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


JOHN R O'NEILL, Employe

WISCONSIN NATURAL GAS CO, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 95005263


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 agrees with the decision of the ALJ, and it adopts the findings and conclusion in that decision as its own.

DECISION

The decision of the administrative law judge is affirmed. Accordingly, as of week 40 of 1995, the employe is not eligible to start a benefit year.

Dated and mailed :  April 16, 1996
oneiljo.usd : 132 : 3 BR 305

/s/ Pamela I. Anderson, Chairman

/s/ Richard T. Kreul, Commissioner

David B. Falstad, Commissioner

MEMORANDUM OPINION

The employe has petitioned for commission review of the adverse appeal tribunal decision which found that the severance pay received by the employe could not be used as base period wages because it was paid outside of the applicable base period. The employe states in his petition that the decision is unfair to an employer who allocates severance pay. The employe argues that the allocation allows an employe a reasonable time period to find employment and preserves the employer's favorable rate because the employe is ineligible for benefits while receiving the allocated severance pay. The commission agrees that allocation of severance pay at not less than an employe's weekly benefit rate may have the effect of rendering an employe ineligible for benefits for each week to which the pay is allocated. Sec. 108.05(5), Stats., provides that such allocated severance/termination pay shall be treated as wages for partial benefit purposes. That is, had the employe applied for benefits when laid off, the allocated severance pay would have been treated as wages to the employe and served to reduce, and perhaps eliminate, benefits due in each week to which the severance pay was allocated. The issue in this case, however, is not whether the allocated severance pay should be treated as wages for partial benefit purposes. The issue in this case is whether the allocated severance pay constitutes base period wages. Section 108.02(4m), Stats., defines "base period wages" and provides, in relevant part, that base period wages means : 

(c) "All holiday, vacation and termination pay which is paid to an employe during his or her base period as a result of employment for an employer."

Section 108.02(4m)(c), Stats., clearly states that severance pay is considered base period wages if paid during the employe's base period. The employe initiated a benefit claim in week 40 of 1995 and therefore his base period consists of the third and fourth quarters of 1994 and the first and second quarters of 1995. The severance pay, although allocated from July of 1994 to August of 1995, was paid in full in the second quarter of 1994. The employe's severance pay was not paid during the employe's base period and therefore does not constitute base period wages.

Basically, if the employe had applied for unemployment benefits after his layoff the severance pay would have been treated as wages to the employe for each week to which it was allocated. However, once the allocation period ended, the employe could not use those wages as base period wages as the entire amount was paid to him outside of his base period. While the statutory scheme may seem unfair to the employe, the language of the statute, as it has been created by the Legislature, requires the result reached. The commission is required to apply the statute as it is written and has no authority to deviate from its plain language. While such language results in a decision adverse to the employe, this reflects the Legislature's intent in cases such as these. Accordingly, the commission may not overturn the appeal tribunal decision.

cc :  WISCONSIN NATURAL GAS CO

ATTORNEY RICHARD W TORHORST


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