Morris v. Metals Engineering Manufacturing Co.

M. F. Cavanagh, P.J. Plaintiff appeals by leave granted from an opinion and order of the Workers’ Compensation Appeal Board (WCAB) which modified the decision of the hearing referee by granting the defendant credit for all wages earned by the plaintiff for the purpose of computing the amount of compensation benefits owed by the defendant. Plaintiff was employed full time as a journeyman sheet metal worker and on weekends supplemented his income by working part time for other employers, including the defendant. One weekend, while working for the defendant, the plaintiff fell from a ladder and injured himself. For the next three months, the plaintiff was disabled from engaging in both part-time and full-time employment. During this period, the defendant paid the plaintiff compensation at the statutory rate. Although the plaintiff subsequently returned to work at his full-time job, he was unable to return to his part-time employment because of the remedial pain from his injury. The parties do not dispute *407 the hearing referee’s finding that the plaintiff has lost earning capacity in his part-time employment and that he is partially disabled within his skill. However, the parties disagree regarding the amount of compensation due the plaintiff. The WCAB, in modifying the hearing referee’s decision, held that the plaintiff is entitled to compensation benefits for his injury at the part-time job but that the defendant is entitled to a credit for all wages earned by the plaintiff in his skill, whether earned in part-time or full-time employment. Plaintiff counters that the defendant should receive credit only for any wages earned in favored part-time employment. We first note that the findings of fact made by the WCAB are conclusive and may not be set aside in the absence of fraud. MCL 418.861; MSA 17.237(861); Derwinski v Eureka Tire Co, 407 Mich 469, 481-482; 286 NW2d 672 (1979). However, the WCAB’s application of legal standards is properly reviewable by an appellate court. Askew v Macomber, 63 Mich App 359, 362; 234 NW2d 523 (1975), aff'd 398 Mich 212; 247 NW2d 288 (1976). Decisions of the WCAB which misapply the proper legal standards may be set aside, and here we are faced with such a case. In Bowles v James Lumber Co, 345 Mich 292; 75 NW2d 822 (1956), the Michigan Supreme Court held that when an employee receives a disabling injury while working at a particular job, any wages the employee receives from a separate, unrelated job which is unaffected by the disability may not be considered in calculating the benefits due from the disability-related employment. The Court reasoned that an employer should not be able to limit his or her liability by offsetting benefits due the employee with the employee’s wages earned at a separate job when those wages *408 could not be considered to increase the employer’s liability. Bowles, p 294. Subsequently, in Lahay v Hastings Lodge No 1965 BPOE, 398 Mich 467; 247 NW2d 817 (1976), the Court not only reaffirmed its decision in Bowles, supra, but also extended the Bowles holding by stating that '[unrelated and unaffected concurrent employment should not be considered under the statute for any purpose”. (Emphasis in original.) Lahay, p 480. Thus, not only may the wages from an employee’s unaffected job not be considered when calculating benefits due from the disability-related employment, but also the number of hours the employee works in the unaffected job may not be considered in deciding whether the employee is a part-time or full-time worker under the Worker’s Disability Compensation Act. Thus, the employer is protected from being required to calculate an employee’s compensation benefits based upon the total number of hours the employee worked in all his or her jobs while not being allowed to reduce the amount of benefits owed by any wages the employee was receiving from any other employment. At the time this cause of action arose, the Worker’s Disability Compensation Act provided different formulas for computing an employee’s average weekly wage, depending upon whether the employee was a part-time or full-time worker. MCL 418.371, subds (2), (3); MSA 17.237(371), subds (2), (3), then in effect, provided as follows: "(2) Average weekly wage means the weekly wage earned by the employee at the time of his injury, * * * but in no case less than 40 times his hourly rate of wage or earning. When it is found that the established normal work week for the employee’s classification of employment in the establishment of the employer where the employee suffered a personal injury is less *409 than 40 hours, then the average weekly wage shall be established by multiplying the employee’s hourly rate or earning by the number of hours customarily worked in the employee’s classification or employment in that place of employment or his actual earned wages, whichever is greater. "(3) When a hearing referee finds that the employee was employed specifically and not temporarily on a part-time basis, the average weekly wage shall be determined by multiplying the hourly rate or earning by the average number of hours worked in the part-time employment. When it is found that the employee has worked an average of 25 hours or more per week in all of his current employments, he shall not be considered a part-time employee.” Thus, an employee who worked more than 25 hours a week in concurrent employment was given the benefit of a fictional 40-hour work week, regardless of the number of actual hours worked, when calculating his or her average weekly wage. The purpose of this statutory section was to insure that an employee whose disability extended to all his or her current employment would be adequately and justly compensated by the employer in whose employ the worker was injured. The problem in Bowles, supra, and Lahay, supra, was that the employee’s disability did not extend to all his current employments, rather, he became disabled in his part-time employment but was able to return unhampered to his full-time employment. Thus, the calculation of benefits owed to the employee had to be based solely on the employment which was affected by the disability. In the instant case, the plaintiff became temporarily disabled in both his part-time and full-time employment but he was subsequently able to return to his full-time employment. However, the WCAB failed to distinguish between indefinitely *410 affected employment and temporarily affected employment. During the period that the plaintiff’s disability affected both his full-time and part-time employment, the defendant was entitled to consider any wages the plaintiff earned in his full-time job when calculating the benefits due the plaintiff. However, when the plaintiff’s full-time job was no longer affected by his disability, the defendant was no longer entitled to a credit for any wages the plaintiff earned in his full-time job. Lahay, supra. This does not result in a windfall to the plaintiff, as the defendant argues, because the hours the plaintiff works in his full-time employment may also not be considered to raise the plaintiff to a status of a full-time worker for the purpose of the defendant’s calculation of benefits. As the Court pointed out in Lahay, supra, p 480: "The result, then, is that an employee working at one full-time job and one part-time job will be considered a part-time employee under the act if his disabling injury affects only the part-time job, and in such case his average weekly wage would be calculated according to the first sentence of subsection 3 of the statute. [MCL 418.371(3); MSA 17.237(371)(3), prior to being amended by 1980 PA 357].” We reverse the decision of the WCAB and remand this case for a redetermination of the plaintiff’s average weekly wage, based solely upon the plaintiff’s part-time employment with the defendant. The defendant is only entitled to credit for any additional wages the plaintiff receives from part-time employment from the defendant or from replacement part-time employment. Reversed and remanded.