B-66833, JULY 28, 1947, 27 COMP. GEN. 27

B-66833, JULY 28, 1947, 27 COMP. GEN. 27

COMPENSATION - INITIAL SALARY RATES - TRANSFER, PROMOTION, DEMOTION, REINSTATEMENT, OR REEMPLOYMENT THE QUALIFICATION IN DECISION OF NOVEMBER 27, 1946, 26 COMP. GEN. 368, TO THE EFFECT THAT THE RULE STATED THEREIN WITH RESPECT TO FIXING THE INITIAL SALARY RATES OF EMPLOYEES IN CLASSIFIED POSITIONS TO WHICH TRANSFERRED, PROMOTED, DEMOTED, REINSTATED, OR REEMPLOYED, ON THE BASIS OF THE HIGHEST SALARY RECEIVED IN PRIOR GOVERNMENT POSITIONS, COULD NOT BE APPLIED TO CASES THERETOFORE PROCESSED IN APPLICABLE TO PRECLUDE THE REOPENING OF PREVIOUSLY PROCESSED CASES FOR THE PURPOSE OF GRANTING NONRETROACTIVE INCREASES IN COMPENSATION, AS WELL AS RETROACTIVE INCREASES.

ACTING COMPTROLLER GENERAL YATES TO THE SECRETARY OF WAR, JULY 28, 1947:

THERE HAS BEEN CONSIDERED YOUR LETTER OF JUNE 3, 1947, AS FOLLOWS:

REFERENCE IS MADE TO YOUR DECISION B-61181 OF 27 NOVEMBER 1946 WHEREIN YOU ANNOUNCED THE FOLLOWING RULE:

"WHEN AN EMPLOYEE IS TRANSFERRED, PROMOTED, DEMOTED OR SEPARATED IT IS WITHIN THE DISCRETION OF THE ADMINISTRATIVE OFFICE TO PAY--- WITHIN AVAILABLE APPROPRIATIONS--- SUCH EMPLOYEE IN ANY CLASSIFIED POSITION TO WHICH TRANSFERRED, PROMOTED, DEMOTED, REINSTATED, OR REEMPLOYED THE MINIMUM SALARY RATE OF THE GRADE OR POSITION OR SUCH HIGHER RATE WITHIN THE GRADE AS WILL NOT EXCEED THE HIGHEST SALARY ATTAINED BY HIM IN ANY PRIOR GOVERNMENT POSITION. * * * HOWEVER, AS THE RULE HEREIN STATED IS, IN EFFECT, A MODIFICATION OF EXISTING RULES AS UNDERSTOOD AND APPLIED IN THE LIGHT OF RELATED DECISIONS OF THIS OFFICE, IT MAY NOT BE APPLIED TO CASES WHICH ALREADY HAVE BEEN PROCESSED.'

IN THE APPLICATION OF THIS DECISION SOME QUESTION HAS ARISEN AS TO ITS POSSIBLE INTERPRETATION IN CASES SUCH AS THE EXAMPLE STATED BELOW:

ON JULY 1, 1946, AN ENGINEER, P-6, SECOND STEP RATE, WAS TRANSFERRED TO ANOTHER WAR DEPARTMENT INSTALLATION TO A P-5 POSITION, WHERE HE WAS PLACED IN THE MAXIMUM STEP RATE OF THAT GRADE, IN ACCORDANCE WITH THEN EXISTING WAR DEPARTMENT POLICY. SUBSEQUENTLY, ON NOVEMBER 1, 1946, HE WAS AGAIN TRANSFERRED TO ANOTHER WAR DEPARTMENT INSTALLATION, TO FILL A P-6 VACANCY. SINCE THIS ACTION TOOK PLACE PRIOR TO YOUR DECISION OF 27 NOVEMBER 1946, QUOTED ABOVE, HE WAS PLACED IN THE MINIMUM STEP RATE OF THE GRADE, IN CONFORMANCE WITH THE REGULATIONS THEN GOVERNING, ALTHOUGH THE ADMINISTRATIVE AUTHORITIES WOULD HAVE DESIRED TO RESTORE HIM TO THE SECOND STEP RATE WHICH HE PREVIOUSLY HELD, WERE IT NOT FOR THE PROHIBITION THEN IN EFFECT.

HAD THIS ACTION TAKEN PLACE SUBSEQUENT TO 27 NOVEMBER 1946, RESTORATION TO THE SECOND STEP RATE WOULD HAVE BEEN PERMISSIBLE, WITHIN ADMINISTRATIVE DISCRETION. IN ADDITION, SHOULD THIS EMPLOYEE AGAIN BE TRANSFERRED, OR SEPARATED AND REINSTATED OR REEMPLOYED, THE HIGHER STEP RATE COULD BE APPLIED.

THE QUESTION ARISES AS TO WHETHER OR NOT IT WOULD NOW BE PERMISSIBLE TO INCREASE THE SUBJECT EMPLOYEE'S SALARY TO THE STEP RATE IN P-6 WHICH HE FORMERLY HELD. SINCE THIS RESULT COULD BE OBTAINED BY TRANSFERRING THE EMPLOYEE, OR BY THE DEVICE OF SEPARATING AND REEMPLOYING OR REINSTATING HIM, IT WOULD APPEAR THAT THERE IS NO REASON WHY IT COULD NOT BE DONE BY ADMINISTRATIVE ADJUSTMENT, EFFECTIVE AS OF THE DATE SUCH ADJUSTMENT IS MADE.

HOWEVER, IN VIEW OF THE PARAGRAPH OF THE CITED DECISION WHICH PROHIBITS ITS APPLICATION TO CASES ALREADY PROCESSED, YOUR DECISION IS REQUESTED AS TO WHETHER THAT PROHIBITION WAS INTENDED SOLELY TO PREVENT RETROACTIVE ADJUSTMENTS OR WHETHER IT ALSO PRECLUDES CURRENT EXERCISE OF ADMINISTRATIVE DISCRETION IN ADJUSTING SALARY RATES, WITHOUT ACTUAL CHANGE IN POSITION, IN THOSE INSTANCES WHERE THE PREVIOUSLY EXISTING LIMITATION HAS BEEN REMOVED, AS ILLUSTRATED IN THE FOREGOING EXAMPLE.

THE BASIS FOR THE RULE STATED IN THAT PART OF THE DECISION OF NOVEMBER 27, 1946, B-61181, 26 COMP. GEN. 368, QUOTED IN YOUR LETTER, SUPRA, WAS TO ELIMINATE, SO FAR AS IS PRACTICABLE, THE INEQUITIES ARISING UNDER THE THEN EXISTING PRACTICES BETWEEN EMPLOYEES WHO ARE SEPARATED FROM THE SERVICE AND SUBSEQUENTLY REINSTATED OR REEMPLOYED, AND THOSE EMPLOYEES WHO ARE REDUCED IN GRADE AND SUBSEQUENTLY RESTORED TO THEIR FORMER GRADES. THAT CONNECTION, IT WAS STATED IN THE DECISION OF NOVEMBER 27, 1946, AS FOLLOWS:

PRESUMABLY, UNDER THE RETRENCHMENT PROGRAM THE GENERAL PRACTICE IS TO TERMINATE FIRST THE SERVICES OF THE LEAST EFFICIENT AND LEAST QUALIFIED EMPLOYEES AND TO RETAIN SO FAR AS PRACTICABLE THE SERVICES OF THE MOST EFFICIENT AND BEST QUALIFIED EMPLOYEES. OFTEN THE SERVICES OF THIS LATTER CLASS OF EMPLOYEES CAN BE UTILIZED ONLY IN GRADES LOWER THAN THE GRADES IN WHICH THEY HAVE BEEN SERVING. MANY EMPLOYEES RESIGN IN ANTICIPATION OF HAVING THEIR SERVICES TERMINATED AND OTHERS RESIGN RATHER THAN ACCEPT A POSITION AT A LOWER SALARY AND A LOWER GRADE. THOSE EMPLOYEES WHOSE SERVICES ARE TERMINATED EITHER BY DISMISSAL OR REINSTATED WITHIN ADMINISTRATIVE DISCRETION AT AN INITIAL SALARY RATE NOT IN EXCESS OF THE SALARY RECEIVED UPON SEPARATION. IN OTHER WORDS, UPON REINSTATEMENT SUCH EMPLOYEES, WITHIN GRADE PROMOTIONS PREVIOUSLY OBTAINED EVEN THOUGH REEMPLOYED IN A POSITION OTHER THAN THE SAME POSITION IN THE SAME GRADE PREVIOUSLY HELD. ON THE OTHER HAND, UNDER EXISTING RULES, AN EMPLOYEE WHOSE SERVICES ARE RETAINED AT A GRADE LOWER THAN THAT PREVIOUSLY HELD AND WHO THEREAFTER IS PROMOTED MAY NOT RECEIVE COMPENSATION AT A RATE IN EXCESS OF THE SALARY RATE RECEIVED IMMEDIATELY PRIOR TO THE DATE OF PROMOTION OR THE MINIMUM SALARY FOR THE GRADE TO WHICH PROMOTED, WHICHEVER IS GREATER, UNLESS THE POSITION TO WHICH PROMOTED IS THE SAME POSITION IN THE SAME GRADE WHICH THE EMPLOYEE HELD IMMEDIATELY PRIOR TO HIS DEMOTION, IN WHICH CASE HE MAY RECEIVE THE BENEFITS OF ANY WITHIN-GRADE SALARY ADVANCES PREVIOUSLY OBTAINED IN THAT POSITION.

SINCE THE CONCLUSION REACHED IN THAT DECISION WAS A DISTINCT DEPARTURE FROM THE RULES THERETOFORE GOVERNING SUCH MATTERS, IT PROPERLY WAS HELD THEREIN, IN ACCORDANCE WITH THE SETTLED PRACTICE OF THE ACCOUNTING OFFICERS, THAT SUCH CONCLUSION MAY NOT BE APPLIED TO CASES WHICH HAD BEEN PROCESSED. THAT RESTRICTION WAS INTENDED AS PROHIBITING THE REOPENING--- ON THE BASIS OF THE CONCLUSION REACHED IN THAT DECISION--- OF ANY CASE THERETOFORE FINALLY PROCESSED, WHETHER SUCH REOPENING RESULTS IN A RETROACTIVE OR CURRENT INCREASE IN COMPENSATION.

WHILE IT MAY BE, AS STATED IN YOUR LETTER, THAT IN THE EXAMPLE GIVEN, THE RESTORATION TO THE EMPLOYEE THERE INVOLVED OF HIS FORMER SALARY RATE IN CLASSIFICATION ACT GRADE P-6 ADMINISTRATIVELY COULD BE ACCOMPLISHED BY THE SUBTERFUGE OF SEPARATING THE EMPLOYEE AND REINSTATING OR REEMPLOYING HIM, OR, UNDER CERTAIN CIRCUMSTANCES, BY TRANSFER, SUCH FACT PROVIDES NO PROPER BASIS FOR RESTORING SUCH RATE TO THE EMPLOYEE BY MEANS OF ADMINISTRATIVE ACTION GRANTING HIM A WITHIN GRADE SALARY ADVANCEMENT AS HERE PROPOSED. IN THAT CONNECTION, IT MAY BE STATED THAT, ASIDE FROM CONSIDERATION OF THE SAID PROHIBITION AGAINST THE REOPENING OF CASES FINALLY PROCESSED PRIOR TO NOVEMBER 27, 1946, THERE IS FOR APPLICATION IN THE EXAMPLE GIVEN THE REQUIREMENT OF THE WITHIN-GRADE SALARY ADVANCEMENT STATUTE RESPECTING WAITING PERIODS OF 12 OR 18 MONTHS OF SERVICE, AS THE CASE MAY BE, BETWEEN SUCH ADVANCEMENTS. THE PROMOTION OF OF THE EMPLOYEE FROM GRADE P-5 TO GRADE P-6, ON NOVEMBER 1, 1946, CONSTITUTED "AN EQUIVALENT INCREASE IN COMPENSATION" AS THAT PHRASE IS USED IN THE WITHIN-GRADE SALARY ADVANCEMENT STATUTE. HENCE, THE EMPLOYEE MAY NOT BE GRANTED A WITHIN GRADE SALARY ADVANCEMENT, AS PROPOSED, PRIOR TO THE EXPIRATION OF THE PRESCRIBED WAITING PERIOD. THAT STATUTORY REQUIREMENT MAY NOT BE AVOIDED OR OVERCOME BY ANY ADMINISTRATIVE ACTION AMOUNTING TO SUBTERFUGE "BY TRANSFERRING THE EMPLOYEE, OR BY THE DEVICE OF SEPARATING AND EMPLOYING OR REINSTATING HIM" (QUOTING FROM THE PENULTIMATE PARAGRAPH OF YOUR LETTER). TO OBTAIN THE BENEFITS OF THE RULE SET OUT IN THE DECISION OF NOVEMBER 27, 1946, SUCH PERSONNEL ACTIONS WOULD HAVE TO BE BONA FIDE.