Jackson v. General Motors Corp – 4.31

Jackson v. General Motors Corp
Digest no. 4.31

Sections 44, 48

Cite as: Jackson v General Motors Corp, unpublished opinion of the Wayne Circuit Court, No. 01-119168-AE (July 8, 2002), lv den No. 242842 (Mich App January 13, 2003).

Appeal pending: No
Claimant: Willie Jackson, Jr., et al.
Employer: General Motors Corporation
Docket no.: MUL1999-57622 et al 154957
Date of decision: July 8, 2002

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CIRCUIT COURT HOLDING: Where the source of a one-time payment is a strike resolution agreement, absent which there was no expectation of receiving monies for the relevant period, the payments are bonuses, not wages, and are excluded from “remuneration” under Section 48(2).

FACTS: In August 1998 employees received special payments for the lay-off period of June 28, 1998 through July 3, 1998. Employer paid the monies as part of a strike settlement and attempted to allocate the monies to that period of time. The payments were to compensate employees laid off due to interruption in the flow of parts caused by the labor dispute at the struck facilities.

DECISION: Claimants are eligible for unemployment benefits for the lay-off period.

RATIONALE: Section 44 defines “remuneration” under the MES Act. Section 48(2) has a narrower scope, and addresses how to treat “lost remuneration,” i.e. remuneration that falls outside the course of ordinary pay. Under Section 48(2), bonuses do not qualify as remuneration. The court found the one-time payments were bonuses, not wages, as the source of entitlement was the agreement resolving the strike, and absent the agreement, the claimants had no expectation of receiving monies for the relevant period.

Section 44 speaks to remuneration in general. The court conceded the payments might appear to be “back pay.” However, the court decided that the specific language of Section 44 precluded such a finding in this case.

[NOTES: Section 48(2) was amended effective April 26, 2002, and no longer includes bonuses in its exclusions to remuneration. Section 44(1) was amended effective April 26, 2002, and now includes “back pay” as remuneration.]

Digest Author: Board of Review (original digest here)
Digest Updated:
11/04

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Cite as: Blanding v Kelsey-Hayes Co, No. 80 022124 AE, unpublished opinion of the Wayne County Circuit Court, issued February 18, 1981 (Docket No. 80 022124 AE).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

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