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12/18/75 GENERAL MOTORS CORPORATION v. ERVES CLAIM

December 18, 1975

GENERAL MOTORS CORPORATION
v.
ERVES; CLAIM OF LAWSON; CLAIM OF BLOOMER



M. S. Coleman, J. Fitzgerald, J., concurred with Coleman, J. Williams, J. T. G. Kavanagh, C. J., concurred with Williams, J. Levin, Lindemer, and Ryan, JJ., took no part in the decision of this case.

SYLLABUS BY THE COURT

Decision of the Court

1. Appeal and Error -- Equally Divided Court.

A decision of the Court of Appeals that workers were laid off, for purposes of back-to-work benefits, as of the first day they would have expected to work after receiving notice of layoff, and that the receipt of "short week" benefits under a union agreement did not affect claims for back-to-work benefits is affirmed by an equally divided Court (MCLA 421.27[2], as amended by 1967 PA 254).

Opinion by Coleman, J.

2. Unemployment Compensation -- Layoffs -- Back-to-Work Benefits.

When an employee is notified of a layoff at the end of the regular work day on Friday his period of unemployment commences on the next regular work day, Monday, for the purposes of the statute providing for back-to-work benefits (MCLA 421.27[2], as amended by 1967 PA 254).

3. Unemployment Compensation -- Statutes -- Construction -- Purpose.

The Michigan Employment Security Act softens the economic burdens of those who through no fault of their own find themselves unemployed through the payment of benefits in order that they might maintain purchasing power and limit the social and economic consequences of unemployment.

4. Unemployment Compensation -- "Layoff" -- Statutes -- Construction.

A "layoff", as the word is used but not defined in the Employment Security Act, is a temporary dismissal by the employer which anticipates reemployment; it is therefore distinguished from unemployment by reason of discharge, resignation, or other permanent termination (MCLA 421.27[2], as amended by 1967 PA 254).

5. Unemployment Compensation -- Back-to-Work Benefits.

The statute providing for back-to-work benefits requires a period of unemployment which commenced with a layoff that continued for more than three weeks (MCLA 421.27[2], as amended by 1967 PA 254).

6. Statutes -- Construction -- Agency Interpretation.

Although consideration should be afforded to the interpretation of the Michigan Employment Security Act by the Employment Security Commission, the ultimate responsibility to interpret legislative intent cannot be abdicated by the Court.

7. Unemployment Compensation -- Layoff -- Short-Week Benefits -- Back-to-Work Benefits.

Unemployment compensation claimants were unemployed for exactly three weeks where they received notice of a layoff at the end of their shifts on a Wednesday and returned to work on a Wednesday four weeks later but where short-week benefits amounting to 80% of base pay were paid for the two days they did not work in each of the first and last weeks; they lost pay for exactly three weeks and because the period of unemployment was not in excess of three weeks they are not entitled to back-to-work benefits (MCLA 421.27[2], as amended by 1967 PA 254).

8. Unemployment Compensation -- Layoff -- Back-to-Work Benefits.

The economic impact on hourly employees who received layoff notices at the end of their shifts on Friday did not begin until the next regular day of work, Monday, and their period of unemployment which commenced with a layoff, for purposes of the back-to-work benefits provision of the Employment Security Act, started on Monday, the first day when no wages were paid, not on the Friday on which they received notice (MCLA 421.27[2], as amended by 1967 PA 254).

Opinion by Williams, J.

9. Unemployment Compensation -- Back-to-Work Payments -- Statutes.

The language and purpose of the back-to-work payments provision of the Employment Security Act, as amended in 1967, differed substantially from those of the original provision; the 1967 provision was designed, as a compromise in response to efforts to eliminate the waiting week during which unemployed individuals are ineligible for benefits, to allow certain, but not all, individuals to receive back-to-work benefits for the waiting week (MCLA 421.27[2], as amended by 1967 PA 254).

10. Unemployment Compensation -- Back-to-Work Payments -- Statutes -- Three-Week Requirement.

The reference in the back-to-work provision of the Employment Security Act to "more than 3 weeks" is to the period of the "layoff", not to the period of the "unemployment"; it requires that the layoff, not the period of unemployment, continue for more than three weeks (MCLA 421.27[2], as amended by 1967 PA 254).

11. Unemployment Compensation -- Statutes -- Words and Phrases -- "Unemployment".

The word "unemployment" is specifically defined in the Employment Security Act, and therefore has a special meaning; the critical factors for determining if an individual is in a state of "unemployment" is whether he has received remuneration or performed any services during the weeks in question (MCLA 421.48).

12. Unemployment Compensation -- Statutes -- Words and Phrases -- "Layoff".

The term "layoff" is nowhere defined in the Employment Security Act, and it must be presumed that it was used in its normally accepted meaning; it is not a termination of the relationship between the employee and his employing unit, but a change in the relationship whereby, at the will of the employer, the employee for a fixed or indefinite period suspends his labors for his employer because no work is available (MCLA 421.27[2], as amended by 1967 PA 254).

13. Unemployment Compensation -- Back-to-Work Payments -- Layoff -- Unemployment.

The terms "layoff" and "unemployment" as used in the back-to-work provision of the Employment Security Act have substantially different meanings and an employee's period of layoff is unaffected by whether he is employed temporarily by another employer (MCLA 421.27[2], as amended by 1967 PA 254).

14. Unemployment Compensation -- Layoff -- Back-to-Work Payments -- Eligibility.

An employee who was laid off on a Wednesday and did not work for four weeks must be considered to have been laid off for the entire four-week period and entitled to back-to-work benefits even though he received short-week benefits for the two weeks for which he received regular pay for three days (MCLA 421.27[2], as amended by 1967 PA 254).

15. Unemployment Compensation -- Back-to-Work Payments -- Layoff -- Computation of Time.

A layoff commences as of the last day worked for the purpose of determining whether it continued "for more than 3 weeks" as required for eligibility for back-to-work payments of unemployment compensation (MCLA 421.27[2], as amended by 1967 PA 254).

16. Unemployment Compensation -- Back-to-Work Payments -- Layoff -- Computation of Time -- Statutes -- Construction.

The established policy of the Employment Security Commission, before the 1967 amendment of the back-to-work provision, that the layoff was measured as of the last day worked for purposes of filing and reporting may be presumed to have been known to the Legislature, and it is proper to conclude that when the 1967 amendment was enacted the Legislature intended that the layoff period should be measured from the last day worked as was the practice at the time (MCLA 421.27[2], as amended by 1967 PA 254).

17. Unemployment Compensation -- Back-to-Work Payments -- Layoff -- Computation of Time -- Statutes -- Construction.

The policy of the Employment Security Commission in treating the last day worked as the first day of the layoff for purposes of eligibility for back-to-work payments under the 1967 amendment of the statute should be given considerable weight in construing the statute (MCLA 421.27[2], as amended by 1967 PA 254).

18. Unemployment Compensation -- Back-to-Work Payments -- Layoff -- Computation of Time -- Economic Impact.

The "economic impact" method of determining the start of a layoff to be the first day that wages are lost treats employees laid off on a Friday differently from those laid off on some other week day, because the former cannot count the first weekend to determine whether the layoff is for more than three weeks, whereas the latter can (MCLA 421.27[2], as amended by 1967 PA 254).

The opinion of the court was delivered by: Coleman; Williams

John Erves, Elmer Bloomer, and Gus P. Kartsonas received notices of layoff for a model changeover from their employer, Cadillac Motor Car Division of General Motors Corporation, at the end of their shifts on a Friday. They returned to work on a Monday, 24 calendar days later. Billy Joe Lawson and Lester A. Griffith received notices of layoff from the same employer on a Wednesday and returned to work on a Wednesday four weeks later; pursuant to contract they received short-week benefits of 80% of base pay for two days not worked in each of the two weeks for which they also received regular pay for three days. All claimants filed for back-to-work benefits pursuant to the Employment Security Act, MCLA 421.27(c)(2); MSA 17.529(c)(2). The Employment Security Commission determined that the claimants were entitled to benefits, and their employer appealed to the Wayne Circuit Court, Roland L. Olzark, J., which ordered payment of back-to-work benefits. The Court of Appeals, Levin, P. J., and V. J. Brennan and O'Hara, JJ., reversed as to the claims of Bloomer, Kartsonas and Erves and affirmed as to the claims of Lawson and Griffith (Docket Nos. 13094-13098). General Motors Corporation appeals as to Lawson, and claimant Bloomer appeals. Held:

The decision of the Court of Appeals is affirmed by an equally divided Court.

Justice Coleman, with Justice Fitzgerald Concurring, would reverse the decision of the Court of Appeals as to Lawson and affirm as to Bloomer, i.e., would hold that none of the claimants is entitled to benefits. She would apply the "economic impact" test because the intention of the Employment Security Act is to soften the economic impact of unemployment. When an employee receives notice of layoff on a Wednesday and returns to work on a Wednesday four weeks later, and pursuant to contract receives short-week benefits of 80% of base pay for the two days not worked in each of the two weeks for which he also received regular pay for three days, he has lost only three full weeks of wages and should not be entitled to back-to-work pay. Lawson and Griffith were not laid off in excess of three weeks because they were not unemployed in excess of three weeks; therefore, they are not entitled to back-to-work benefits. In the case of employees laid off on a Friday who have been paid for that week and would receive no additional pay for Saturday or Sunday had they not been laid off, the economic impact is not felt until Monday, the next working day. When an employee is notified of a layoff at the end of the regular work day on Friday, his period of unemployment commences on the next regular work day, Monday, for the purposes of the statute providing back-to-work benefits. Bloomer, Kartsonas and Erves are not entitled to back-to-work pay.

Justice Williams, with Chief Justice Kavanagh Concurring, would affirm the decision of the Court of Appeals as to Lawson and reverse as to Bloomer i.e., he would hold that all claimants are entitled to benefits. The "back-to-work" benefit provision of the Employment Security Act, as amended in 1967, was a compromise designed, in response to efforts to eliminate the waiting week during which unemployed persons are ineligible for benefits, to allow certain, but not all, persons to receive back-to-work benefits for the waiting week. The reference to "more than 3 weeks" in subsection (ii) of the back-to-work section pertains to the period of the "layoff" (which is not merely a kind of unemployment) rather than the period of the "unemployment", i.e., it requires that the layoff, not the period of unemployment, continue for more than three weeks. Lawson, whose last day of work was July 31, 1968, and who returned to work on August 28, 1968, was laid off for exactly four weeks within the meaning of subsection (ii), and since it is undisputed that he met the requirements of subsections (i) and (iii), he is entitled to back-to-work benefits. The last day worked, not the next regularly scheduled work day, is the start of the layoff period for purposes of back-to-work benefits. Claimant Bloomer, who was laid off on a Friday at the end of work and returned to work on a Monday three weeks and two days later, was therefore laid off for more than three weeks and is entitled to back-to-work benefits.

47 Mich App 591; 209 NW2d 713 (1973) affirmed by an equally divided Court.

M. S. Coleman, J.

Plaintiff, General Motors Corporation, appeals a judgment of the circuit court ordering payment of back-to-work benefits to five individual defendants. The Court of Appeals reversed as to the claims of Bloomer, Kartsonas and Erves and affirmed as to the claims of Lawson and Griffith.

In each case, the controlling statute is MCLA 421.27(c)(2); MSA 17.529(c)(2), which provides:

"(2) When an individual has had a period of unemployment: (i) for which he has been paid benefits for 1 or more weeks or has received a credit for a waiting week, (ii) which commenced with a layoff by an employing unit that continued with such employing unit for more than 3 weeks, and (iii) which has been terminated by his accepting and engaging in full-time work with any employing unit within the 13 weeks immediately following his last week of employment with such employing unit, such individual shall be paid for the most recent week in such period for which benefits are payable or were paid to him or for which he was entitled to credit for a waiting week, an amount equal to his currently applicable weekly benefit rate in addition to any benefits otherwise payable or paid to him for such week. * * *"

The questions before the Court are how this enactment falls upon the following situations:

(1) Employes receive their layoff notice at the end of the shift on Friday, while receiving full pay for that week. They return to work exactly three weeks from the next work day, Monday, or three weeks and two days after receiving notice of layoff.

(2) Employes receive their notice of layoff at the end of the Wednesday shift and are paid for those days plus 80% of wages for two remaining days pursuant to contract ("short-week" benefits). They return to work on a Wednesday and again receive short-week benefits for Thursday and Friday, thereby being "unemployed" for three weeks by definition, although not working for four weeks.

Bloomer-Kartsonas-Erves

Because two factual situations exist, we consider first the Bloomer-Kartsonas-Erves matters.

The specific question arising from these claims is:

When an employe is notified of a "layoff" at the end of the regular work day on Friday, does his "period of unemployment" commencing with a layoff begin on Friday, Saturday or on the next regular work day, Monday, for the purposes of MCLA 421.27(c)(2); MSA 17.529(c)(2)? *fn1

We agree with the Court of Appeals that the "period of unemployment * * * which commenced with a layoff" began on Monday.

Defendants were hourly employes of General Motors Corporation, Cadillac Motor Car Division. All were laid off during the annual model changeover period in the summer of 1968. *fn2

Bloomer and Kartsonas received their layoff notices at the end of their shift on Friday, August 2. They were paid for that entire week. On Monday, August 26, the twenty-fourth calendar day later, they returned to work. Erves received his notice at the end of his shift on Friday, July 5, and, similarly, returned to work on a Monday, 24 calendar days later.

Each defendant filed a claim for back-to-work benefits pursuant to § 27(c)(2) of the Michigan Employment Security Act, the interpretation of which is the subject matter of this appeal.

The appeal board and the Wayne Circuit Court found that defendants were entitled to back-to-work benefits, reasoning that their layoff became effective on the last day worked and so they would have been laid off more than three weeks. The Court of Appeals reversed, 47 Mich App 591; 209 NW2d 713 (1973), reasoning that the next regularly scheduled work day for which defendants would have received pay was Monday and so they would not have been laid off for purposes of this subsection for more than three weeks. Exactly three weeks of pay would have been received if claimants had been working. Underlying the Court of Appeals decision is the theory of economic impact.

Legislative Policy:

In deciding this issue, we look to the expressed declaration of policy of the Michigan ...


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