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

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Cite as: Van Wormer Industries v MESC, unpublished opinion of the Macomb Circuit Court, issued February 28, 1985 (Docket No. 84-2768 AE).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

Abbeg v Russell, Burdsall & Ward, Inc – 4.15

Abbeg v Russell, Burdsall & Ward, Inc
Digest no. 4.15

Section 48

Cite as: Abbeg v Russell, Burdsall & Ward, Inc, unpublished opinion of the Branch Circuit Court, issued October 5, 1982 (Docket No. 81-12-581 AE).

Appeal pending: No
Claimant: Clarence Abbeg, et al.
Employer: Russell, Burdsall & Ward, Inc.
Docket no.: B80 18840 75094, et al.
Date of decision: October 5, 1982

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CIRCUIT COURT HOLDING: Where “the employer complies substantially with the requirements contained in Commission Administrative Rule 302, the purpose of the notice is accomplished.”

FACTS: The claimants were laid off from August 3 through August 16. The employer had scheduled a plant shut down for this period. “The claimants and their union president were given advance notice by the employer of the intended shutdown and on April 22, 1980, the employer posted notice on the plant’s bulletin board which was followed by the employer’s letter to the union president. … [N]either of the written notices contained any statement regarding any possible effect of the shutdown or payment thereof on the (claimant’s) eligibility for unemployment benefits.”

DECISION: The notice was sufficient to comply with Commission Administrative Rule 302.

RATIONALE: “[T]he employer did comply substantially with the requirements contained in Rule 302 so that the purpose of the notice was accomplished. Written notices failed to mention any possible effect that the August, 1980 shutdown would have on the claimant’s eligibility for unemployment compensation, but in other respects the notice was clear. The dates of shutdown were set forth as was the fact that this was considered a ‘vacation’ shutdown. The letter which the employer sent to the union president further clarified that employees would be required to take vacation during the shutdown to the extent that their vacation had been earned. Further, the employees must have understood the shutdown to be a vacation and circulated a petition of protest which showed they had such understanding.” The payments in question are remuneration under Section 48 of the Act.

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