Elliott’s Amusements, LLC v. Garrison – 17.23

Elliott’s Amusements, LLC v. Garrison
Digest No. 17.23

Section 421.44

Cite as: Elliott’s Amusements, LLC v Garrison, unpublished opinion of the Ingham County Circuit Court, issued October 1, 2007 (Docket No. 07-251-AE).

Appeal pending: No
Claimant: Ronald L. Garrison
Employer: Elliott’s Amusements, LLC
Date of decision: October 1, 2007

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HOLDING: Certain per diem payments made by the employer to the claimant were remuneration when not for the “convenience of the employer” and the claimant had the ability to choose how to spend the money.

FACTS: The ALJ decided that per diem amounts the employer paid to the claimant were remuneration under Section 44(1). The Board of Review affirmed and incorporated the ALJ’s decision. As the Board explained, the claimant worked six months per year for the employer, while also living in the employer’s trailer and paying rent and food money. The claimant received a per diem payment from the employer, plus reimbursements for some expenses. Citing Seligman v MESC, 164 Mich App 507 (1988) as controlling, the Board endorsed the ALJ’s view that the per diem payments amounted to wages because the employer did not require the claimant to live at the work site, the lodging was not free, and the claimant’s use of the per diem payments were not controlled by the employer.  The claimant choice to use the employer-provided lodging was based on his own convenience, distinguishing his situation from the mandatory on-site lodging provided for the “convenience of the employer” in Seligman.

DECISION: The court upheld the determination that certain per diem payments made by the employer to the claimant were remuneration.

RATIONALE: Per diem payments for on-site lodging and food are considered remuneration if the employer did not control the claimant’s use of the per diem monies and the claimant could have spent the money in other ways.

Digest author: Austin L. Webbert, Michigan Law, Class of 2017
Digest updated: 10/25/2017

 

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Cite as: Jackson v General Motors Corp, unpublished opinion of the Wayne Circuit Court, No. 01-119168-AE (July 8, 2002), lv den No. 242842 (Mich App January 13, 2003).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

Fletcher v Atrex Corp – 4.29

Fletcher v Atrex Corp
Digest no. 4.29

Sections 48, 44

Cite as: Fletcher v Atrex Corp, unpublished opinion of the Macomb Circuit Court, issued October 22, 1997 (Docket No. 96-7137-AE).

Appeal pending: No
Claimants: Clare Fletcher
Employer: Color Custom Compounding, Inc., d/b/a Atrex Corporation
Docket no.: FSC 95-00061-136470W
Date of decision: October 22, 1997

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CIRCUIT COURT HOLDING: Where claimant spent her time performing services, though not paid for those services until after the fact, she was nonetheless employed and received remuneration.

FACTS: Claimant had a benefit year in effect in May 1992 when she began performing services for Universal Plastics. At that time, that employer was unable to offer her a paying job. Nonetheless, claimant continued to perform services until she was officially hired there August 1, 1992, at which time she informed the Agency that she was employed. After claimant was hired she was compensated retroactively for the services she performed between May and August 1992. When the Agency became aware of this a determination was issued holding claimant ineligible for the May – August period under Section 48.

DECISION: Claimant is ineligible for benefits for the period May 3, 1992, through July 11, 1992, under Section 48.

RATIONALE: Remuneration is compensation for personal services and is not limited by the statute as to when it is paid – it may be paid after the service is rendered and not in the form of an hourly or weekly rate. The substantial amounts claimant received in addition to her regular wages after she was hired were, in fact, remuneration for services rendered during the period in question.

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

Smith v Hayes Albion – 4.27

Smith v Hayes Albion
Digest no. 4.27

Section 48

Cite as: Smith v Hayes Albion, 214 Mich App 82 (1995); lv den 453 Mich 912 (1996).

Appeal pending: No
Claimant: Bernard Smith, et al.
Employer: Hayes Albion
Docket no.: B86-11358-111657, et al.
Date of decision: October 20, 1995

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COURT OF APPEALS HOLDING: Where collective bargaining agreement allowed employer to allocate vacation pay to plant shutdown period, vacation payments made were remuneration for the shutdown period and rendered claimants ineligible for benefits.

FACTS: Under 1985 collective bargaining agreement, seniority employees were entitled to vacation or pay in lieu of vacation as specified in Paragraph 90. Paragraph 91 provided that employer could schedule all vacation during a plant shutdown period if certain procedures were followed, such as notification to employees. Pursuant to the contract payments for accrued vacation time were made in February and June, 1986. Employer scheduled a two week shutdown from June 30, 1986, through July 11, 1986. Notices were posted indicating the earned vacation time and pay would be allocated to the shutdown period and that the allocation might render the employees ineligible for unemployment benefits.

DECISION: Claimants are ineligible for benefits under Section 48(2).

RATIONALE: Under Paragraph 90 of the collective bargaining agreement, employees had the option of receiving pay in lieu of vacation. Under Paragraph 91, the employer could allocate vacation pay to plant shutdown period. The fact these provisions appear in separate paragraphs does not mean the payment in lieu of vacation provided for in Paragraph 90 is independent of the period of unemployment (vacation shutdown) provided for in Paragraph 91. Thus the contract did not preclude the employer from designating the vacation pay to the shutdown period. As the employer maintained that discretion, the claimants’ option to take pay in lieu of vacation was extinguished when the employer exercised its Paragraph 91 authority. Therefore the payments were not “bonuses” under Brown v LTV Aerospace Corp, 394 Mich 702 (1975).

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

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

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