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

PHILLIPS SYKES, Employe

PARADISE I INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 97607685MW

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 the applicable law, records and evidence in this case, the commission makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The employe worked four years as a clerk for the employer, a video and magazine business. The employe's last day of work was August 22, 1997 (week 34), when he terminated his employment.

The employe quit because the employer failed to give him a raise in pay above the minimum wage he was earning. The employer did not appear at the hearing. The employe repeatedly asked for a raise and was advised that the employer was not able to afford such a raise. There were no complaints made about the employe's work and he performed tasks which were complex in nature given the amount of money he was paid.

The issue to be decided is whether the employe's quitting was for any reason that would permit the immediate payment of unemployment benefits. The most relevant statutory exception to the quit/disqualification can be found in Wis. Stat. § 108.04 (7)(b) which provides payment of benefits if an employe quits with "good cause attributable to the employing unit". Courts have held that good cause for quitting must be based on some fault of the employer and that the employe's reasons must be real and substantial. Nottelson v. ILHR, Dept., 94 Wis. 2d 106, 120 (1980).

The ALJ found that the employe established that his quitting was with good cause attributable to the employer. The ALJ concluded that it was unreasonable for the employer to deny the employe a raise in pay over the course of four years, especially in view of the fact that the employe was paid minimum wage and his work was not defective. The ALJ simply found that the employe's termination of employment after four years without a raise was a reasonable reaction to the employer's actions.

The commission, however, believes that while the employe's reason may have been personally valid, the employer never promised the employe a raise. An employer is not obligated to provide an employe with a raise after four years of dutiful service. That decision is the employer's prerogative and in response the employe is free to seek other employment at a higher wage. Thus, while the employe's decision to quit was reasonable, it was personal in nature and fails to establish any employer fault as there was no promise to provide the employe with a raise in pay.

The commission therefore finds that in week 34 of 1997, the employe terminated his employment but not with good cause attributable to the employer within the meaning of Wis. Stat. § 108.04 (7)(b), or within any of the statutory exceptions that would allow benefits.

The commission further finds that the employe was paid benefits amounting to a total of $2,750.00, for which he is not eligible and to which he is not entitled, within the meaning of Wis. Stat. § 108.03 (1). Pursuant to Wis. Stat. § 108.22 (8)(a), the employe is required to repay such sum to the Unemployment Reserve Fund.

The commission further finds that waiver of benefit recovery is not required under Wis. Stat. § 108.22 (8)(c), because although the overpayment did not result from the fault of the employe as provided in Wis. Stat. § 108.04 (13)(f), the overpayment was not the result of a department error. See Wis. Stat. § 108.22 (8)(c)2.

DECISION

The appeal tribunal decision is reversed. Accordingly, the employe is ineligible for benefits beginning in week 34 of 1997, and until four weeks have elapsed since the end of the week of quitting and the employe has earned wages in covered employment performed after the week of quitting equaling at least four times his weekly benefit rate which would have been paid had the quitting not occurred. The employe is required to repay the amount of $2,750.00 to the Unemployment Reserve Fund.

Dated and mailed: February 27, 1998
sykesph.urr : 135 : 1 VL 1059.10

/s/ David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

/s/ James A. Rutkowski, Commissioner

MEMORANDUM OPINION

Because credibility was not at issue, the commission did not confer with the ALJ. Rather, the commission reverses the ALJ's decision because it concludes that the employer's failure to provide the employe with a raise did not provide the employe with good cause attributable to the employer for quitting. The employer never promised to provide the employe with a raise. The employe's decision to quit while reasonable was personal in nature. Although the commission reaches a decision contrary to the ALJ, the commission does not believe the ALJ committed department error in reaching the conclusion he did. Consequently, any overpayment assessed to the employe may not be waived under Wis. Stat. § 108.22.

cc: DIRECTOR GREGORY A FRIGO
BUREAU OF LEGAL AFFAIRS

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