RONALD P FALK, Employee

FLYWAY AUTOMOTIVE LLC, Employer

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:

The employee worked for about four years as a mechanic and service manager for the employer, an automotive sales and service business. His last day of work was August 7, 2003 (week 32), when the employer discharged him. The employee began a claim for unemployment benefits on or about August 11, 2003 (week 33). The employee was found eligible for benefits based on his separation from employment in week 33 of 2003.

On approximately July 28, 2003, the employee proposed a change in his work hours to the employer's owner. He had recently opened his own repair shop, and had told the employer that he was going to do primarily body work and specialized suspension work which the employer did not perform and therefore was non-competitive. He had been operating the shop during evening hours, but wanted to have some hours of operation when parts suppliers were open for business. He proposed working for the employer from 6:00 a.m. to 2:00 p.m. but skipping lunch. The employer was unwilling to have him working when no one else was on the premises and would not agree to that request. However, the owner agreed that he could work from 8:00 a.m. to 2:00 p.m., which would reduce his work hours for the employer by 2 hours per day. They also agreed on his hourly pay rate as a part-time worker, and the employee began working the reduced hours later that week.

Wis. Stat. § 108.04(7m), provides that an employee whose employer grants the employee's voluntary request to reduce indefinitely his usual number of work hours voluntarily terminates his employment. A worker who voluntary quits employment is ineligible for benefits for the week of quitting, the next four weeks, and until he has earned wages in covered employment performed after the week of quitting of at least four times his unemployment benefit rate. The wages the employee earns for his reduced working hours after the week of quitting are counted toward this requalification requirement unless the employer has notified the employee in writing before granting the request for reduced hours that reducing his hours may be deemed a quitting. In this case, the employee did not make a voluntary request to reduce his hours, but a voluntary request to rearrange his full-time hours. The employer and employee did eventually agree to a schedule that in effect reduced the employee's weekly hours. However, this was more by mutual agreement than due to the employee's request to reduce his hours.

A finding that no separation occurred in week 31 of 2003, is in keeping with the purpose of Wis. Stat. § 108.04(7m). In Lipscomb v. St. Johns Home of Milwaukee, UI Hearing No. 98606449MW (LIRC Mar. 30, 1999), the commission noted:

The purpose of the statute is to prevent an employe from requalifying for unemployment insurance eligibility (after reducing his or her hours) and receiving partial benefits based on reduced employment with the on-going employer, when the partial-benefit entitlement is due to the employe's choice to work reduced hours. Before this statute came into being, on-going employers were being charged for benefits based on a reduction in hours granted due to employes' requests (as opposed to reductions initiated by the employer). The previous situation was deemed unfair to employers, and rightly so, since they were being charged for unemployment insurance that was payable due to an employe's request to reduce his or her hours (and thus be eligible for partial benefits). To apply Wis. Stat. § 108.04(7m) in the present case is just as unfair, but in the other direction. The effect of doing so would be to prevent an employe from ever requalifying for unemployment insurance eligibility following a voluntary reduction of hours even where, as here, the subsequent separation and application for unemployment insurance by the employe have nothing whatsoever to do with the previous reduction in hours.

The commission therefore finds that in week 31 of 2003 the employee did not voluntarily terminate his employment within the meaning of Wis. Stat. § 108.04(7m).

The decision of the administrative law judge is reversed. Accordingly, the employee is eligible for benefits beginning in week 31 of 2003, if he is otherwise qualified.

Dated and mailed May 7, 2004
falkron . urr : 132 : 1 :    BR 339  VL 1054.01

/s/ David B. Falstad, Chairman

/s/ James T. Flynn, Commissioner

/s/ Robert Glaser, Commissioner

NOTE: The commission did not discuss witness credibility and demeanor with the ALJ who presided at the hearing. The commission's reversal is not based on the credibility of the witnesses but upon reaching a different legal conclusion than that reached by the ALJ based on essentially the same findings of fact.

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uploaded 2004/05/10