STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

RICHARD J SZYDLOWSKI, Employee

DELTROL CONTROLS DIVISION, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 01604833MW


An administrative law judge (ALJ) for the Division of Unemployment Insurance of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The employee worked about 22 years as a machine operator for the employer, a manufacturer of drill bushings. His last day of work was April 13, 2001 (week 15), when he was laid off. He received vacation and dismissal pay in a lump sum payment on April 27, 2001.

The employee was given the lump sum check with his vacation and dismissal pay following his last day of work. Prior to the employee's layoff, the employer posted a notice on the bulletin board prior to the lay off which stated "all payments will be allocated over time equal to the amount due." The union contract did not discuss allocation of separation pay but explained how it would be calculated based on years of service. When the employee asked his supervisor how this pay was to be allocated, the supervisor said he did not know. In week 27, during the hearing on this issue, the employer's witness explained the basis on which it was calculated and how it was to be allocated. The employee received notice of allocation at that point.

The issue to be decided is whether the employee received dismissal or termination pay which should be treated as wages for benefit purposes for the weeks in which the employee claimed benefits.

Under Wis. Stat. § 108.05(4) and (5), vacation and dismissal payments are treated as wages for unemployment insurance purposes and reduce benefits in a particular week only if it has become definitely allocated and payable by the end of that week and the employee had notice of this fact. To be definitely allocated the employer must identify the pay as vacation or separation pay and assign it to a particular week prior to the end of that week. An employer may also allocate to future weeks so long as it gives verbal or written notice prior to the end of the week it is allocated. Once allocated it may not be reallocated.

The only notice of allocation the employee could have received from the employer prior to the hearing was the vague posting above was unclear and confusing and does not meet the statutory requirements of due notice of allocation. The employee was placed on notice by the employer's representative at the hearing in week 27 that the money was allocated to each week at a rate of forty times his base rate.

The commission therefore reverses with respect to those weeks prior to week 27 and finds that the employer did not allocate the pay prior to the end of those weeks. For weeks 27 through 32, the employee received notice from the employer at the hearing that the termination pay was allocated to those weeks. The employer explained it in some detail. Due notice of allocation dates from that point.

The commission therefore finds that for weeks 20 through 26 of 2001, the employee did not receive any payments constituting dismissal or termination pay, within the meaning of Wis. Stat. § 108.05(5).

The commission further finds that the employee received dismissal or termination pay in the amount of $506.80 for weeks 27 through 31, and $405.44 for week 32 of 2001, that was definitely allocated, payable or assigned to those weeks and the employee received due notice of that assignment or allocation within the meaning of Wis. Stat. § 108.05(5).

DECISION

The decision of the administrative law judge is reversed in part and affirmed in part. Accordingly, the employee's benefit entitlement for weeks 27 through 32 is reduced as set forth above.

Dated and mailed November 2, 2001
szydlri . urr : 178 : 3  UW 910

/s/ David B. Falstad, Chairman

/s/ James A. Rutkowski, Commissioner


MEMORANDUM OPINION

The commission did not confer with the administrative law judge prior to reversing. The commission does not dispute any credibility finding in the decision but reaches a different conclusion when applying the law to the facts.

The commission rejects the conclusion that the department can provide due notice of allocation of vacation or dismissal pay for the employer by issuing an initial determination. Such a determination in a disputed case does not constitute due notice. The fact of the allocation was in dispute. The employer asserted to the department that the employee had notice from the posting above and was also told by his supervisor. The employee disputed receiving any notice from either source. The employee promptly appealed the initial determination. The employer did not send anything to the employee at that point to give him formal notice. The only "notice" the employee received was the legal conclusion from the department.

While the statute does not expressly require notice of the allocation come from the employer, the department has always placed that responsibility on the employer and it is not reasonable to infer that the department can make that allocation for the employer in those cases in which the employer neglects to formally do so.

 


Note: The decision as reproduced above incorporates non-substantive changes to the specifications of the weeks involved, made by an Amended Decision issued by the Commission on November 16, 2001.

[ Search UC Decisions ] - [ UC Digest - Main Index ] - [ UC Legal Resources ] - [ LIRC Home Page ]


uploaded 2001/11/05