Opinion
No. 3835.
Decided June 28, 1949.
An employee who receives a week's vacation with pay during a layoff is not "totally unemployed" for that week within the meaning of the Unemployment Compensation Act and therefore is not entitled to unemployment compensation benefits for the week. The question of what constitutes total unemployment is governed by section 1 N of the Unemployment Compensation Act which requires that no wages shall be payable with respect to the week for which benefits are sought. The provision of subsection D of section 3 of the Unemployment Compensation Act that "an individual shah be deemed totally unemployed in any week in which he earns no wages or salary . . ." is specifically limited in its application to the required waiting period of one week and is not controlling of what constitutes total unemployment for the following week for which benefits are claimed under section 2 B. A payment to an employee, for a week's vacation during a layoff, carried on the employer's books as wages for the particular week and so identified through a posted notice and designation on the check falls within the definition of wages under section 1 P of the Unemployment Compensation Act. The purpose of the Unemployment Compensation Act is to insure in limited measure against unemployment of individuals regularly attached to the labor market which is not occasioned with their consent or by their fault.
APPEAL to the Superior Court from a decision of the Appeal Tribunal of the Unemployment Compensation Division of the Bureau of Labor affirming a decision of a claims deputy of the Division, denying unemployment compensation benefits to the plaintiff for the week ending July 5, 1947, on the ground that he was not unemployed during that week within the meaning of the Unemployment Compensation Act. The appeal was reserved and transferred without ruling by Wescott, J., upon an agreed statement of facts.
From the statement it appears that the plaintiff was an employee of a division of Textron, Inc. who was laid off on June 6, 1947 for lack of work. He thereupon applied for benefits which were paid him for two weeks in June. On June 21 the employer posted notice that the mill would close from June 28 to July 7 for the annual vacation. On June 27 the plaintiff was paid $33.51 by check purporting to be wages for the vacation week ending July 5, 1947. The payment was carried on the employer's payroll as wages and was subject to social security and income tax deductions but not to check off. It exceeded the amount of the weekly benefit to which the plaintiff would be entitled in case of his total unemployment.
The notice given and the payment made by the employer conformed to provisions of its contract with a labor union of which the plaintiff was a member. The contract required the employer to give a vacation of one week, with pay amounting to 2% of the employee's total earnings during a specified 52 weeks. The vacation was to be given "at a time and in a manner to be determined by the Employer." The contract also provided that if the latter determined that it was impracticable to grant vacations, it might, after notice to the union, pay employees their vacation pay in lieu of vacation.
Guertin Leahy, J. Russell Widener and Richard M. Ryan (Mr. Ryan orally), for the plaintiff.
F. Maurice LaForce (by brief and orally), for the defendant.
The issue to be determined upon the agreed facts is whether an employee who receives a vacation with pay during a lay-off is entitled to unemployment compensation for the vacation period. Section 2 B (1) of the Unemployment Compensation Act (R. L., c. 218, as amended) provides that "each eligible individual who is totally unemployed in any week shall be paid with respect to such week benefits" specified in the section, which vary according to the individual's total earnings for the calendar year preceding the "benefit year" from April to April.
"Total unemployment" is defined by section 1 N: "An individual shall be deemed `totally unemployed' in any week with respect to which no wages are payable to him and during which he performs no services." "Wages," according to section 1 P, "means every form of remuneration for personal services paid or payable . . . including salaries, commissions, bonuses. . . ." It is thus apparent that if wages were payable to the plaintiff with respect to the week ending July 5, or if he performed services during that week, he was not "totally unemployed."
The plaintiff makes no serious claim that the vacation pay which he received was not wages within the definition of the act; but he asserts that his right to benefits is determinable according to the definitions of "total unemployment" found in subsection D of section 3 relating to "benefit eligibility conditions." By this definition, "an individual shall be deemed totally unemployed in any week in which he earns no wages in excess of three dollars"; and the plaintiff says that he did not "earn" his vacation pay in the week in question.
The argument overlooks the express provision that the definition thus relied upon is "for the purposes of this subsection," and that the subsection pertains solely to the required waiting period of one week of total unemployment (as thus defined) which must precede the benefit week if the employee is to be an "eligible individual." In view of its limited application, the definition cannot be held controlling of the question of what constitutes total unemployment for the following week for which benefits are claimed under section 2 B.
There is no question raised but what the plaintiff is "eligible" under the provisions of section 3. What must be determined is whether he was totally unemployed in the week ending July 5, so as to be entitled to benefits under section 2 B (1). For purposes of that section the definition of section 1 N controls.
The plaintiff argues that no wages were payable to him with respect to the week of July 5; that he performed no services during it; and that his vacation pay was earned during his prior employment for longer than the three month period required by the union contract to entitle him to vacation pay. However well the argument might be thought to describe the rationale supporting a bonus paid in lieu of vacation (Cf. Appeal of Joseph Lemieux, No. 220-A-47, N.H.U.C. Div., Sept. 12, 1947; In re Claim of Jos. E. Wellman a, Nos. 612-614, 619, Vt. U.C. Com., April 6, 1948), it is inapplicable to the agreed facts of this case, and cannot be adopted. The payment to the plaintiff was carried on the employer's books as wages for the particular week, and was so identified through the posted notice and designation on the check. It falls within the statutory definition of wages (s. 1 P. supra) and as was held in Brampton Woolen Co. v. Local Union, ante, 255, 257, would be considered by ordinary intendment to be pay or wages.
It follows that wages as defined by the act were payable and paid to the plaintiff with respect to the week in question, and that he fails to qualify himself as "totally unemployed" as required by the act. The conjunctive requirement of the definition, "any week . . . during which he performs no services," need receive no consideration. In order to be deemed unemployed, the plaintiff must bring himself within both clauses of the definition. Having failed as to one, it becomes immaterial whether he could succeed as to the other.
The denial of compensation under the circumstances disclosed accords with what is understood to have been the general intent of the Legislature in enacting the legislation. Not every case of unemployment entitles an unemployed person to benefits. The purpose of the act is to insure in limited measure against unemployment of individuals regularly attached to the labor market which is not occasioned with their consent or by their fault. See Burns, Unemployment Compensation, 55 Yale L. J. 1, 3; Hewett v. Riley, 94 N.H. 460. The payment of compensation for a period of vacation with pay is not within the scope of this purpose. The conclusion reached has the support of authorities elsewhere, both in the few courts where the question has been considered, and in the administrative tribunals where it has more frequently arisen. See Moen v. Director of Division of Employment Security, (Mass.), 85 N.E.2d 779; Mattey v. Unemployment Compensation Board of Review, 164 Pa. Super. 36; In re Buffelen Lumber Mfg. Co. (Wash.), 201 P.2d 194; Hamlin v. Coolerator Co. (Minn.), 35 N.W.2d 616; 13164-Ohio R, U.C.I.S. (Ben. Ser.) Vol. 12, No. 2; Baker v. Kroehler Mfg. Co., 46-RD-5763, Ill., Oct. 11, 1946. Compare 12398-Vt. A, U.C.I.S. (Ben. Ser.), Vol. 11, No. 4 (aft. sub nom. In re Claim of Jos. E. Wellman, a. Nos. 612-614, 619, Vt. U.C. Com., supra) with 12399-Vt. A, U.C.I.S. (Ben Ser.), Vol. 11, No. 4.
Appeal dismissed.
All concurred.