Krupa v. Western Union Telegraph Co.

Fess, J. This is an appeal on questions of law from a judgment of the Common Pleas Court reversing the decision of the Unemployment Compensation Board of Review which allowed the claim for benefits of the individual appellant, Anna Krupa. The claimant, as well as the board, appeals. Prior to March 8, 1949, claimant had been employed for a period of some six years by the appellee, the Western Union Telegraph Company. On February 8, 1949, she was informed that there would be no more work for her in Toledo after March 8th and that she should decide whether she was interested in a transfer to similar employment in Detroit, Michigan, or whether she would prefer to receive severance pay under the terms of the contract between her employer and the union. On April 11, 1949, she elected to receive her severance pay in the gross amount of $1,160.64. After her separation on March 8,1949, claimant was unsuccessful in securing other employment. At the *91 time of filing her initial claim on March 16, 1949, she was physically able and desirous of securing work and was available therefor. She had a base-period employment of more than 24 calendar weeks and her highest base-period quarterly earnings exceeded $591. Her claim, initially allowed, was thereafter disallowed by the administrator who found that claimant had elected to receive severance pay and had resigned from the service of the employer; that she was to receive $46.80 per week for 24 weeks and 4 days; and that she was entitled to severance pay until August 26, 1949. The administrator concluded that the claimant had not suffered and would not suffer loss of remuneration during the period covered by her separation pay. Upon claimant’s appeal to the board of review, her claim was referred to a referee, who after a hearing reversed the administrator’s decision and found claimant eligible to receive benefits under the terms of the initial determination. In so holding, he found that the severance pay she received on April 11, 1949, was for services rendered prior to March 8, 1949; that she rendered no services to the employer after such date so she could receive no remuneration allocable to any period subsequent to March 8, 1949; and that the receipt of severance pay on April 11 did not disqualify her for unemployment compensation. Thereafter, the application of the employer for leave to institute a further appeal was disallowed by the board, one member dissenting, from which decision an appeal was taken to the Common Pleas Court, which reversed the decision of the board and thereby denied unemployment compensation to the claimant. The journal entry merely recites that the decision of the board that the claimant is eligible to receive benefits is reversed. We may assume, however, that the reversal is based upon the statutory grounds that the de *92 cisión was either unlawful, unreasonable, or against the manifest weight of the evidence. The record of the hearing before the referee consists merely of narrative statements of the claimant and the traffic manager of the employer and certain exhibits. These exhibits disclose that the employer notified the claimant on February 8, 1949, that there would be no work for her in the Toledo office after March 8, 1949. Thereafter, on March 4, 1949, claimant elected to receive severance pay in accordance with the terms of the union contract. ■ Upon her separation from employment, the employer, in accordance with the law, gave her a Bureau of Unemployment Compensation form entitled “separation report” upon which the employer indicated that the reason for separation was “resigned.” To the report there were attached slips reciting that “this employee last worked on March 8, 1949, but received a legally required severance allowance of 24 weeks and 4 days pay at $46.80 per week until 8-26-49 in lieu of continued employment” and “this employee last worked on 3-8-49 but received in addition to remuneration paid for periods to the last day worked a vacation allowance of $99.16, which is the equivalent of at least full time wages up to and including 3-22-49. ’ ’ On April 11, 1949, claimant signed a receipt for the sum of $1,160.64 in full and complete payment and settlement of all claims of every nature which she might have against the employer and consented that her name be stricken from the employment rolls of the company as of March 8, 1949. The receipt also recited that she had voluntarily elected to receive severance pay in preference to all other options and rights to which her employment entitled her, including transfer, forced reduction furlough, seniority, pension and benefit rights; and that she “hereby voluntarily *93 terminate my employment with the company by voluntarily resigning my position.” It is stated in claimant’s brief that the traffic manager of the employer, on cross-examination, was unable to explain the basis for the statement attached to the separation slip that the severance pay was given as wages “until 8-26-49 in lieu of continued employment.” Upon this record, however, we must disregard this contention inasmuch as such testimony does not appear in the record. The union contract, which consists of 49 printed pages, throws no light upon what is meant by severance pay other than a reference in the paragraphs relating thereto to “a lump sum separation allowance.” The separation slip, however, attached as .an exhibit to the record, is some indication of an intention on the part of the employer to regard severance pay as remuneration for the period during which the separated employee performs no services. It is reasonable to assume that the allowance of severance pay was in consideration of length of service of employment since it was computed on the basis of past service and loss of seniority, pension and other benefits which the employee must relinquish incident to the acceptance of such severance pay. It may also be assumed that the purpose of the payment was to tide the separated employee over a possible period of unemployment. The only provisions of the Unemployment Compensation Act which bear upon the question here involved are to be found in the following sections of the General Code. Section 1345-1, General Code (122 Ohio Laws, 695), as here relevant, provided: í i * # # “d. ‘Benefits’ mean money payments payable to an individual, as provided in the Unemployment Com *94 pensation Act, for loss of remuneration due to his unemployment. Í { * * # “f. ‘Remuneration’ means all compensation for personal services, including commissions and bonuses and the cash value of all compensation in any medium other than cash. * * * Í C * # * “k. An individual shall be deemed ‘totally unemployed’ in any week during which he performs no services and with respect to such week no remuneration is payable to him.” (Italics added.) Section 1345-7, General Code, as pertinent here, provides : “a. No benefits shall be paid for any week with respect to which an individual is receiving or has received remuneration in the form of “(1) Remuneration in lieu of notice * * (Italics added.) The regulations of the board recite that remuneration in lieu of notice constitutes a continuation of wages for a designated period after termination of employment, and that the period covered by remuneration in lieu of notice is to be considered a period of employment and so reported. Remuneration in lieu of notice normally relates to a situation where an employee is entitled to several weeks’ notice prior to separation. However, when no work is available the employee is separated but his wages are paid to him for the period during which he would be entitled to employment. During such a compensated period of unemployment the employee would not be entitled to benefits. It will be noted that the employee is entitled to benefits in any week during which he performs no services and, with respect to such week no remuneration is payable to him. He must be unemployed and receive *95 no remuneration from his employer during the period of such unemployment in order to qualify for benefits. It is the contention of the employer that, inasmuch as it pays a substantial amount by way of severance pay upon which it in turn contributes unemployment compensation, it is unjust to permit a separated employee who receives such a substantial allowance to tide her over the period of unemployment to likewise receive unemployment compensation and thereby affect the employer’s merit rating. On the other hand, if the consideration for the payment of the severance pay is attributable to length of service and loss of seniority, retirement and other benefits, and is not for the purpose of reimbursing an employee for loss of the opportunity to work, the contention falls. However, upon the state of the record in the instant case, where there is some evidence from which it may be inferred that the severance pay was remuneration for the period of unemployment up to August 1949, we can not find and determine that there was prejudicial error in the judgment of the Common Pleas Court reversing the decisions of the referee and the board of review. Judgment affirmed. Conn, J., concurs.