Employment Security Commission v. Vulcan Forging Co.

375 Mich. 374 (1965) 134 N.W.2d 749 EMPLOYMENT SECURITY COMMISSION v. VULCAN FORGING COMPANY. Calendar Nos. 74-79, Docket Nos. 49,607, 49,674-49,678. Supreme Court of Michigan. Decided May 10, 1965. *376 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, *377 in accordance with section 27 of the act, CLS 1961, § 421.27 (Stat Ann 1960 Rev § 17.529), the weekly vacation pay received by the claimant being more than one-half, but less than, the weekly unemployment compensation benefit rate provided by the act. There was a time, prior to PA 1951, No 251, when section 29 of the employment security commission act, CL 1948, § 421.29 (Stat Ann 1950 Rev § 17.531), expressly disqualified an employee from unemployment compensation benefits for any week with respect to which he received any vacation pay. Had this appeal arisen prior to PA 1951, No 251, we would be obliged to reverse the circuit judge's ruling, at least with respect to the sixth claimant who received some vacation pay, in the face of such an express statutory disqualification. The act as amended in 1951 and thereafter, however, expressly includes among the unemployed entitled to unemployment compensation benefits those employees, such as claimants herein, 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. In the face of such express statutory language of entitlement, we are obliged to affirm the trial judge's decision. The statutory language to which we refer appears in CLS 1961, § 421.48 (Stat Ann 1960 Rev § 17.552), and was first added to the act by PA 1951, No 251, which significantly also repealed the section 29 disqualification for paid vacations. It now reads as follows: "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 remuneration *378 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, *379 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 *380 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 (CL 1948, § 421.2 [Stat Ann 1960 Rev § 17.502]), which declared the policy of the act to be, among other things, to provide for the relief of victims of "involuntary unemployment". However, that opinion failed to consider that section 29, even as then (in 1956) written, did not disqualify a claimant for benefits merely for leaving work voluntarily, but only if he "[l]eft his work voluntarily without good cause attributable to the employer or employing unit". Even if we accept the Dach majority's premise that the claimants had left their work voluntarily because their bargaining representative had voluntarily entered into a contract requiring such unpaid "vacations",[*] by a parity of reasoning it must be conceded such unemployment resulted also from a cause attributable to the employer, namely, the employer's voluntary execution of the contract requiring such unpaid "vacations". Thus, in our view, the express disqualification for voluntary unemployment without good cause attributable to the employer provided *381 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 Dach[1] has been overruled by implication, nor that it should be overruled expressly. It should control here. Malone[2] was correctly distinguished from Dach in the Malone opinion. *382 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." CL 1948, § 421.31 (Stat Ann 1960 Rev § 17.533). [1] I.M. Dach Underwear Co. v. Employment Security Commission, 347 Mich 465. [2] Malone v. Employment Security Commission, 352 Mich 472.