Opinion
Argued March 3, 1978
July 6, 1978.
Unemployment compensation — Fair hearing — Failure to object — Due process — Constitution of the United States, Fourteenth Amendment — Self-employed businessmen — Unemployment Compensation Law, Act 1936, December 5, P.L. (1937) 2897.
1. An unemployment compensation claimant is not denied a fair hearing and due process rights are not violated because of an alleged denial of the right to cross-examine witnesses or to present testimony, when the record reveals that counsel for claimant did conduct cross-examination and did present evidence and did not object to the action of the referee in concluding the hearing at the time he did. [417-18]
2. The denial of benefits under the Unemployment Compensation Law, Act 1936, December 5, P.L. (1937) 2897, to a corporate stockholder exercising substantial control over the corporation when his employment is terminated by the corporation and he becomes an unemployed businessman, is not violative of the Fourteenth Amendment to the Constitution of the United States, when an unemployment tax is collected from such corporate employer for such employes. [418-19]
Argued March 3, 1978, before Judges WILKINSON, JR., MENCER and BLATT, sitting as a panel of three.
Appeal, No. 301 C.D. 1977, from the Order of the Unemployment Compensation Board of Review in case of In Re: Claim of Michael J. Healey, Jr., No. B-139382.
Application to the Bureau of Employment Security for unemployment compensation benefits. Application denied. Applicant appealed to the Unemployment Compensation Board of Review. Denial affirmed. Applicant appealed to the Commonwealth Court of Pennsylvania. Held: Affirmed.
Albert G. Feczko, Jr., with him Feczko and Seymour, for appellant.
Reese Couch, Assistant Attorney General, with him Robert P. Kane, Attorney General, for appellee.
Michael J. Healey, Jr., a 20-percent shareholder in Catalyst Regeneration Service, Inc. (CRS), was discharged from his employment as Vice President of CRS on May 3, 1976. The Bureau of Employment Security (Bureau) denied his claim for unemployment compensation pursuant to Section 402(e) of the Unemployment Compensation Law (Act) on the ground that he was discharged for willful misconduct. After a hearing on appeal, the decision of the Bureau was "affirmed as modified" by the referee, who concluded that claimant was also ineligible under Section 402(h) of the Act, 43 P. S. § 802(h), because he was a self-employed businessman rather than an employee. The Unemployment Compensation Board of Review (Board) disallowed further appeal and this appeal followed.
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P. S. § 802(e).
Section 402(e) provides, in pertinent part:
An employe shall be ineligible for compensation for any week —
(e) In which his unemployment is due to his discharge or temporary suspension from work for willful misconduct connected with his work. . . .
Section 402(h) provides, in pertinent part:
An employe shall be ineligible for compensation for any week —
(h) In which he is engaged in self-employment. . . .
Claimant raises two issues on appeal. First, it is argued that he was denied a full and fair hearing in that he was not permitted to fully cross-examine the employer's representative and he was not permitted to take testimony from his witness. After a review of the record, we cannot agree.
The hearing was conducted in accordance with the rule in 34 Pa. Code § 101.21(b) which states:
(b) The tribunal shall determine the order in which the evidence shall be presented in all hearings. Within the discretion of the tribunal, the parties shall be permitted to present all evidence and testimony which they believe is necessary to establish their rights.
The record reveals that both the claimant and the employer's representative testified at length. Counsel for claimant was permitted to question the representative numerous times. Prior to the conclusion of the hearing, the referee indicated that he intended to end the hearing because there was sufficient evidence to resolve the issues. Nevertheless, when the conclusion of the hearing was announced, counsel for claimant merely asked whether he would not be permitted to "ask any further questions." The referee replied that there was no need to continue since the questioning was repetitious. Counsel did not object to the conclusion of the hearing, did not request that his witness be permitted to testify, did not offer to produce additional probative evidence, and did not request a further hearing.
While the referee may not improperly refuse to accept relevant, competent and material evidence, this record reveals no attempt to introduce such evidence and no denial thereof. No deprivation of claimant's due-process rights has been shown, and, therefore, we conclude that a fair hearing was not denied. See Knox v. Unemployment Compensation Board of Review, 12 Pa. Commw. 588, 317 A.2d 60 (1974).
The case of Spinner v. Unemployment Compensation Board of Review, 24 Pa. Commw. 662, 358 A.2d 455 (1976), relied upon by claimant, is distinguishable since, in Spinner, the referee actually refused the claimant's request that his witness be allowed to testify.
Claimant's second contention is that collection of the unemployment tax from employers for employees who are stockholders and who have substantial control over the employer corporation and a subsequent denial of unemployment compensation to those employees is a violation of the Fourteenth Amendment of the Constitution of the United States. This Court recently decided that this contention is without merit in Bagley Huntsberger, Inc. v. Employer Accounts Review Board, Bureau of Employment Security, Department of Labor Industry, 34 Pa. Commw. 488, 383 A.2d 1299 (1978).
For the foregoing reasons, we affirm the decision of the Board and enter the following
ORDER
AND NOW, this 6th day of July, 1978, the order of the Unemployment Compensation Board of Review, dated January 7, 1977, disallowing further appeal to Michael J. Healey, Jr., is affirmed.