A-43069, AUGUST 30, 1932, 12 COMP. GEN. 301

A-43069, AUGUST 30, 1932, 12 COMP. GEN. 301

ECONOMY ACT - LEAVES OF ABSENCE - PANAMA CANAL EMPLOYEES THE RIGHT OF EMPLOYEES OF THE PANAMA CANAL TO BE PAID UPON SEPARATION FROM THE SERVICE FOR LEAVE OF ABSENCE ACCRUED AND UNUSED PRIOR THERETO HAS BEEN SUSPENDED DURING THE FISCAL YEAR 1933 BY SECTION 103 OF THE ECONOMY ACT, AND SUCH SUSPENSION DOES NOT DEPRIVE THE FORMER EMPLOYEES OF A PROPERTY RIGHT WITHOUT DUE PROCESS OF LAW IN VIOLATION OF THE FIFTH AMENDMENT TO THE CONSTITUTION OF THE UNITED STATES.

COMPTROLLER GENERAL MCCARL TO THE GOVERNOR OF THE PANAMA CANAL, AUGUST 30, 1932:

CONSIDERATION HAS BEEN GIVEN TO YOUR LETTER OF AUGUST 16, 1932, AS FOLLOWS:

YOU ARE HEREBY REQUESTED TO RECONSIDER YOUR DECISION OF JULY 26, 1932, NO. A-43069, HOLDING THAT CASH PAYMENT FOR ACCRUED LEAVE COULD NOT BE MADE TO PANAMA CANAL EMPLOYEES WHOSE LEAVE OF ABSENCE IS CONTROLLED BY EXECUTIVE ORDER ISSUED UNDER AUTHORITY OF THE PANAMA CANAL ACT.

THIS REQUEST IS MADE IN CONFORMITY WITH AIR MAIL LETTER, DATED AUGUST 11, 1932, RECEIVED FROM THE GOVERNOR OF THE PANAMA CANAL, WHICH READS AS FOLLOWS:

"THE COMPTROLLER GENERAL IN DECISION DATED JULY 26, 1932, ADDRESSED TO THE GOVERNOR OF THE PANAMA CANAL, CARE OF THE CHIEF OF OFFICE, HELD THAT CASH PAYMENT FOR ACCRUED LEAVE COULD NOT BE MADE TO PANAMA CANAL EMPLOYEES WHOSE LEAVE OF ABSENCE IS CONTROLLED BY EXECUTIVE ORDER ISSUED UNDER AUTHORITY OF THE PANAMA CANAL ACT.

"IT APPEARS, HOWEVER, THAT NO SPECIFIC CASE WAS SUBMITTED TO THE COMPTROLLER GENERAL ON WHICH THIS DECISION WAS BASED, AND IT CAN NOT BE CONCEIVED HOW AN EMPLOYEE MAY BE DEPRIVED OF WHAT IS JUSTLY AND LEGALLY DUE HIM BY THE PRESENT CONSTRUCTION OF SECTION 103 OF THE ECONOMY ACT.

"THE SPECIFIC CASE WHICH IS NOW BEFORE US IS THAT OF WILLIAM E. BATTON, AN APPRENTICE IN THE MECHANICAL DIVISION OF THE PANAMA CANAL, WHO WAS DISCHARGED ON JULY 9, 1932, ON ACCOUNT OF THE COMPLETION OF HIS APPRENTICESHIP. DURING THE PERIOD OF HIS EMPLOYMENT BY THE MECHANICAL DIVISION HE ACCUMULATED 44 1/2 DAYS' LEAVE BY REASON OF SUCH EMPLOYMENT UP TO JUNE 30, 1932. THE AMOUNT NECESSARY TO PAY THIS ACCRUED LEAVE HAS BEEN RESERVED FROM EARNINGS OF THE MECHANICAL DIVISION UP TO THAT TIME IN ORDER TO PAY ACCRUED LEAVE DUE THIS EMPLOYEE AS WELL AS OTHER EMPLOYEES SIMILARLY SITUATED. THE MECHANICAL DIVISION IS PURELY A BUSINESS DIVISION, AND NO APPROPRIATION IS ASKED BY CONGRESS FOR THE OPERATION OF THIS DIVISION. IN ORDER TO HAVE AVAILABLE THE NECESSARY FUNDS TO PAY LEAVE WHICH MAY ACCRUE TO EMPLOYEES OF THE MECHANICAL DIVISION, A DEFINITE PERCENTAGE TO COVER LEAVE EARNED IS ADDED TO ALL BILLS FOR WORK DONE BY THE MECHANICAL DIVISION, A DEFINITE PART OF WHICH IS SET ASIDE AS A RESERVE FOR THIS PURPOSE.

"UNDER THESE CIRCUMSTANCES, IT SEEMS TO ME THAT THIS RESERVE FOR THE PAYMENT OF LEAVE IS IN FACT A TRUST FUND OUT OF WHICH IS PAYABLE THE ACCRUED LEAVE OF ALL EMPLOYEES WHOSE SERVICES ARE TERMINATED DURING THE FISCAL YEAR 1933, WITHOUT REGARD TO THE PROVISIONS OF SECTION 103 OF THE ECONOMY ACT.

"ANOTHER CASE PRESENTED IS THAT OF J. E. WESTBERG, A POLICEMAN, WHO REACHED THE AGE OF 62 IN JULY, 1932, AND UNDER THE PROVISIONS OF THE ECONOMY ACT WAS RETIRED EFFECTIVE AUGUST 1, 1932. DUE TO CONSTRUCTION OF THE RETIREMENT ACT, MR. WESTBERG WAS NOT MADE SUBJECT TO RETIREMENT DEDUCTIONS UNTIL SOME YEARS AFTER THE RETIREMENT ACT BECAME EFFECTIVE IN AUGUST, 1920. AFTER IT WAS DETERMINED THAT HE WAS SUBJECT TO THE RETIREMENT DEDUCTIONS, MR. WESTBERG HAD CONSIDERABLE SICKNESS IN HIS FAMILY SO THAT HE WAS UNABLE TO PAY UP THE BACK RETIREMENT DEDUCTIONS, BUT CONTEMPLATED THAT, WHEN HE FINALLY REACHED THE RETIREMENT AGE, HE WOULD HAVE SUFFICIENT ACCRUED LEAVE TO MAKE PAYMENT OF THE BACK RETIREMENT DEDUCTIONS IN ONE LUMP SUM. THE AMOUNT OF SUCH RETIREMENT DEDUCTIONS DUE FROM MR. WESTBERG IN ORDER TO SECURE FULL CREDIT FOR HIS SERVICE IS APPROXIMATELY $470. THE ACCRUED LEAVE DUE MR. WESTBERG UP TO JUNE 30, 1932, AMOUNTS TO OVER $600. THE AMOUNT DUE THE GOVERNMENT FROM MR. WESTBERG ON ACCOUNT OF RETIREMENT DEDUCTIONS BEARS INTEREST, WHICH HE MUST PAY IN ORDER TO SECURE RETIREMENT CREDIT. IF THE AMOUNT OF LEAVE DUE MR. WESTBERG ON HIS SEPARATION FROM THE PANAMA CANAL SERVICE IS DENIED HIM DURING THE FISCAL YEAR 1933, NO INTEREST WILL ACCRUE ON SUCH INDEBTEDNESS TO HIM. THE INJUSTICE OF SUCH PROCEDURE IS APPARENT.

"IT IS REQUESTED THAT THE MATTER BE AGAIN SUBMITTED TO THE COMPTROLLER GENERAL FOR A DEFINITE DECISION ON THESE SPECIFIC CASES.'

IN THIS CONNECTION YOUR ATTENTION IS RESPECTFULLY INVITED TO THE FIFTH AMENDMENT TO THE CONSTITUTION OF THE UNITED STATES, WHICH PROVIDES THAT NO PERSON SHALL BE DEPRIVED OF HIS PROPERTY WITHOUT DUE PROCESS OF LAW. THE RIGHT TO MONEY ACCUMULATED FOR LEAVE BY AN EMPLOYEE OF THE PANAMA CANAL UNDER HIS CONTRACT OF EMPLOYMENT ENTERED INTO IN CONFORMITY WITH THE PROVISIONS OF LAW IS CERTAINLY A PROPERTY RIGHT, AND IS JUST AS MUCH THE PROPERTY OF THE EMPLOYEE AS THE MONEY PAYABLE TO HIM AT THE END OF EACH MONTH. EVEN THOUGH IT IS HELD THAT ACTION TAKEN IN CONFORMITY WITH YOUR PRIOR DECISION IS MERELY DEFERRING PAYMENT UNTIL THE END OF THE PRESENT FISCAL YEAR, THERE IS AT LEAST A TAKING OVER BY THE UNITED STATES OF THE INTEREST ON THE MONEY SO WITHHELD.

SECTIONS 103 AND 104 (A) OF THE ECONOMY ACT OF JUNE 30, 1932, 47 STAT. 399-400, PROVIDE IN PART AS FOLLOWS:

SEC. 103. ALL RIGHTS NOW CONFERRED OR AUTHORIZED TO BE CONFERRED BY LAW UPON ANY OFFICER OR EMPLOYEE TO RECEIVE ANNUAL LEAVE OF ABSENCE WITH PAY ARE HEREBY SUSPENDED DURING THE FISCAL YEAR ENDING JUNE 30, 1933.

SEC. 104. WHEN USED IN THIS TITLE---

(A) THE TERMS "OFFICER" AND "EMPLOYEE" MEAN ANY PERSON RENDERING SERVICES IN OR UNDER ANY BRANCH OR SERVICE OF THE UNITED STATES GOVERNMENT OR THE GOVERNMENT OF THE DISTRICT OF COLUMBIA, BUT DO NOT INCLUDE * * * (7) PUBLIC OFFICIALS AND EMPLOYEES WHOSE COMPENSATION * * * IS NOT PAID FROM THE FEDERAL TREASURY; * * *.

IN DECISION OF JULY 8, 1932, A-43056, 12 COMP. GEN. 9, IT WAS STATED:

THE PLAIN PURPOSE OF THE ENACTMENT IS TO EFFECT A SAVING OR ECONOMY TO THE GOVERNMENT DURING THE FISCAL YEAR 1933, AND IT MUST BE CONSTRUED AND APPLIED TO EFFECTUATE THAT PURPOSE. IN THE ABSENCE OF ANY PROVISION IN THE STATUTE LIMITING THE SUSPENSION TO ANNUAL LEAVE WHICH WOULD BE EARNED OR ACCRUE DURING THE FISCAL YEAR 1933, THERE IS NO ALTERNATIVE BUT TO HOLD THAT THE SUSPENSION APPLIES, ALSO, TO RIGHTS TO ALL ANNUAL LEAVE ACCRUED OR EARNED AND UNUSED PRIOR TO JULY 1, 1932.

THE SAME APPLICATION WAS MADE TO EMPLOYEES OF THE PANAMA CANAL IN DECISION OF JULY 9, 1932, A-43069, 12 COMP. GEN. 17.

IN DECISION OF JULY 26, 1932, A-43069, YOU WERE ADVISED AS FOLLOWS:

IN DECISION OF JULY 8, 1932, TO THE PUBLIC PRINTER, A-43056, WHICH WAS QUOTED IN PART IN DECISION TO YOU DATED JULY 9, 1932, THE FOLLOWING QUESTIONS WERE ANSWERED IN THE NEGATIVE:

"4. WILL IT BE PERMITTED TO PAY TO EMPLOYEES RESIGNING OR SEPARATED FROM THE SERVICE FOR ANY CAUSE, IN THE FISCAL YEAR 1933, 15 (OR 30) DAYS OF LEAVE EARNED IN FISCAL YEAR 1932 AND THE PRO RATA LEAVE EARNED IN FISCAL YEAR 1933 AT RATE OF 15 DAYS ANNUALLY?

"5. WILL IT BE PERMITTED TO PAY TO THE LEGAL REPRESENTATIVE OF AN EMPLOYEE WHO MAY DIE IN FISCAL YEAR 1933, 15 (OR 30) DAYS' LEAVE EARNED IN FISCAL YEAR 1932 AND PRO RATA LEAVE EARNED IN FISCAL YEAR 1933?

NO SUPERIOR RIGHT TO RECEIVE CASH PAYMENT FOR ACCRUED LEAVE DURING THE FISCAL YEAR 1933 EXISTS AS TO PANAMA CANAL EMPLOYEES WHOSE LEAVE OF ABSENCE IS CONTROLLED BY EXECUTIVE ORDER ISSUED UNDER AUTHORITY OF THE PANAMA CANAL ACT THAN AS TO EMPLOYEES OF THE GOVERNMENT PRINTING OFFICE WHO HAD SIMILAR RIGHTS UNDER PROVISIONS OF STATUTE LAW. NEITHER DOES THE AVAILABILITY OF A SURPLUS FROM APPROPRIATIONS OR FUNDS FOR THE FISCAL YEAR 1932 TO MAKE SUCH CASH PAYMENT FOR ACCRUED LEAVE, TO WHICH YOU CALL ATTENTION, JUSTIFY APPLICATION OF ANY DIFFERENT PRINCIPLE. OTHERWISE, THE SAVING INTENDED BY THE OPERATION OF THE ECONOMY ACT WOULD BE PREVENTED.

SEE, ALSO, DECISION OF AUGUST 2, 1932, A-43620, 12 COMP. GEN. 160, WHEREIN IT WAS STATED:

THE PURPOSE AND EFFECT OF SECTIONS 103 AND 803 OF THE ACT IN QUESTION ARE TO PREVENT THE USE OF APPROPRIATIONS OR FUNDS AVAILABLE FOR EXPENDITURE DURING THE FISCAL YEAR 1933 IN PAYING FOR TIME ABSENT ON LEAVE. AND THE INHIBITION OPERATES AGAINST PAYMENTS FOR LEAVE TAKEN WITHOUT PAY DURING A PREVIOUS YEAR AS WELL AS AGAINST PAYMENTS FOR LEAVE ACCRUED IN A PREVIOUS YEAR WHETHER TAKEN OR NOT TAKEN DURING THE FISCAL YEAR 1933, AS WELL AS AGAINST PAYMENTS FOR LEAVE WHICH BUT FOR SAID SECTION WOULD ACCRUE AND BE FOR TAKING DURING THE FISCAL YEAR 1933. IN OTHER WORDS, APPROPRIATIONS FOR THE FISCAL YEAR 1933 MAY NOT BE USED TO PAY FOR ANNUAL LEAVE, REGARDLESS OF WHEN IT MAY HAVE BEEN EARNED OR WHETHER IT IS OR IS NOT TAKEN.

WITH REFERENCE TO YOUR CONTENTION THAT THE APPLICATION OF SECTION 103 OF THE ACT TO CASES SUCH AS HERE PRESENTED WOULD BE IN CONTRAVENTION OF THE FIFTH AMENDMENT TO THE CONSTITUTION, IT MAY BE STATED THAT THERE IS NOT INVOLVED HERE A PROPERTY RIGHT OF WHICH THE EMPLOYEES HAVE BEEN DEPRIVED "WITHOUT DUE PROCESS OF LAW.' THE RIGHT TO LEAVE OF ABSENCE WITH PAY, OR THE RIGHT TO BE REIMBURSED IN MONEY IN LIEU OF LEAVE NOT TAKEN, IS IN THE NATURE OF A GRATUITY OR PRIVILEGE VOLUNTARILY GRANTED, IN THE CASE OF PANAMA CANAL EMPLOYEES, BY EXECUTIVE ORDER ISSUED PURSUANT TO STATUTORY AUTHORITY CONTAINED IN THE PANAMA CANAL ACT, AND IS NOT A PROPERTY RIGHT THAT HAD BECOME VESTED IN THE EMPLOYEES. THE CONGRESS OF THE UNITED STATES HAD THE POWER TO GRANT TO OR TO WITHHOLD FROM THESE EMPLOYEES THE PRIVILEGE OF TAKING LEAVE OF ABSENCE WITH PAY AND OF BEING PAID ON TERMINATION OF SERVICE FOR ACCRUED LEAVE NOT TAKEN AND THERE WOULD APPEAR TO BE NO ROOM FOR REASONABLE DOUBT THAT IT HAD, ALSO, THE POWER TO SUSPEND OR EVEN TO TERMINATE SUCH RIGHTS OR PRIVILEGES PREVIOUSLY GRANTED.

WITH REFERENCE TO THE STATEMENT THAT NO APPROPRIATION IS ASKED FOR THE OPERATION OF THE DIVISION IN WHICH WILLIAM E. BATTON WAS EMPLOYED AND THE INFERENCE THAT BECAUSE OF THAT FACT HIS CASE COMES WITHIN EXCEPTION (7) TO SECTION 104 OF THE ECONOMY ACT, IT IS UNDERSTOOD THAT THE DIVISION IN QUESTION IS MAINTAINED UNDER AUTHORITY OF THE PROVISIONS OF SECTION 6 OF THE ACT OF AUGUST 24, 1912, 37 STAT. 563, 564, WHICH READ:

* * * THE PRESIDENT IS ALSO AUTHORIZED TO ESTABLISH, MAINTAIN, AND OPERATE, THROUGH THE PANAMA RAILROAD COMPANY OR OTHERWISE, DRY DOCKS,REPAIR SHOPS, YARDS, DOCKS, WHARVES, WAREHOUSES, STOREHOUSES, AND OTHER NECESSARY FACILITIES AND APPURTENANCES FOR THE PURPOSE OF PROVIDING COAL AND OTHER MATERIALS, LABOR, REPAIRS, AND SUPPLIES FOR VESSELS OF THE GOVERNMENT OF THE UNITED STATES AND, INCIDENTALLY, FOR SUPPLYING SUCH AT REASONABLE PRICES TO PASSING VESSELS, IN ACCORDANCE WITH APPROPRIATIONS HEREBY AUTHORIZED TO BE MADE FROM TIME TO TIME BY CONGRESS AS A PART OF THE MAINTENANCE AND OPERATION OF THE SAID CANAL. MONEYS RECEIVED FROM THE CONDUCT OF SAID BUSINESS MAY BE EXPENDED AND REINVESTED FOR SUCH PURPOSES WITHOUT BEING COVERED INTO THE TREASURY OF THE UNITED STATES; AND SUCH MONEYS ARE HEREBY APPROPRIATED FOR SUCH PURPOSES, BUT ALL DEPOSITS OF SUCH FUNDS SHALL BE SUBJECT TO THE PROVISIONS OF EXISTING LAW RELATING TO THE DEPOSIT OF OTHER PUBLIC FUNDS OF THE UNITED STATES, AND ANY NET PROFITS ACCRUING FROM SUCH BUSINESS SHALL ANNUALLY BE COVERED INTO THE TREASURY OF THE UNITED STATES. * * *

IT IS TO BE NOTED THAT THIS ACT SPECIFICALLY APPROPRIATES THE FUNDS DERIVED FROM THESE AUTHORIZED OPERATIONS OF THE GOVERNMENT FOR THE PURPOSES MENTIONED AND PROVIDES THAT ANY PROFITS ACCRUING SHALL BE COVERED INTO THE TREASURY. UNDER SUCH CIRCUMSTANCES, IT MUST BE HELD THAT BATTON'S SALARY WAS PAYABLE FROM THE FEDERAL TREASURY AND, THEREFORE, THAT EXCEPTION (7) OF SECTION 104 IS NOT APPLICABLE IN HIS CASE.

FOR REASONS HEREINBEFORE STATED, I HAVE TO ADVISE THAT PAYMENT FOR ACCRUED UNUSED LEAVE IN THE CASE OF THESE FORMER TWO EMPLOYEES IS NOT AUTHORIZED.