Reduction in Force Notice-Certification of Expected Separation; Exception to 60 Days Specific Notice; Permissive Temporary Exception

SUMMARY: The Office of Personnel Management (OPM) is issuing final

reduction in force (RIF) regulations that authorize: an agency to issue

a Certification of Expected Separation to an employee who the agency

expects will be separated within 6 months by RIF; the Director of OPM

to approve a (RIF) notice period of less than 60 days specific written

notice in unforeseeable circumstances; and, an agency to make a

permissive temporary exception for more than 90 days past the RIF

effective date to satisfy a Government obligation to an employee.

DATES: Final rules effective February 10, 1995.

FOR FURTHER INFORMATION CONTACT:

Thomas A. Glennon or Edward P. McHugh, Workforce Restructuring Office,

(202) 606-0960; FAX (202) 606-0390.

SUPPLEMENTARY INFORMATION:

Certification of Expected Separation

On May 26, 1992, OPM published interim regulations in the Federal

Register at 57 FR 21890 with a 60 day comment period. The regulations

were inadvertently deleted by regulations published June 8, 1993 (58 FR

32046). To correct this error, the regulations were republished for

information in the Federal Register on June 27, 1994, at 59 FR 32871.

These interim regulations allowed agencies to issue employees a

Certification of Expected Separation (CES) if the agency found that the

employee would likely be separated within 6 months by RIF. The CES

notice allows employees to register early for outplacement and

retraining services provided by the agency, OPM, and programs under the

Job Training Partnership Act (JTPA) administered by the Department of

Labor.

OPM received fourteen written comments on these interim

regulations: Nine from agencies and five from State or local

governmental units or their representatives. All of the comments

favored the CES option. After consideration of the comments, the

interim regulations are published without revision.

Each comment addressed employees' eligibility for the JTPA after

receiving a CES.

Eight recommended a minimum CES notice period longer than the 6

month limit provided in 5 CFR 351.807(a) of the interim regulations.

After reviewing these comments, we left the 6 month limit unchanged

because the maximum time period was consistent with the Department of

Labor's policy.

Five requested broader eligibility criteria for registration in the

JTPA. Again, we left the eligibility requirements unchanged because we

believe 5 CFR 351.807(a) is consistent with the Department of Labor's

policy.

Other comments asked that OPM issue technical guidance to clarify

receipt of a CES on employees' eligibility for OPM's interagency

placement programs and the reemployment priority list. We will provide

this guidance to agencies through other sources.

The Discretionary Temporary Exception to the Order of Release and the

Liquidation Provision

On May 27, 1994, OPM published proposed regulations in the Federal

Register at 59 FR 27509 with a 60 day comment period. These regulations

proposed elimination of the 90 day limit on the use of a permissive

temporary exception to satisfy a Government obligation to an employee

during a RIF. These regulations also proposed extending the time limit

for use of the liquidation provision because of closure from 90 days to

120 days.

OPM received three written comments on these proposed regulations:

Two from agencies, and one from an individual who suggested other

changes to the RIF system.

Both agencies favored our proposed change to provide that an agency

may use a permissive temporary exception without time limitation to

satisfy a Government obligation to the retained employee. For example,

a Department of Defense employee is entitled to 120 days written

specific notice before release in a significant RIF. If the activity

conducting the RIF subsequently finds that it must make a worse offer

than that specified in the employee's original RIF notice, the employee

is entitled to a new RIF notice period of 120 days. This means that the

activity must use a permissive temporary exception to retain the

released employee on its rolls past the effective date of the RIF in

order to meet its notice obligation. Under a permissive temporary

exception, the activity determines the released employee's retention

rights on the effective date of the RIF, but the activity does not

actually implement the action until it provides the employee with full

specific notice of the RIF.

In conforming changes, 5 CFR 351.608(c) is redesignated as 5 CFR

351.608(d) and 5 CFR 351.608(d) is redesignated as 5 CFR 351.608(e).

One agency also requested that OPM expand the liquidation provision

found in 5 CFR 351.605 from the present 90 days to 1 year. The

liquidation provision in 5 CFR 351.605 allows a closing activity to

release employees without regard to their respective service dates in a

closure situation, provided that the employees have the same tenure and

veterans' preference status.

Under the current regulations, a liquidation situation exists when

an agency will abolish all positions in a competitive area within 90

days. In separating employees by RIF, the agency must release employees

in group and subgroup order consistent with 5 CFR 351.601(a). (An

agency may not apply this section to release an employee who is

entitled to retention in the subgroup under 5 CFR 351.606 because of

reemployment after military service.) However, the liquidation

provision permits the agency, at its discretion, to release employees

within a subgroup

[[Page 2678]]

regardless of the employees' relative retention standing for up to 90

days before closure of an activity. The 90 day liquidation provision

was implemented when the minimum specific RIF notice period was 30 days

rather than the present standard of 60 days notice (i.e., the

liquidation provision was three times the basic RIF notice period).

We proposed revision of 5 CFR 351.605 to provide that the

liquidation provision is applicable in a closure situation when an

agency will abolish all positions in a competitive area within 120

days. After considering the agency's comments, 5 CFR 351.605 is revised

to provide that the liquidation provision is applicable when an agency

will abolish all positions in a competitive area within 180 days (i.e.,

three times the basic RIF notice period of 60 days). The new 180 day

standard for the liquidation provision will also provide the Department

of Defense with needed flexibility in carrying out large scale closures

in which a Defense activity must provide its employees with a minimum

of 120 days RIF notice because of a significant RIF. An employee

released from a competitive level under the liquidation provision found

in 5 CFR 351.605 may still have assignment rights to a position in a

different competitive level, as provided in subpart G of part 351.

RIF Notices

On June 8, 1993, OPM published interim RIF notice regulations in

the Federal Register at 58 FR 32047, effective upon publication with a

60 day comment period. These regulations implement section 4433 of

Public Law 102-484 (the National Defense Authorization Act for Fiscal

Year 1993), which revised 5 U.S.C. 3502 by adding new sections (d) and

(e) containing new notice requirements for RIF actions.

OPM received five written comments on these interim regulations:

Three from agencies and two from local offices of national unions.

All three agencies favored the proposal. However, one agency

requested that OPM expand 5 CFR 351.802(b) to affirm that an agency

must provide an employee who receives a specific RIF notice with a copy

of OPM's retention regulations, upon the employee's request. We have

reviewed the proposed language and believe that 5 CFR 351.802(b) as

written specifically covers this requirement.

A second agency requested that OPM revise 5 CFR 351.803(b) to

provide that the agency must meet special notice requirements only when

50 or more employees are actually separated from a competitive area. In

the interim regulations, 5 CFR 351.803(b) provides that an agency must

provide additional notice when 50 or more employees in a competitive

area receive specific RIF separation notices. The agency must send this

additional notice of a large RIF to (1) the appropriate State

dislocated worker unit under the Job Training Partnership Act, (2) the

chief elected local government official where the separations will take

place, and (3) OPM. We retained the language in 5 CFR 351.803(b)

without revision because we believe that an employee who receives a

specific notice of separation in a large RIF is entitled to the same

benefits as an employee who is actually separated.

The two union locals were concerned that OPM could approve a

shortened RIF notice period that would be detrimental to their members.

Both locals are in Department of Defense (DoD) activities. 5 CFR

351.801(a)(2) provides that DoD components must provide their employees

with a minimum of 120 days specific notice when a significant number of

employees will be separated by RIF.

5 U.S.C. 3502(e)(1) provides that the President of the United

States may approve a RIF notice period of less than, as appropriate, 60

or 120 days, based on unforeseeable circumstances. However, 5 U.S.C.

3503(e)(3) provides that a shortened RIF notice period must always

cover at least 30 days. E.O. 12828, approved on January 5, 1993 (58 FR

2965), authorizes OPM to shorten the applicable mandatory 60 or 120 day

specific written RIF notice requirement to a minimum of 30 days. 5 CFR

351.801(b) implements E.O. 12828 and authorizes the Director of OPM to

approve a shortened notice period at the request of an agency head or

designee.

We have adopted 5 CFR 351.801(b) without revision because OPM is

limited by law and Executive Order in granting exceptions to the

minimum RIF notice period.

Regulatory Flexibility Act

I certify that this regulation will not have a significant economic

impact on a substantial number of small entities because it only

affects Federal employees.

List of Subjects in 5 CFR Part 351

Government employees.

Office of Personnel Management.

James B. King,

Director.

Accordingly, OPM is adopting as final its interim and proposed

rules published under 5 CFR part 351 on May 26, 1992, at 57 FR 21890

(as corrected on June 27, 1994, at 59 FR 32871), on June 8, 1993, at 58

FR 32047, and on May 27, 1994, at 59 FR 27509, with the following

changes:

PART 351--REDUCTION IN FORCE

1. The authority citation for part 351 is revised to read as

follows:

Authority: 5 U.S.C. 1302, 3502, 3503; S351.801 also issued under

E.O. 12828, 58 FR 2965.

2. Section 351.605 is revised to read as follows:

Sec. 351.605 Liquidation provisions.

When an agency will abolish all positions in a competitive area

within 180 days, it must release employees in group and subgroup order

consistent with Sec. 351.601(a). At its discretion, the agency may

release the employees in group order without regard to retention

standing within a subgroup, except as provided in Sec. 351.606. When an

agency releases an employee under this section, the notice to the

employee must cite this authority and give the date the liquidation

will be completed. An agency may also apply Secs. 351.607 and 351.608

in a liquidation.

3. In Sec. 351.608, paragraphs (c) and (d) are redesignated as

paragraphs (d) and (e) respectively, paragraph (b) is revised, and

paragraph (c) is added, to read as follows:

Sec. 351.608 Permissive temporary exceptions.

* * * * *

(b) Exception not to exceed 90 days. An agency may make a temporary

exception for not more than 90 days when needed to continue an activity

without undue interruption.

(c) Government obligation. An agency may make a temporary exception

to satisfy a Government obligation to the retained employee.

* * * * *

4. Subpart H, consisting of Secs. 351.801 through 351.806, is

revised to read as follows:

Subpart H--Notice to Employee

Sec.

351.801 Notice period.

351.802 Content of notice.

351.803 Notice of eligibility for reemployment and other placement

assistance.

351.804 Expiration of notice.

351.805 New notice required.

351.806 Status during notice period.

351.807 Certification of Expected Separation.

[[Page 2679]]

Subpart H--Notice to Employee

Sec. 351.801 Notice period.

(a)(1) Except as provided in paragraph (b) of this section, each

competing employee selected for release from a competitive level under

this part is entitled to a specific written notice at least 60 full

days before the effective date of release.

(2) Under authority of section 4433 of Public Law 102-484, each

competing employee of the Department of Defense is entitled, under

implementing regulations issued by that agency, to a specific written

notice at least 120 full days before the effective date of release when

a significant number of employees will be separated by reduction in

force. This 120 days notice requirement is applicable during the period

from January 20, 1993, through January 31, 2000. The basic requirement

for 60 full days specific written notice set forth in paragraph (a) of

this section is still applicable when less than a significant number of

employees will be separated by reduction in force.

(3) At the same time an agency issues a notice to an employee, it

must give a written notice to the exclusive representative(s), as

defined in 5 U.S.C. 7103(a)(16), of each affected employee at the time

of the notice. When a significant number of employees will be

separated, an agency must also satisfy the notice requirements of

Secs. 351.803 (b) and (c).

(b) When a reduction in force is caused by circumstances not

reasonably foreseeable, the Director of OPM, at the request of an

agency head or designee, may approve a notice period of less than 60

days, or a notice period of less than 120 days when a significant

number of Department of Defense employees will be separated. The

shortened notice period must cover at least 30 full days before the

effective date of release. An agency request to OPM shall specify:

(1) The reduction in force to which the request pertains;

(2) The number of days by which the agency requests that the period

be shortened;

(3) The reasons for the request; and

(4) Any other additional information that OPM may specify.

(c) The notice period begins the day after the employee receives

the notice.

(d) When an agency retains an employee under Sec. 351.607 or

Sec. 351.608, the notice to the employee shall cite the date on which

the retention period ends as the effective date of the employee's

release from the competitive level.

Sec. 351.802 Content of notice.

(a) The notice shall state specifically:

(1) The action to be taken and its effective date;

(2) The employee's competitive area, competitive level, subgroup,

service date, and annual performance ratings of record received during

the last 4 years;

(3) The place where the employee may inspect the regulations and

record pertinent to this case;

(4) The reasons for retaining a lower-standing employee in the same

competitive level under Sec. 351.607 or Sec. 351.608;

(5) Information on reemployment rights, except as permitted by

Sec. 351.803(a); and

(6) The employee's right, as applicable, to appeal to the Merit

Systems Protection Board under the provisions of the Board's

regulations or to grieve under a negotiated grievance procedure. The

agency shall also comply with Sec. 1201.21 of this title.

(b) When an agency issues an employee a notice, the agency must,

upon the employee's request, provide the employee with a copy of OPM's

retention regulations found in part 351 of this chapter.

Sec. 351.803 Notice of eligibility for reemployment and other

placement assistance.

(a) An employee who receives a specific notice of separation under

this part must be given information concerning the right to

reemployment consideration under subparts B (Reemployment Priority

List) and C (Displaced Employee Program) of part 330 of this chapter.

The employee also must be given information concerning how to apply for

unemployment insurance through his or her appropriate State program.

This information must be provided either in or with the specific

reduction in force notice, or as a supplemental notice to the employee.

(b) When 50 or more employees in a competitive area receive

separation notices under this part, the agency must provide written

notification of the action, at the same time it issues specific notices

of separation to employees, to:

(1) The State dislocated worker unit(s), as designated or created

under title III of the Job Training Partnership Act;

(2) The chief elected official of local government(s) within which

these separations will occur; and

(3) OPM.

(c) The notice required by paragraph (b) of this section must

include:

(1) The number of employees to be separated from the agency by

reduction in force (broken down by geographic area or other basis

specified by OPM);

(2) The effective date of the separations; and

(3) Any other information specified by OPM, including information

needs identified from consultation between OPM and the Department of

Labor to facilitate delivery of placement and related services.

Sec. 351.804 Expiration of notice.

A notice expires except when followed by the action specified, or

by an action less severe than specified, in the notice or in an

amendment made to the notice before the agency takes the action. An

agency may not take the action specified before the effective date in

the notice. An action taken after the specific date in the notice shall

not be ruled invalid for that reason except when it is challenged by a

higher-standing employee in the competitive level who is reached out of

order for reduction in force as a result of the action.

Sec. 351.805 New notice required.

An employee is entitled to a written notice of, as appropriate, at

least 60 or 120 full days if the agency decides to take an action more

severe than first specified.

Sec. 351.806 Status during notice period.

When possible, the agency shall retain the employee on active duty

status during the notice period. When in an emergency the agency lacks

work or funds for all or part of the notice period, it may place the

employee on annual leave with or without his or her consent, or leave

without pay with his or her consent, or in a nonpay status without his

or her consent.

Sec. 351.807 Certification of Expected Separation.

(a) For the purpose of enabling otherwise eligible employees to be

considered for eligibility to participate in dislocated worker programs

under the Job Training Partnership Act administered by the U.S.

Department of Labor, an agency may issue a Certificate of Expected

Separation to a competing employee who the agency believes, with a

reasonable degree of certainty, will be separated from Federal

employment by reduction in force procedures under this part. A

certification may be issued up to 6 months prior to the effective date

of the reduction in force.

(b) This certification may be issued to a competing employee only

when the agency determines:

(1) There is a good likelihood the employee will be separated under

this part;

(2) Employment opportunities in the same or similar position in the

local

[[Page 2680]]

commuting area are limited or nonexistent;

(3) Placement opportunities within the employee's own or other

Federal agencies in the local commuting area are limited or

nonexistent; or

(4) If eligible for optional retirement, the employee has not filed

a retirement application or otherwise indicated in writing an intent to

retire.

(c) A certification is to be addressed to each individual eligible

employee and must be signed by an appropriate agency official. A

certification must contain the expected date of reduction in force, a

statement that each factor in paragraph (b) of this section has been

satisfied, and a description of Job Training Partnership Act programs,

the Interagency Placement Program, and the Reemployment Priority List.

(d) A certification may not be used to satisfy any of the notice

requirements elsewhere in this subpart.

(e) An agency determination of eligibility for certification may

not be appealed to OPM or the Merit Systems Protection Board.

(f) An agency may also enroll eligible employees in the Interagency

Placement Program and the Reemployment Priority List up to 6 months in

advance of a reduction in force. For requirements and criteria for

these programs, see subparts B and C of part 330 of this chapter.

[FR Doc. 95-643 Filed 1-10-95; 8:45 am]

BILLING CODE 6325-01-M