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Cite as: Van Wormer Industries v MESC, unpublished opinion of the Macomb Circuit Court, issued February 28, 1985 (Docket No. 84-2768 AE).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

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Cite as: Tenneco Inc v MESC, unpublished opinion of the Jackson Circuit Court, issued December 30, 1983 (Docket No. 82-29572 AE).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

Blanding v Kelsey Hayes – 4.06

Blanding v Kelsey Hayes
Digest no. 4.06

Section 48

Cite as: Blanding v Kelsey-Hayes Co, No. 80 022124 AE, unpublished opinion of the Wayne County Circuit Court, issued February 18, 1981 (Docket No. 80 022124 AE).

Appeal pending: No
Claimant: James Blanding, et al.
Employer: Kelsey-Hayes Co.
Docket no.: B76 13949(1) 60456 et al.
Date of decision: February 18, 1981

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CIRCUIT COURT HOLDING: Where a contract requires payment of vacation pay in March of each year, and allows designation of a vacation shutdown period, the March payment is not remuneration.

FACTS: The claimants received their vacation pay in March of each year, as specified in the union contract. Section 19 of the contract allowed designation of a vacation shutdown period. “At various times in 1975 and 1976 the management at the three plants invoked the company’s option, as provided in Section 19, to require vacations to be taken during a plant shutdown period.”

DECISION: The payments in question are not remuneration under Section 48 of the Act.

RATIONALE: The Court cited Renown Stove Co v UCC, 328 Mich 436 (1950), and Hubbard v UCC, 328 Mich 444 (1950). “The lesson of the Hubbard and Renown Stovecases is that the questioned payments, being payable at the specific time and without regard to whether vacation time is also taken, do not qualify in the first instance under Section 48 as ‘amounts paid … for a vacation,’ are bonuses instead, and are therefore not subject to the employer’s right of allocation.” “The rationale of the Supreme Court’s interpretation of Section 48 seems clear. Although vacation pay is deemed remuneration, a payment cannot be considered remuneration for the period of unemployment if the employee is entitled to the payment in all events without regard to the period of unemployment.”

Digest Author: Board of Review (original digest here)
Digest Updated:
11/90

McCaleb v Harbor Industries, Inc – 4.10

McCaleb v Harbor Industries, Inc
Digest no. 4.10

Section 48

Cite as: McCaleb v Harbor Industries, Inc, unpublished opinion of the Court of Appeals of Michigan, issued September 8, 1978 (No. 77-5202).

Appeal pending: No
Claimant: Victor E. McCaleb, et al.
Employer: Harbor Industries, Inc.
Docket no.: B75 15530 50209
Date of decision: September 8, 1978

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COURT OF APPEALS HOLDING: (1) Where contractual specification of vacation procedures includes designation of vacation periods but does not treat the allocation of vacation pay, the employer may allocate such pay as it chooses. (2) Arbitration has no role in the determination of eligibility for benefits.

FACTS: The employer allocated vacation pay to a week in which the claimants were on layoff. A subsequent arbitration decision dealt with the selection of a vacation period.

DECISION: The claimants received remuneration under Section 48 of the Act.

RATIONALE: The Court affirmed the Ottawa Circuit Court, which held: “We interpret Section 10.1 of the Collective Bargaining Agreement as dealing with the scheduling of vacations by the employer, and employee participation in selecting individual vacation periods. Nothing is said about the allocation of vacation pay to any particular period. Neither does the arbitrator’s decision reach such issue. (Properly so, because arbitration has no place in the Michigan system of administrative and judicial determination as to eligibility for statutory employment compensation benefits.) We reject appellant’s request to add contractual language by implication as being without justification, particularly in view of the statutory grant of power to the employer to allocate vacation pay as he chooses in the absence of ‘contractual specification.'”

Digest Author: Board of Review (original digest here)
Digest Updated:
11/90

Brown v LTV Aerospace Corp – 4.01

Brown v LTV Aerospace Corp
Digest no. 4.01

Section 48

Cite as: Brown v LTV Aerospace Corp, 394 Mich 702 (1975).

Appeal pending: No
Claimant: Russell W. Brown, et al.
Employer: LTV Aerospace Corporation
Docket no.: B70 773 38400
Date of decision: September 8, 1975

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SUPREME COURT HOLDING: (1) A pro-rata vacation allowance at the time of layoff is not a termination allowance and may be considered as vacation pay. (2) Where claimants are not numerous enough to require a class action, and their consolidated appeal is filed in a circuit other than Ingham, the appeal must be dismissed as to any claimant not residing in the circuit of filing.

FACTS: At the time of layoff, the claimants were paid a pro-rata share of their annual vacation pay. These payments were held to be remuneration under Section 48 of the Act. The claimants appealed to Macomb Circuit Court, where the appeal was dismissed as to claimant Boyer because he resided in Oakland County.

DECISION: (1) The pro-rata vacation pay was remuneration. (2) Boyer’s appeal was properly dismissed.

RATIONALE: (1) Analysis of the union contract ” … indicates that the agreement speaks of vacation pay to an employee regularly employed, of one ‘at the time of termination’ and one ‘terminated for lack of work and subsequently recalled’ in exactly the same way. The emphasis is all on guaranteeing vacation pay in accord with credit earned because of time worked. The system is integral and it is no different ‘at time of separation’ from either regular annual anniversary payments or payments of allowances for those terminated and then recalled.”

“The language of the statute is unambiguous, and it is clear that under [Section] 38 Boyer should have filed his appeal in either Oakland Circuit Court, the circuit court of the county in which he resided, or the Ingham Circuit Court.

Section 38 is a statutory grant of jurisdiction to certain circuit courts; if an appeal is improperly filed in the wrong court, that court has no option but to dismiss the action for lack of jurisdiction.”

Digest Author: Board of Review (original digest here)
Digest Updated:
11/90

Hickson v Chrysler Corp – 4.02

Hickson v Chrysler Corp
Digest no. 4.02

Section 48

Cite as: Hickson v Chrysler Corp, 394 Mich 724 (1975).

Appeal pending: No
Claimant: Joseph R. Hickson
Employer: Chrysler Corporation
Docket no.: B70 5047 RO 39184
Date of decision: September 8, 1975

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SUPREME COURT HOLDING: Where a labor agreement provides for the allocation of vacation pay to a portion of an indefinite layoff period, the payments are remuneration and not severance pay.

FACTS: “Soon after being laid off plaintiff received 28 days vacation pay from his employer in accordance with a Chrysler-UAW contract. The 28 days pay was comprised of:

1) 17-1/2 days vacation credit accrued in 1969 which prior to the layoff plaintiff and his employer had agreed the plaintiff would take between July 6 and July 29 and

2) 10-1/2 vacation days accrued in 1970 up to the time of the layoff which normally would not have been taken until 1971.”

DECISION: The claimant’s vacation pay constitutes remuneration under Section 48 of the Act.

RATIONALE: “In this case there can be no question that the Chrysler/UAW contract provided for the designation of the period for allocation of vacation pay.”

“Receipt of ‘termination, separation, severance, or dismissal allowances, and bonuses’ suggests payment independent of and perhaps in addition to vacation payments. The payments in question were clearly ‘for a vacation or a holiday.'”

Digest Author: Board of Review (original digest here)
Digest Updated:
11/90

Renown Stove Co v UCC – 4.21

Renown Stove Co v UCC
Digest no. 4.21

Section 48

Cite as: Renown Stove Co v UCC, 328 Mich 436 (1950).

Appeal pending: No
Claimant: George Sheldon, et al.
Employer: Renown Stove Company
Docket no.: B8 5900 1 9580
Date of decision: September 11, 1950

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MICHIGAN SUPREME COURT HOLDING: Where the option to receive vacation with pay or payment in lieu of vacation rests with the employee, a payment received during a period of unemployment will be deemed a bonus rather than vacation pay.

FACTS: One group of employees worked under a contract which provided for vacation pay and specified the vacation period from July 5 to July 18, 1948. There was no option for payment in lieu of vacation. The second group’s contract also provided for vacation pay but their vacation period was not specified and these claimants had the right to receive pay in lieu of vacation. Both groups of employees were laid off for lack of work in April, 1948 and filed for and began receiving unemployment benefits. On June 28, 1948, they received checks equal to either 1 or 2 weeks of wages. The employer contested the payment of benefits for the period following July 5, 1948 asserting that the workers had vacation pay for the same period.

DECISION: The claimants covered by the first agreement received vacation pay and are not entitled to receive unemployment benefits for the same period. Those covered by the second agreement received a bonus and not vacation pay and are entitled to receive benefits with respect to the period beginning July 5 during which they did not work.

RATIONALE: The controlling question is whether the employer paid the employees for or with respect to the 1 or 2 week period beginning July 5. The first agreement specified that the period from July 5 to July 18 was a vacation period and those claimants were not entitled to the June 28 payment for any other reason. But, the claimants who worked under the second agreement had the option to take a vacation with pay or work, and in addition to wages for such work, receive a bonus in lieu of the vacation with pay. Since the option rested with the employees, the June 28 payment was a bonus and not vacation pay.

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