Issue: Qualification/Position/Classification/Demotion; Ruling Date October 23, 2001; Ruling #2001-168; Agency: Department of Corrections; Outcome: Not Qualified.

In the matter of Department of Corrections/ No. 2001-168

October 23, 2001

The grievant has requested a ruling on whether his July 16, 2001 grievance with the Department of Corrections (DOC) qualifies for a hearing. The grievant claims that DOC misapplied policy in the handling of his request for a voluntary demotion. Specifically, he claims that (1) he was not able to negotiate his salary, (2) the thirteen step pay factors¹ used to determine salary were not appropriately considered, (3) DOC placed a number of conditions on the demotion in violation of policies and procedures, and that (4) no such conditions were placed on another employee who was granted a voluntary demotion. The grievant would like the voluntary demotion without the above-referenced conditions, as well as the opportunity to negotiate his pay. Furthermore, he requests that his demotion be retroactive to June 25, 2001. For the reasons discussed below, this grievance does not qualify for a hearing.

The grievant is employed as an Institutional Safety Specialist with DOC. In January 2002, he will have been with DOC for a total of twenty-nine years. He was a correctional officer for fifteen and one-half of those years. His performance has consistently exceeded expectations, and his attendance has been excellent.

On June 1, 2001, he applied for a Corrections Officer position, which was a voluntary demotion. The Correctional Officer position is considered a "security" position and is one of the positions included in the Virginia Law Officers Retirement System (VALORS).² The grievant’s Institutional Safety Specialist position is not included in VALORS.

His request for a voluntary demotion was approved on June 7, 2001 with four conditions: his salary was to be reduced by $4399, there would be no salary increase granted upon interclass advancement, he was required to serve a new twelve-month probationary period, and he was required to sign a two-year Tenure Agreement. The grievant chose not to accept the Correctional Officer position and decided to utilize the grievance procedure. The grievant claims that DOC did not appropriately apply DHRM Policy 3.05 or DOC’s Salary Administration Plan in its failure to consider the thirteen pay factors in making his salary determination. Further, he notes that those policies do not enumerate or require the conditions placed on his demotion and that another employee who took a voluntary demotion was not subjected to those conditions. Finally, he claims that he should be granted the opportunity to negotiate his salary, and requests that his voluntary demotion be retroactive to June 25, 2001.

By statute and under the grievance procedure, management is reserved the exclusive right to manage the affairs and operations of state government.³ Complaints relating solely to the establishment and revision of salaries and other pay practices "shall not proceed to a hearing"⁴ unless the grievant presents evidence raising a sufficient question as to whether discrimination, retaliation, or discipline may have improperly influenced management’s decision, or whether state policy may have been misapplied.⁵ The grievance, as filed in this case, does not allege discrimination, retaliation, or discipline. Thus, the claim can best be viewed as a claim that the Commonwealth’s compensation policy has been misapplied or unfairly applied.

For an allegation of misapplication of policy or unfair application of policy to qualify for a hearing, there must be facts that raise a sufficient question as to whether management violated a mandatory policy provision, or whether the challenged action, in its totality, was so unfair as to amount to a disregard of the intent of the applicable policy. If a claim of policy misapplication is qualified and proven at a hearing, the relief that a hearing officer can order is limited to directing the agency to reapply the policy from the point at which it was misapplied.⁶ A hearing officer may not order damages or attorney’s fees, or any other prospective relief.⁷

The Department of Human Resources Management (DHRM) Policy 3.05 provides that state agency compensation responsibilities include the development and utilization of an Agency Salary Administration Plan to outline "implementation of the Compensation Management System" and for "ensuring consistent application of pay decisions." ⁸ With respect to voluntary demotions, Policy 3.05 states that employee-initiated demotions may be competitive (between agencies) or non-competitive (within the same agency), and that the salary is negotiable from the minimum of the lower pay band up to the employee’s current salary, not to exceed the maximum of the lower pay band.

Similarly, DOC’s Salary Administration Plan states that its purpose is "to ensure appropriate compensation actions for classified employees based on the State and Department pay practices." ¹⁰ Under DOC’s Plan, salary decisions for voluntary demotions "will be based on the thirteen pay factors." ¹¹ There is no mention in DOC’s Plan of any limitations or conditions placed on voluntary demotions. Furthermore, the Plan does not expressly state that the employee may negotiate his salary; rather, it states that salary determinations are a shared responsibility between the organizational Unit Head and the Human Resources Unit.

The second step respondent, the Unit Head, indicates that he consulted with the Manager of the Department’s Human Resources Office in making the salary decision for the grievant’s voluntary demotion. Although DHRM Policy 3.05 states that the employee’s salary is "negotiable," in practice, this is not necessarily the case. The DHRM Policy merely provides guidelines for the agencies and leaves the ultimate responsibility of managing compensation with the individual agencies. The DHRM policy appears to allow an agency to negotiate salary, but the policy does not mandate that an agency must negotiate. DOC’s Salary Administration Plan does not expressly mandate or prohibit any employee-agency negotiation, but states that the Human Resources Office and the Unit Head are responsible for decisions regarding salary adjustments. Thus, by not negotiating salary with the grievant, the agency did not misapply or unfairly apply its policy. As a result, this issue does not qualify for a hearing.

With respect to the consideration of the thirteen pay factors, it appears that DOC intended that the guidelines from DHRM 3.05 be incorporated into their Salary Administration Plan. Under state and agency policy, DOC is obligated to review requests for voluntary demotion, analyze the appropriate factors, and determine what, if any, compensation adjustment would be appropriate and consistent with its other pay decisions. Importantly, state policy and the grievance procedure accord much deference to management’s exercise of judgment, including management’s assessment of the degree of adjustment required for a voluntary demotion. ¹² Accordingly, this Department has long held that a hearing officer may not substitute his or her judgment for that of management regarding compensation decisions. In this case, it is evident that management did consider the pay factors in determining the grievant’s salary. His Pay Action Worksheet notes several of those factors, including the grievant’s strong work performance, training, knowledge, skills, and abilities, the availability of other qualified applicants, and agency need. Any challenge to management’s ultimate decision after reviewing these factors would be inappropriate.

Several restrictions were placed on the grievant’s request for voluntary demotion. As noted above, however, management has the exclusive right to manage the affairs and operations of state government. ¹³ Inherent in this right is management’s responsibility to set the salaries of its employees. DHRM Policy 3.05 expressly states that salary upon voluntary demotion may be set between the minimum of the lower Pay Band and the employee’s current salary. ¹⁴ The Correctional Officer position is in Pay Band 3. Therefore, his salary could have been set anywhere between $20,455 (the minimum of Pay Band 3) and $41,719 (his current salary). Management set the grievant’s salary upon demotion at $37,320, which is well within the parameters set by policy. Accordingly, the decision to lower the grievant’s salary by $4399 cannot be challenged in a grievance hearing.

With respect to the new probationary period, this condition would have been required of anyone taking a voluntary demotion to a security position. DOC issued a memorandum on performance management that states that "any non-security employee who becomes a security employee (Corrections Officer through Corrections Major) will serve a new 12 month probationary period because of the requirement to become a certified Corrections Officer."¹⁵ The grievant’s current position as Industrial Safety Specialist is not a security position. Although he had served as a Correctional Officer in the past, the Human Resources Office reports that he would nevertheless have to become re-certified under the policy expressed in this memorandum. Therefore, it cannot be said that management was acting in violation of state or agency policy in requiring the grievant to serve a new probationary period.

Significantly, in 1999, the DOC Director noted that the VALORS contained some loopholes and could be easily manipulated, which would be contrary to agency policy.¹⁶ As a result, certain conditions are placed on individuals moving into VALORS-covered positions. It is important to note that those conditions are placed on employees based on an individual analysis.¹⁷ Included in the conditions are (1) the requirement to sign a two-year tenure agreement and (2) the restriction on pay increases upon advancement.¹⁸ In this case, the grievant told management that the reason for taking the voluntary demotion was for retirement purposes, and that is why management placed the restrictions on him. It is true that no such conditions are mentioned or required in DHRM Policy 3.05 or in DOC’s Salary Administration Plan, but nothing in those policies states that conditions cannot be placed on voluntary demotions. Furthermore, it is DOC’s policy to avoid manipulation of VALORS. In view of that policy, it was appropriate for management to place conditions on the grievant’s voluntary demotion.

A grievance that challenges the salary determination of management does not qualify for a hearing unless the management action violates a mandatory policy provision, or in its totality was so unfair as to amount to a disregard of the intent of the applicable policy. To support his inconsistent application of policy claim, the grievant cites to one employee who was granted a voluntary demotion from Food Service to Correctional Officer. This employee did take a ten percent cut in pay, but did not have to sign a two-year tenure agreement and was allowed a pay increase upon completion of his Correctional Officer certification.

DOC’s Salary Administration Plan clearly states that "there are legitimate factors for treating employees differently." ¹⁹ In this case, the restrictions placed on the grievant’s request for voluntary demotion were based on an analysis of his situation. The individual cited by the grievant began employment with the Commonwealth in 1993 and voluntarily demoted on September 25, 1999. The grievant, on the other hand, has twenty-nine years with the Commonwealth, sixteen years of which were in a security position. His prior years as a Correctional Officer would automatically "roll-over" into the VALORS program upon voluntary demotion. The other employee, who did not have prior service in a VALORS-covered position, would have to stay in his position for twenty years in order to qualify for VALORS, whereas the grievant could voluntarily demote, retire the next day, then qualify for the additional benefits. This is management’s reason for placing the conditions on the grievant while not placing the same conditions on the other employee who voluntarily demoted. Its reason for treating these employees differently does not indicate that there was any "unfair" application of policy, rather, it indicates that management is taking reasonable steps in order to protect a valuable benefit for Correctional Officers. Therefore, this issue does not qualify for a hearing.

The grievant has requested that he be allowed to voluntarily demote, and that his voluntary demotion be retroactive to June 25, 2001 to be eligible for VALORS covered position. The Grievance Procedure Manual expressly states that "hiring, promotion, transfer, assignment, or retention of any employee" and "directing the methods, means, or personnel by which work activities are to be carried out" cannot be granted as relief. ²⁰ The grievant is asking for a hearing officer to place him in a Correctional Officer position and to specify an effective date for this transfer. This relief cannot be granted, and this issue is not appropriate for adjudication by a hearing officer. Accordingly, this issue does not qualify for a hearing.

For information regarding the actions the grievant may take as a result of this ruling, please refer to the enclosed sheet. If the grievant wishes to appeal this determination to the circuit court, he should notify the human resources office, in writing, within five workdays of receipt of this ruling. If the court should qualify this grievance, within five workdays of receipt of the court’s decision, the agency will request the appointment of a hearing officer unless the grievant notifies the agency that she does not wish to proceed.

Neil A. G. McPhie, Esq.
Director

Leigh A. Brabrand
Employment Relations Consultant