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12/18/75 FORD MOTOR COMPANY v. JACKSON CLAIM BANIA

December 18, 1975

FORD MOTOR COMPANY
v.
JACKSON CLAIM OF BANIA CLAIM OF MOHAMMED



Williams, J. T. G. Kavanagh, C. J., concurred with Williams, J. Coleman, J., Dissenting. Fitzgerald, J., concurred with Coleman, 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 by the Court of Appeals that a circuit court should have dismissed an appeal from a decision of the Employment Security Commission where an appeal of the same decision involving the same claim and the same parties was pending in another circuit court at the time of filing the claim of appeal is affirmed by an equally divided Court (GCR 1963, 116.1[4]).

Opinion by Williams, J.

2. Unemployment Compensation -- Back-to-Work Benefits -- Vacation Pay -- Statutes.

Receipt of vacation pay by an employee during a layoff period does not interrupt the layoff for purposes of determining his eligibility for back-to-work benefits under the former statute (MCL 421.27[2], as amended by The opinion of the court was delivered by: Williams

Claimants Jan K. Bania and others employed in the Livonia plant of the Ford Motor Company were notified on March 12 and April 29, 1968 that there would be a layoff and vacation shutdown of the plant beginning July 15, 1968. Claimant Bania was laid off beginning July 15 for a period of two weeks. He requested and received one week of vacation beginning July 29. He returned to work on Monday, August 5. Claimant's vacation pay had been received with his last paycheck on July 12. The Employment Security Commission Appeal Board awarded Bania back-to-work benefits.

Claimants Donald W. Jackson, Akil Mohammed, and others employed at Ford's Sterling plant were notified that the plant would be shut down from July 22 through August 9, 1968. Mohammed's last day of work was July 19, 1968 and he returned to work on August 12. He received no vacation pay, and was administratively awarded back-to-work benefits. The Employment Security Commission Appeal Board affirmed the referee's ruling that Mohammed and other test claimants were entitled to back-to-work benefits.

The Ford Motor Company appealed to Ingham Circuit Court, but prior to that, Mohammed joined with five others in filing a "class action" appeal in Wayne Circuit Court. The Ingham Circuit Court, Donald L. Reisig, J., reversed the award of benefits. Claimants appealed to the Court of Appeals, V. J. Brennan, P. J., and Holbrook and Van Valkenburg, JJ., which reversed the Ingham Circuit Court and dismissed (Docket Nos. 13111-13116). The Ford Motor Company appeals. Held:

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

Justice Williams, with Chief Justice Kavanagh Concurring, would affirm the decision of the Court of Appeals for the following reasons: Receipt of vacation pay, although it interrupts payment of regular unemployment benefits, does not interrupt a layoff period for determining eligibility for back-to-work benefits. Claimant Bania's layoff period must be measured from the last day of work for determining eligibility for back-to-work benefits; he was unemployed for more than three weeks and is entitled to back-to-work benefits. The Ingham Circuit Court should have granted claimants' motion to dismiss based upon GCR 1963, 116.1(4) because, at the time Ford filed its appeal in the Ingham Circuit Court, an appeal taken from the same appeal board decisions involving the same parties and the same claims was pending in Wayne Circuit Court, and the prior action was not on its face one in which the court had no jurisdiction because the case contained two undecided justiciable questions at the time of the Ingham Circuit Court's refusal to dismiss the second action.

Justice Coleman, with Justice Fitzgerald Concurring, would reverse the decision of the Court of Appeals for the following reasons: A designated paid vacation period cannot be included in a period of unemployment for determining qualification for back-to-work benefits. Claimant Bania's one week of vacation pay is treated as remuneration under the statute; he thus was laid off for two weeks without remuneration. He was not laid off for more than three weeks regardless of his vacation pay; his layoff commenced July 15 and he returned to work exactly three weeks later. He did not qualify for back-to-work benefits. Claimant Mohammed had already been awarded back-to-work benefits and was therefore an improper member of the Wayne class suit seeking back-to-work benefits in that he did not seek relief common to the class and had no standing in such an action; he was not aggrieved. The Ingham Circuit Court was correct in refusing to dismiss the Ford appeal when on its face the claimants' class appeal was invalid because two of the claimants lived out of the Wayne Circuit Court's jurisdiction and the remaining four had no right to appeal because they were not aggrieved parties.

47 Mich App 700; 209 NW2d 794 (1973) affirmed by an equally divided Court.

The present proceeding like General Motors Corp v Erves, 395 Mich 604; 236 NW2d 449 (1975), requires this Court to construe § 27(c)(2) of the Michigan Employment Security Act (MESA) *fn1 and in particular the following language from that section:

"a period of unemployment * * *, which commenced with a layoff by an employing unit that continued with such employing unit for more than 3 weeks * * *."

In addition we are called upon to resolve a procedural question concerning the jurisdiction of the Ingham Circuit Court to review an appeal taken by Ford Motor Co. from an adverse decision by the Employment Security Appeal Board.

In this action we consider the following:

1. Whether a laid-off employee whose last day of work was on Friday, July 12, 1968, who was advised a layoff would begin July 15, 1968, who returned to work three weeks and two days later on Monday, August 5, 1968, and who received vacation pay allocated by the employer to the last week of this period, is entitled to back-to-work benefits under § 27(c) of the MESA. (Claim of Bania.)

2. Whether the Court of Appeals was correct in reversing the decision of the Ingham Circuit Court and dismissing the action because another action involving the same claim had previously been filed and was pending in Wayne Circuit Court. (Claim of Mohammed.)

We answer both questions affirmatively. In order to simplify matters we separate the factual and legal Discussions of the claims of Bania and Mohammed.

I -- Claim of Bania

A. Facts

Jan Bania was an employee of the Ford Motor Company at its Livonia plant. He was notified on April 29, 1968 by intra-company communication to all hourly employees of the Livonia plant that a scheduled plant shutdown would begin July 15, 1968 and normal operations would resume on August 5, 1968. Claimant's last day of work was Friday, July 12, 1968 and he returned to work as scheduled on Monday, August 5, 1968.

At the hearing Donald W. Shepler, Supervisor of Hourly Personnel and Labor Relations, testified on cross-examination that there was no work available for Jan Bania from July 13 to August 4, 1968 because the "plant, for all intents and purposes, was on a vacation shutdown, or closed down, or whatever term you want to use."

As is permitted by § 48 of the MESA *fn2 Ford designated the last week of shutdown for the allocation of Bania's accrued vacation pay. Bania received this pay on July 12, 1968.

Claimant filed with the commission and qualified for unemployment compensation. The commission found the week ending July 20, 1968, to be his waiting week and awarded him benefits of $50 for the week ending July 27, 1968. However, as the allocated vacation pay for the week ending August 3 was in excess of his weekly benefit rate, he was held by the commission to be ineligible for benefits during that week. Upon returning to work he applied for and was awarded back-to-work benefits of $50 for the week ending July 27, 1968.

B. Court May Reach Substantive Issue

As we uphold the Court of Appeals decision dismissing this action on procedural grounds, (see § II of this opinion) it is not necessary, nor in most instances would it be appropriate, for us to then consider the substantive issues. Normal practice would dictate that the parties refile in circuit court, and start the process anew. However, special circumstances are present in this action which make treatment of the substantive issue proper. First, the cases before this Court are test cases representing thousands of similar claims which have been pending since 1968. Further delay in resolution of the issues is undesirable. Second, the parties were put on notice that we wished to consider the specific issue relating to the impact of receiving vacation pay on eligibility for unemployment. They have briefed the issue in a commendable fashion and do not object to our reviewing this issue. Their briefs are supplemented by the various opinions from the administrative and judicial bodies below who have discussed this issue. Inasmuch as we have the authority to act under GCR 1963, 865.1(7), we deem it appropriate to consider and decide the substantive issues raised in the claim of Bania.

C. Receipt of Vacation Pay Does Not Terminate Layoff

Bania was out of work from July 12, 1968 to August 5, 1968. (See § I, D of this opinion for Discussion as to why layoff period is measured from July 12, the last day worked.) As is permitted by § 48 of the MESA *fn3 his employer designated the week ending August 3, 1968 for the allocation of vacation pay. Receipt of payments "for a vacation or a holiday" disqualify an employee for unemployment compensation benefits during the period designated by the employer because the employee is not "unemployed" within the meaning of § 48. See Brown v LTV Aerospace Corp, 394 Mich 702, 708; 232 NW2d 656 (1975). However, it does not follow that receipt of such payments means that he is no longer laid off under § 27(c)(2). *fn4

Referee Wesleyan Voigt was correct when he concluded that:

"the claimant was on lay-off and for the last week of such period, he was issued vacation pay which exceeded his weekly benefits rate, and consequently, was ineligible for benefits for this particular week. However, he performed no work for his employer during such week, and this was a continuance of his layoff which began July 12, 1968. Under the circumstances the vacation payment is not found to affect his lay-off for purposes of qualification for the so-called back-to-work payment. This provision of the Act does not require that an individual be eligible for waiting week credit and for benefits in each of the weeks involved in the lay-off period as he may be eligible for only a waiting week, or one or more benefit payment weeks."

As has been stated in this opinion and in Erves, supra, the term "layoff" denotes a particular status between an employer and his employee whereby the employee's work is terminated at the will of the employer for a specific or indefinite period of time because no work is available. While Jan Bania received vacation pay allocated to the week ending August 3, that week there was no available work for Bania with Ford Motor Company. Consequently, he must be considered laid off for the entire period from July 12, 1968 to August 5, 1968.

Our Conclusion that receipt of vacation pay does not interrupt a layoff period is also supported by the fact that the MESC, the agency charged with the administration of the MESA, treats the receipt of vacation pay in the same manner. Section 5648 of the MESC manual provides in pertinent part:

"1. A layoff period will not be interrupted by:

"b. A vacation payment or a holiday payment made for any period during the layoff period, even though under contract provisions such payment is allocated to a specific day(s) or week(s) during the period of unemployment, or, in the absence of contract provisions, is so allocated by the employer. The payment will, of course, as provided in Section 48 of the Act, be held to be remuneration and will be considered in determining eligibility for waiting period credit or benefits, but, since no work is performed, receipt of the payment does not interrupt the layoff." (Emphasis added.)

D. Layoff Commences as of the Last Day Worked

In General Motors Corp v Erves, 395 Mich 604, 637; 236 NW2d 449 (1975) (opinion of Williams, J.) we said that for the purposes of determining the eligibility for back-to-work payments the legislators intended that the layoff period be measured from the last day worked. This Conclusion was based in part on the fact that elsewhere in the MESA a "layoff" was measured as of the last day worked *fn5 and because the MESC, the agency charged with the administration of the MESA, both prior and subsequent to the adoption of the 1967 amendments to the back-to-work payment provisions, treated a layoff as commencing as of the last day worked.

Jan Bania's last day of work was Friday, July 12, 1968 and, for the purposes of determining eligibility for back-to-work payments, the layoff period must be measured from that date. That the employer posted an intra-company notice to all hourly workers on April 29, 1968 which listed the "Vacation Layoffs" as beginning the week of July 15, 1968 does not alter this fact.

In Erves we said that a layoff is "a termination of employment at the will of the employer" 395 Mich 633. While the employer has the power to lay off his employees in accordance with the exigencies of the production schedule, it is the statute, not the employer, which determines when a layoff commences for purposes of determining eligibility for back-to-work benefits. If the period of the layoff for § 27(c)(2) purposes was measured solely by the dates set forth in an employer's notice to his employees, the way would be opened for the employer to make the notice self-serving in order to deny employees benefits to which they are rightfully entitled.

While not dispositive, it appears that although the layoff was scheduled by announcement to begin Monday, July 15, the actual plant shutdown began July 13. The Supervisor of Hourly Personnel and Labor Relations of the Ford Motor Company, Livonia Transmission Plant, where plaintiff was employed, when asked "How many worked on July 13, Saturday, 1968?" responded, "I cannot answer you because of ...


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