v.
PERSONNEL ADVISORY BOARD, Respondent,
and
High Court of
Appellate Division
[1] Under A.S.C.A. § 7.0201, career service statutes
serve the enacted public purpose of establishing a personnel administration
system to provide equitable treatment of employees of the ASG through a merit
system regulated by a comprehensive scheme of statutes and rules.
[2] Under A.S.C.A. § 4.0403(b), compensation of
classified career service employees of the ASG who are not teachers or
laborers, is governed under the broad principle of “equal pay for substantially
equal work.”
[3] Under
A.S.C.A. § 4.0409(a), it is contemplated that a “salary step increment” will be
given annually within grade increases from one step to the next step after an
employee receives a satisfactory performance evaluation. [2ASR3d4]
[4] Under
A.S.C.A. § 4.0296, a “pay adjustment” refers to a change in the rate of
compensation due to revision of the salary schedules of ASG or for reasons not
covered elsewhere.
[5] Under A.S.C.A. § 4.02111, a “promotion”‘ is a change of an employee from a position in one class to
a position in a class having a higher salary range.
[6] Under A.S.C.A. § 4.0401-.0414 and A.S.C.A. §
2.010l-.0110, a “reclassification” is the changing of any position from one
class to another class whenever warranted by significant change in position
duties and responsibilities or class definition, or to correct an error.
[7] Under A.S.C.A. § 4.1044, the court may reverse,
modify or remand the decision of an agency if substantial rights of a
petitioner have been prejudiced by an agency’s improper or unlawful decision
under this statute.
[8] Because no administrative rules
have been duly adopted establishing fair procedures for implementing a “pay
adjustment” process, ad hoc salary increases that result in disparate
compensation rates for career service employees of similar grade and seniority
in comparable positions violates the principle of equal pay for substantially
equal work.
[9] Where the Department of Human Resources did not
follow legally established procedures to either promote or change petitioner’s
classification, but rather followed no procedures and simply awarded a six step
raise in the same grade, the increase in annual salary was not valid.
[10] The definition of “pay
adjustment” precludes its application to a personnel request for promotion or change in classification.
Before
Counsel: For
Petitioner, Charles V.
For
Respondent and Real Party in Interest, Gwen Tauiliili-Langkilde,
Assistant Attorney General
OPINION AND ORDER
This action
is for judicial review of a final administrative decision, pursuant to A.S.C.A.
§ 4.1040 of the administrative procedures act. Petitioner
Context of the Controversy
Kruse, a
career service employee, was promoted to the position of Program Director for
Instructional Resources in ASG’s Department of
Education on
On
Discussion
[1-2] This controversy focuses on practices affecting the
compensation of ASG’s classified career service
employees. The
career service statutes serve the enacted public purpose of establishing a personnel
administration system which provides “equitable treatment of employees” and “a
merit system based on recognized principles of appointment, promotion,
termination, and other aspects of government employment.” A.S.C.A.
§ 7.0201.
A
comprehensive scheme of statutes and rules regulates the personnel
administration system.
See A.S.C.A. §§
7.0101-.1513; A.S.C.A. §§
4.0101-.1448. Compensation
of classified career service employees who are not
teachers or laborers, is governed under the broad principle of “equal pay for
substantially equal work.” A.S.C.A. § 4.0403(b). [2ASR3d6]
The
overall regulatory scheme contemplates not only that individual employees will
receive fair and impartial treatment by ASG, but also that all employees may
expect that all persons in like classes of position with comparable,
satisfactory years of service in such positions will be compensated equally. Further, all
employees in the career service may expect that career advancement will be based
upon merit and processed, reviewed, and authorized as provided by law.
Before
proceeding further, we will first identify and define the terms and procedures
commonly used to describe and prescribe increases in a career service
employee’s compensation.
[3] The term “salary step increment”
is not specifically defined in the government personnel rules in the
administrative code, but it is substantially described as within grade
increases from one step to the next step after receiving a satisfactory
performance evaluation.
See A.S.C.A. § 4.0409; see
also A.S.C.A. § 2.0104.
The rules contemplate that salary step increments will be given
annually upon qualification. A.S.C.A. § 4.0409(a).
[4] The term “pay adjustment”
refers to “a change in the rate of compensation due to revision of the salary
schedules of ASG or for reasons not covered elsewhere.” A.S.C.A. § 4.0296. Although this term is defined, it is
not used elsewhere in the administrative code.
[5] The term “promotion” is defined as “a change of an
employee from a position in one class to a position in a class having a higher
salary range.” A.S.C.A. § 4.02111. The procedures governing personnel
demotions and other specified adverse actions are set forth under A.S.C.A. §
4.0802.
[6] Finally, the term “reclassification” is neither
defined nor substantively set forth in the administrative code. The term used in
the personnel rules is “classification.” A.S.C.A. § 4.0401-.0414. “Reclassification,”
as that term is used when upgrading or downgrading a present position, is more
precisely described in the administrative code as “the changing of any position
from one class to another class whenever warranted by significant change in
position duties and responsibilities or class definition, or to correct an
error.” A.S.C.A.
§ 4.0404(4)
“Reclassification” as a bona fide personnel
term may owe its currency to the Shortfall Rectification Program of 1983,
embodied in the administrative code at A.S.C.A. §§ 2.0101-.0110. This chapter
specifically addressed “reclassifications and promotions” at A.S.C.A. § 2.0105.
[2ASR3d7]
Applying these terms and procedures to the facts of
this case, we first note that on
Nonetheless, on October 18, 1996, the Acting Director of Program Planning
and Budget Development advised the Director of Education in writing that the
“promotion” requested for Kruse to grade 16, step 5 ($29,172 per annum) would
not be approved as submitted: “We understand that Classification Division of
Department of Human Resources could not actualize this action as the position
itself is classified at a Grade 15 level. However, they instead chose to
classify her to Grade 15, step 10 (a jump of 6 increment steps) or the
equivalent of $31,075.”
PAB Transcript, Exhibit
D.
Subsequently the Director of Education concurred with this course of
action and submitted a form to the Office of Program Planning and Budget
Development deleting a vacant clerk’s position to free up $5,331.00 for funding
Kruse’s salary increase.
PAB Transcript, Exhibit
F.
Then, in
late January 1997, the newly inaugurated Governor initiated his “roll-back”
program, and in March 1997, the Director of Human Resources duly reduced
Kruse’s compensation back to Grade 15, step 5, leaving her with only her annual
step increment to step 5 as additional
compensation. This
personnel action was designated a “pay adjustment.”
PAB heard this matter on
[7] Under A.S.C.A. § 4.1044, the court may reverse,
modify or remand the decision of an agency “if substantial rights of the
petitioner have been prejudiced” because the agency’s decision was improper or
unlawful as specified under one or more of subsections (1)-(6) of this statute. The threshold
question becomes, “has Kruse demonstrated that the agency decision prejudices
any of her substantial rights?” We must answer in the negative.
Kruse’s “basic salary rate,” see A.S.C.A. § 4.0217, was increased under
the guise of a “pay adjustment.” As the record before the PAD reveals, [2ASR3d8] the only legitimate method of
increasing a classified employee’s basic salary rate (other than by annual
salary step increments or special incentive awards prescribed by rule) is by a
change in classification of the employee’s position or by the employee’s
promotion to a higher paid position. See PAP Transcript, generally
at 20-23 and specifically at 32.
[8] PAP found that Kruse’s
salary increase was a “pay adjustment.” Although “pay adjustment” is a defined
term, no procedures have been adopted to implement its impartial use within the
merit system of the career service. Until administrative rules are duly
adopted establishing fair procedures for implementing a “pay adjustment”
process, ad hoc salary increases that
result in disparate compensation rates for career service employees of similar
grade and seniority in comparable positions violates the stated principle of
“equal pay for substantially equal work.”
[9] The Department of Human Resources declined the original
request to either ‘promote’ Kruse or change the classification of her position
to a higher grade resulting in an anticipated annual salary of approximately
$29,000. Instead
of following legally established procedures for a promotion or change in classification,
which could have legitimately resulted in a valid increase of Kruse’s annual
salary to the $29,000 level, the Department of Human Resources followed no
procedures and simply awarded a six step raise in the same grade.
The Director of Program Planning and Budget
Development did not object, the Director of Education did not object, and
Kruse, whose maximum legal salary increase under a promotion or change in
classification was planned at approximately $29,000, certainly did not object
to a $31,075 annual salary.
[10] Even if
this court were to seriously entertain Kruse’s argument that a “pay
adjustment,” by virtue of being defined, operates as a legal basis for salary
increases “for reasons not covered elsewhere” in the personnel rules, Kruse’s
initial personnel action request was for a “promotion” or “change of
classification” as originally requested by the Deputy Director of Education for
Administrative Services.
Even assuming for sake of argument that a “pay adjustment” may be
validly utilized to increase compensation in certain specific cases, the
definition of “pay adjustment” precludes its application to a personnel request
for promotion or change in
classification.
Conclusion
We note the irony of the
current administration’s use of the term “pay adjustment” in PAB Transcript,
Exhibit A to describe Kruse’s salary roll back because her upward “pay
adjustment” was unlawful.
We need not, [2ASR3d9] however, reach the paradoxical
conclusion that two wrongs make a right to decide this matter. We simply hold that Kruse could obtain
no right (substantial or otherwise) to a compensation rate established in
violation of the prescribed merit-based administrative procedures for career
service employees.
Since we have decided that
Kruse had no rights to the increased level of compensation which could have
been prejudiced by PAB’s decision, we decline to
further investigate the legality of the procedures whereby the Director of
Human Resources corrected this unlawful compensation rate.
As PAB recognized,
Kruse may well deserve a promotion or a change of classification of her
position. If
there are funds available and such action is justified, Kruse would be entitled
to all procedural rights and safeguards in pursuing such legitimate goals,
including the right to grieve and appeal adverse decisions on such lawful
request. Further,
if Kruse believes that she has suffered compensable damages as a result of PAB’s action in the instant matter, she may pursue her
legal (or equitable) remedies in a court of general jurisdiction.
Order
The PAB decision of
It is so Ordered.
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