Opinion
Argued December 5, 1975
August 20, 1976.
Unemployment compensation — Legislative intent — Unemployment Compensation Law, Act 1936, December 5, P.L. (1937) 2897 — Refusal of accrued leave pay.
1. The Unemployment Compensation Law, Act 1936, December 5, P.L. (1937) 2897, is intended to relieve the economic stress which attends unemployment in individual cases and to apply the accumulated fund to aid persons unemployed through no fault of their own. [162-3]
2 An employed person who performed no work for remuneration but was on leave during which period he voluntarily declined to receive the leave pay accrued to him as a result of services performed, is ineligible for unemployment compensation benefits. [163-4]
Judge BLATT filed a dissenting opinion which was substantially as follows:
1. Receipt of vacation pay no longer disqualifies an employe from receipt of unemployment compensation benefits so long as he performs no services and receives no actual pay. [164-5]
2. An individual placed on indefinite leave from his employment, performs no service and receives no remuneration for such period is entitled to full benefits under the Unemployment Compensation Law, Act 1936, December 5, P.L. (1937) 2897, without deduction for any vacation pay available to him. [165-6-7]
Argued December 5, 1975, before, Judges CRUMLISH, JR., MENCER and BLATT, sitting as a panel of three. Reargued June 8, 1976, before President Judge BOWMAN and Judges CRUMLISH, JR., WILKINSON, JR., MENCER and BLATT. Judges KRAMER and ROGERS did not participate.
Appeal, No. 457 C.D. 1975, from the Order of the Unemployment Compensation Board of Review in case of In Re: Claim of Charles Buss, No. B-123274-B.
Application to Bureau of Employment Security for unemployment compensation benefits. Benefits awarded. Employer appealed to the Unemployment Compensation Board of Review. Benefits denied. Employe appealed to the Commonwealth Court of Pennsylvania. Held: Affirmed.
Charles Buss, with him Richard J. Shiroff, for appellant.
Charles G. Hasson, Assistant Attorney General, with him Sydney Reuben, Assistant Attorney General, and Robert P. Kane, Attorney General, for appellee.
This is an appeal by Charles Buss (Claimant) from a decision and order of the Unemployment Compensation Board of Review (Board) which denied unemployment compensation by affirming the order of the referee.
Claimant was last employed by the United States Postal Service as a nixie clerk. When the central mark-up system where he worked was transferred to another city, he did not move with the system and entered into leave status. Prior to his going on non-paid leave, Claimant had been given the choice of taking either annual or sick leave status, both of which he refused. Claimant has maintained that despite his physical limitation caused by rheumatoid arthritis, he is nevertheless able to work.
The Board sustained the referee's reversal of the Bureau of Employment Security's determination that Claimant was eligible for benefits. Upon Claimant's request for reconsideration, the Board ordered a remand hearing. After a review of the testimony taken during the remand hearing, the Board reaffirmed its decision.
The sole question presented is whether the Board erred in affirming the determination made by the referee, who found that Claimant is not unemployed and hence is not entitled to unemployment compensation under the appropriate sections of the Unemployment Compensation Law (Law).
Section 401 as defined by Section 4(u) of the Unemployment Compensation Law, Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P. S. § 753(u), 801.
The fundamental social purpose of the Unemployment Compensation Law is to provide relief from the rigors of unemployment, that is, to alleviate economic distress in individual cases. Unemployment Compensation Board of Review v. Department of Labor and Industry, 203 Pa. Super. 336, 201 A.2d 310 (1964); Neff v. Unemployment Compensation Board of Review, 195 Pa. Super. 4, 169 A.2d 338 (1961).
A further tenant of the Law is to help solve involuntary unemployment and its resulting burden of indigency, and the fund is to be used for the benefit of persons unemployed through no fault of their own. Charney v. Unemployment Compensation Board of Review, 194 Pa. Super. 402, 168 A.2d 604 (1961).
In the case at bar, Claimant was on non-paid leave status, a status he chose. His employment with the Post Office was not terminated. While pension payments do not constitute wages within the Law, the receipt of a pension will not disqualify an employe from receiving unemployment compensation if he meets the other requirements of the Law. Keystone Mining Co. v. Unemployment Compensation Board of Review, 167 Pa. Super. 256, 75 A.2d 3 (1950). Claimant, if he chose paid leave status, would not be receiving pension payments. If we are to categorize these payments, they are similar to vacation pay. In Sopko v. Unemployment Compensation Board of Review, 168 Pa. Super. 625, 82 A.2d 598 (1951), a claimant was disqualified from receiving benefits for weeks in which he received vacation pay.
In Gianfelice Unemployment Compensation Case, 396 Pa. 545, 555, 153 A.2d 906, 911 (1954), our Supreme Court set the standard for us to determine whether a claimant is entitled to benefits if, at the same time, he is eligible to receive other remuneration. The late Justice COHEN, speaking for the Supreme Court, wrote:
"Under sec. 4(u) of the act, 43 P. S. § 753(u), an individual is deemed unemployed if he performs no remunerated services during the claim week and if he is paid or owed no remuneration with respect to such week. Here, Gianfelice certainly has performed no services for which he was compensated; so he has qualified under the first condition. As to the second — that he be paid or owed no remuneration with respect to the claim week — the act is devoid of a definition of 'remuneration' . . . 'Remuneration' is generally defined as a payment for services performed. . . ."
This standard is applicable to this case. As in Gianfelice, Claimant has performed no services for which he was compensated during the claim weeks, thereby satisfying the first condition, but he falls under the demands of the second condition. Claimant was entitled to annual and/or sick leave pay for services performed. This leave pay, which he chose not to accept, accrued to him as a result of services performed. Since he is owed remuneration for the claim weeks, the Board did not err when it denied Claimant unemployment compensation benefits.
We therefore
ORDER
AND NOW, this 20th day of August, 1976, the decision and order of the Unemployment Compensation Board of Review is hereby affirmed.
I must respectfully dissent.
The claimant here was given a choice by his employer either to use his accrued annual and sick leave or to be placed at once on indefinite leave without pay. He chose the latter. In either case, however, it was clear that he would not receive his regular salary nor would he perform any services during the claim weeks in question.
On these facts the majority has concluded that claimant was not "unemployed" during these claim weeks and is not, therefore, entitled to unemployment compensation. And, relying upon Gianfelice Unemployment Compensation Case, 396 Pa. 545, 153 A.2d 906 (1959) and Sopko Unemployment Compensation Case, 168 Pa. Super. 625, 82 A.2d 598 (1951) the majority holds that vacation pay is "remuneration" and that a claimant entitled to receive vacation pay is, therefore, not "unemployed." These are old cases, however, which seem to me to have no application to the case at hand.
I believe that statutory amendments to the Unemployment Compensation Law (Act) since those 1950's cases now make it clear that availability for or receipt of vacation pay does not disqualify a claimant from collecting unemployment compensation as an unemployed individual.
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P. S. § 751 et seq.
Some of these changes have been discussed by our Supreme Court in Piestrak Unemployment Compensation Case, 404 Pa. 527, 172 A.2d 807 (1961).
I fail to see how the majority can characterize sick leave as being "similar to vacation pay," but, in any case, the threshold issue remains the same: i.e., is the claimant here an unemployed individual. Prior to 1964, Section 4(u) of the Act, 43 P. S. § 753(u) provided the following definition of "unemployed."
See Lucciola v. Secretary of Education, 25 Pa. Commw. 419, 360 A.2d 310 (1976).
"(u) 'Unemployed.' — An individual shall be deemed unemployed (I) with respect to any week (i) during which he performs no services for which remuneration is paid or payable to him and (ii) with respect to which no remuneration is paid or payable to him, or (II) with respect to any week of less than his full-time work if the remuneration paid or payable to him with respect to such week is less than his weekly benefit rate plus his partial benefit credit. [ Provided, That for the purposes of this subsection vacation pay and similar payments, wages in lieu of notice, separation allowances, dismissal wages and similar payments whether or not legally required to be paid shall be deemed remuneration paid or payable with respect to such period as shall be determined by rules and regulations of the department. . . .]" (Brackets and emphasis added.)
At that time, therefore, vacation pay clearly was remuneration, and under those provisions, the claimant here would not be unemployed. In 1964, however, the General Assembly specifically deleted the proviso, bracketed above, which classified vacation pay as remuneration, and, at the same time, amended Section 404(d) of the Act, 43 P. S. § 804(d), a provision describing how to compute benefits for eligible individuals, to allow for the benefit amount to be reduced by the amount of vacation pay available to the claimant. In view of these amendments, it seems to me that the General Assembly then no longer considered vacation pay to be remuneration. The availability, or receipt of vacation pay, therefore, would not disqualify a claimant from becoming an eligible individual under the provisions of Section 4(u) of the Act. As long as a claimant performs no service and receives no actual pay, he is unemployed and vacation pay figures only in the computation of the benefit amount to which he would be entitled. Even this last provision under Section 404(d) of the Act, however, has since been amended in 1968 and 1971 to eliminate consideration of vacation pay from the computation of the benefit amount payable where the unemployed individual is permanently or indefinitely separated from his employment. United States Steel Corporation v. Unemployment Compensation Board of Review, 9 Pa. Commw. 206, 303 A.2d 852 (1973). It would appear, therefore, that when this claimant was placed on an indefinite leave without pay, Section 404(d) read in pertinent part as follows.
For a more complete discussion of vacation pay in unemployment compensation cases prior to 1964 see Ungarean Unemployment Compensation Case, 207 Pa. Super. 506, 218 A.2d 847 (1966); Doble Unemployment Compensation Case, 196 Pa. Super. 367, 175 A.2d 345 (1961); Franceschi Unemployment Compensation Case, 196 Pa. Super. 150, 173 A.2d 774 (1961).
Section 404(d) was amended to add the language emphasized below.
"(d) Notwithstanding any other provisions of this section each eligible employe who is unemployed with respect to any week ending subsequent to the first day of July, one thousand nine hundred sixty-four, shall be paid, with respect to such week, compensation in an amount equal to his weekly benefit rate less the total of (1) that part of the remuneration, if any, paid or payable to him with respect to such week for services performed which is in excess of his partial benefit credit, (2) vacation pay, if any, (3) severance or separation allowances or dismissal wages and similar payments, the payments of or eligibility for which is made or conditioned upon a temporary, indefinite or permanent separation from employment. . . ."
Act of January 17, 1968, P.L. 21.
Act of September 27, 1971, P.L. 460.
"(d) Notwithstanding any other provisions of this section each eligible employe who is unemployed with respect to any week ending subsequent to the first day of October, one thousand nine hundred seventy-one, shall be paid, with respect to such week, compensation in an amount equal to his weekly benefit rate less the total of (i) the remuneration, if any, paid or payable to him with respect to such week for services performed which is in excess of his partial benefit credit; (ii) vacation pay, if any, except when paid to an employe who is permanently or indefinitely separated from his employment. . . ." (Emphasis added.)
In my view, therefore, because this claimant performed no service and received no remuneration for the claim weeks in question, he was "unemployed" within the meaning of Section 4(u) of the Act as it stood at the time in question here. Because he was placed on an indefinite leave from his employment, therefore, he is entitled to the full benefit amount without any deduction for the vacation pay which was available to him.
I would reverse the Unemployment Compensation Board of Review and remand this case for a proper determination of the benefit amount due.