DIANNE M KONGSHAUG, Employee

LIL STARS NIGHTCARE, 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 almost eight months as a care provider for the employer, a licensed daycare center. She quit her employment on February 25, 2005 (week 9).

On December 30, 2004, the employer instituted a new policy that employees could not receive personal telephone calls at work unless it was an emergency. On the employee's last day of work, February 25, 2005, at 11:00 a.m. the employee's husband called the work site and spoke to the owner. He asked if he could talk to the employee. The owner said no, that the employee was busy but that the husband could leave a message. The husband chose not to leave a message and hung up. Unbeknownst to the employer, the employee's husband was calling to find out what prescription the employee needed refilled that day. The employee overheard the conversation, was concerned that if she did not get her prescription refill order in by noon that it would not be refilled and she would suffer withdrawal symptoms. She grabbed her coat and told the employer she was leaving on her lunch break, which would normally start at noon. The employee spoke with her husband while home, decided to quit and so informed the employer shortly thereafter. She quit because she felt the employer showed favoritism to her co-worker and allowed the co-worker to receive personal telephone calls and because her hours were cut by eight hours a week on February 13, 2005. Yet, upon hire, the employee understood that her 40 hour per week work and pay was subject to enrollment at the daycare.

Following the quitting, the employee initiated a claim for unemployment insurance benefits. The initial determination denied benefits, finding that the employee's quitting in week 9 of 2005 was not within any exception to allow for the immediate payment of unemployment insurance benefits. The employee timely appealed and an appeal tribunal hearing was conducted with a decision issued on April 28, 2005. The administrative law judge found that the employee's hours had been reduced by 50 percent and that while the employer's treatment of her on February 25 did not constitute good cause, the 50 percent reduction in hours did. The appeal tribunal decision allowed unemployment insurance benefits as of week 9 of 2005 and the employee was paid benefits totaling $4,178.00 for the calendar weeks ending February 26, 2005 through July 9, 2005 (weeks 9-28).

Wis. Stat. § 108.04(7) provides that a worker who quits his or her employment is ineligible for unemployment insurance benefits unless the circumstances of the quitting fall within an exception listed in the Wisconsin statutes. Thus, the issue before the commission is whether the employee's voluntary termination of employment fell within an exception to allow immediate payment of benefits.

The employer timely petitioned the appeal tribunal decision, contending that the employee's quitting was not with good cause attributable to the employer, Wis. Stat. § 108.04(7)(b), and was not within any other exception allowing for the immediate payment of benefits. Specifically, the employer objected to the finding that the employee's hours were cut by 50 percent. Good cause attributable to the employer means that the employee's resignation is caused by some act or omission by the employer which justifies the employee'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). Also, in Harris v. Cassandra Holley Enterprises Inc., UI Dec. Hearing No. 05600373MW (LIRC April 26, 2005) the commission held that, as a general rule, a worker who experiences a reduction in hours, affected by an employer for valid business reasons, is expected to remain employed and file a claim for partial unemployment insurance benefits rather than quit.

In this case, the employee's hours and corresponding pay were not reduced by 50 percent but, at most, by 20 percent. The reduction, due to a declining daytime enrollment, was for a valid business reason. Upon hire, the employee understood that her hours could be reduced depending upon enrollment. These facts, together with the fact that the employee could have filed a claim for partial unemployment benefits while working the reduced schedule, leads the commission to find that the reduction in hours did not constitute good cause attributable to the employer for quitting.

Moreover, as found by the administrative law judge, the commission agrees that the employer's treatment of the husband's telephone call on the employee's last day did not constitute good cause attributable to the employer. Had the husband wished, he could have left a message with the employer's owner or he could have explained the nature of the telephone call. Had he done so, the owner may have allowed the employee to take the telephone call or at least to call her husband back. Additionally, there is no evidence that the employee's perceived favoritism constituted good cause attributable.

In conclusion, the employee's quitting was not with good cause attributable to the employer, nor was it within any other exception to allow for the immediate payment of unemployment insurance benefits. The employee was ineligible for the benefits $4,178.00 in benefits paid to her after the appeal tribunal decision was issued.

Wis. Stat. § 108.22(8)(c), provides that the department shall waive the recovery of erroneously paid benefits if the overpayment was not the result of employer fault, was the result of department error, and the overpayment did not result from the fault of the claimant. The next issue before the commission is whether the employee must repay the erroneously benefits.

The employer was not at fault in the erroneous benefit payment. Next, Wis. Stat. § 108.02(10e)(a) and (b) defines department error as an error made by the department in computing or paying benefits which results from a mathematical mistake, miscalculation, misapplication or misinterpretation of the law or mistake of evidentiary fact, or from misinformation provided to a claimant by the department, on which the claimant relied.

In this case, the administrative law judge reversed the initial determination and found a quitting with good cause attributable to the employer based solely upon a 50 percent reduction in hours and resulting reduction in pay. However, this was a mistake of evidentiary fact. The employee testified that her hours were reduced four hours per day, two days per week for a total of eight hours or 20 percent. The commission finds that the appeal tribunal's mistake regarding the reduction was department error. Further, the commission finds that the employee was not at fault in the overpayment. Therefore, recovery of the overpaid benefits is waived.

The commission therefore finds that the employee voluntarily terminated her employment in week 9 of 2005 and that her quitting was not within any exception to allow for the immediate payment of unemployment insurance benefits within the meaning of Wis. Stat. § 108.04(7). The commission further finds that waiver of benefit recovery is required under Wis. Stat. § 108.22(8)(c), because the overpayment did not result from the fault of the claimant or the employer, as provided in Wis. Stat. § 108.04(13)(f) and the overpayment was a result of department error within the meaning of Wis. Stat. § 108.02(10e)(a) and (b).

The decision of the administrative law judge is reversed. Accordingly, the employee is ineligible for benefits beginning in week 9 of 2005 and until four weeks have elapsed since the end of the week of the quitting and the employee has earned four times her weekly benefit rate in subsequent covered employment which would have been paid had the quitting not occurred. The employee is not required to repay the sum of $4,178.00 to the Unemployment Insurance Reserve Fund.

Dated and mailed July 18, 2005
kongsdi . urr : 150 : 8 VL 1005.01 VL 1059.204  BR 335.02

James T. Flynn, Chairman

/s/ David B. Falstad, Commissioner

/s/ Robert Glaser, Commissioner

The commission did not confer with the administrative law judge prior to reversing his decision. The commission's reversal is based upon the undisputed facts in the record and the legal conclusions drawn there from.

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