on discontinued service retirement.

Grade and Pay Retention

An employee who is placed in a lower grade as a result of RIF procedures is entitled to grade and pay retention under the provisions of 5 U.S.C. Secs. 5362, 5363 (1982). Grade retention ceases to apply to an employee when the employee is demoted at his request or when the employee is placed in or declines a reasonable offer of a position the grade of which is equal to or higher than the retained grade, 5 U.S.C. Sec. 5362(d)(2)(3). Pay retention ceases to apply when the employee declines a reasonable offer of a position the rate of basic pay for which is equal to or higher than the rate to which the employee is entitled or when the employee is demoted at the employee's request. 5 U.S.C. Sec. 5363(c)(2)(3).

The Army held that Mr. Zervas was not eligible for reemployment priority at the grade GS-9 level since he had previously declined a position at this level, citing to FPM, ch. 351, subch. 8, as authority. Although no specific provision is referenced, we believe the Army was referring to section 8-3b(2)(b), which states that an employee's name is deleted from the reemployment priority list when he declines a full-time nontemporary competitive position with a representative rate the same as, or higher than, the position he was separated from. See also 5 C.F.R. Sec. 351.1004(c)(2) (1988).

We believe that the Army erred when it applied this regulation to Mr. Zervas. A representative rate is defined in 5 C.F.R. Sec. 351.203 (1988) as the fourth step of the grade for a position subject to the General Schedule. Mr. Zervas was employed at the grade GS-12, step 7, level and the representative rate of that grade, GS-12, step 4 ($33,441), was obviously higher than the representative rate of the position he was offered, grade GS-9, step 4 ($23,062). Therefore, Mr. Zervas's name would not be removed from the reemployment priority list on the basis that he declined a position with a representative rate the same as, or higher than, the position he was separated from.

Mr. Zervas was also entitled to grade retention for a 2-year period, and the only possible bases to terminate his entitlement would be if he was placed in a position the grade of which was equal to, or higher than, his retained grade or if he declined a reasonable offer of a position, the grade of which was equal to, or higher than, his retained grade. 5 C.F.R. Sec. 536.207(a)(3) (1988). Since Mr. Zervas was in a grade GS-12 position, his declination of a grade GS-9 position would not serve to remove him from his entitlement to grade retention. 5 C.F.R. Sec. 536.201 (1988).

We also note that Mr. Zervas complied with OPM regulations when he enrolled in a priority placement program. Failure to do so would also have been a reason to discontinue his grade retention. 5 C.F.R. Sec. 536.207(b)(2) (1988). Further, if an employee separates from the federal service under conditions which include reemployment or restoration rights, no break in service occurs if the employee exercises those reemployment rights within the time allotted. The employee's current rate of basic pay, with respect to grade and pay retention, is computed as if he had never separated from the federal service. FPM Supp. No. 990-2, bk 536, S5 -1b(2).

Accordingly, Mr. Zervas is entitled to pay at his retained grade for the initial 2-year period of his employment, and to retained pay after this period computed under the provisions of 5 U.S.C. Sec. 5363 (1982).

Quarters Allowances

We are unable to determine from the record why Mr. Zervas was denied a living quarters allowance. We assume that he was treated as a local hire since he remained in Germany beyond his separation for retirement date, and since the agency incorrectly believed he was not entitled to reemployment priority. If this assumption is correct, Mr. Zervas would be entitled to the quarters allowance for the same reasons given under the discussion of grade and pay retention.

We would also point out that provisions of the Standardized Regulations (Government Civilians, Foreign Areas) would also permit the agency to grant Mr. Zervas a living quarters allowance. Paragraph 031 of the Standardized Regulations provides that a quarters allowance may be granted to an employee recruited outside the United States if (1) the employee's actual place of residence is fairly attributable to his employment by the United States Government, (2) prior to his employment the employee was recruited in the United States by the United States Government, and (3) the employee had been in substantially continuous employment under conditions which provided for his return transportation to the United States.

The provisions of the Standardized Regulations would apply to Mr. Zervas since his residence in West Germany is attributed to his employment in the area of Rhein-Main and Darmstadt. A letter to Mr. Zervas from the Department of the Air Force is also in the record which advises Mr. Zervas that he had 1 year from his separation date to exercise his return travel rights to the United States, presumably under a prior travel and transportation agreement. Further, Mr. Zervas was reemployed by the Department of the Army approximately 6 months after his separation through reduction in force which, under the provisions of Joint Travel Regulations, vol. 2, para. C4002-3b3 (Change No. 241, Nov. 1, 1985), would entitle him to negotiate a new travel renewal agreement.

Therefore, the Department of the Army committed an unjustified or unwarranted personnel action when it erroneously denied Mr. Zervas his retained grade, retained pay, and quarters allowance, as authorized by pertinent statutes and regulations. Accordingly, Mr. Zervas is entitled to backpay as specified in this decision under the provisions of the Back Pay Act, 5 U.S.C. Sec. 5596 (1982).