Ford Motor Co. v. Ohio Bureau of Employment Services

H. Brown, J. This court has recognized that an employee who, pursuant to a labor-management agreement, accepts termination in lieu of a reassignment or involuntary layoff is entitled to unemployment compensation benefits. Bockover v. Ludlow Corp. (1986), 23 Ohio St. 3d 190, 23 OBR 352, 492 N.E. 2d 149. This case asks us to decide whether an employee is entitled to unemployment benefits where the employer, due to lack of work for its employees, offers a plan of voluntary termination and an employee, who because of seniority would not have been laid off or reassigned, consents to termination under the terms of the employer’s plan. For the reasons which follow, we conclude that the employee is eligible and reverse the judgment of the court below. I Eligibility In general, an employee who leaves voluntarily without just cause — a so-called “voluntary quit” — is ineligible to receive unemployment compensation benefits. See R.C. 4141.29(D)(2)(a). Before 1974, this rule applied to employees who accepted a layoff under the terms of a collective bargaining contract or an established employer policy which provided the option of accepting a lower-rated job or of “bumping” into a position held by a fellow employee with less seniority. See former R.C. 4141.29 (134 Ohio Laws, Part I, 91, 128-129); Legislative Services Commission, Analysis of Am. Sub. S.B. No. 52 (July 25, 1973) 4 (“LSC Summary”). In 1973, the General Assembly enacted a series of amendments to R.C. 4141.29(D), effective in 1974, to create exceptions to the “voluntary quit” rule. 135 Ohio Laws, Part I, 201, 242-243; Bockover, supra, at 194, 23 OBR at 355, 492 N.E. 2d at 149.1 One such exception is found in R.C. 4141.29(D)(2)(a)(ii). This statute states in pertinent part: “* * * [N]o individual may serve a waiting period or be paid benefits under the following conditions: "* * * “(2) For the duration of his unemployment if the administrator finds that: ‘ ‘(a) He quit his work without just cause or has been discharged for just cause in connection with his work, provided division (D)(2) of this section does not apply to the separation of a person under any of the following circumstances: "* * * “(ii) Separation from employment pursuant to a labor-management contract or agreement, or pursuant to an established employer plan, program, or policy, which permits the employee, because of lack of work, to accept a separation from employment[.]” (Emphasis added.) Landra Guy was not personally [190] faced with the possibility of being laid off or of being forced to accept a lower-rated job. However, it is undisputed that Ford offered the VTP in order to reduce the number of its employees due to a lack of work. In other words, lack of work necessitated the elimination of some employees; the question was: which employees? Thus, we come to the central question posed by this appeal: does the phrase “lack of work” in R.C. 4141.29(D)(2)(a)(ii) refer to a lack of work for the particular claimant, or for the employer’s work force as a whole? Ford and its supporting amici contend that the phrase “lack of work” in R.C. 4141.29(D)(2)(a)(ii) refers to a lack of work for the particular employee who files for unemployment compensation, and that the statute is intended to protect only employees who choose not to accept reassignment or exercise “bumping” rights. This interpretation renders the statute meaningless. Employees who choose not to accept reassignment or exercise “bumping” rights are protected by R.C. 4141.29(D)(2)(b)(i), which was also enacted as part of the 1974 amendments. 135 Ohio Laws, Part I, at 243; Bockover, supra. If there is no work for a particular employee, there is no reason for the employer to offer that employee an incentive to leave — the employer will simply lay the employee off. Even before the 1974 amendments, an employee in this situation would qualify for unemployment compensation. On the other hand, if we read this phrase as referring to a lack of work in that portion of the employer’s work force covered by the VTP, then R.C. 4141.29(D)(2)(a)(ii) serves to create an exception to the “voluntary quit” rule for participants in a VTP. As a matter of economics, an employer will not reduce its work force, by layoffs or other means, unless it has more employees than it needs — in other words, a “lack of work” for some of its employees. When such a reduction becomes necessary, the employer may (as Ford did in the instant case) choose to ask more senior employees to volunteer to leave before involuntarily laying off employees in inverse order of seniority. If the employer deems it advantageous to make such an offer, the employer must provide some sort of incentive to encourage employees to volunteer. The advantage to the employer lies in the elimination of employees who draw higher salaries and require more expensive health care insurance, thus saving the employer money in the long run. Whether it is a senior employee who volunteers to leave (such as the claimant in the instant case, Landra Guy) or a junior employee who is laid off because no one volunteered, the job has still been eliminated due to a “lack of work” within the employer’s work force. “The presumption always is, that every word in a statute is designed to have some effect, and hence the rule that, ‘in putting a construction upon any statute, every part shall be regarded, and it shall be so expounded, if practicable, as to give some effect to every part of it.’ ” (Emphasis sic.) Turley v. Turley (1860), 11 Ohio St. 173, 179 (citing Commonwealth v. Alger [Mass. 1851], 7 Cush. 53, 89); see, also, R.C. 1.47(B) (“In enacting a statute, it is presumed that * * * [t]he entire statute is intended to be effective * * *.”). As we have noted, R.C. 4141.29 (D)(2)(a)(ii) would be rendered meaningless if we accept Ford’s construction of the statute. Further, by the plain language of the statute, an exception to the “voluntary quit” rule is created for an employee who accepts termination under a plan offered by the employer due to a lack of work. [191] Landra Guy is precisely such an employee. Accordingly, in order to give meaning to the statute at issue, we hold that an employee who elects voluntary termination under a plan or policy adopted by. the employer to reduce the number of employees due to a lack of work in the employer’s overall work force is entitled to unemployment compensation under R.C. 4141.29(D)(2)(a)(ii). II Setoff Ford and its supporting amici further argue, in support of their construction of the statute, that it would be inequitable for Landra Guy to draw unemployment compensation while also receiving a substantial sum from her employer. While R.C. 4141.29 does not contain any financial or equitable criteria for unemployment compensation eligibility, the General Assembly has provided in R.C. 4141.31(A)(4) for a setoff in the amount of any “* * * separation or termination pay paid to an employee at the time of his separation from employment[.]” A question of fact is presented: is a payment to a departing employee “separation or termination pay” within the meaning of R.C. 4141.31(A)(4) or the sale of an asset, namely, the sale of the employee’s seniority and pension rights? See Budd Co. v. Mercer (1984), 14 Ohio App. 3d 269, 14 OBR 298, 471 N.E. 2d 151; Krupa v. Western Union Tel. Co. (1951), 90 Ohio App. 90, 46 O.O. 443, 103 N.E. 2d 784; Schleicher v. General Motors Corp. (June 22, 1984), Trumbull C.P. No. 83-CV-884, unreported; Sigley v. Bd. of Review (Nov. 14, 1984), Trumbull C.P. No. 83-CV-1112, unreported. In its initial appeal to the court of common pleas, Ford asserted that the payments it made to Guy under the VTP should have been set off against her unemployment compensation benefits. In the court of appeals, Ford argued the setoff issue as an alternative ground for affirmance in the event the court reversed on the issue of eligibility. Our review of the record indicates that this issue was not considered by either of the courts below. Whether the payments to Guy were a purchase of assets or constitute separation pay is primarily a question of fact. The determination should be considered first by the trial court. Accordingly, we remand the case for consideration of the setoff issue. Judgment reversed and cause remanded. Moyer, C.J., Holmes and Wright, JJ., concur. Sweeney, Douglas and Res-NICK, JJ., concur in part and dissent in part. Footnotes [1] This legislation was apparently spawned as part of a comprehensive proposal for reform of the unemployment compensation laws, submitted by the Unemployment Compensation Advisory Commission (established by R.C. 4141.08). According to this proposal as it appears in the appendix to the brief of appellee filed in this court, the commission stated: “The proposal updates the law by recognizing that it is desirable in many industries to keep productive efficiency by stabilizing the work force to reduce the movement of skilled personnel from their particular skills during a reduction in work force; and, at the same time, to give protection to those workers who have acquired equities in their employment through length of service. The proposal does not vitiate the qualifications for benefit eligibility but only makes them amenable to our industrial practice.”