B-27412, JULY 29, 1942, 22 COMP. GEN. 82

B-27412: Jul 29, 1942

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

ADOPTED A POLICY OF PAYING 2 MONTHS' WAGES OR SALARY TO EMPLOYEES ENTERING MILITARY SERVICE WHO HAD ONE YEAR'S SERVICE WITH THE COMPANY IS ENTITLED TO REIMBURSEMENT FOR SUCH PAYMENTS TO EMPLOYEES WHERE THEIR SERVICES WERE USED SOLELY IN CONNECTION WITH THE PARTICULAR CONTRACT DURING THE YEAR PRECEDING ENTRANCE INTO THE MILITARY SERVICE. THE PROPRIETY OF THE CLAIM AGAINST THE UNITED STATES IS IN DOUBT AND YOUR DECISION IS REQUESTED AS TO THE VALIDITY OF THE VOUCHER FOR REIMBURSEMENT TO THE CONTRACTOR. THE SPECIFIC QUESTIONS IN DOUBT ARE: (A) THE PAYMENT OF A GRATUITY OF TWO MONTHS' FULL WAGES OR SALARY UPON ENTRY INTO THE MILITARY SERVICE WAS ADOPTED SUBSEQUENT TO THE SIGNING OF THE CONTRACT.

B-27412, JULY 29, 1942, 22 COMP. GEN. 82

CONTRACTS - COST-PLUS - GRATUITY PAYMENTS TO EMPLOYEES ENTERING MILITARY SERVICE UNDER A COST-PLUS-A-FIXED-FEE CONTRACT OBLIGATING THE GOVERNMENT TO PAY ITS PROPORTIONATE SHARE OF EXPENSES INCURRED, PURSUANT TO A GENERAL COMPANY POLICY, FOR EMPLOYEES' RELATIONS PLANS, DISCONTINUANCE WAGES, ETC., A CONTRACTOR WHO, SUBSEQUENT TO DATE OF CONTRACT BUT IN ANTICIPATION OF COMPULSORY MILITARY TRAINING, ADOPTED A POLICY OF PAYING 2 MONTHS' WAGES OR SALARY TO EMPLOYEES ENTERING MILITARY SERVICE WHO HAD ONE YEAR'S SERVICE WITH THE COMPANY IS ENTITLED TO REIMBURSEMENT FOR SUCH PAYMENTS TO EMPLOYEES WHERE THEIR SERVICES WERE USED SOLELY IN CONNECTION WITH THE PARTICULAR CONTRACT DURING THE YEAR PRECEDING ENTRANCE INTO THE MILITARY SERVICE.

ACTING COMPTROLLER GENERAL ELLIOTT TO LT. COL. GEORGE DOBERT, UNITED STATES ARMY, JULY 29, 1942:

THERE HAS BEEN RECEIVED BY REFERENCE FROM THE CHIEF OF FINANCE, YOUR LETTER OF JUNE 25, 1942, AS FOLLOWS:

THE INCLOSED VOUCHER, PROPERLY APPROVED AND CERTIFIED, HAS BEEN PRESENTED TO THE UNDERSIGNED DISBURSING OFFICER FOR THE ARMY FOR PAYMENT.

THE PROPRIETY OF THE CLAIM AGAINST THE UNITED STATES IS IN DOUBT AND YOUR DECISION IS REQUESTED AS TO THE VALIDITY OF THE VOUCHER FOR REIMBURSEMENT TO THE CONTRACTOR, E. I. DU PONT DE NEMOURS AND CO., INC.

THE VOUCHER PRESENTED REQUESTS REIMBURSEMENT TO THE CONTRACTOR FOR EXTRA COMPENSATION PAID EMPLOYEES UPON ENTRY INTO THE MILITARY SERVICE OF THE UNITED STATES.

THE SPECIFIC QUESTIONS IN DOUBT ARE:

(A) THE PAYMENT OF A GRATUITY OF TWO MONTHS' FULL WAGES OR SALARY UPON ENTRY INTO THE MILITARY SERVICE WAS ADOPTED SUBSEQUENT TO THE SIGNING OF THE CONTRACT, W-ORD-458, A COPY OF WHICH IS ON FILE IN YOUR OFFICE.

(B) NO EVIDENCE HAS BEEN PRODUCED TO SHOW THE PAYMENT OF ANY GRATUITY UPON ENTRY INTO THE MILITARY SERVICE WAS THE POLICY OF THE CONTRACTOR, E. I. DU PONT DE NEMOURS AND CO. INC., DURING WORLD WAR NO. 1, OR ANY PREVIOUS WAR.

THE VIEWS OF THE CHIEF OF ORDNANCE WITH RESPECT TO THE QUESTION PRESENTED ARE SET FORTH IN THIRD ENDORSEMENT OF JULY 3, 1942, TO THE CHIEF OF FINANCE, AS FOLLOWS:

1. REFERENCE IS MADE TO 2ND INDORSEMENT DATED JUNE 30, 1942, REQUESTING REMARK AND RECOMMENDATION WITH RESPECT TO REIMBURSEMENT OF $840.32 TO E. I. DU PONT DE NEMOURS AND COMPANY ( CONTRACT W-ORD-458) FOR COMPENSATION PAID EMPLOYEES UPON ENTRY INTO THE MILITARY SERVICE OF THE UNITED STATES.

2. ARTICLE IV-A (1) OF THE CONTRACT PROVIDES FOR REIMBURSEMENT TO THE CONTRACTOR FOR:

"* * * WAGES AND EXTRA COMPENSATION TO EMPLOYEES CHARGES UNDER AND A PROPORTIONATE SHARE OF THE COST OF ALL WELFARE AND OTHER EMPLOYEES RELATIONS PLANS MAINTAINED BY THE CONTRACTOR * * * ANY DISCONTINUANCE WAGES * * *. IN THE PAYMENT OF EXTRA COMPENSATION, AND IN THE MAKING OF EXPENDITURES PURSUANT TO OR IN THE MAINTENANCE OF WELFARE OR OTHER PLANS FOR THE BENEFIT OF EMPLOYEES, THE GOVERNMENT SHALL BE CHARGEABLE THEREFOR INSOFAR AS THE SAME ARE CONSISTENT WITH THE CONTRACTOR'S GENERAL EMPLOYEE RELATIONS POLICIES THROUGHOUT ITS ORGANIZATION, ARE INCURRED PURSUANT TO AGREEMENT MADE AS A RESULT OF COLLECTIVE BARGAINING WITH REPRESENTATIVES OF EMPLOYEES, OR ARE EXPRESSLY AUTHORIZED IN WRITING BY THE REPRESENTATIVES OF THE CONTRACTING OFFICER; IT BEING INTENDED THAT THE EMPLOYEES AT SAID PLANT SHALL BE TREATED NO LESS FAVORABLY THAN EMPLOYEES AT OTHER PLANTS OF THE CONTRACTOR.'

3.THE EXECUTIVE COMMITTEE OF E. I. DU PONT DE NEMOURS AND COMPANY PASSED RESOLUTIONS ON SEPTEMBER 11, 1940, AND AUGUST 27, 1941, WITH RESPECT TO TREATMENT OF EMPLOYEES INDUCTED INTO THE MILITARY SERVICE. AS A RESULT OF THESE RESOLUTIONS THERE HAS BEEN INCORPORATED IN THE DU PONT COMPANY'S SERVICE MANUAL PROVISIONS DEALING WITH THE TREATMENT OF EMPLOYEES ENTERING THE MILITARY SERVICE. SEE PART 23, ITEM 205, OF THE MANUAL.

4. IT IS TO BE NOTED THAT THE RESOLUTIONS AND SERVICE MANUAL PROVIDE FOR:

"TWO MONTHS' FULL WAGES OR SALARY FROM DATE OF LEAVING THE COMPANY'S EMPLOY TO ENTER MILITARY SERVICE IN RESPONSE TO CALL OR ENLISTMENT WILL BE GRANTED TO SUCH EMPLOYEES WHO HAVE ONE OR MORE YEARS OF COMPANY SERVICE WHEN INDUCTED INTO THE MILITARY SERVICE.'

5. FROM THE TERMS OF THE CONTRACT AND DUE TO THE POLICY OF THE CONTRACTOR AS EVIDENCED BY PART 23, ITEM 205, OF THE SERVICE MANUAL, IT APPEARS TO THIS DEPARTMENT AS IF REIMBURSEMENT TO THE CONTRACTOR FOR PAYMENT OF TWO MONTHS' WAGES OR SALARY TO EMPLOYEES ENTERING THE MILITARY SERVICE IS PROPER. IT BEING UNDERSTOOD, OF COURSE, THAT WHERE AN EMPLOYEE IS EMPLOYED ON THE GOVERNMENT PROJECT FOR ONLY PART OF THE YEAR WHICH IS REQUIRED BEFORE THE EMPLOYEE IS ENTITLED TO EXTRA COMPENSATION, THE GOVERNMENT SHALL BE CHARGEABLE WITH ONLY THE PROPORTIONATE PART OF THE PAYMENT.

IT APPEARS FROM THE TERMS OF THE CONTRACT, AS SET FORTH BY THE CHIEF OF ORDNANCE IN THE ABOVE-QUOTED THIRD ENDORSEMENT, THAT IT IS THE OBLIGATION OF THE GOVERNMENT TO PAY ITS PROPORTIONATE SHARE OF THE EXPENSE INCURRED BY THE CONTRACTOR ON BEHALF OF THE EMPLOYEES ENGAGED ON THIS PROJECT, PROVIDED THE INCURRENCE OF SUCH EXPENSE IS PURSUANT TO A GENERAL POLICY OF THE CONTRACTOR.

THE PERTINENT PROVISIONS OF PART 23, ITEM 205, OF THE COMPANY'S SERVICE MANUAL, PHOTOSTATIC COPY OF WHICH IS ATTACHED TO THE VOUCHER, ARE AS FOLLOWS:

MILITARY SERVICE OTHER THAN TRAINING CAMPS

TREATMENT OF EMPLOYEES INDUCTED INTO MILITARY SERVICE

EXECUTIVE COMMITTEE ACTION OF 9/11/40

WHEREAS THE UNITED STATES GOVERNMENT AS A DEFENSE MEASURE HAS ENACTED SOME LEGISLATION AND IS IN THE COURSE OF ENACTING FURTHER LEGISLATION WHICH WILL REQUIRE MEN TO BE TRAINED FOR MILITARY SERVICE: THEREFORE BE IT

RESOLVED, THAT THE FOLLOWING POLICY BE ADOPTED WITH RESPECT TO THE TREATMENT OF EMPLOYES CALLED OR VOLUNTEERING FOR MILITARY SERVICE:

(1)FULL SERVICE CREDIT FOR THE TIME SPENT IN MILITARY SERVICE, AND UP TO TWO MONTHS THEREAFTER, BUT NOT TO EXCEED A TOTAL OF FOURTEEN MONTHS, WILL BE GIVEN ANY SUCH EMPLOYE FROM THE DATE OF LEAVING THE COMPANY'S EMPLOY TO ENTER MILITARY SERVICE IN RESPONSE TO CALL OR ENLISTMENT TO DATE OF REEMPLOYMENT, PROVIDED HE MAKES APPLICATION FOR REEMPLOYMENT WITHIN FORTY DAYS AND REENTERS THE COMPANY'S EMPLOY WITHIN SIXTY DAYS AFTER HE IS RELIEVED OF SUCH MILITARY DUTY OR SERVICE.

(2) TWO MONTHS' FULL WAGES OR SALARY FROM THE DATE OF LEAVING THE COMPANY'S EMPLOY TO ENTER MILITARY SERVICE IN RESPONSE TO CALL OR ENLISTMENT WILL BE GRANTED TO SUCH EMPLOYES WHO HAVE ONE OR MORE YEARS OF COMPANY SERVICE WHEN INDUCTED INTO THE MILITARY SERVICE.

IT THUS APPEARS TO BE THE ADOPTED POLICY OF THE COMPANY TO PAY 2 MONTHS' FULL WAGES OR SALARY TO EMPLOYEES ENTERING MILITARY SERVICE IN RESPONSE TO CALL OR ENLISTMENT PROVIDED SAID EMPLOYEES HAVE HAD ONE OR MORE YEARS OF SERVICE WITH THE COMPANY WHEN INDUCTED INTO THE MILITARY SERVICE.

IT APPEARS FROM THE EVIDENCE FURNISHED IN SUPPORT OF THE VOUCHER THAT J. KNADLER AND ROY L. ESPY HAD BEEN EMPLOYED BY THE CONTRACTOR FOR MORE THAN A YEAR WHEN THEY ENTERED THE MILITARY SERVICE, THAT THEIR ENTIRE TIME FOR THE YEAR PRECEDING INDUCTION WAS IN PERFORMANCE OF WORK IN CONNECTION WITH THE CITED CONTRACT, AND THAT THEY HAVE BEEN PAID AN AGGREGATE OF $840.32 REPRESENTING 2 MONTHS' SALARY FOR WHICH REIMBURSEMENT IS CLAIMED.

WHILE THE ACTION OF THE EXECUTIVE COMMITTEE OF THE COMPANY ADOPTING THE POLICY WITH RESPECT TO EMPLOYEES ENTERING THE MILITARY SERVICE WAS TAKEN SEPTEMBER 11, 1940, OR SUBSEQUENT TO JULY 19, 1940, THE DATE OF THE CONTRACT HERE INVOLVED, IT APPEARS THAT THE RESOLUTION IN THE MATTER WAS ADOPTED AS THE GENERAL POLICY OF THE COMPANY FOR APPLICATION TO ALL OF ITS EMPLOYEES, INCLUDING THOSE IN OTHER PLANTS. FURTHERMORE, THE CONTRACT WAS ENTERED INTO APPROXIMATELY 2 MONTHS PRIOR TO THE ENACTMENT OF THE SELECTIVE TRAINING AND SERVICE ACT OF 1940, APPROVED SEPTEMBER 16, 1940, 54 STAT. 885, AND THE COMPANY'S EXECUTIVE COMMITTEE ACTION OF SEPTEMBER 11, 1940, TOOK INTO CONSIDERATION THE POSSIBILITY OF ENACTMENT OF THAT LEGISLATION WHICH WAS THEN PENDING.

ACCORDINGLY, SINCE THE COMPANY SPECIFICALLY ADOPTED AS ITS GENERAL POLICY THE PAYMENT OF 2 MONTHS' WAGES OR SALARY TO ANY OF ITS EMPLOYEES ENTERING THE MILITARY SERVICE, AND SINCE THE EMPLOYEES HERE INVOLVED HAVE QUALIFIED THEREFOR IN ACCORDANCE WITH SAID POLICY, PAYMENT ON THE VOUCHER, WHICH IS RETURNED HEREWITH, IS AUTHORIZED, IF OTHERWISE CORRECT.