DANIEL M ALEXANDER, Claimant

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 by the department.

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.

The decision of the administrative law judge is affirmed. Accordingly, the claimant is eligible for Trade Readjustment Allowances, if otherwise qualified.

Dated and mailed July 10, 2003
alexada . tsd : 110 : TRA

/s/ David B. Falstad, Chairman

/s/ James T. Flynn, Commissioner

/s/ Robert Glaser, Commissioner

The claimant's employer was certified by the Secretary of the U. S. Department of Labor as having been impacted by foreign imports, and an impact period of August 6, 2001 through October 7, 2001 was established.

The claimant last actually performed work for the employer on July 18, 2001. On July 18, 2001, he was told he should no longer come in to work. However, he was told by his employer that he was considered to be employed until September 16, 2001, and he continued to receive pay and benefits through that date. He was informed that September 16, 2001 was the effective date of his termination. Following September 16, 2001, he received a severance pay package.

The administrative law judge concluded that during the 60-day period following his last day of actual work, during which time the claimant was receiving his full pay and benefits, the claimant was on "employer-authorized leave" within the meaning of 20 C.F.R. § 617.3, which provides that for purposes of determining when a claimant's date of separation occurs, date of separation means:

(1) With respect to a total separation -

(i) For an individual in employment status, the last day worked; and

(ii) For an individual on employer-authorized leave, the last day the individual would have worked had the individual been working . . .

On that basis, the administrative law judge concluded that the claimant's date of separation was September 16, 2001, the last day the employee would have worked had he been working rather than on employer-authorized leave. Therefore, the administrative law judge concluded that the claimant was eligible for Trade Readjustment Allowances.

The department argues, without citation to authority, that the administrative law judge erred in concluding that the claimant was on "employer-authorized leave". The department asserts that the claimant cannot be considered to have been on leave because "a leave contemplates a return to work" and there was no such possibility here, the employer having announced its intention to close and having provided the 60-day period of continuing pay and benefits in order to comply with applicable laws concerning giving notice prior to plant closings.

The commission does not agree with the department's argument. The definition of date of separation contained in 20 C.F.R. § 617.3 does not require the conclusion, that an "employer-authorized leave" necessarily contemplates a return to work at the end of the leave. It requires simply that the employee be on a leave which is authorized by the employer. The commission believes that the essence of a "leave", for these purposes, is that it is a period during which the employer gives the employee permission (i.e., grants them leave) to not work, while nevertheless continuing to accord them the status of an employee.

It is significant, the commission believes, that the claimant was not simply given a lump-sum payment as of his last day of work. Such a payment would be consistent with the conclusion that there had been a separation of the employment relationship with payment of a severance benefit. Indeed, that is precisely what happened following September 16, 2001, the date which the employer identified as the effective date of the employee's termination. Instead, the claimant was continued in full pay and benefit status, throughout the period from his last day of actual work to the effective date of his termination. He was thus being treated in all respects as a continuing employee of the employer during this period, with the exception that he was excused from the expectation that he come in to work. The commission considers it reasonable to view this as an "on leave" status.

The commission finds support for this conclusion in Talberg and Novak v. Commissioner of Economic Security, 370 N.W.2d 686 (Ct. App. Minnesota, 1985). In that case, the employer had a regular practice that during the fall, employee vacation times were assigned for the following July, when temporary reductions in operations were generally scheduled. In the fall of 1981, employee vacation times were scheduled for July, 1982. In March, 1982, a number of employees were laid off because of lack of work. They did not actually perform work for the employer again. In July, however, at the time of their scheduled vacation, they were paid their vacation pay and treated as being on work status. At the end of those vacation periods, their employment was permanently severed. The employer was subsequently certified as having been affected under the Trade Act, but the impact date assigned was March 24, 1982, which was after the date of the layoffs in March, 1982. However, the court held that employees had a separation date in July, 1982, at the end of their vacation periods. Because that separation date occurred during the impact period, they were held to be entitled to benefits under the Trade Act. The court said:

Relators argue that, although they were laid off prior to the impact date, the layoff does not mark the date of final separation from employment. We agree. By being returned to active status when put on vacation leave, these employees returned to work. Testimony before the referee indicated that both the employer and employees viewed the vacation time as work status. 370 N.W.2d at 689
. . .
We hold that when employees work for an employer, and are not fired, discharged or terminated but are told that due to a slow down in work they will not be required to report to the job site but are to stay on call and to report for purposes of receiving their vacation pay at a later date, there is an employer-employee relationship. The claimants herein . . . received periodic payment for vacation leave . . . An individual's receipt of employer-authorized leave benefits is indicative of an employment relationship. The relators did not finally separate from employment until their authorized periods of vacation leave had expired. 370 N.W.2d at 690-91.

In Talberg, there was no indication that either the employer or the employees "contemplated" that the employees would return to actual work for the employer after their scheduled paid vacation leave periods in July 1982. Nevertheless, the Talberg court concluded that the employees had a qualifying date of separation at the end of those vacation leaves.

The commission also finds support for its conclusion herein, in Santo v. Pa. Unemployment Compensation Bd. of Rev., 130 Pa Commw. 330, 568 A.2d 291 (Commonwealth Ct. of Pennsylvania, 1989). In that case, the employees last actually worked for their employer on July 25, 1981, but the impact date certified by the U.S. Department of Labor was July 26, 1981. The court in Santo took note of the fact that under the formal layoff policy of the employer in that case, a worker who was informed they were being laid off was not considered to be on layoff status until the first day of the week following his last day of work. Thus, the court concluded, while the employees were notified on July 25 that they were to be laid off and did not work thereafter, they were not actually laid off at that point, but were on employer-authorized leave within the meaning of 20 C.F.R. § 617.3 until the first day of the following week -- which was after the impact date.

The commission is persuaded that the most reasonable construction of the applicable rule here is that the claimant was on an employer-authorized leave during the period while he was no longer required to come in to work but was still being provided the pay and benefits indicating his employee status.  Therefore, under 20 C.F.R. § 617.3, his date of separation was within the impact period.

cc: 
Gregory A. Frigo, Director
Bureau of Legal Affairs
Division of Unemployment Insurance
Department of Workforce Development

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