EMPLOYMENT SECURITY COMMISSION v. VULCAN FORGING COMPANY.
Nos. 49,607, 49,674-49,678
Supreme Court of Michigan
Decided May 10, 1965
375 Mich. 374
OPINION OF THE COURT.
1. UNEMPLOYMENT COMPENSATION-QUALIFICATION FOR BENEFITS-PART TIME EMPLOYMENT.
Employees are entitled to unemployment compensation benefits, if not otherwise disqualified, who during any week perform no services and with respect to which they receive no remuneration or who during any week of less than full-time work receive remuneration less in amount than the weekly unemployment compensation benefit rate (
2. SAME-VACATION PAY.
Vacation pay received for periods of unemployment is considered remuneration in determining whether an employee is unemployed and in determining the amount of unemployment compensation benefits (
3. SAME-LEAVE OF ABSENCE-VACATION.
A leave of absence, as the term is defined in the employment security act, is not synonymous with vacation, but signifies an authorized temporary absence from work for other than vacation purposes (
4. SAME-VACATION-WAIVER, RELEASE, OR COMMUTATION BY AGREEMENT.
Claimants who are entitled to unemployment compensation benefits may not waive, release, or commute same by agreement with the employer (
REFERENCES FOR POINTS IN HEADNOTES
[1-6] 48 Am Jur, Social Security, Unemployment Insurance, and Retirement Benefits § 34.
[7] 14 Am Jur, Costs § 91.
Employees who were unpaid for period of vacation or only partially paid therefor, not otherwise disqualified for unemployment compensation benefits held, entitled to such benefits, expressly overruling I. M. Dach Underwear Company v. Employment Security Commission, 347 Mich 465 (
DISSENTING OPINION.
DETHMERS, KELLY, and O‘HARA, JJ.
6. UNEMPLOYMENT COMPENSATION-COLLECTIVE BARGAINING CONTRACT-DISQUALIFICATION FOR BENEFITS-VACATION.
Claimants for unemployment compensation benefits were disqualified from receiving such benefits for such portion of vacation period as fell within time provided in collective bargaining contract covering such employees and were not disqualified from receiving such benefits for such period as fell without time provided in such contract (
7. COSTS-UNEMPLOYMENT COMPENSATION-VACATION.
No costs are allowed in proceedings to obtain unemployment compensation benefits, a public question being involved in determining whether employees were entitled to such benefits for vacation period (
Appeal from Wayne; Murphy (Thomas J.), J. Submitted December 3, 1963. (Calendar Nos. 74-79, Docket Nos. 49,607, 49,674-49,678.) Decided May 10, 1965.
Certiorari by Employment Security Commission against Vulcan Forging Company, a Michigan corporation, and the Employment Security Appeal Board to review decision of board in matter of claim of Henry Czarnata for unemployment compensation benefits when not qualified for vacation pay under union contract.
Similar actions by commission relating to claims of Laurent Bruneau, Jerry McIntosh, Floyd Henderson, and Charles Tyno, which had been consolidated before hearing referee.
Cases consolidated on circuit court hearing and on appeal. Judgment for plaintiff commission modifying orders of appeal board in 5 cases, and judgment for defendant commission confirming order of appeal board, in all instances granting right of claimants to unemployment compensation benefits. Vulcan Forging Company appeals from all orders. Affirmed.
Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, and John J. Long, Assistant Attorney General, for plaintiff and defendant Employment Security Commission.
Long, Ryan, Grylls, Franseth & Spicer, for defendant and plaintiff Vulcan Forging Company.
SOURIS, J. This is an appeal by Vulcan Forging Company from a decision of the circuit court for Wayne county involving six consolidated appeals to that court from decisions of the appeal board of the employment security commission. In five of the cases the circuit court ordered payment of unemployment compensation benefits for a two-week period during which Vulcan‘s plant was shut for vacation but for which the five claimants received no vacation pay because they lacked the requisite seniority specified for entitlement to such vacation pay by the collective bargaining agreement between their union and Vulcan. In the sixth case, the circuit court ordered payment of one-half the weekly benefit rate,
in accordance with section 27 of the act,
There was a time, prior to PA 1951, No 251, when section 29 of the employment security commission act,
“Sec. 48. An individual shall be deemed ‘unemployed’ with respect to any week during which he performs no services and with respect to which no remuneration is payable to him, or with respect to any week of less than full-time work if the remunera-
tion payable to him is less than his weekly benefit rate: Provided, That any loss of remuneration incurred by an individual during any week resulting from any cause other than the failure of his employing unit to furnish full-time, regular employment shall be included as remuneration earned for purposes of this section and of subsection (c) of section 27 of this act: Provided further, That the total amount of remuneration thus lost shall be determined in such manner as the commission shall by regulation prescribe. For the purposes of this act, an individual‘s weekly benefit rate shall mean the weekly benefit rate shown in the table in section 27 (b), which is applicable to the individual.”
Our conclusion is buttressed by the second paragraph of the amended section which, among other things, provides that vacation pay received for such periods of unemployment is considered remuneration in determining whether an employee is unemployed and in determining the amount of unemployment compensation benefits, under section 27 of the act, to which he is entitled. The second paragraph of section 48, to which we refer, reads as follows:
“All amounts paid to a claimant by an employing unit or former employing unit for a vacation or a holiday, and amounts paid in the form of retroactive pay, or in lieu of notice, shall be deemed remuneration in determining whether an individual is unemployed under this section and also in determining his benefit payments under section 27 (c), for the period designated by the contract or agreement providing for the payment, or if there is no contractual specification of the period to which such payments shall be allocated, then for the period designated by the employing unit or former employing unit: Provided, however, That payments for a vacation or holiday made, or the right to which has irrevocably vested, after 14 days following such vacation or holiday, and payments in the form of termination,
separation, severance or dismissal allowances, and bonuses, shall not be deemed wages or remuneration within the meaning of this section.”
The third and last paragraph of section 48, added by PA 1954, No 197, reads as follows:
“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 his duly authorized bargaining agent, or in accordance with law.”
It has been suggested that “leave of absence“, as used in the foregoing paragraph really means “vacation“. From that unsupported assumption, it is argued that, notwithstanding the crystal-clear language of the two preceding paragraphs which include among those defined as unemployed for purposes of the act employees on vacation who receive no remuneration or remuneration less than their weekly benefit rate, the effect of the third paragraph of the section is to exclude from the definition of those who are unemployed employees granted vacations at their own requests, pursuant to a collective bargaining agreement, or in accordance with law. No explanation is offered for the legislature‘s failure to use the word “vacation“, assuming that is what it meant, and its use, instead, of the term “leave of absence“, a term used and defined in section 29 of the act in connection with unemployment due to pregnancy. In rejecting this suggestion, we can conclude only that the legislature‘s use of the term “leave of absence” was advertent and not inadvertent and that it signifies an authorized temporary absence from work for other than vacation purposes.
While the foregoing analysis of the applicable statute is sufficient for decisional affirmance of the trial court‘s judgment, there remains the task of
expressly overruling I. M. Dach Underwear Company v. Employment Security Commission (1956), 347 Mich 465, previously effectively overruled, but sub silentio, in Malone v. Employment Security Commission (1958), 352 Mich 472. In Dach, a majority of this Court held that employees unemployed and unpaid during a plant shut-down for vacations were not entitled to unemployment compensation benefits because, it was said, they were not “involuntarily unemployed“, the collective bargaining agreement between the employees’ union and the employer requiring yearly vacations. The majority‘s opinion placed emphasis upon section 2 of the act (
in section 29 was in Dach, and is in this case of Vulcan, inapplicable to bar claimants from the benefits due them, as made doubly clear by the 1951 amendments.
In Malone, while the Court‘s majority planted its decision, as do we in this case of Vulcan, squarely upon the 1951 amendments which were construed to authorize payment of unemployment compensation benefits during a vacation period to employees whose weekly vacation pay was less in amount than their weekly benefit rate under the act, instead of expressly overruling Dach, its facts were purportedly distinguished and, thus, it was held not controlling of decision in Malone. The fact differences between Dach and Malone are not significant to the rationale of the decision made in Dach, as clearly demonstrated by Mr. Justice CARR‘S dissent in Malone; nor are they significant to the rationale of decision in Malone, that decision, like the present one, having been made, as Judge Thomas Murphy perceptively observed, on the basis of the 1951 amendments. Accordingly, Dach should have been expressly overruled in Malone rather than distinguished on its facts. We correct that error now. Dach is overruled.
Affirmed. Costs may be taxed.
T. M. KAVANAGH, C. J., and BLACK and SMITH, JJ., concurred with SOURIS, J.
O‘HARA, J. (dissenting). I do not agree that Dach¹ has been overruled by implication, nor that it should be overruled expressly. It should control here. Malone² was correctly distinguished from Dach in the Malone opinion.
In disposition hereof I would, as to all claimants but Sineveck, vacate the order of the circuit judge and affirm the decision of the appeal board for I agree with its finding that the vacation period which extended into September was not within the contract designated time. Hence for that period the claimants, if otherwise eligible, were entitled to benefits.
As to claimant Sineveck, I would vacate the decisions of the circuit court, the appeal board, the referee and the determination and redetermination of the commission, for under Dach since his whole vacation time was within the contract designated period, he is entitled to no benefits.
The cause should be reversed and remanded to the circuit court with directions to enter orders consonant herewith. No costs, a public question.
DETHMERS and KELLY, JJ., concurred with O‘HARA, J.
ADAMS, J., took no part in the decision of this case.
Notes
* Since claimants were entitled to unemployment compensation benefits by the express provisions of section 48 of the act, they could not by any agreement waive their right to such benefits:
“No agreement by an individual to waive, release, or commute his rights to benefits or any other rights under this act from an employer shall be valid.”