Arbitrator Denies Severance Pay Grievance

December 25, 2016

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From 2003 to 2009 the Postal Service offered a series of Voluntary Early Retirements (VER) with the approval of the Office of Personnel Management.  Employees involved in these offers were not paid any severance pay.  In 2008 the APWU filed a grievance concerning the failure to pay severance to certain employees.

The general rule is that severance is not paid to employees who terminate postal employment but are entitled to an immediate annuity payment like an optional retirement or a VER.  The one exception is found in the layoff provisions of the contract (Article 6.B.4) which provides that an employee can receive both a severance and a VER.

The Postal Service argued that Article 6 layoff provisions were not invoked or applicable to the VER offers USPS had been making; but rather the offers were made to facilitate Article 12 reassignments. Article 12 has no provisions similar to the severance pay provisions in Article 6. 

Arbitrator Shyam Das agreed with the Postal Service that the triggering events were reassignments under Article 12 and not Article 6; therefore, severance pay was not due. Click here to view the award. 

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