B-165710, JUL. 23, 1970

B-165710, JUL. 23, 1970

CIVIL PAY -- BACK PAY -- RESTORATION OF POSTAL EMPLOYEE DECISION ON BEHALF OF A POSTAL EMPLOYEE REAFFIRMING THE PREVIOUS ACTIONS IN COMPUTATION OF BACK PAY UPON RESTORATION TO DUTY FOLLOWING APPEAL TO CIVIL SERVICE COMMISSION. POSTAL EMPLOYEE WHO, UPON ORDERED RESTORATION TO DUTY FOLLOWING APPEAL OF DISMISSAL ACTION HAD BACK PAY PROPERLY COMPUTED UNDER 5 U.S.C. 652(B)(1) LESS INTERIM EARNINGS, LIFE INSURANCE PREMIUMS AND LUMP-SUM LEAVE.

TO MR. NOBLE FREEMON AND MR. FRED ELLEDGE:

THIS REFERS TO YOUR LETTER OF MAY 7, 1970, WITH ENCLOSURES, CONCERNING THE BACK PAY CLAIM OF MR. WILLIAM CLAUDE DAVIS, A POSTAL EMPLOYEE.

MR. DAVIS WAS SEPARATED FROM THE POSTAL SERVICE ON MARCH 23, 1963, AND AFTER AN APPEAL OF HIS DISMISSAL TO THE CIVIL SERVICE COMMISSION THE COMMISSION ORDERED HIS RESTORATION TO DUTY WHICH WAS ACCOMPLISHED ON OCTOBER 2, 1965. HE WAS GRANTED BACK PAY UNDER THE PROVISIONS OF THE ACT OF JUNE 10, 1948, 62 STAT. 354, 5 U.S.C. 652(B)(1).

YOU CONTEND THE SECTION OF THE CODE, CITED ABOVE, IS NOT APPLICABLE AND THAT MR. DAVIS IS ENTITLED TO PAY OTHERWISE DUE UNDER THE HOLDING IN HANIFAN V UNITED STATES, 354 F. 2D 358 (1965)(173 CT. CL. 1053). IN THAT CASE THE PLAINTIFF, A VETERANS PREFERENCE ELIGIBLE, WAS REMOVED IN 1959 FROM HIS POSITION AS A SPECIAL AGENT IN THE INTERNAL REVENUE SERVICE. THE COURT HELD THAT A CIVIL SERVICE EMPLOYEE DEPRIVED OF A PROCEDURAL RIGHT BY THE CIVIL SERVICE COMMISSION IN A REMOVAL HEARING MUST BE REGARDED AS NOT LAWFULLY REMOVED AND IS ENTITLED TO HIS PAY OTHERWISE DUE. THE AMOUNT OF RECOVERY WAS TO BE DETERMINED UNDER RULE 47(C) OF THE COURT. THE JUDGMENT IN THAT CASE FAILS TO INDICATE WHETHER MR MANIFAN'S BACK PAY WAS COMPUTED UNDER THE PROVISIONS OF THE ACT OF JUNE 10, 1948, 62 STAT. 354, 5 U.S.C. 652(B)(1). GENERALLY, WE BELIEVE THE COURT OF CLAIMS IN REMOVAL CASES HAS AWARDED BACK PAY UNDER THAT STATUTE UNTIL IT WAS SUPERSEDED BY THE BACK PAY ACT OF 1966. FOR EXAMPLE, SEE GEORGE STONE CLARK V UNITED STATES, 162 CT. CL. 477 (1963) AND 170 CT. CL. 898 (1965). IN ANY EVENT WE HAVE ALWAYS REGARDED THE 1948 AND 1966 STATUTES AS THE AUTHORITIES UNDER WHICH WE ALLOW CLAIMS FOR BACK PAY.

AS EXPLAINED IN OUR LETTER OF JANUARY 10, 1969, TO MR. FREEMON THE ALLOWANCE OF BACK PAY UNDER THE 1948 ACT IS SPECIFICALLY LIMITED TO THE SALARY RATE RECEIVED BY AN EMPLOYEE ON THE DATE OF SUCH REMOVAL AND WOULD NOT INCLUDE STATUTORY AND WITHIN-GRADE RAISES. THE STATUTE ALSO PROVIDED THAT FOR ALL PURPOSES EXCEPT THE ACCUMULATION OF LEAVE THE EMPLOYEE SHALL BE DEEMED TO HAVE RENDERED SERVICE DURING THE PERIOD OF SEPARATION AND THAT AMOUNTS EARNED BY HIM THROUGH OTHER EMPLOYMENT DURING THE PERIOD OF REMOVAL OR SUSPENSION SHALL BE DEDUCTED FROM THE AMOUNT OF BACK PAY. INDICATED IN OUR LETTER OF JANUARY 10, 1969, WE WERE REQUIRED TO ALLOW MR. DAVIS' CLAIM UNDER THE 1948 ACT AND TO COMPUTE THE AMOUNT DUE IN ACCORDANCE THEREWITH.

YOU SAY THAT MR. DAVIS WAS NOT COVERED BY LIFE INSURANCE DURING THE PERIOD OF HIS REMOVAL AND THERE WAS NO AUTHORITY TO DEDUCT $97.50 FOR LIFE INSURANCE PREMIUMS. YOU SUBMIT A PAPER (U.S. CIVIL SERVICE STANDARD FORM 55) WHICH YOU SAY IS A NOTICE OF CANCELLATION OF HIS INSURANCE. THE PAPER SUBMITTED IS NOT A CANCELLATION OF INSURANCE BUT MERELY A NOTICE OF CONVERSION PRIVILEGE ADVISING EMPLOYEES WHAT PROCEDURE TO FOLLOW WHEN AN EMPLOYEE IS ENTITLED TO CONVERT TO AN INDIVIDUAL POLICY WHEN HIS GROUP INSURANCE TERMINATES BECAUSE OF VARIOUS CIRCUMSTANCES.

UNDER THE TERMS OF SECTION 5(A) OF THE FEDERAL EMPLOYEES' GROUP LIFE INSURANCE ACT OF 1954, 68 STAT. 738, AN EMPLOYEE COVERED UNDER THAT ACT WHO DESIRES TO TERMINATE HIS INSURANCE IS REQUIRED TO GIVE WRITTEN NOTICE TO HIS EMPLOYING OFFICE AND HIS INSURANCE WILL CEASE EFFECTIVE WITH THE END OF THE PAY PERIOD DURING WHICH THE NOTICE IS RECEIVED BY THE EMPLOYING OFFICE. THERE IS NOTHING IN THE RECORD TO INDICATE THAT A WRITTEN NOTICE WAS RECEIVED BY THE EMPLOYING OFFICE FROM MR. DAVIS REQUESTING TERMINATION OF HIS INSURANCE. THEREFORE, MR. DAVIS WAS COVERED BY THE INSURANCE STATUTE DURING THE PERIOD OF HIS SEPARATION AND DEDUCTIONS MADE FOR THAT PURPOSE FROM HIS RETROACTIVE COMPENSATION WERE PROPER. 36 COMP. GEN. 225, 228. IN THE HANIFAN CASE SUPRA, WE NOTE THAT THE JUDGMENT SPECIFICALLY PROVIDED FOR DEDUCTION OF INSURANCE PREMIUMS.

WE HAVE RULED IN NUMEROUS DECISIONS THAT AN EMPLOYEE UPON RESTORATION, BECAUSE OF AN UNJUSTIFIED OR UNWARRANTED REMOVAL, MUST REFUND THE LUMP-SUM LEAVE PAYMENT WHICH HE RECEIVED AT THE TIME OF THE ERRONEOUS REMOVAL. THIS IS USUALLY DEDUCTED FROM HIS BACK PAY WITH THE LEAVE REPRESENTED THEREBY BEING RECREDITED TO THE EMPLOYEE'S LEAVE ACCOUNT SUBJECT TO THE MAXIMUM ACCUMULATED LIMITATION OF THE ANNUAL AND SICK LEAVE ACT OF 1951, AS AMENDED, 5 U.S.C. 2062(C). SEE 28 COMP. GEN. 333; 34 ID. 303; ID. 657. SEE ALSO WILLIAM W. PECHETTE V UNITED STATES, 145 CT. CL. 189 (1959).

CONCERNING INTEREST ON BACK PAY DUE, IT IS WELL SETTLED THAT THE PAYMENT OF INTEREST BY THE GOVERNMENT ON ITS UNPAID ACCOUNTS OR CLAIMS MAY NOT BE MADE EXCEPT WHEN INTEREST IS STIPULATED FOR IN LEGAL AND PROPER CONTRACTS, OR WHEN ALLOWANCE OF INTEREST IS SPECIFICALLY DIRECTED BY STATUTE. SMYTH V UNITED STATES, 302 U.S. 329 (1937). THERE IS NO STATUTE AUTHORIZING INTEREST ON CLAIMS SIMILAR TO THAT HERE INVOLVED.

IN VIEW OF THE FOREGOING, THE PREVIOUS ACTIONS TAKEN BY OUR OFFICE ARE SUSTAINED.