The resignation yesterday of Secretary Raymond J. Donovan ends an unprecedented six months of limbo in which the 18,000-employe Labor Department functioned without clear leadership and was paralyzed by an inability to make key decisions that awaited Donovan's possible return, according to department sources.
In his 44 months in office until taking leave last October after he was indicted, Donovan vigorously carried out President Reagan's philosophy at the department, sharply cutting major spending programs and putting regulatory activities into a much more conciliatory gear.
Donovan's strained relations with most of organized labor and with critics in Congress -- coupled with his 5 1/2-month absence -- had prompted growing complaints that the department was adrift under the caretaker stewardship of Ford B. Ford, Donovan's undersecretary who ran the department and maintained a low profile in his absence.
"This department has just not been operating in the last six months . . . . Everyone's been waiting," said a top Republican appointee, who spoke on condition of anonymity. "We have been under orders not to talk to the press because they want to keep the lid on" the department's inactivity.
As recently as this week, top Donovan aides were optimistic about his prompt return, and several Labor Department political appointees had been soliciting contributions among senior staffers for a welcome-back party or other celebration in the event Donovan was cleared of criminal charges.
During his leave of absence, Donovan periodically visited the department, but Ford, 62, a longtime California state official and Reagan associate, has presided at the weekly policy meetings.
At one recent session, top aides acknowledged privately that the department was performing "terribly" in its key 1985 legisla- tive initiative, the proposed "subminimum" wage for teen-agers seeking summer jobs, according to a participant.
The department's relations with most of organized labor were the worst in modern times, according to AFL-CIO officials. They viewed Donovan as presiding over the virtual abandonment of enforcement under the Occupational Safety and Health Administration (OSHA), the Mine Safety and Health Administration (MSHA), and other branches of the department.
OSHA, which like other department branches has had substantial budget cuts, has issued only two major rules dealing with toxic substances during the Reagan administration, prompting criticism from labor and management. OSHA citations for serious violations dropped 41 percent between 1980 and 1984 as part of the department's program of "voluntary compliance."
"They have completely destroyed the intent of Congress as far as health and safety in the workplace. Their aim is to tell violators to just correct things without imposing penalties," said Rep. William L. Clay (D-Mo.), chairman of the House subcommittee on labor-management relations. Clay, who has served on the subcommittee 16 years, said that more than any predecessors Donovan repeatedly snubbed requests by House committees to explain department policies and staff changes.
The Labor Department has been among the top budget-slashers in response to Reagan administration requests, and critics faulted Donovan for not fighting for department programs.
Supporters of Donovan, among them Sen. Orrin G. Hatch (R-Utah), chairman of the Senate Labor Committee, said OSHA's cooperative approach to job safety has succeeded in reducing injury rates.
They also credited Donovan with pursuing pension reform and successfully overseeing the birth of new job-training programs under the Job Training Partnership Act that replaced the Comprehensive Employment and Training Act.
AFL-CIO President Lane Kirkland, a vocal critic of Reagan and Donovan, said yesterday, "The AFL-CIO hopes that the president will now nominate a person who enjoys the respect and confidence of labor, as well as management, and the public at large . . . . We seek an individual who will vigorously pursue the statutory obligations of the Department of Labor."
Ford, who was appointed by Reagan in 1981 to head MSHA, will continue running the department until a successor to Donovan is named and confirmed.