4. Modifying Veterans' Preference

The present Veterans' Preference in the hiring process goes far beyond the concept of helping those called to service to readjust to civil life following their military service. The current system deters the hiring of minorities and women and goes too far in restricting equality of access to federal employment and in modifying the basic principles of a merit system. The Panel supports the moderate position taken on Veterans' Preference

in S.2640.

5. Providing Authority for Demonstration Projects

The size and complexity of the Federal workforce is such that each agency should be encouraged to develop personnel systems to meet its particular needs. Where laws or regulations restrict innovation, there should be authority to lift those restrictions under controlled conditions. Where demonstration projects prove successful, then the innovations can be made permanent either for that agency or, if applicable, for the Government as a whole.

Innovation would be particularly useful in (1) incentives for mobility, (2) merit pay, (3) new hiring procedures, (4) training employees for new positions in lieu of reduction in force, and (5) labor-management negotiations.

6.

Improving the Adverse Action Appeals System

The present appeals system is too complex and too cumbersome, and appeals drag on to the detriment of managers and employees alike.

The proposed legislation does not change the present statutory basis of appeals systems within departments and agencies, except by redefining adverse action to eliminate reduction in rank. It does greatly simplify the system by which appeals are taken from agency decisions to an outside agency (now the Civil Service Commission; under the bill, the Merit Systems Protection Board) by reducing the present three levels of appeals (hearing examiner, appeals board, full Commission) to one. It also shifts the burden of proof at this stage from the employer to the employee and specifies a limited number of grounds for such appeal.

The Panel favors the proposed changes, on the grounds that an operable appeals system will continue to exist in each executive agency, that most cases should be settled there rather than in the Merit Systems Protection Board, and that the Board will have the authority and responsibility to assure that agency appeals systems are fully protective of employee rights.

Mr. Chairman, this may be the most important governmental reform proposal to be considered by this Congress. The American people seek a government in which they have trust, confidence and pride. So also do the millions of Americans who serve in that government. We believe these proposals, when implemented, will move us toward those goals.

Chairman RIBICOFF. The committee will stand adjourned until 10 o'clock Monday morning.

[Whereupon, at 11:45 a.m., the committee recessed, to reconvene at 10 a.m., Monday, April 10, 1978.]