The “notice of hearing” referred to in subsection (b) of the regulation is the notice required when the UCBR determines that a further hearing is necessary, not the referee's notice of hearing. Mellott v. Unemployment Compensation Board of Review, 105 Pa.Cmwlth. 101, 523 A.2d 412, 414 (1987); Libonate v. Unemployment Compensation Board of Review, 57 Pa.Cmwlth. 422, 426 A.2d 247, 248–49 (1981); see also34 Pa.Code § 101.105(a). Here, the record establishes that the only section of the Law at issue before the service center and the referee was section 402(e). Employer's initial separation information stated that Claimant was discharged, and Employer's petition for appeal to the referee specified that only section 402(e) was at issue.

While this situation has not arisen before in Missouri, many other courts have previously found it to violate due process. Camacho v. Bowling, 562 F. Supp. 1012 (N.D.Ill. 1983); Linscott v. Director of Labor, 9 Ark. App. 103, 653 S.W.2d 150 (1983); Gonzales v. Texas Employment Comm'n, 653 S.W.2d 308 (Tex.App. 1983); Swezey v. Employment Div., 47 Or. App. 923, 615 P.2d 1103 (1980); Kuraspediani v. Employment Div., 38 Or.App. 409, 590 P.2d 294 (1979); Libonate v. Commonwealth Unemployment Comp., 57 Pa.Cmwlth. 422, 426 A.2d 247 (Pa.Cmwlth.Ct. 1981); Fournier v. State, 121 N.H. 283, 428 A.2d 1238 (1981); Kaufman v. Dept. of Emp. Sec., 136 Vt. 72, 385 A.2d 1080 (1978); White v. Idaho Forest Industries, 98 Idaho 784, 572 P.2d 887 (1977); Lewis v. Hot Shoppes, 211 So.2d 20 (Fla.App. 1968). The circuit court's decision is reversed and the cause is remanded to the circuit court with directions to remand to the Labor and Industrial Relations Commission for further proceedings.

The court held there that this denied claimant the fair hearing mandated by statute and caselaw and remanded the case for further proceedings. The Pennsylvania Board of Review in Libonate v. Commonwealth Unemployment Compensation, 426 A.2d 247 (Pa.Commw. Ct. 1981), changed the issue of the claimant's failure to accept suitable work to removal from the job market. The court stated that the board may consider issues delineated in the notice of hearing, expressly ruled on by the referee, and raised by agreement of the parties, but held that the claimant was denied an effective opportunity to be heard on the determinative issue of her unavailability for work when the board disqualified her on a ground different from that relied upon and considered in the referee's decision.

Here, the referee did not address the issue of Claimant's ability and availability to work for purposes of eligibility under Section 401(d)(1), and Claimant never consented to a review of a Section 401(d)(1) challenge. Accordingly, the Board asserts Claimant would have been prejudiced if it ruled on an issue not initially decided by the Department. Turgeon v. Unemployment Comp. Bd. of Review, 64 A.3d 729 (Pa. Cmwlth. 2013); Libonate v. Unemployment Comp. Bd. of Review, 426 A.2d 247 (Pa. Cmwlth. 1981). The Board contends it properly limited its review to the willful misconduct issue.

This is precisely the reason that petitioner believes the Board erred. In Libonate v. Unemployment Compensation Board of Review, 57 Pa. Commw. 422, 426 A.2d 247 (1981), we held that the Board could consider only the following issues: (1) any issue ruled upon by the referee; (2) any issue raised in the notice of hearing form used by the Office of Employment Security; and, (3) any issue which does not fall into the first two categories but which the parties agree may be considered. In that case, the claimant had been denied benefits by OES and the referee based upon her failure to accept suitable work in violation of Section 402(a).

We agree with the Board that this issue is squarely controlled by our holding in Kligge v. Unemployment Compensation Board of Review, 89 Pa. Commw. 30, 491 A.2d 325 (1985), wherein this Court condoned the Board's action in changing the basis of a disqualification from Section 402(e) to Section 402(b) without consent of the parties. As was explained recently in Mellott v. Unemployment Compensation Board of Review, 105 Pa. Commw. 101, 523 A.2d 412 (1987), while the Board generally is not free to rule upon an issue about which the parties have received no notice, see Libonate v. Unemployment Compensation Board of Review, 57 Pa. Commw. 422, 426 A.2d 247 (1981), when one party insisted that a quit occurred while the other insisted that there was a termination, "the parties had notice that both Sections of the Law would be considered and that the final resolution of the issue would depend upon the Board's final credibility determination." Mellott, 105 Pa. Commw. at 105, 523 A.2d at 414.

However, any issue in the case, with the approval of the parties, may be determined though not expressly ruled upon or indicated in the notice of hearing, if the speedy administration of justice, without prejudice to any party, will be substantially served thereby and are supported by the record.Libonate v. Unemployment Compensation Board of Review, 57 Pa. Commw. 422, 426 A.2d 247 (1981), cited by Mellott, interpreted the above regulation to mean that the Board, in an appeal from a referee's decision, may consider: (1) those issues expressly ruled upon by the referee; (2) those issued delineated in the notice of hearing; and (3) any other issues which the parties have agreed to raise. Moreover, the Court held that the "notice of hearing" referred to in the regulation could not be the notice received by the parties prior to the hearing before the referee.

OES argues that the Board's actions amount to a substitution of new issues on reconsideration, a practice which, absent the taking of new evidence or a non-prejudicial agreement by the parties, we have expressly held to be violative of the Board's regulations concerning appeals to the Board from a referee's decision. See 34 Pa. Code § 101.107; Libonate v. Unemployment Compensation Board of Review, 57 Pa. Commw. 422, 426 A.2d 247 (1981). However, while it is true that the Board's regulations do not specifically address the permissibility of introducing new issues without notice at the Board reconsideration level, and that we have explicitly disapproved such a practice as an abuse of the Board's discretion, Grcich, we do not believe that the Board here injected a new issue into this case in place of that which was involved when the case was originally before that body.

The claimant argues that the employer failed to sustain its burden of proof. Although Department of Labor and Industry regulations, 34 Pa. Code § 101.87 and 34 Pa. Code § 101.107, prohibit the referee from basing a decision on a legal issue other than the one found in the OES determination, we have held in Libonate v. Unemployment Compensation Board of Review, 57 Pa. Commw. 422, 426 A.2d 247 (1981) that a remand in such a case would cure any prejudice to the claimant. In light of the numerous remands and rehearings in the present case, however, we find that the claimant has not been prejudiced by the change in legal theory from the original OES determination to the final Board order.

Although the disposition of this matter obviates the necessity for a remand hearing, we again remind the board that its regulations, case law and due process guarantees preclude it from considering issues or grounds not addressed or relied upon by the referee absent the taking of additional evidence by the board or nonprejudicial agreement between the parties. Libonate v. Unemployment Compensation Board of Review, 57 Pa. Commw. 422, 426 A.2d 247 (1981). Parties must be provided adequate opportunities to present evidence concerning issues not ruled upon by the referee.