B-197033.OM, L/M, MAR 31, 1980

B-197033.OM, L/M, MAR 31, 1980

SUBJECT: MICHAEL J. BATOVSKY - B-197033-O.M.

ASSOCIATE DIRECTOR, FGMSD - CLAIMS GROUP:

RETURNED IS CLAIMS FILE Z-2787316 PERTAINING TO THE REQUEST OF MICHAEL J. BATOVSKY FOR WAIVER OF ERRONEOUS PAYMENTS UNDER 5 U.S.C. 5584 (1976).

MICHAEL J. BATOVSKY HELD THE POSITION OF AIRCRAFT MECHANIC (WG 11, STEP 5) WITH THE NATIONAL GUARD WITH HIS DUTY STATION AT WORTHINGTON, OHIO. WAS SELECTED FOR A POSITION AS QUALITY ASSURANCE SPECIALIST (ELECTRONICS) GRADE GS-9, WITH THE NAVAL SEA SYSTEMS COMMAND, AT THE NAVAL PLANT REPRESENTATIVE OFFICE, AKRON, OHIO, EFFECTIVE JUNE 5, 1977. ON JULY 19, 1977, HE WAS ADVISED THAT HIS APPOINTMENT TO THE WITH THE NATIONAL GUARD AT WORTHINGTON WAS IN THE "EXCEPTED" SERVICE AND HE DID NOT HAVE COMPETITIVE STATUS. HE WAS FURTHER INFORMED THAT THE NAVY PERSONNEL OFFICE WAS SEEKING GUIDANCE FOR A SOLUTION TO THE PROBLEM. SUBSEQUENTLY MR. BATOVSKY MADE APPLICATION FOR COMPETITIVE STATUS AND AFTER THE PROPER PROCEDURES WERE TAKEN HE WAS CERTIFIED AND APPOINTED COMPETITIVELY FOR THE GS-9 POSITION ON AUGUST 28, 1977. ON AUGUST 10, 1977, MR. BATOVSKY WAS GIVEN A TEMPORARY APPOINTMENT AT GRADE GS-7, STEP 10, RETROACTIVE TO JUNE 5, 1977. HE CONTINUOUSLY PERFORMED THE DUTIES OF QUALITY ASSURANCE SPECIALIST, GS-9, UNTIL AND AFTER HIS COMPETITIVE APPOINTMENT ON AUGUST 28, 1977.

BECAUSE OF THE ERRONEOUS APPOINTMENT MR. BATOVSKY WAS NOTIFIED ON SEPTEMBER 19, 1977, OF AN OVERPAYMENT OF SALARY IN THE AMOUNT OF $667.20 FOR SIX PAY PERIODS FOR WORK PERFORMED FROM JUNE 5, 1977, TO AUGUST 27, 1977. THIS AMOUNT IS $111.20 FOR EACH PAY PERIOD REPRESENTING THE DIFFERENCE BETWEEN THE PAY RATE OF A GS-7, STEP 10, AND A GS-9, STEP 9. HE THEREUPON REQUESTED WAIVER OF THE ERRONEOUS PAYMENTS. THE ADMINISTRATIVE REPORT STATES THAT THERE IS NO EVIDENCE OF FRAUD, MISREPRESENTATION, FAULT, OR LACK OF GOOD FAITH ON THE PART OF THE EMPLOYEE OR ANY OTHER PERSON HAVING AN INTEREST IN OBTAINING A WAIVER OF THE CLAIM AND RECOMMENDS APPROVAL OF THE WAIVER REQUEST.

IN A LETTER DATED SEPTEMBER 27, 1979, THE CLAIMS DIVISION DETERMINED THAT $222.40 OF THE GOVERNMENT'S CLAIM FOR ERRONEOUS PAYMENTS WOULD BE WAIVED BUT THAT WAIVER FOR AMOUNTS RECEIVED AFTER JULY 19, 1977, TOTALING $444.80 WAS DENIED UPON THE BASIS THAT SINCE THE EMPLOYEE WAS ON NOTICE AFTER THAT DATE THAT HE WAS RECEIVING ERRONEOUS PAYMENTS HE HAD AN OBLIGATION TO RETAIN THEM FOR SUBSEQUENT REFUND TO THE GOVERNMENT.

WHERE AN APPOINTMENT IS VOID BUT THE INVALIDITY DOES NOT RESULT FROM AN ABSOLUTE STATUTORY BAR AND THERE IS A LEGALLY AUTHORIZED AND EXISTING POSITION, THE EMPLOYEE IS CONSIDERED TO BE A DE FACTO EMPLOYEE AND ENTITLED TO RETAIN COMPENSATION ALREADY RECEIVED. 38 COMP.GEN. 175 (1958). IN 55 COMP.GEN. 109 (1975) AND 52 COMP.GEN. 700 (1973), WE EXTENDED THE DE FACTO RULE TO PERMIT PAYMENT FOR THE REASONABLE VALUE OF SERVICES RENDERED BY PERSONS WHO SERVE IN GOOD FAITH. WHEN AN EMLOYEE SERVES UNDER A VOIDABLE APPOINTMENT, THE DE FACTO RULE IS NOT INVOLVED AND HE IS ENTITLED TO EARNED COMPENSATION AND TO ALL EMPLOYEE BENEFITS INCLUDING SERVICE CREDIT. 37 COMP.GEN. 483 (1958); AND 58 COMP.GEN. 197 (1979). WE HAVE FOUND, HOWEVER, THAT THE "VOID" VERSUS "VOIDABLE" DISTINCTION, HOWEVER CLEAR IN THEORY, HAS ALWAYS BEEN DIFFICULT TO APPLY IN PRACTICE AND HAS LED TO CONFUSION AND UNCERTAINTY. THEREFORE, IN 58 COMP.GEN. 734 (AUGUST 17, 1979) WE ANNOUNCED A NEW RULE AS FOLLOWS:

"*** IN THOSE CASES WHERE A PERSON HAS BEEN APPOINTED TO A POSITION BY AN AGENCY AND THE APPOINTMENT IS SUBSEQUENTLY FOUND TO HAVE BEEN IMPROPER OR ERRONEOUS, THE NEW RULE IS THAT THE EMPLOYEE IS ENTITLED TO RECEIVE UNPAID COMPENSATION AND TO CREDIT FOR GOOD FAITH SERVICE FOR PURPOSES OF ACCRUAL OF ANNUAL LEAVE AND TO LUMP-SUM PAYMENT FOR UNUSED LEAVE UPON SEPARATION, UNLESS -

"(1) THE APPOINTMENT WAS MADE IN VIOLATION OF AN ABSOLUTE STATUTORY PROHIBITION, OR

"(2) THE EMPLOYEE WAS GUILTY OF FRAUD IN REGARD TO THE APPOINTMENT OR DELIBERATELY MISREPRESENTED OR FALSIFIED A MATERIAL MATTER."

MR. BATOVSKY'S APPOINTMENT BY TRANSFER FROM ANOTHER AGENCY WAS INVALID BECAUSE HE DID NOT HAVE CAREER STATUS. THEREFORE HE WAS A DE FACTO OFFICER OF THE GOVERNMENT DURING THE PERIOD THAT HE ERRONEOUSLY HELD THE GS-9 POSITION WITH THE NAVAL SEA SYSTEMS COMMAND, THAT IS FROM THE TIME OF HIS ERRONEOUS APPOINTMENT ON JUNE 5, 1977, UNTIL HIS TEMPORARY APPOINTMENT AS A GS-7 ON AUGUST 10, 1977. UNDER THE CITED 1972 AND 1975 DECISIONS HE IS ENTITLED TO THE PAY OF THE POSITION WHICH HE OCCUPIED AS A DE FACTO EMPLOYEE.

FOR THE PERIOD AUGUST 11, 1977, THROUGH AUGUST 27, 1977, WHILE MR. BATOVSKY WAS SERVING UNDER THE TEMPORARY GS-7 POSITION HE CONTINUED TO PERFORM ALL OF THE DUTIES AND FUNCTIONS OF THE GS-9 POSITION. CONTINUED IN THE SAME JOB WITH PAY AT THE GS-9 LEVEL AND WAS GIVEN ASSURANCES THAT THE MATTER WAS BEING CORRECTED BY THE PERSONNEL OFFICE. IN VIEW OF THE AMOUNT OF CONFUSION SURROUNDING THE PERSONNEL ACTIONS INVOLVED IN MR. BATOVSKY'S TRANSFER WE CONCLUDE THAT HE WAS NOT AT FAULT AND THAT COLLECTION OF THE ERRONEOUS PAYMENTS FOR THE PERIOD AUGUST 11, 1977, THROUGH AUGUST 27, 1977, WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE AND NOT IN THE BEST INTEREST OF THE UNITED STATES.

ACCORDINGLY, WE WAIVE THE CLAIM OF THE UNITED STATES AGAINST MICHAEL J. BATOVSKY FOR THE ERRONEOUS PAYMENTS MADE FOR THE PERIOD AUGUST 11, 1977, THROUGH AUGUST 27, 1977. SUMS PAID TO HIM IN ERROR FROM JUNE 5, 1977, THROUGH AUGUST 10, 1977, MAY BE RETAINED BY HIM AS A DE FACTO EMPLOYEE.

APPROPRIATE STEPS SHOULD BE TAKEN TO ADVISE MR. BATOVSKY OF THIS ACTION AND OF HIS RIGHT UNDER 5 U.S.C. 5584(C) TO APPLY FOR REFUND WITHIN 2 YEARS FOLLOWING THE EFFECTIVE DATE OF THE WAIVER OF ANY AMOUNTS WHICH HAVE PREVIOUSLY BEEN COLLECTED FROM HIM TOWARDS SATISFACTION OF THE GOVERNMENT'S CLAIM.