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Pay & Leave Claim Decisions

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Office of the General Counsel

OPM Ref. # 1996-01551

Dear Ms. [xxx]:

This replies to your request for an advance decision on Ms. [xxx]s claim for severance pay. For the reasons discussed below, the claim is not payable.

Ms. [xxx] was employed by the [Agency] as an air traffic control specialist. In early 1994, employees at that facility received notice from the FAA that certain activities, including Ms.[xxx]s function, would be contracted out in 1994. Her job was contracted out effective October 29, 1994, and she resigned from the FAA effective that date. She subsequently applied for severance pay, but her claim was denied.

The basis for Ms. [xxx]s claim is that she never received a written offer of a new position, and therefore, did not reject a "reasonable offer", as that term is defined in the applicable regulations. 5 C.F.R. 550.703. However, as explained below, Ms. [xxx] is applying the wrong regulation.

Different regulations apply to separations effected by the agency and to resignations in anticipation of an agency-effected separation. The former situation is governed by 5 C.F.R. 550.704. This regulation provides, among other things, that an employee who is removed from Federal service by involuntary separation may not receive severance pay if the employee declines a reasonable offer, which essentially means another position within the commuting area. Section 550.704.

Ms. [xxx]s situation, however, is governed by section 550.706(a). This regulation authorizes severance pay for employees who resign because they expect to be involuntarily separated if they have received either "specific written notice" that they are to be separated or a "general written notice of reduction-in-force or transfer of function". The notice of the agencys intent to contract out the work at Ms. [xxx]s facility does not meet either criteria since it did not state that any employee would be removed. In fact, the record shows that no one was involuntary removed because of the decision to contract out that work.

Had the agency involuntary separated Ms. [xxx] as a result of its decision to contract out the function--which did not happen here--then, the question of whether she declined a reasonable offer would be relevant to her eligibility for severance pay. However, because she resigned before the agency acted, the only question is whether she received either of the written notices described above. Because we conclude that she did not, she is not eligible for severance pay.

Very truly yours,

Paul Britner
Senior Attorney

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