Vanderlaan v Tri-County Community Hospital – 4.25

Vanderlaan v Tri-County Community Hospital
Digest no. 4.25

Section 48(2)

Cite as: Vanderlaan v Tri-County Community Hosp, 209 Mich App 328 (1995).

Appeal pending: No
Claimant: James Vanderlaan
Employer: Tri-County Community Hospital
Docket no.: B91-00104-117753
Date of decision: March 20, 1995

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COURT OF APPEALS HOLDING: The MES Act does not require a contractual right to notice or payment in lieu of notice in order for monies received to be considered “amounts paid… in lieu of notice” thus rendering claimant ineligible for benefits.

FACTS: Claimant was discharged on June 14, 1990. Employee handbook provided that employer would give four weeks’ notice to terminate, but could instead, pay four weeks’ salary instead of notice. Claimant continued to receive regular pay checks for six weeks after he stopped working. The first four weeks were considered salary instead of notice by the employer and the last two were severance pay. The issue in this case was whether the four weeks pay were in lieu of notice and, therefore, remuneration. If so, claimant was not entitled to unemployment compensation for those weeks.

DECISION: Claimant received four weeks pay in lieu of notice (remuneration) following his termination and is ineligible for benefits.

RATIONALE: It is not necessary to prove a contractual right to notice in order to show pay in lieu of notice. The rules of statutory construction should be applied to give every word and phrase of Section 48(2) its plain and ordinary meaning. Contractual right is only one factor which may be considered in deciding whether or not claimant received remuneration. Other factors are employer’s custom or policy and employee’s expectation of payment.

Digest Author: Board of Review (original digest here)
Digest Updated:
7/99

MESC v Worth – 4.24

MESC v Worth
Digest no. 4.24

Section 44(5)

Cite as: MESC v Worth, unpublished opinion of the Oceana Circuit Court, issued February 13, 1995 (Docket No. 94-004703-AE); lv den, Mich App, July 7, 1995 (No. 184836); lv den, Mich, April 29, 1996 (No. 103801).

Appeal pending: No
Claimant: Jane Worth
Employer: Michigan Department of State
Docket no.: B92-27803-124350W
Date of decision: February 13, 1995

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CIRCUIT COURT HOLDING: Payments made from insurance, annuities or a fund for disability coverage are not remuneration or considered wages under the Michigan Employment Security Act. However, “sick pay” is remuneration and constitutes wages under the Michigan Employment Security Act and as such must be considered when computing benefit rates.

FACTS: The claimant worked for the employer from December 1976 until November 1991. She was laid off for lack of work. The employer did not include in its wage calculations submitted to the MESC the amounts paid the claimant in the form of sick pay. The employer’s computation of the claimant’s average weekly wage was $413.70 which would entitle the claimant to $224.00 a week in benefits. The claimant computed her average weekly wage as $445.47 which would entitle her to $240.00 a week in benefits. The claimant used her gross wages without deducting any amounts received in the form of sick payments. At issue was the $16.00 per week difference in benefits.

DECISION: “Sick pay” is wages and therefore, claimant’s average weekly wage was $445.47 which entitled the claimant to $240.00 a week in benefits

RATIONALE: Payments made from insurance, annuities or on account of accidents are not wages any more than an accident, retirement or death benefit would be considered a wage. Similarly, sickness disability payments are either insurance benefits payments or a form thereof and are not wage payments. However sick pay amounts to a decision of an employer to pay the day wages to an employee when the employee is ill. The sick payments are remuneration and wages under the Michigan Employment Security Act.

Digest Author: Board of Review (original digest here)
Digest Updated:
7/99

Kenkel v Tremec Trading Co – 4.30

Kenkel v Tremec Trading Co
Digest no. 4.30

Section 48

Cite as: Kenkel v Tremec Trading Co, unissued opinion of the Oakland County Circuit Court, issued January 30, 1995 (Docket No. 94-476557).

Appeal pending: No
Claimants: Matthew Kenkel
Employer: Tremec Trading Co.
Docket no.: B93-05246-126675W
Date of decision: January 30, 1995

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CIRCUIT COURT HOLDING: Self-employment does not, per se, disqualify an individual from receiving benefits so long as they receive no remuneration and remain genuinely attached to the labor market.

FACTS: Claimant’s job with employer was eliminated in April 1992. At that time, Claimant purchased 50 percent interest in a real estate franchise. Claimant was not involved in day to day running of business, but did assist with long term planning. He received no compensation for services provided. He testified that he was at all times available for and seeking work. Any time he spent at the business was to increase the equity of his holding.

DECISION: Claimant was unemployed within the meaning of Section 48.

RATIONALE: Claimant’s situation was compared and contrasted with that of claimants in Phillips v UCC, 323 Mich 188 (1948) and Bolles v ESC, 361 Mich 378 (1960). Found to be similar to facts of Bolles which enunciated test of whether or not claimant remained genuinely attached to the labor market despite his self-employment. Distinguish from Phillips, because claimant had not returned to a profession in which he had previously worked and he earned no remuneration. Citing Bolles, the court noted the intent of the Act is to foster industry and self-help, not idleness and inactivity.

Digest Author: Board of Review (original digest here)
Digest Updated:
7/99

Urban (State of Michigan) – 4.19

Urban (State of Michigan)
Digest no. 4.19

Section 48

Cite as: Urban v Secretary of State, unpublished opinion of the Michigan Employment Security Board of Review, issued August 1, 1986  (Docket No. B85 13293 102223W).

Appeal pending: No
Claimant: Pamela A. Urban
Employer: Secretary of State (State of Michigan)
Docket no.: B85 13293 102223W
Date of decision: August 1, 1986

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BOARD OF REVIEW HOLDING: A “waived rights leave of absence” is not a leave of absence within the meaning of Section 48 of the MES Act.

FACTS: The claimant was a member of the Michigan State Employees Association. The contract executed between that organization and the State of Michigan provided for various types of leaves of absences. Article 16, Section D of that agreement provides that an employee may request a “waived rights leave of absence” of up to one year in those situations when an employee must leave his or her position for reasons beyond his or her control and for which a regular leave of absence is not granted. Employees requesting and granted a “waived rights leave of absence” do not have the right to return to state service at the end of the leave but will have the continuous nature of their service protected provided they return to work prior to the expiration of such leave.

In the instant matter the claimant sought and secured a “waived rights leave of absence”. While on the “waived rights leave of absence” the claimant filed for unemployment benefits. The employer asserted the claimant was ineligible under Section 48(3) of the MES Act which reads “An individual shall not be deemed to be unemployed during any leave of absence from work granted by an employer either at the request of the individual or pursuant to an agreement with the individual’s duly authorized bargaining agent, or in accordance with law.”

DECISION: The claimant is not ineligible for benefits.

RATIONALE: In American Telephone and Telegraph Company v MESC, 376 Mich 271 (1965) the Michigan Supreme Court held that a leave of absence meant a temporary authorized release from one’s duties for a stated period with the right or duty to return at the end of the period. The claimant in this matter had no right to return at the end of the period at issue. Therefore the Board found the claimant was not on a leave of absence as defined in American Telephone and Telegraph and consequently was not ineligible under Section 48(3).

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

Cox v Tri-County Labor Agency – 4.20

Cox v Tri-County Labor Agency
Digest no. 4.20

Section 48, 62

Cite as: Cox v Tri-County Labor Agency, unpublished opinion of the Calhoun Circuit Court, issued March 13, 1986 (Docket No. 85-1861AE).

Appeal pending: No
Claimant: Wayne O. Cox
Employer: Tri-County Labor Agency
Docket no.: B84 06074 97817W, 97818W
Date of decision: March 13, 1986.

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CIRCUIT COURT HOLDING: Receipt of a lump sum settlement of an arbitration award constituted back pay and hence remuneration within the meaning of the MES Act.

FACTS: The claimant was employed as an executive director by the employer until his termination. After his termination an arbitrator issued a decision which reinstated the claimant and ordered the employer to pay the claimant back pay. Shortly after the claimant was reinstated the employer again terminated him. At this point the claimant and the employer negotiated an agreement whereby which the employer paid the claimant a sum in satisfaction of the arbitration award. Claimant was paid unemployment benefits while the arbitration was pending. After claimant received the arbitration settlement the MESC sought restitution of the benefits received.

DECISION: The sum received by the claimant in settlement of the arbitration award included back pay. Thus it constituted remuneration within the meaning of the MES Act and therefore claimant was ineligible for benefits during the relevant period. Restitution was properly ordered.

RATIONALE: The arbitration award specifically indicated the employer would both reinstate the claimant and pay him back wages. The back wages payable to the claimant would have been remuneration. The claimant’s receipt of a sum in lieu of reinstatement and back wages must also be considered remuneration since it was received in satisfaction of the same.

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

Van Wormer Industries v MESC – 4.03

Van Wormer Industries v MESC
Digest no. 4.03

Section 48

Cite as: Van Wormer Industries v MESC, unpublished opinion of the Macomb Circuit Court, issued February 28, 1985 (Docket No. 84-2768 AE).

Appeal pending: No
Claimant: Jerry L. McCullough
Employer: Van Wormer Industries
Docket no.: B83 21674 96043W
Date of decision: February 28, 1985

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CIRCUIT COURT HOLDING: Where an employer fails to properly allocate vacation pay to a period of lay-off, the vacation pay is not remuneration under Section 48 of the Act.

FACTS: On May 2, 1983, the employer posted a notice that the entire plant would be closed for a one week vacation period effective June 30, to July 11, 1983. The contract provided that employer could not shutdown the plant unless such action was announced by the employer not later than May 1st. May 1st was a Sunday. On May 2, 1983, the claimant requested and was granted vacation time for the period July 16, to July 31. Claimant filed for unemployment for the period of the plant shutdown.

DECISION: The claimant is eligible for benefits for the period of the plant shutdown under Section 48.

RATIONALE: “It is settled that an employer may lawfully designate a period during lay-off for the allocation of vacation, Brown v LTV Aerospace Corp, 394 Mich 702, .” In this case, the employer did not make a proper allocation.

“The terms of the collective bargaining agreement specify that the plant may be closed for a two week vacation period, announced by the employer not later than May 1st. (emphasis provided). It is undisputed that on May 2nd, the employer posted a notice stating the plant would be closed for a one week vacation period effective June 30, 1983 at 4:00 p.m. through July 11, 1983 at 7:30 p.m. The notice did not comply with specified requirements. …

” … it must be kept in mind that the Michigan Employment Security Act is remedial in nature and is to be liberally construed to provide coverage, and its disqualification provisions are to be narrowly interpreted. Kempf v Michigan Bell Telephone Co 137 Mich App 574 (1974).”

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

Hamilton v W A Foote Memorial Hospital – 4.18

Hamilton v W A Foote Memorial Hospital
Digest no. 4.18

Section 4850

Cite as: Hamilton v W A Foote Memorial Hosp, unpublished opinion of the Jackson Circuit Court, issued October 3, 1984 (Docket No. 84-33223-AE).

Appeal pending: No
Claimant: Joseph W. Hamilton
Employer: W. A. Foote Memorial Hospital
Docket no.: B83 09754 93402W
Date of decision: October 3, 1984

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CIRCUIT COURT HOLDING: Payments made to claimant after his separation and after he stopped performing services were severance pay, in light of the fact both parties characterized them as such and claimant had no right to payment in lieu of notice.

FACTS: The claimant worked for the employer as a controller. The employer requested the claimant’s resignation. After the claimant resigned the employer continued to pay the claimant on a bi-weekly basis for a six month period. Notably, both parties referred to the payments as “severance pay”. Upon filing for benefits the claimant asserted the monies received were remuneration under the Act and could be used to establish credit weeks.

DECISION: No remuneration was earned and no credit weeks could be established based on the payments in question.

RATIONALE: It is necessary to determine the understanding of the parties at the time of the separation. Here, both parties referred to the payment as severance pay. Further, the claimant did not perform any services during the six month period.

The court quoted from Bolta Products v Director of Employment Security, 356 Mass 684 (1970), : “A payment in lieu of dismissal notice may be defined as a payment made under the circumstances where the employing unit, not having given an advance notice of separation to an employee, and irrespective of the length of service to the employee, makes a payment to the employee equivalent to the wages which he could have earned had he been permitted to work during the period of notice. Severance pay, on the other hand, may be defined as a payment to an employee at the time of his separation in recognition and consideration of the past service he has performed for the employer and the amount is usually based on the number of years of service.”

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

Golden v Huron Valley Schools – 4.23

Golden v Huron Valley Schools
Digest no. 4.23

Section 48

Cite as: Golden v Huron Valley Schools, unpublished opinion of the Oakland Circuit Court, issued April 25, 1984 (Docket No. 83-258818-AE).

Appeal pending: No
Claimant: William P. Golden
Employer: Huron Valley Schools
Docket no.: B82 03503 R01 85873W
Date of decision: April 25, 1984

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CIRCUIT COURT HOLDING: A claimant is considered an employed person under Section 48 of the Act when a claimant’s request for a leave of absence in lieu of being fired is granted even if the leave is for an indefinite period and with no guarantee of re-employment.

FACTS: Claimant worked for the employer from September, 1954 until June, 1980. In August, 1980 he was charged criminally with embezzlement and commingling of funds. He was suspended with pay from August, 1980 until August, 1981. In June, 1981 he was convicted of the charged felonies. A hearing was scheduled to discharge claimant, however, the claimant and the employer reached a settlement. It was agreed claimant would request a leave of absence and the employer would grant the leave of absence until all his appeal rights were exhausted. Claimant began a leave of absence August 3, 1981 which continued through the date of the Referee hearing on March 22, 1982.

DECISION: Claimant was employed under Section 48 on August 3, 1981 and thereafter while on an approved leave of absence and was therefore ineligible for benefits.

RATIONALE: “The phrase ‘leave of absence’ is not defined in the statute. Appellant’s suggested strict limitation of its meaning to only those leaves of absence where the employee has an ‘absolute right’ to return to work apparently arises from his understanding of American T. & T. Co. v Employment Security Commission, 376 Mich 271 (1965), and a now repealed provision of the Act, former Section 29(1)(d) … A plain reading of the statute does not justify such a limited definition.

Appellant’s reliance on American T.&.T. Co. v Employment Security Commission, supra, is misplaced. This Michigan Supreme Court decision was controlled by a now repealed section of the Act providing for pregnancy leaves. Even assuming the provision was presently in effect, its definition of ‘leave of absence’ is clearly confined to pregnancy leaves.”

Digest Author: Board of Review (original digest here)
Digest Updated:
12/91

Tenneco Inc v MESC – 4.14

Tenneco Inc v MESC
Digest no. 4.14

Section 48

Cite as: Tenneco Inc v MESC, unpublished opinion of the Jackson Circuit Court, issued December 30, 1983 (Docket No. 82-29572 AE).

Appeal pending: No
Claimant: John J. Brieger
Employer: Tenneco, Inc. – Walker Mfg.
Docket no.: B80 23129 RO1 76344
Date of decision: December 30, 1983

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CIRCUIT COURT HOLDING: Where an employer allocates vacation pay to periods of lay-off, but fails to comply with the notice requirements of Commission Administrative Rule 302, the payment is not remuneration under Section 48.

FACTS: The claimant made a request for vacation pay. On June 6, 1980, he received a check representing his vacation pay with his vacation beginning the following week. The collective bargaining agreement provided that the company could schedule a shutdown of plant operations for a period in July or August, on the condition that 90 days prior notice be given. Written notice of a shutdown scheduled for August 28, was posted at plant locations on May 9, and July 2, 1980.

DECISION: The vacation payment is not remuneration under Section 48.

RATIONALE: “[T]he employment contract provides for plant closures, but makes no provision for allocation of vacation pay to those periods. The effectiveness of the allocation must hinge upon the company’s compliance with the provisions of Rule 302.”

Neither of the posted notices referred to the allocation of vacation pay or that employees might be ineligible for unemployment benefits upon receipt of the vacation pay.

“Since the notices in this case do not meet with the requirements of Rule 302, the decision of the MESC allowing benefits … is affirmed.”

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

Barnett v Good Housekeeping Shop – 4.05

Barnett v Good Housekeeping Shop
Digest no. 4.05

Section 44

Cite as: Barnett v Good Housekeeping Shop, unpublished opinion of the Court of Appeals of Michigan, issued March 14, 1983 (Docket No. O/P B78 53596 60992); lv den 418 Mich 873 (1983).

Appeal pending: No
Claimant: Rebekah Barnett
Employer: Good Housekeeping Shop
Docket no.: O/P B78 53596 60992
Date of decision: March 14, 1983

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COURT OF APPEALS HOLDING: The distinction in Section 44(5)(a) and (c) of the MES Act as to the treatment of disability payments as wages depending on whether the disability benefits are paid directly to an employee or through a disability plan does not constitute a denial of equal protection.

FACTS: Claimant, a 12 year employee, was on a medical leave and received 26 weeks of medical disability benefits through a disability insurance plan provided by the employer. When her disability ended claimant’s employment was terminated. She applied for unemployment benefits but had insufficient credit weeks because the disability payments were not considered wages under Section 44(5) because they were paid through an insurance plan rather than directly to the employee.

DECISION: Claimant does not have sufficient credit weeks to establish a claim because disability payments she received do not constitute wages under Section 44 of the Act.

RATIONALE: “Equal protection in its guarantee of like treatment to all similarly situated citizens permits classification which is reasonable and not arbitrary and which is based upon material and substantial differences which have reasonable relation to the object or persons dealt with and to the public purpose or purposes sought to be achieved by the legislation involved. The equal protection clause does not forbid discrimination with respect to things that are different. Gauthier v Campbell, Wyant & Cannon Foundry Co360 Mich 510, 514 (1960). We find as did the trial court, that the legislative purpose in the distinction of Section 44 is to encourage the establishment of plans and systems which would financially aid workers when they are ill and disabled and for which unemployment benefits are not payable because the individual employees are not qualified under section 28 of the act, because they are not able and available for work due to the sickness or disability.”

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