Malone v. Employment Security Commission

90 N.W.2d 468, 352 Mich. 472, 1958 Mich. LEXIS 465
CourtMichigan Supreme Court
DecidedJune 11, 1958
DocketDocket 43, Calendar 47,374
StatusPublished
Cited by15 cases

This text of 90 N.W.2d 468 (Malone v. Employment Security Commission) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Malone v. Employment Security Commission, 90 N.W.2d 468, 352 Mich. 472, 1958 Mich. LEXIS 465 (Mich. 1958).

Opinions

Edwards, J.

A manufacturing concern, Champion Spark Plug Company, laid off a considerable number of employees, including all of the plaintiffs in this case, in the spring of 1954. Plaintiffs then sought and, except for a period of 2 weeks hereinafter discussed, received unemployment compensation until called back to work in the fall of 1954.

The exception which occasions this appeal concerns the weeks ending July 31st and August 7th which the company determined to be a vacation period and during which it paid these plaintiffs various sums called for by its contract with the union.

[474]*474A referee who heard plaintiffs’ claims for unemployment compensation as to these 2 weeks held that plaintiffs whose vacation pay did not equal the unemployment compensation rate otherwise due were eligible for unemployment compensation, reduced according to statutory formula to 1/2 the usual rate. The appeal board of the Michigan employment security commission reversed the referee’s decision, holding that under Michigan case precedent no compensation was payable. On appeal to the circuit court in the nature of certiorari, the judge reversed the appeal board and reinstated the decision of the referee, and the company brings this appeal to us.

Judge Beers recited the facts concisely in his opinion and we adopt his statement:

“The Champion Spark Plug Company, a large industrial concern, entered into a labor contract with Local Union No. 272 of the United Automobile, Aircraft, and Agricultural Implement "Workers of America, C.I.O. This labor contract, among many other provisions, provided for a money payment to employees of the company termed vacation pay. The contract specifically provides:

“ ‘Section 5. Employees on the company’s rolls as of May 31st of each year who have fulfilled their probationary period will be granted vacations and pay as follows: Normally the plant will be shut down 2 weeks each year for vacation sometime during July or August at the company’s discretion. During suela shutdowns certain employees may be required aiad they normally will take their vacations at other times.’

“The contract then goes on to specify that the amount of vacatioia pay to be paid to each employee shall be determined by the length of time of service to the company and provides a schedule for such determination. It will be noted here that whether the plant actually shuts down and terminates operations for any vacation period is left wholly in the discre[475]*475tion of the company, and under this contract if the company did not shut down, the employees would be entitled to a certain amount of money which would be termed vacation pay whether they were actually on vacation or not. * * *

“In the early part of the year 1954, the company made a general layoff of certain employees who are involved in the present litigation. These employees, it is undisputed upon the record, became eligible to receive benefits under the statute. In July and August of the year 1954, the company, in compliance with what it conceived to be the terms of its employment contract, and while these employees were unemployed by it, gave notice to its unemployed personnel that the weeks ending July 31st and August 7th, 1954, would be determined a vacation period, and it paid to the unemployed personnel the amounts of money designated as vacation pay and determined by the provisions of the aforesaid employment contract. The employment security commission thereupon removed these unemployed people from the number receiving compensation benefits under the statute for the period of the above-mentioned 2 weeks on the theory that for this vacation period they were employed and ineligible to receive the aforesaid employment benefits and the present suits were then commenced by the employees and their representatives for the purpose of securing to the employees the payment of compensation benefits for the 2-weeks period mentioned. A hearing was had first before a referee of the employment security commission in which the referee made a finding that the amount of money received by the employees as vacation pay was remuneration within the meaning of the Michigan employment security statute and computed the amount of income to each individual employee for the 2 weeks. He then allowed this amount as income received and computed the benefits in accordance with the provision of the statute, the amount of income for each week thus being determined to be less than the amount called for in the [476]*476statute to be paid to a beneficiary, he allowed each employee 1/2 of the regular allowance, which provision is, of course, in accordance with the statute. Appeal was then taken from the decision of the referee to the appeal board of the employment security commission. The appeal board heard the matter and rendered a majority decision holding that the employees of the company were actually employed and ineligible to receive any compensation under the statute for the 2 weeks I have mentioned. From this decision of the appeal board, this appeal by certio-rari is taken.”

We are confronted here by the relatively simple problem of construing the 1951 amendments to sections 29 and 48 of the employment security act which pertain to vacations (PA 1951, No 251, immediate effect June 17, 1951 rCLS 1952, §§ 421.29, 421.48 (Stat Ann 1951 Cum Supp §§ 17.531, 17.552)]).

Prior to the above date the employment security act (then known as Michigan unemployment compensation act) contained a specific provision in its disqualification section applicable to vacations. This provision read:

“(1) An individual shall be disqualified for benefits * * *

“(d) For any week with respect to which he is receiving or has received payments in the form of #

“(2) Vacation with pay.” CL 1948, § 421.29 (Stat Ann 1950 Rev § 17.531). ■

Basing its action upon this language, this Court denied claims for unemployment compensation in a case which is factually nearly identical with our current case. Renown Stove Co. v. Unemployment Compensation Commission, 328 Mich 436.

The Renown Case was decided September 11, 1950. The following year the legislature repealed the vacation disqualification section quoted above [477]*477(Section 29 [1] [d] [2]). At the same time it added to section 48 of the act the following self-explanatory language:

“An individual shall he 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 remuneration payable to him is less than his weekly benefit rate.” CLS 1952, § 421.48 (Stat Ann 1951 Cum Supp § 17.552).

The amendment then went on to spell out the purpose of the legislature to have vacation pay (when, as noted above, less than weekly benefit rate) considered as “remuneration” for the purpose of computing partial unemployment benefits under section 27(c).

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Malone v. Employment Security Commission
90 N.W.2d 468 (Michigan Supreme Court, 1958)

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Bluebook (online)
90 N.W.2d 468, 352 Mich. 472, 1958 Mich. LEXIS 465, Counsel Stack Legal Research, https://law.counselstack.com/opinion/malone-v-employment-security-commission-mich-1958.