Jones v Gateway, Inc – 4.17

Jones v Gateway, Inc
Digest no. 4.17

Section 48

Cite as: Jones v Gateway, Inc, unpublished opinion of the Michigan Employment Security Board of Review, issued February 23, 1983 (Docket No. 1983 BR 86593W).

Appeal pending: No
Claimant: Robert H. Jones
Employer: Gateway, Inc.
Docket no.: B82 18088 86593W
Date of decision: February 23, 1983

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BOARD OF REVIEW HOLDING: Where the claimant has no contractual entitlement to notice, any money paid by the employer upon termination is in the nature of a gift and therefore severance pay, which cannot be considered remuneration for purposes of Section 48.

FACTS: The claimant was employed as an executive director. The claimant received a call from the president of the employer’s executive committee requesting that the claimant submit his resignation the following day. In the ensuing conversation, the claimant requested “severance pay” of 6 months, and the president said he did not anticipate that “severance” would be a problem. Thereafter an executive committee meeting was called and it was agreed to award the claimant a sum equal to three months wages even though the claimant’s employment contract had no provision for notice in advance of discharge, pay in lieu of such notice or any severance arrangement.

DECISION: Claimant is entitled to benefits.

RATIONALE: The claimant had no contractual agreement entitling him to notice or to pay in lieu thereof. Therefore, he had no enforceable right to the money which was paid to him. Consequently, it was in the nature of a gift or bonus and as a result must be considered severance pay.

Digest Author: Board of Review (original digest here)
Digest Updated:
6/91