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

RUSSELL L MURRAY, Employe

PROFESSIONALLY SPEAKING INC, Employer

UNEMPLOYMENT COMPENSATION DECISION
Hearing No. 97605916MW

On August 19, 1997, the Department of Workforce Development issued an initial determination in the above-captioned matter which held that the employe quit and not for a reason which would permit the immediate payment of benefits. The employe filed a timely appeal and a hearing was held before an appeal tribunal. On October 1, 1997, the appeal tribunal issued a decision which affirmed the initial determination. As a result, benefits were denied. The employe filed a timely petition for commission review of the appeal tribunal decision.

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 for the employer, a business engaged in fund raising, for about nine months as a sales person. His last day of work was July 11, 1997.

The employe began his employment on a commission-only basis. However, about three months into his employment the employe asked the employer to change his compensation structure because he was not making any money. On or about January 7, the employer notified the employe that he was going to be put on a $300 weekly base salary, provided he worked full-time, from 8:00 a.m. until 3:30 p.m. four days a week, and from 8:00 a.m. until 6:00 p.m. one day a week. After some negotiating, this figure was increased to $350 a week. Excluding the hour the employe took for lunch every day, for which he was not paid, the new arrangement required the employe to work approximately 35 hours a week at a pay rate of $10 per hour.

In the week ending May 28, 1997, the employe missed a day of work in order to attend his mother's funeral. His gross pay for that week was $280. Although the employer did not explain how it arrived at this figure, it appears that the employe was paid on a pro-rated basis, as $280 represents four/fifths of the $350 base. The employe also missed one day due to personal illness prior to his last day of work, but the record contains no evidence to show what he was paid for that week.

During the payroll week extending from July 3 through July 9 the employe requested and received permission from the employer to miss work on July 4 and one other day. When the employe received his paycheck for that week on July 11, he discovered that he had only been paid $100 for the week. The employer indicated that it arrived at this figure by paying the employe minimum wage for the hours he worked during the three days he reported for work. The employer explained that, since the employe worked less than his designated hours, his salary for the week dropped to commissions or minimum wage, whichever was greater.

On July 14, 1997 (week 29), the employe went to see the employer's vice-president of operations, Dennis Schulist, about his most recent paycheck. The employe stated that he wanted to get paid for the hours he worked and that he should have been paid on a pro-rated basis. Had the employe's $350 base pay been pro-rated according to the number of days he actually worked, he would have been paid $210 instead of $100. Mr. Schulist disagreed with the employe and directed him to leave his office. The employe did so. He did not return to work thereafter.

The first issue to decide is whether the employe quit or was discharged.

Although the employe was ordered to leave Mr. Schulist's office, he was not told that he was discharged and had the option of remaining employed by the employer. The employe voluntarily left the premises based on his own decision that he no longer wished to work for the employer under these terms. Consequently, the separation from employment was a voluntarily quit on the employe's part.

The next issue to decide is whether the employe's quitting was for any reason permitting the immediate payment of benefits.

Under Wis. Stat. § 108.04(7)(a), an employe who voluntarily terminates employment with an employer is ineligible for benefits unless the quitting falls within a statutory exception permitting the immediate payment of benefits. One such exception is Wis. Stat. § 108.04(7)(b), which provides that, if an employe voluntarily terminates employment with good cause attributable to the employing unit, he or she is eligible for the immediate payment of unemployment benefits. Good cause attributable to the employer means that the employe's resignation is caused by some act or omission by the employer which justifies the employe's decision to quit. It involves some fault on the employer's part and must be real and substantial. Kessler v. Industrial Comm., 27 Wis. 2d 398, 134 N.W.2d 412 (1965); Hanmer v. DILHR, 92 Wis. 2d 90, 98, 284 N.W.2d 587 (1979).

The employe quit after the employer refused to pay him on a pro-rated basis for a week in which he worked less than full time. The appeal tribunal found that the employer and employe had never arrived at any agreement regarding how the employe would be paid if he worked less than a full week and that, in the absence of such an agreement, the employer had no legal obligation to pay the employe more than what was promised him or minimum wage. Consequently, the appeal tribunal concluded the employe did not have good cause attributable to the employer for quitting. The commission disagrees.

While the parties never arrived at any formal agreement about how the employe would be compensated if he worked less than a full week, the lack of such an agreement does not give an employer the right to arbitrarily reduce an employe's pay to minimum wage whenever it wishes to do so. To the contrary, a worker must have some assurance that his wages will not be dramatically reduced at the whim of the employer.

In the instant case, the employe missed two days of work with the employer's permission and, as a result, found that the rest of his week's wages were reduced by approximately one-half. The commission believes that the employer's actions in reducing the employe's pay in this matter were highly punitive and, in the absence of some express agreement on the part of the employe, inherently unreasonable. It seems clear that the employe did not agree to such an arrangement, and his assumption that his salary would be pro-rated if he worked less than full time was a reasonable one, which was consistent with the employer's past practice during the week in which he missed a day of work to attend his mother's funeral.

The commission believes that the employer's actions in unilaterally reducing the employe's pay to minimum wage after he missed two days of work amounted to a real and substantial fault on the employer's part. Moreover, after the employe made efforts to address the situation short of quitting his employment but was rebuffed, his decision to become unemployed rather than continue working under such adverse conditions was justified.

The commission, therefore, finds that in week 29 of 1997 the employe voluntarily terminated his work with the employer, and that his quitting was with good cause attributable to the employer, within the meaning of Wis. Stat. § 108.04(7)(b).

DECISION

The appeal tribunal decision is reversed. Accordingly, the employe is eligible for benefits beginning in week 29 of 1997, provided he is otherwise qualified. There is no overpayment with respect to this issue.

Dated and mailed: March 6, 1998
murraru.urr : 164 : 8 VL 1059.07

/s/ David B. Falstad, Chairman

/s/ James A. Rutkowski, Commissioner

NOTE: Although the commission did confer with the administrative law judge regarding witness credibility and demeanor, the commission's reversal of the appeal tribunal decision did not involve any differing assessment of the credibility of the witnesses in this case, but was based upon a different interpretation of the law when applied to essentially the same set of facts as that found by the appeal tribunal.

Pamela I. Anderson, Commissioner (dissenting):

I am unable to agree with the result reached by the employer herein and I dissent.

The employe began working for the employer and was paid straight commissions. The employe was not earning much of anything. The employe approached the employer and they changed the compensation so that the employe was paid a $350 base salary if he worked the hours requested. The employe testified that "I understood I had to work full-time to earn the base--8:00am-3:30pm Monday-Friday and 8:00am-6:00pm one day, but it is a touchy question." The employe also was eligible for bonuses depending on how much income he brought in to the employer. The disagreement in the case occurs because the employe took off two days in a week and the employer paid him at $5 an hour for 19.5 hours.

The employe believed that he had three days off per year with pay. The employee relations handbook says "If you work full-time, you accrue two(2) hours per month as sick time. This calculates to three (3) days a year. No sick time will be paid during the 30-day probationary period. The company reserves the right to request a doctor's certification of illness." The vacation pay section allows for one week after 12 months of uninterrupted full-time service. This did not apply as the employe worked 5-6 months for the employer. The employer also allowed for leave without pay for up to 30 days but the request must be in at least two weeks prior to the leave.

The employe would have had approximately 8-10 hours of sick leave but he was not off because he was sick. He was not entitled to paid vacation because he had not worked for the employer for over 1 year. The employer did grant him personal leave but that was without pay. I would find that the employe understood he would need to work full-time to receive the base or he would receive commissions only for that time. If he received commissions only, the employer was obligated by law to pay him at least the minimum wage for hours worked even if he earned zero dollars in commissions for a pay period. I would not find that the check for the time his mother died created a pattern that allowed the employe to be able to depend on a pro-rated wage. The only misunderstanding I found in the case was whether the employe realized how sick days were handled.

The change from $350 a week to $5 per hour is large but the intent was to give the employe a base which would even out commissions. The change to the base if he performed full-time work was to the employe's benefit if he put in his hours. The employer believed if he put in his hours he would sell more so they would also benefit.

I would affirm the administrative law judge's decision.

Pamela I. Anderson, Commissioner

Appealed to Circuit Court. Affirmed November 11, 1998. Court Decision Summary

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