Wis.LIRC UC Decision: Anthony, Estell - February 14, 1991 - VL 1059.20 - Wages - Reduction in; VL 1080.268 - Working Conditions - Transfer; Type of work changed; VL 1080.269 - Working Conditions - Transfer; wages reduced - transfer from manager job to lower-paying bartender job due to poor performance not good cause to quit under 108.04(7)(b) because transfer was not arbitrary and unreasonable; 108.04 (7)(f) not applicable here because that provision relates to wage rate, not overall income, and even assuming value of provided apartment is included rate here was not reduced to less than 2/3

BEFORE THE
STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION

ESTELL M. ANTHONY, Employee

THE GOOD GUY'S PUB, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 90-402092

Pursuant to the timely petition for review filed in the above- captioned matter, the Commission has considered the petition and all relief requested. The Commission has reviewed the applicable records and evidence and finds that the Appeal Tribunal's findings of fact and conclusions of law are supported thereby. The Commission therefore adopts the findings and conclusions of the Appeal Tribunal as its own.

DECISION

The decision of the Appeal Tribunal is affirmed. Accordingly, the employe is ineligible for benefits beginning in week 20 of 1990, and until four weeks have elapsed since the end of the week of quitting and she has earned wages in covered employment performed after the week of quitting equaling at least four times her weekly benefit rate which would have been paid had the quitting not occurred. She is required to repay the sum of $1,224.00 to the Unemployment Reserve Fund.

Dated and mailed February 14, 1991
125 : CD2022 VL 1059.20 VL 1080.268 VL 1080.269

/s/ Kevin C. Potter, Chairman

Carl W. Thompson, Commissioner

/s/ Pamela I. Anderson, Commissioner

MEMORANDUM OPINION

The Commission concurs with the Administrative Law Judge's decision that the employe terminated the employment relationship.

On appeal the employe's counsel argues that even assuming the employe quit, such quitting was for good cause attributable to the employer because work as a bartender at $5.00 per hour would have amounted to a wage reduction in excess of 50 percent of her gross compensation as a manager. In arriving at this figure the employe's counsel makes reference to the employer-provided apartment, a cut in hours to less than 40 from 50, and the loss of a performance bonus. As a bartender, working 40 hours per week at $5.00 per hour would yield the same salary the employe had received as manager -- $200.00 per week. As for the employer-provided apartment, the employe testified that "They took $100.00 per week out of my pay that went toward the apartment. That's why my pay was only $4.00 per hour at 50 hours per week." The loss of the employer-provided apartment plus whatever bonus the employe would have been entitled to apparently would have effectively caused her to suffer a wage reduction in excess of 50 percent of her gross compensation.

The Commission does not dispute that as a bartender the employe would have sustained a significant reduction in her compensation. However, on the other hand, she was just not working out as the manager. In Schensky d/b/a Schensky Builders v. DILHR, Case No. 145-357 (Dane County Circuit Court, 5/16/75), the court stated that to constitute good cause for leaving a job, a reduction in wages must be substantial. The court further stated that it was safe to say that a pay cut amounting to two percent of the previous wage was not substantial while a pay cut amounting to 60 percent of the former salary is substantial. However, the court further stated that: 1) The percentage of the pay cut, the employe's actual dollar loss, and the surrounding circumstances were all relevant factors to be considered; and 2) "(e)ven a substantial wage cut will not constitute good cause in most cases unless the cut was arbitrary or unreasonable." Id. (emphasis added). The employer's actions in this case were not arbitrary or unreasonable. The employe's pay cut occurred because the employer removed her as the manager, and she was removed as manager because the employer concluded she could not meet the employer's expectations with respect to the scheduling of hours, cleaning the grill and seeing that the bartenders tapped beers correctly. The employer had discussed these matters with the employe on two occasions prior to her quitting. She was told that the employer was losing profits because of the overscheduling of hours and the bartender's failure to tap beers correctly.

Further, the employe's counsel alleges that the employer's requirement that the employe vacate the previously provided accommodations and her ineligibility for further performance bonuses would have amounted to a reduction in her "weekly wages" in excess of 50 percent, thus making her eligible for benefits under section 108.04 (7)(f), subject to the limitations provided in that section. The question of whether section 108.04 (7)(f) applies appears to be controlled by the case of Linda Gustrowsky v. DILHR, Case No. 152-355 (Dane County Circuit Court, 4/28/77). There the employe was removed from her full-time job and offered a choice of two part-time jobs which provided 16-20 hours per week. The employe's arguments for eligibility included the claim that section 108.04 (7)(f) was applicable, arguing that the offered transfer was for a wage paying less than two-thirds of the wage she had been receiving. However, the Court noted that the crucial words of the statute was work "paying less than two-thirds of his immediately preceding wage rate" (emphasis added), and that wage rate is not to be construed as synonymous with wages but refers to the rate of pay per unit of time such as an hour or week.

In the instant case the employe's claim under section 108.04 (7)(f) is based upon the definition of wages under section 108.02 (26), such definition including the value of housing as well as bonuses. As noted above, however, Gustrowsky says that wage rate is not synonymous with wages but refers to the rate of pay per unit of time such as an hour or week. It still possibly could be argued that the value of the housing furnished should be included as part of the wage rate. This is because according to the employe, as manager, $100.00 per week was taken out of her pay for the apartment. This translates to $2.00 per hour based on the fact that the manager was required to work 50 hours per week. As manager, the employe was paid $4.00 per hour at 50 hours per week. Adding $2.00 per hour to the $4.00 per hour wage rate equals a wage rate of $6.00 per hour. What this means, however, is that using the $6.00 per hour figure the employe's wage rate had to be reduced from $6.00 per hour to less than $4.00 per hour in order for section 108.04 (7)(f) to apply. However, as a bartender the employe's wage rate was to be $5.00 per hour. Thus, even assuming for purposes of argument that the value of the housing could be included as part of the wage rate, the bartender work would not have constituted work paying less than two-thirds of her immediately preceding wage rate. Finally, it appears clear that any bonus the employe might have been entitled to as manager would not be included as part of her wage rate. The evidence failed to disclose how the managerial bonus was to be calculated, except for testimony that the bonus "had to do with a percentage of the total sales." Again, wage rate refers to the rate of pay per unit of time.

cc:
Steven J. Frasetto
Attorney at Law
McCarty, Curry, Wydeven, Peeters & Riester

John D. Landre
Attorney at Law
Gill & Gill. S.C.

Appealed to Circuit Court. Affirmed November 4, 1991. [Circuit Court decision summary]

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