Teledyne Wah Chang Albany v. Employment Division

712 P.2d 154, 77 Or. App. 148

• Court: Court of Appeals of Oregon
• Decided: December 26, 1985
• Docket: 84-AB-476; CA A31254
• Status: Published

Opinions

ROSSMAN, J.

Employer seeks review of a decision by the Employment Appeals Board that claimants were unemployed and were not otherwise disqualified from receiving unemployment benefits. We affirm.

Claimants are employed by Teledyne Wah Chang at its Albany plant and are represented there by the United Steel Workers of America. The collective bargaining agreement in force at the plant provided for an “annual vacation shutdown,” to be implemented at employer’s discretion. Employer implemented a shutdown from August 13 to September 10, 1983. The contract provided that at the time of a shutdown each employe was “required to use all vacation awarded as of [that employe’s] last anniversary date,” with the exception of certain reservable vacation time. Employes with three or more years of service could reserve seven days of their annual vacation to be taken at times other than the annual vacation shutdown. Employes with ten or more years of service could reserve up to ten days. In addition, employes could use vacation time earned since their last anniversary date (“accrued but not yet awarded”) during the shutdown but were not required to do so. If vacation time were used, employes would receive vacation pay. Employes choosing to reserve vacation hours during the shutdown would be considered to be on “leave of absence without pay.”

According to these provisions, claimants chose to use vacation time and to receive vacation pay for a part of the shutdown period. They received no unemployment benefits for that time. For the remainder of the shutdown, however, they chose to reserve their vacation time and to receive no vacation pay; for that time, EAB awarded unemployment benefits.

The first issue is whether claimants were unemployed during the time when they chose to reserve their vacation time and receive no pay. ORS 657.100(1) provides, in part:

“An individual is deemed ‘unemployed’ in any week during which the individual performs no services and with respect to which no remuneration for services performed is paid or payable to the individual * * *.”

Employer concedes that claimants performed no services during the period in question. It contends, however, that remuneration was payable to claimants in the form of the reserved vacation pay.¹

Employer’s contention is mistaken, because it is based on a misinterpretation of ORS 657.100(1), where the term “remuneration” is identified with the week in which an individual either performed or did not perform services. The essential inquiry, therefore, is whether the claimant performed services during the period in question and whether any remuneration was paid or payable for that period. See Pa. Elec. Co. v. Com., Unempl. Comp. Bd., 73 Pa Cmwlth 258, 458 A2d 626, 628-29 (1983).

That meaning is supported by common sense. Given that there is a time period to which to refer to determine whether an individual is unemployed, a choice must be made concerning the allocation of remuneration. The only sensible choice is to allocate remuneration to the time period for which the services were rendered. For example, if an individual performs services for weeks one and two, is laid off for weeks three and four, and receives his wages at the end of week four, during which weeks was that individual unemployed? Clearly, he was unemployed during weeks three and four. Remuneration is allocated to the period in which services were performed.

The reserved vacation pay was earned and payable with respect to earlier weeks of service, and not with respect to the weeks that claimants were on “leave of absence.” Therefore, according to the terms of ORS 657.100(1), claimants’ reserved vacation pay was not remuneration that was payable to them.²

We believe that the dissent’s interpretation of ORS 657.100(1) is contrary to legislative intent and public policy. First, it is inconceivable that the legislature intended “remuneration for services performed” to refer to services performed “at any time,” as the dissent concludes. If remuneration is not allocated to the week or weeks in which it was earned, that is, when the services were performed, then remuneration “paid” in a week other than when it was earned disqualifies nonworking claimants for that week; and remuneration that is “payable” has the unfortunate effect of continuously disqualifying a nonworking claimant until it is paid.

Second, the dissent’s policy argument is misconceived, because it fails to recognize that a “vacation shutdown” is imposed at the employer’s discretion, undoubtedly for economic reasons. The fundamental undisputed fact is that there was no work available at the plant for these claimants. The terms of the collective bargaining agreement do not change that fact and must not obscure it. Thus, the dissent is mistaken when it suggests that the majority would allow claimants to enjoy an “extra week of partially-compensated vacation.” In fact, we are simply allowing claimants to receive unemployment benefits during a time in which there was no work available to them. What we do not do, as the dissent would, is essentially to require claimants to take all of their vacation time during the plant shutdown. Union and management have not agreed to that requirement in their collective bargaining agreement. We should not accomplish here for management what it has not accomplished at the bargaining table.

The second issue is whether claimants voluntarily left work. ORS 657.176 provides, in part:

“(2) An individual shall be disqualified from the receipt of benefits * * * if * * * the individual:

<<* * * * *

“(c) Voluntarily left work without good cause * *

Employer first contends that claimants were voluntarily unemployed, because they chose to take unpaid “leaves of absence” rather than vacation pay. Employer’s contention is flawed, because it is based on the assumption that the phrase “leave of absence” in the collective bargaining agreement indicates that claimants voluntarily left work; however, it does not. An employe’s eligibility for benefits does not depend on terms found in a collective bargaining agreement. McKinney v. Employment Division, 21 Or App 730, 737, 537 P2d 126 (1975).

It is undisputed that, although claimants were willing to work, there was no work available during the period in question. It is also undisputed that their leaves of absence were authorized by the collective bargaining agreement. We hold that an authorized leave of absence does not constitute grounds for disqualification from unemployment benefits if the employe was willing to work but was not allowed to do so. See OAR 471-30-038(2).

Employer next contends that claimants were voluntarily without work because they agreed, through their union, to allow employer to impose the plant shutdown at its discretion. To support this contention, employer relies on Stanley v. Employment Division, 43 Or App 905, 607 P2d 1195, (1979), rev den 289 Or 1 (1980), which presented the flipside of the factual situation involved in this case, because it considered the unemployment claims of Wah Chang employes who had elected to take vacation pay during a plant shutdown in 1978. The employer did not contest, as it does here, the employes’ claims for benefits for the time during the shutdown when they had elected not to receive vacation pay but chose leaves without pay instead. Because Stanley involved the effect of vacation payments on unemployment benefits, the case turned on an interpretation of ORS 657.150(8) (amended by Or Laws 1983, ch 51, §1), which provided:³

“Payment made to an individual for vacation taken shall be considered in the determination of the amount of benefits payable with respect to the vacation period * * *; however, notwithstanding any other provision of this chapter, vacation payments made to an individual who is terminated, or placed on layoff status, shall not constitute a disqualification and benefits payable under this chapter shall not be denied or reduced because of receipt of any such payment.”

The court held that, because the employes voluntarily took vacations and received vacation pay during a plant shutdown, the first clause of that statute applied and that, therefore, employes had to offset vacation payments against unemployment benefits.⁴ 43 Or App at 911. The vacation period was voluntary because, during the shutdown, the employes chose to take some vacation time rather than only time on leave without pay, as they could have done. However, in dictum, the court also stated that, even if the employer had the right under a collective bargaining agreement to impose a vacation period during a plant shutdown, the first clause of ORS 657.150(8) would apply, “because the collective bargaining agreement has been ratified by the employes and the vacation period is in that sense voluntary.” 43 Or App at 911 n 3.

In this case, employer relies on that dictum for its contention that claimants were voluntarily without work, because they agreed through their union to allow employer to impose the plant shutdown. However, we conclude that employer’s reliance on Stanley is misplaced, because the issue of whether an employe has voluntarily taken a vacation period and received vacation pay for purposes of ORS 657.150(8) is distinct from the issue of whether an employe has voluntarily left work for purposes of ORS 657.176(2)(c).⁵ Furthermore, we disapprove the dictum to the extent that it lends support to employer’s contention, because the issue of whether a claimant is bound by the agreements of his union for purposes of determining whether he has voluntarily left work was decided in Publishers Paper Co. v. Morgan, 10 Or App 94, 498 P2d 798 (1972). We held that, when an employe retires at the age made mandatory by the collective bargaining agreement under which he is employed, this does not constitute “having left work voluntarily without good cause” within the meaning of ORS 657.176(2). 10 Or App at 96. We agreed with the reasoning in Campbell Soup Co. v. Div. of Employment Security, 13 NJ 431, 435, 100 A2d 287 (1953):

“If the inquiry is isolated to the time of termination, plainly none of the claimants left voluntarily in a sense that on his own he willed and intended at the time to leave his job. On the contrary, each claimant resisted his termination and left against his will only upon his employer’s insistence that the contract obligation gave neither of them any alternative but to sever their relationship.

* * * *

“* * * The legislature plainly intended that the reach of the subsection was to be limited to separations where the decision whether to go or to stay lay at the time with the worker alone and, even then, to bar him only if he left his work without good cause. * * *”

Concerning the issue of whether a claimant voluntarily left work, we see no important distinction between a negotiated vacation shutdown and a negotiated permanent retirement age. Therefore, EAB correctly decided that claimants did not voluntarily leave work.⁶

Affirmed.

1 Employer also contends that remuneration was paid to claimants in the form of medical, dental and vision insurance. This contention lacks merit, because the Employment Division Law excludes such payments from the definition of remuneration. ORS 657.105(1); 657.115(1).

2 Employer does not argue that claimants received remuneration in the form of vacation pay accrued during the benefit week.

3 The parties here agree that ORS 657.150(8) does not govern this case, because we are not considering the effect of vacation pay on unemployment benefits.

4 Claimants here did not claim benefits for the time during the shutdown that they received vacation pay.

5 This distinction is implicitly recognized in Stanley, because the court commented that, for the time during the shutdown that the employes had chosen to take leaves without pay, they were eligible for unemployment benefits. Stanley v. Employment Division, supra, 43 Or App at 909, 911.

6 Employer assigns as error “the Board’s failure to review the referee’s decision de novo.” This assignment has no merit. The Board expressly stated that it had reviewed the entire hearing record, and it adopted the referee’s findings and conclusions. There is no error in that procedure. ORS 657.610; OAR 472-10-020; Skookum Co., Inc. v. Employment Div., 276 Or 303, 554 P2d 520 (1976); Paillette v. Employment Division, 59 Or App 598, 651 P2d 1087 (1982).