The construction of the statute in accord with the above discussion has been followed in other states. In Ackerson v. Western Union Tel. Co., 234 Minn. 271 [ 48 N.W.2d 338], it was held that employees discharged because of mechanization and paid "severance" pay based on the period of prior service under a collective bargaining agreement, the same as the dismissal pay here, were entitled to unemployment compensation under an unemployment compensation statute the same as ours. The court said: "Section 268.04, subd. 23, provides that an individual shall be deemed unemployed in any week in which he performs no service and with respect to which no wages are payable to him.
Busch points to the fact that while allocation is specifically authorized by subdivision 3(1) — the provision governing severance pay — similar language does not appear in subsection (4), governing pensions; thus, Busch argues that his special pension payment may not be allocated. Busch cites Ackerson v. Western Union Telegraph Co., 234 Minn. 271, 48 N.W.2d 338 (1951) in support of his argument. Ackerson involved the receipt of a lump sum severance payment under a prior version of Minn.Stat. § 268.08, subd. 3(1). At that time, the statute did not expressly provide for allocation of severance payments.
In so ruling, the Busch court distinguished a prior decision by the Supreme Court of Minnesota which had held that the severance payment could be used to offset the employee's unemployment compensation benefits for only the week in which the payment was actually received. See Ackerson v. Western Union Tel. Co., 48 N.W.2d 338 (Minn. 1951); see also Busch, supra, 415 N.W.2d at 895. The Ackerson court had noted that severance pay usually is "in no way related to or dependent upon the employee's employment status after separation" so that even if the employee obtained a new position the day after termination, she would still be entitled to retain both her severance pay as well as wages earned at her new position.
Petitioners urge that dismissal or severance payments should not be considered as "wages" because, assertedly, such payments are not compensation for services but rather are partial compensation for the loss of anticipated future earnings, the present necessity to retain and acquire new skills, and the need to seek and acquire new jobs without seniority rights. (See Ackerson v. Western Union Tel. Co., 234 Minn. 271 [ 48 N.W.2d 338, 343, 25 A.L.R.2d 1063]; Western Electric Co. v. Hussey, 35 N.J. 250 [ 172 A.2d 645, 650-651]; Balding v. TennesseeDepartment of Employment Sec., 212 Tenn. 517 [ 370 S.W.2d 546, 547 et seq.].) Petitioners also contend, Bradshaw notwithstanding, for the same reason that dismissal and severance payments are not "wages," that such payments are not made "with respect to" any particular period of time although the amounts thereof are measured by a length of time, and that even such time measure is determined from services performed prior to dismissal or severance.
Messrs. James Julien Bush, of Columbia, and John D.Long and James M. Arthur, of Union, for Respondents, cite: As to severance payments, made upon severance of employment,being deemed wages: 306 P.2d 669; 48 N.W.2d 338; 243 S.W.2d 217; 148 N.E.2d 734; 112 S.E.2d 167; 132 S.W.2d 514. March 13, 1962.
It is true that some statutes refer to dismissal payments "which the employer is not legally required to make." See Industrial Comm. v. Sirokman, Colo., 306 P.2d 669; Ackerson v. Western Union Tel. Co., 234 Minn. 271, 48 N.W.2d 338, 2, A.L.R.2d 1063. Our statute, however, like those in many other states, does not contain such a restriction.
Below we cite first the cases and Law Reviews in accord with our conclusion that the employees are not disqualified and following them the decisions holding to the contrary. In accord with our view are: Kroger Co. v. Blumenthal, 13 Ill.2d 222 ( 148 N.E.2d 734); Western Union Tel. Co. v. Texas Employment Commission (Tex.Civ.App.) 243 S.W.2d 217; Dubois v. Maine Employment Commission, 150 Me. 494 ( 114 A.2d 359); Industrial Commission of Colorado v. Sirokman, 134 Colo. 481 ( 306 P.2d 669); Keystone Mining Co. v. Unemp. Comp. Bd. of Review, 167 Pa. Supr. 256 ( 75 A.2d 3); 100 U. of Pa. Law Review 144; 64 Harvard Law Review 681; Ackerson v. Western Union Telegraph Co., 234 Minn. 271 ( 48 N.W.2d 338, 25 A.L.R. 2d 1063). Several unemployment departments or commissions have recently rendered similar decisions.
Following the contention that the dismissal payment was a termination allowance contemplated by the statute which had the effect of disqualifying Employee for only the week in which it was paid, it advances the somewhat inconsistent argument that the payment actually represented additional remuneration for the Employee's prior services. The Commission based its decision on Ackerson v. Western Union Telegraph Co., 1951, 234 Minn. 271, 48 N.W.2d 338, 25 A.L.R.2d 1063. In this court Employee and Commission insist that the Ackerson case is squarely in point and urge us to follow it.
It was a mutually advantageous arrangement: To the employee, reasonable assurance of tenure and the attendant benefits and privileges; to the employer, reasonable assurance of continuous service and the avoidance of disruptive labor turnover without preventing reduction of force when necessary because of changes in operating methods or for the sake of economy. These factors were well expressed by the Supreme Court of Minnesota, concerning a similar severance pay plan, in Ackerson v. Western Union Tel. Co., 234 Minn. 271, 48 N.W.2D 338, 342, 25 A.L.R.2d 1063: 'Severance pay was in no way related to or dependent upon the employe's employment status after separation. She received the payment even though she might secure a job the next day.
Although one of the objectives of severance pay, sometimes known as dismissal compensation, is to ease the employee's financial burden while searching for new employment, severance pay is also "[p]artial compensation for loss of seniority rights, loss of pension rights; compensation for retraining or acquiring new skills; and many others." Ackerson v. Western Union Tel. Co., 48 N.W.2d 338, 342 (Minn. 1951); see Dismissal-Pay Provisions in Union Agreements, 1949, 70 Monthly Labor Review 384 (1950). Thus, severance benefits serve the same purpose as notice of termination of employment.