3970 - Financial Exigency Policy and Staff Reduction Procedures
Last updated: July 01, 2009
PREAMBLE: An earlier version of this section appeared in the 1979 Handbook; it was substantially revised in July of 1987 to reflect changes in regents’ policy. Unless otherwise noted, the text is as of July 1996. Further information may be obtained from the Provost’s Office (208-885-6448), the Faculty Secretary’s Office (208-885-6151), or Human Resources (208-885-3609). (ed. 7-97, 7-01, 9-06, 12-13)
NOTE 1: This section comprises (a) statements of general policy and procedures contained in part III of chapter B of the Rule Manual of the State Board of Education and UI Board of Regents, IDAPA08.00.B.20-37 (these have been edited slightly, primarily to make them refer specifically to UI, rather than to all entities under the board’s governance), and (b) statements of UI procedures that supplement the general policy (see also 3950). (ed. 7-97, 7-00)
NOTE 2: References to "faculty" and "nonfaculty" in this section are governed by the definition of "faculty member" in 3520 C-3. (ed. 7-97)
NOTE 3: In case of inconsistency between any element herein and a corresponding element of the board’s rule cited in note 1, the latter takes precedence.
A. Financial Exigency Policy
B. Staff-Reduction Procedures
C. Role of UI Faculty and Staff in the Declaration of a State of Financial Exigency
D. Staff-Reduction Criteria
F. Form of Notice
G. Time of Notice
H. Appeal Rights of Classified Employees
I. Appeal Rights of Exempt Employees
J. Appeal Rights of Non-Tenured Faculty Members (rev. 12-06)
K. Appeal Rights of Tenured Faculty Members
L. Appeal Procedure for Faculty Members
M. Standard of Review
N. Classified Employees’ Layoff Roster
O. Reinstatement Rights of Tenured Faculty Members
P. Reinstatement Rights of Other Exempt Employees
Q. Formation and Composition of Hearing Bodies
R. Board Review
A. FINANCIAL EXIGENCY POLICY.
A-1. The Board of Regents recognizes that, in order to discharge its responsibilities for UI, it may become necessary, due to unfavorable economic conditions, to curtail, modify, or eliminate some of the university’s programs. The board also recognizes that it must dedicate its resources to the achievement of the purposes and goals of the university.
A-2. As used here, "financial exigency" (pronounced with stress on first syllable, EX’igency, as in EX’it) means a demonstrably bona fide financial crisis that adversely affects the institution as a whole, or one or more of its programs or other distinct units.
A-3. The procedures described in this section are put into effect only on the board’s declaration that a state of financial exigency exists.
B. STAFF-REDUCTION PROCEDURES.
B-1. The Board of Regents declares the existence of a state of financial exigency by written resolution setting forth the basis for its decision to implement a staff reduction after notice and hearing at a regular or special meeting of the board.
B-2. An employee may be laid off as a result of financial exigency.
B-3. A reduction in force must be done equitably, in good faith, and in a systematic manner directly related to the financial exigency.
B-4. After active consultation with the employees, including members of the faculty and professional staff and classified personnel, the president prepares and recommends to the board a program consisting of various alternatives to implement staff-reduction procedures. When developing this program, consideration must be given to the necessity and manner of reducing the employment force, the appropriate units or subunits to be reduced in force, and the criteria (see D) for identifying the employees who are to be laid off.
B-5. A reduction in force may occur (a) across the entire university, (b) by unit within UI, such as a college, school, academic department, administrative department, division, office, bureau, discipline, or specialty within a discipline, or (c) by any combination of (a) and (b). The program for reduction in force at UI may or may not be the same as at any other institution or agency governed by the board. Moreover, it may differ from one program or unit of UI to another.
B-6. The board must consider the president’s recommendation and approve a program to implement its decision before the effective date of any layoffs.
C. ROLE OF UI FACULTY AND STAFF IN THE DECLARATION OF A STATE OF FINANCIAL EXIGENCY AND PLANNING FOR STAFF REDUCTION. These procedures are intended to ensure that representatives of the faculty, staff, and administration work collaboratively throughout a financial crisis to develop a mutually acceptable plan of action and that members of the faculty and staff who would be affected by a proposed plan have an opportunity to comment on it before it is forwarded to the president.
C-1. Fiscal Emergency Committee.
a. The Fiscal Emergency Committee, whose members are drawn from the administration, faculty, staff, and students (see 1640.47), is primarily responsible for developing the institutional response to and recommendations necessary to cope with fiscal emergencies. The committee has primary responsibility for: (1) studying the university-wide fiscal problem and making a recommendation to the president as to whether an official declaration of financial exigency at UI is warranted and (2) developing the timetable, the criteria, and implementation recommendations in the event that a reduction in force becomes necessary under a state of financial exigency declared by the board.
b. In all arenas of responsibility, the committee forwards its preliminary recommendations to the Faculty Senate and the Staff Affairs Committee for review so that suggestions and alternatives can be considered before forwarding the final recommendations to the president. (ed. 7-09)
c. In years in which no apparent or real financial emergency exists, the committee does not function except that it is convened for the purpose of briefing its members on board rules covering financial exigency and on UI budget and budget-development procedures. These activities serve to prepare the committee to deal with any fiscal emergencies that may arise.
C-2. Establishment. The committee is appointed and takes office shortly after the beginning of each academic year. Its structure is described in 1640.47.
C-3. Activation. Should evidence exist that a fiscal emergency at UI is probable or imminent, or should actions of the board, legislature, or governor force UI into a fiscal emergency, the president, on his or her own initiative and in consultation with the Faculty Senate leadership, or in response to a two-thirds vote of Faculty Senate, activates the committee. (ed. 7-09)
C-4. Procedural Guidelines.
a. Declaration of Financial Exigency. When a fiscal emergency at UI exists or is imminent, the committee studies the financial state of the institution to determine whether a declaration of financial exigency is warranted. In reaching its decision, the committee proceeds as follows:
- The magnitude of the fiscal problem is displayed to the university community, and the timetable to be followed is also established and displayed.
- In accordance with the timetable, academic and administrative units of the institution convene their faculties and staffs and prepare budget-reduction impact reports that address the need for a declaration of financial exigency. Each impact report is forwarded to the committee for consideration via the dean of the college or equivalent administrator.
- After receiving the impact reports, the committee drafts preliminary recommendations as to whether a declaration of financial exigency is warranted.
- The preliminary recommendations are presented to the Faculty Senate and the Staff Affairs Committee for additional faculty and staff views and suggestions. (ed. 7-09)
- The committee then drafts its recommendation and forwards it to the president.
b. Recommendations for Implementation of Staff Reduction. After the board has declared that a state of financial exigency exists at UI, the Fiscal Emergency Committee develops staff-reduction recommendations to be considered by the president. In developing the recommendations, the committee proceeds as follows:
- The magnitude of the financial exigency is displayed to the university community and the timetable for developing the recommendations to the president is also established and displayed.
- The criteria to be used in identifying programs for reduction or elimination under the financial exigency are presented to the Faculty Senate and the Staff Affairs Committee for review and to provide an opportunity for the faculty and staff to suggest modifications. (ed. 7-09)
- After receiving views and suggestions from the faculty and staff, the committee establishes the final criteria to be employed in staff reductions, and these are circulated to the faculty and staff.
- In accordance with the implementation timetable, academic and administrative units convene their faculties and staffs to prepare reduction-in-force impact reports for consideration by the committee. These reports are collated and summarized at the college or equivalent administrative level and forwarded to the committee.
- After receiving (by the date specified in the timetable) and considering the staff-reduction impact reports, the committee drafts preliminary recommendations for implementation.
- The preliminary recommendations are presented to the Faculty Senate and the Staff Affairs Committee to provide opportunity for consideration of alternatives. The leaders of the Faculty Senate and the Staff Affairs Committee arrange to have the committee present the recommendations to the faculty and staff at a general meeting or meetings. (ed. 7-09)
- After the presentations, the Faculty Senate and the Staff Affairs Committee may draft alternative recommendations and forward them to the committee for consideration. (ed. 7-09)
- After considering the suggested alternatives submitted by the faculty and staff, the committee drafts its recommendations and forwards them to the president and to the affected units.
- Tenured faculty members who are identified for termination as a result of the committee’s recommendations may present additional information to the committee.
- After considering any further information, the committee forwards its final recommendations to the president.
D. STAFF-REDUCTION CRITERIA. In making any staff-reduction recommendation to the board, the president’s first criterion must be the preservation of the quality and effectiveness of UI’s programs. Consequently, those employees who are deemed to be of key importance to the specific program will be retained in preference to other employees, whatever their status. "Programs," for the purposes of this paragraph, include, but are not limited to, academic areas and noninstructional, administrative, maintenance, and other support areas.
D-1. Classified Employees. The procedure described in 3930 B-1 is used to differentiate among classified employees within the unit or other entity being reduced in force.
D-2. Exempt Employees. Criteria that the president must use to differentiate among exempt employees within the unit or other entity being reduced in force include, but are not limited to, tenure, rank, time in rank, length of service, field of specialization, maintenance of necessary programs or services, including affirmative-action programs, and quality of service and work.
E. RELOCATION. At the time it is preparing and implementing a program for reduction in force, UI must, to the extent practicable, make a good-faith effort to relocate any employee to be laid off in a suitable vacant position for which that employee is fully qualified. (A UI employee to be laid off does not have a right to "bump" another employee from a position to maintain employment.) This good-faith effort to relocate an employee need not extend beyond the effective date of the layoff, but the employee does enjoy the layoff-roster rights provided in N, O, or P (below).
F. FORM OF NOTICE. The board recognizes that any layoff may be a severe economic and personal loss to an employee. Therefore, and within the time specified in G (below), the president must give notice in writing to employees who are affected by a reduction in force, which notice must include the following: (1) the effective date of the layoff, (2) a statement of the reasons for the board’s action to declare a financial exigency, (3) the basis, the procedures, and the criteria used to lay off an employee, (4) information about the employee’s opportunity for reconsideration or appeal, including access to appropriate documentation, and the issues that may and may not be considered on appeal, and (5) information on the employee’s reinstatement rights.
G. TIME OF NOTICE. UI must make every effort to give as much notice as is practical in light of the financial exigency to each employee in advance of the effective date of the layoff. Yet, the legislative appropriation process and the subsequent analysis needed before the board declares a condition of financial exigency and receives, considers, and approves implementing programs may allow little time for formal notice to the employees who are to be laid off. The active consultation with its employees that the board requires of UI (see B-4) should give to each employee as much actual, informal notice of the impending action as is humanly possible under the circumstances. However, the board requires that UI provide the following minimum written notice:
G-1. Of the President’s Recommendation of Layoff. To affected employees except classified employees--at least 30 days before the recommendation is considered by the board.
G-2. Of the Board’s Approval of Layoff. To affected employees according to their employment categories, as follows:
a. Classified employees and exempt employees serving under fixed-term appointments, including nontenured faculty members occupying permanent faculty positions--at least 60 days before the effective date of layoff.
b. Employees serving at the pleasure of the board--at least 30 days before the effective date of layoff.
c. Tenured faculty members occupying permanent faculty positions--at least one full semester before the effective date of layoff, except that UI, at its option, may provide these faculty members up to a full year’s notice.
H. APPEAL RIGHTS OF CLASSIFIED EMPLOYEES. The layoff of a classified employee is a grievable matter, but, unless otherwise required by law or regulation, the grievance procedure does not delay the effective date of the layoff. The decision of the president is final and not appealable to the board. The grievance procedure is described in Q (below).
I. APPEAL RIGHTS OF EXEMPT EMPLOYEES. (rev. 12-06)
I-1. In most instances, a reduction in force of employees serving under fixed-term appointments (see 3080 D) will be accomplished by nonreappointment rather than by layoff during the term of employment. Nonrenewal under these circumstances is not appealable within UI, nor is it appealable to the board. In the event an employee serving under a fixed-term appointment is laid off during the term of employment because of a reduction in force under financial exigency, that employee is entitled to use the appeal procedure described in Q (below). The decision of the president following the appeal procedure is final and not appealable to the board. Use of the appeal procedure does not delay the effective date of the layoff.
I-2. Notwithstanding the provisions of I-1, termination of employees serving at the pleasure of the board (see 3080 D-2-b) in furtherance of a reduction in force is not appealable.
APPEAL RIGHTS OF NONTENURED FACULTY MEMBERS. A nontenured faculty member who occupies a permanent faculty position and is laid off is entitled to use the appeals procedure described in Q (below). The decision of the president, after reviewing the final written recommendation of the hearing body, is final and not appealable to the board. If a nontenured faculty member is given notice of nonreappointment, as provided in 3900, in furtherance of a reduction in force, that action is not appealable except as provided in 3900 E and F. (ed. 7-01)
K. APPEAL RIGHTS OF TENURED FACULTY MEMBERS. A tenured faculty member is entitled to use one or the other of the following appeal procedures, but not both (see Q-2-b for time requirements):
K-1. Within 15 calendar days following certified receipt of notice that the president intends to recommend layoff to the board, the tenured faculty member may submit to the president a written request appealing that recommendation. In the written request, the faculty member must set forth the grounds on which the layoff is alleged to be improper and ask for an informal resolution of the issue in advance of final action by the board. If an informal resolution is not reached, the faculty member may appear before the board before its final action on the president’s recommendation of layoff. The faculty member’s appearance before the board will be informal and will not be treated as a contested case. The decision of the board is final.
K-2. Following final action by the board, the tenured faculty member is entitled to use the appeals procedure described in Q (below). The decision of the president, after reviewing the written recommendation of the hearing body, is final and not appealable to the board. In the event the president determines that the original recommendation was made in error, a corrective recommendation must be submitted to the board.
L. APPEAL PROCEDURE FOR FACULTY MEMBERS. A faculty member, other than a part-time or temporary faculty member, who is recommended for layoff is entitled to a prompt hearing under the procedure described in Q. Use of the hearing procedure does not delay the effective date of the layoff.
L-1. The hearing body must evaluate whether the established and approved procedures were followed and appropriate criteria applied in arriving at the decision to lay off the faculty member.
L-2. The hearing body will not review the board’s decision or the funding distribution among and within the institutions.
M. STANDARD OF REVIEW. The sole basis on which a layoff of classified employees may be contested is that of compliance with the provisions of 3930 B-1, with this section, and with the program for reduction in force approved by the board. The sole basis on which a layoff of exempt employees may be contested is that of compliance with this section and with the program for reduction in force approved by the board. The board’s declaration of financial exigency is judgmental or discretionary and is not subject to contest by any employee in any grievance or appeal procedure.
N. CLASSIFIED EMPLOYEES’ LAYOFF ROSTER. In the event of a layoff of classified employees, UI maintains a layoff roster as provided in 3930 B.
N-1. If an offer of reinstatement is not accepted, the employee’s name may be deleted from the layoff roster and, if so deleted, the board has no further obligation to the employee.
N-2. An employee who is laid off may continue to contribute toward and receive the benefits of any UI insurance program if the laws, rules, regulations, policies, and procedures governing the administration of such insurance program so permit.
N-3. An employee who has been laid off and who accepts reemployment in any state agency must be credited with any sick leave he or she had accrued as of the date of layoff and with any annual leave he or she had accrued as of the date of the layoff and for which payment has not been made.
O. REINSTATEMENT RIGHTS OF TENURED FACULTY MEMBERS. In case of layoff of a tenured faculty member occupying a permanent faculty position, the position concerned may not be filled by replacement within a period of three years from the effective date of the layoff unless the faculty member has been offered a return to employment in that position and has not accepted the offer within 30 calendar days after the offer is extended.
O-1. The provisions of N-1 (with "reinstatement list" substituted for "layoff roster") and N-2 apply also to tenured faculty members.
O-2. A tenured faculty member who has been laid off and who accepts reemployment at UI will resume tenure and the rank held at the time of layoff, be paid a salary commensurate with the rank and length of previous service, be credited with any sick leave accrued as of the date of layoff, and be credited with any annual leave accrued as of the date of layoff for which payment has not been made.
P. REINSTATEMENT RIGHTS OF OTHER EXEMPT EMPLOYEES. In case of layoff of a nontenured faculty member occupying a permanent faculty position or of an exempt employee occupying a permanent position, the position concerned may not be filled by replacement within a period of one year from the effective date of the layoff unless the employee has been offered a return to employment in that position and has not accepted the offer within 30 calendar days after the offer is extended. (rev. 12-06)
P-1. The provisions of N-1 (with "reinstatement list" substituted for "layoff roster") and N-2 apply also to these employees.
P-2. The provisions of O-2, except for reference to tenure, apply also to nontenured faculty members; and, except for reference to tenure and rank, they apply also to exempt employees. (rev. 12-06)
Q. APPEALS PROCESS. This process applies only to employees under notice that they are to be laid off because of a declared financial exigency.
Q-1. Formation and Composition of Hearing Bodies. On the board’s declaration of a state of financial exigency, the president initiates the following process for establishing hearing bodies.
a. Four hearing bodies are formed, one for each of the following groups: classified employees, exempt employees, faculty members, and off-campus faculty members. Each hearing body consists of nine persons, chosen as described below, from which five are chosen to hear each appeal. (rev. 12-06)
- The hearing body for classified employees is selected as follows: (a) three classified employees designated by the Staff Affairs Committee, (b) three classified employees designated by the president, and (c) three classified employees elected by the first six chosen.
- The hearing body for exempt employees is selected as follows: (a) three exempt employees designated by the Staff Affairs Committee, (b) three exempt employees designated by the president, and (c) three exempt employees elected by the first six chosen. (rev. 12-06)
- The hearing body for faculty members is selected as follows: (a) three faculty members, at least two of whom are tenured, designated by the Faculty Affairs Committee, (b) three faculty members, at least two of whom are tenured, designated by the president, and (c) three faculty members, at least two of whom are tenured, elected by the first six chosen.
- The hearing body for off-campus employees with faculty status is selected as follows: (a) three off-campus employees with faculty status designated by the Faculty Affairs Committee, (b) three faculty members designated by the president, and (c) three faculty members elected by the first six chosen.
b. Limitations. No person who has received notice of layoff as a result of financial exigency, has received notice of termination or nonrenewal for any other reason, or has any appeal or lawsuit pending against UI may be chosen to serve on a hearing body. Nor may any person who has participated in any decision to lay off any particular employee for reasons of financial exigency be chosen.
c. Standards for Electing Additional Members. The six members designated by constituent groups and the president for each hearing body must endeavor to ensure that the three additional persons elected have some experience or special expertise with administrative hearings and are otherwise not likely to be advocates for either side.
d. Conflict of Interest. Any member of a hearing body who has any special relationship to any particular appellant or to the administration, which might reasonably be said to raise a claim of conflict of interest, must report the facts to the parties, and the parties may use that information in exercising challenges.
e. Selecting the Panel for Each Hearing. As soon as practicable after the hearing process is invoked, the provost calls a meeting with the appellant to select a hearing panel. From the hearing body appropriate to the appellant, the provost and the appellant may each peremptorily strike two persons. These challenges are exercised alternately, beginning with the provost. The five persons remaining constitute the panel for that appeal and are promptly notified of that fact.
f. Presiding Officers. As soon as possible after it is selected, each five-member hearing panel selects one of its number to serve as its presiding officer.
Q-2. Procedures for Initiating an Appeal.
a. An employee who wishes to appeal a decision for termination due to financial exigency may do so by submitting a written request for a formal hearing. (These procedures are not available to a tenured faculty member who has used the appeal procedure described in K-1.) The request must be made within 15 calendar days after he or she receives written notice of the decision for termination. In the request the appellant must state clearly the grounds on which the appeal is based.
b. A request for a hearing is addressed to the president. The president or the president’s designee furnishes the appellant a written statement of the reasons for the administrative decision. Copies of the appellant’s request and the administration’s response are transmitted to the hearing panel.
c. If the president takes action that results in the appellant’s satisfaction, the appeal need not be brought to the hearing panel.
Q-3. Activating the Panel.
a. Before selection of the hearing panel, the hearing body (see Q-1-a) is provided an orientation to board and UI policies regarding financial exigency, the circumstances leading up to the declaration of financial exigency, and the procedures followed in planning for staff reduction. Appellants may be present at the orientation.
b. The specific hearing panel is selected in accordance with the procedures described in Q-1-e.
c. The hearing panel convenes as soon as possible, and in any case within 14 calendar days, after the written request is received by the president.
Q-4. Hearing Proceedings.
a. The hearing process is not a judicial proceeding. The procedural requirements of formal adjudication are not mandatory; nonetheless, the minimum standards of procedure outlined below must be observed.
(1) The appellant and the hearing panel agree on the conduct of the hearing and specify a format (i.e., the steps to be followed in presentation of information); for example:
(a) A statement of the appellant’s grounds for appeal and supporting documentation.
(b) A statement of the university’s case for the decision to terminate the appellant.
(c) Further arguments in behalf of the appellant.
(d) Further arguments in behalf of the university.
(2) The hearing must focus on the issues contained in the filed written appeal.
(3) Copies of written documents specified in Q-2-b are made available to all parties.
(4) The hearing panel and the appellant must be afforded access to appropriate documentation that was used in reaching a layoff decision.
(5) Tape recordings must be made of each hearing session and, on written request and payment of the cost of duplication, the appellant may obtain duplicate copies.
(6) Summary notes of the hearing must be kept by the presiding officer.
(7) The written appeal and subsequent information presented by the appellant must be made a part of the summary notes.
(8) The appellant must be afforded the opportunity to appear before the hearing panel and discuss the issues contained in the written appeal.
(9) The appellant may have an adviser of his or her choice who may discuss before the hearing panel the issues contained in the written appeal filed by the appellant.
(10) Witnesses may be asked to appear before the hearing panel by the appellant, the administration, or by the presiding officer and asked to give testimony that is material and directly relevant to the layoff decision. Those asked to appear have the responsibility to respond as though summoned by the president. Each party may request the presiding officer to ask specific questions of an adverse witness, and the presiding officer must comply if the questions posed appear to be probative, relevant, and fair. Direct questions by a party to an adverse witness are allowed only if they are asked without undue antagonism and are truly questions and not argument.
(11) Members of the hearing panel may directly question any witnesses or participating parties for the purpose of seeking additional information or for clarifying issues.
b. After concluding the hearings, the hearing panel conducts its deliberations and submits its written findings to the president and the appellant within 10 calendar days. The findings must include a summary statement of the substantive evidence considered, the panel’s recommendations, and its rationale for these recommendations.
c. The president’s action on the panel’s recommendations is final and not appealable to the board. In the event the president determines that his or her decision was made in error, a corrective recommendation must be made to the board.
R. BOARD REVIEW. Notwithstanding the appeal provisions of H, I, J, K, L, and Q (above), an employee may elect to petition the board to review UI’s final action. Any written petition for review must be filed at the Office of the State Board of Education within 15 calendar days after the employee receives notice of final action under the appeal procedure. The board may agree to review the final action, setting out whatever procedure and conditions for review it deems appropriate, or it may choose not to review the final action. The fact that a review petition has been filed does not stay the effectiveness of the final action, nor does the grant of a petition for review, unless specifically provided by the board. Board review is not a matter of right. An employee need not petition for board review in order to exhaust administrative remedies for the purposes of judicial review.