Relator appeals the decision of the Commissioner of the Department of Economic Security finding that the relator’s employees, the 60 respondents here, were separated from their employment due to a lockout. We affirm.
Sunstar Foods, Inc. (Sunstar) operated a beef-slaughtering and packing operation in South St. Paul, Minnesota. Respondents, all employees of Sunstar, were members of the United Food and Commercial Workers Union, Local 4-P (the union). The labor contract between Sunstar and the union was due to expire on October 31, 1979. On October 26, 1979, Sunstar wrote a letter to all employees explaining that its financial position was not good, that the wages paid at Sunstar were $3 per hour more than paid by competitors, and that the employer needed the help of employees in the upcoming contract negotiations to solve Sunstar’s financial difficulties. On the day before expiration of the contract, the employer and the union agreed to extend the existing labor agreement until a new contract could be negotiated.
*82 Representatives of the union and Sunstar met seven times to negotiate, beginning on October 30, 1979. The union presented a list of 23 demands of items to be included in the new contract but dropped all but six of its demands dealing with wage and benefit increases in the course of bargaining. The employer proposed contract provisions with wage reductions of $2.23 per hour, a cap on cost-of-living increases, a longer probationary period, and reductions in sick leave benefits and severance pay.
The employer made an oral agreement in the course of bargaining that there would be a real guarantee of 38 hours of work per week. The old contract had a guarantee of 36 hours, but, through the sanction of an arbitrator’s decision, the employer had frequently laid off workers on Friday and recalled them on Tuesday, making the effective work week 28.8 hours. The previous experience led the employees to believe that the real guarantee of 38 hours proposed by the employer was no more “real” than was the 36-hour guarantee in the old contract, because the proposed language was identical to that in the old contract. Therefore, the decrease in wages alone meant a 21-26 percent reduction in pay for the employees in various job categories.
Though the union dropped most of its demands, the employer continued to support its proposed contract through several bargaining sessions. On January 22, 1980, the employer informed the union that the proposed contract would go into effect on February 4, 1980. The union membership voted to reject the unilaterally proposed contract on January 28, 1980, and voted to authorize a strike in the event of a negotiation stalemate. The union and the employer met again on January 31, 1980, but no agreement was reached. The union stated that the employees felt the proposed contract terms were unacceptable but the union wished to continue negotiations. The union membership met on the same day and agreed that they could not work under the new wage structure, and the union notified the employer of this decision. The usual Monday and Tuesday work schedules were posted on Friday, February 1, 1980. The employees worked on Saturday, February 2, 1980, to process all of the cattle in the plant to make sure no meat would spoil if the negotiations reached no conclusion over the weekend and they would not be working on Monday.
Picket lines were established at 12:01 a. m. on Monday, February 4, 1980. Members carried signs reading, “Strike, Unfair.” Many employees joined the picket line but did not report for work. Sunstar did not purchase any cattle for processing on February 4, and no beef production had occurred at the plant up to the date of the hearing.
Respondent employees filed the necessary forms to apply for unemployment compensation benefits. Some reported their reason for failing to work as “strike,” while others reported “$2.23 cut in pay.” Some reported that their regular jobs were not available, while others reported that their regular jobs were not available due to the pay cut. Most reported that they had heard about not reporting for work and the pay cut through union officials. The claims deputy determined that the claimants were ineligible for unemployment compensation benefits because they had lost their employment due to a labor dispute in which they participated at the establishment where they worked.
Appeals from these determinations were consolidated and heard by the Appeals Tribunal on May 5, 1980. The Appeals Tribunal affirmed the determination of the claims deputy. The employees appealed to the Commissioner of the Department of Economic Security (the Commissioner). The Commissioner’s Representative vacated and set aside the decisions of the Appeals Tribunal and substituted the decision that the employees were separated from their employment due to a lockout. Sunstar petitioned this court for a writ of certiorari under Minn.R.Civ.App.P. 115.01. We find none of the relator’s arguments regarding lack of jurisdiction or faulty notice of appeal to the Commissioner persuasive and review the case under the writ of certiorari.
*83 The issué before this court, simply stated, is whether, on the record as a whole, there is substantial evidence to support the decision of the Commissioner that the claimants were separated from their employment due to a lockout.
The Minnesota legislature has declared its policy that “unemployment reserves * * * be used for the benefit of persons unemployed through no fault of their own.” Minn.Stat. § 268.03 (1980).
Loftis v. Legionville School Safety Patrol Training Center, Inc.,
The statutory definition of a lockout in the Minnesota Labor Relations Act is “the refusal of the employer to furnish work to employees as a result of a labor dispute.” Minn.Stat. § 179.01, subd. 9 (1980). Sunstar would have this court interpret this provision strictly: Since the employer did offer work, albeit at a lower wage, as evidenced by the posted work schedule, there was no refusal to furnish work, hence no lockout. The employees would have this court interpret the definition of lockout as we did in
Hessler v. American Television & Radio Co.,
Whether there has been a lockout is a question of fact-to be determined by the Commissioner on all the facts developed at the hearing.
Carper v. Administrator, Unemployment Compensation Act,
[When] we have considered the issue of disqualification [from unemployment compensation benefits] where a claimant either quit work because of a pay reduction in his regular job or, when faced with a layoff, refused to accept an alternate job at a reduction in salary * * * [we have] supported] the general rule that a substantial pay reduction gives an employee good cause for quitting.
Scott v. The Photo Center, Inc.,
Other courts have found a decrease in wages of about 20-25 percent a good cause for separation from employment.
See, e. g., Bunny’s Waffle Shop, Inc. v. California Employment Commission,
Judicial review of a contested case decision in an administrative department is governed by Minn. Stat. § 15.0424-.0426 (1980), of the Minnesota Administrative Procedure Act. The standard to be used by the reviewing court is whether the findings of the department are supported by substantial evidence in view of the entire record submitted, are affected by an error of law, or are arbitrary or capricious. Minn. Stat. § 15.0425(d)-(f);
Continental Can Co. v. State,
Affirmed.
Notes
. Minn.Stat. § 268.09, subd. 3, reads in relevant part:
Labor dispute. An individual who has left or partially or totally lost his employment with an employer because of a strike or other labor dispute at the establishment in which he is or was employed shall be disqualified for benefits:
(a) For each week during which the strike or labor dispute is in progress; or
(b) For one week following the commencement of the strike or labor dispute if he is not participating in or directly interested in the strike or labor dispute.
* * * * * *
For the purpose of this subdivision the term “labor dispute” shall have the same definition as provided in the Minnesota labor relations act. Nothing in this subdivision shall be deemed to deny benefits to any employee:
* * * * * *
(b) who becomes unemployed because of a lockout * * *.
. Sunstar also maintains that employees must be terminated before they are eligible for unemployment compensation benefits, but neither the eligibility statutes nor the cases from other
*84
jurisdictions support Sunstar’s position. Minn. Stat. § 268.08, subd. 1 (1980), governing eligibility benefits, states that an individual shall be eligible for benefits once (1) he has registered for work; (2) he has made a claim for benefits; (3) he was able to, available for, and actively seeking work; and (4) he has been unemployed for the waiting period of one week. Some cases have involved workers who are not terminated and who still considered themselves employees of the employer in question. See, e.
g., Assif v. Adm’r Unempl. Comp. Act,
. Sunstar is correct in stating that it is not illegal or unfair for an employer to bargain for lower wages. But imposition of lower wages as terms and conditions of employment is considerably different than proposing the same terms in the course of collective bargaining and negotiation. We look to the result of the imposition of such terms of employment: If they are unreasonably onerous, we can find good cause for leaving work. Sunstar’s imposition of lower wages and benefits bears little resemblance to the “model” package of lower wages and benefits they cite, Chrysler Corporation’s agreement with the United Auto Workers. In the Chrysler agreement, the final terms and conditions were agreed upon by both sides in negotiation, not unilaterally imposed by the employer. Chrysler made significant concessions, including more labor control in management of the company. See, e. g.. Labor Reassessment, Wall St. J. Feb. 19, 1981 at 30; Pleas for Labor relief ñood into the UAW, Bus. Week, Feb. 16, 1981 at 27; Hoerr, Auto workers inch toward the driver’s seat, Labor Commentary, Bus.Week, Feb. 9, 1981 at 30.