TOM P CASSIDY, Employee
DEAN S YOST
QUALITY HOME INNOVATIONS, Employer
Administrative law judge (ALJ) Ottenstein issued a decision in this matter on behalf of the Division of Unemployment Insurance of the Department of Workforce Development. A timely petition for review was filed. On June 27, 2007, the commission remanded the matter for additional testimony and notice regarding the issues involved. On August 8, 2007, the remand hearing was conducted by ALJ Smith. Upon completion, the matter was forwarded to the commission for review and decision.
The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to ALJ Ottenstein and ALJ Smith. Based on its review, the commission makes the following:
The employee worked for 13 years as a finish carpenter for the employer, an owner of a remodeling business.
The owner only employed himself and the employee. During the last four years, the employee and owner have worked in the State of Wisconsin from approximately May through December and on projects in the State of Florida during the remaining winter months. In early winter, the owner typically traveled to Florida before the employee. The owner paid the airfare for the employee and his girlfriend at the start and end of the winter work as well as for flights home every few weeks to visit family and for the holidays. The owner also provided the employee's housing while in Florida. Additionally, while in Florida, the owner increased the employee's wages to $30 an hour; for work in Wisconsin, the employee was paid $20 an hour.
The employee's last day of work was September 26, 2006 (week 39) when the owner laid the employee off after a customer cancelled a remodeling project scheduled for the month of October.
Departmental records reflect that the employee initiated his claim for benefits on October 3, 2006 (week 40). At that time, the employee indicated an anticipated return to work with the employer. Based upon the employee's anticipated return to work, a UCB-16R form was sent to the employer questioning the employee's work situation and whether the employer anticipated him returning to work. The employer agreed that it anticipated the employee would return to work and the employee's work search was waived.
Departmental records reflect that the employee filed weekly claims for unemployment insurance benefits (benefits) for the calendar weeks ending October 6 through November 10, 2006 (weeks 40-45). The employee was not required to search for work in those weeks and answered, "No" to the questions whether he worked, quit a job, refused offered work or missed work available. Although the employee testified that he performed a "side job" for one of the employer's customers during the month of October, he answered, "No" to the weekly claim question asking him whether he was self-employed.
Sometime in October, the employer's owner contacted the employee to discuss the employee's return to work in Florida. The employee understood that the employer had work for him as of November but refused to work for the employer in Florida, citing reasons related to his daughter. On November 9, 2006 (week 45), the employer contacted the Unemployment Insurance Division contesting the employee's continuing eligibility for benefits based upon the employee's refusal to work in Florida.
An adjudicator investigated the employer's claim and, on December 1, 2006 (week 48), a determination was issued finding that, as of week 45 of 2006, the employee had good cause for refusing to accept an offer of work with the employer. Benefits were allowed and the employee's work search waiver remained in place. The employer appealed the determination leading to the hearing, appeal tribunal decision and the commission's review of the matter.
Departmental records reflect that the employee continued to file weekly claims for benefits for the calendar weeks ending November 18, 2006 (week 46) through May 26, 2007 (week 21), receiving weekly benefit checks of $341 per week in 2006 and $355 per week in 2007. Throughout this period, the employee's work search was waived. For the calendar weeks ending December 2 and 9, 2006 (weeks 48-49), the employee answered, "Yes" to the questions whether he refused work and whether he missed work the employer had scheduled for him. He also answered, "No" to the questions whether he worked, quit a job, refused offered work or missed work available. Finally, the employee answered, "No" to the weekly question asking him whether he was self-employed.
The first issue to be decided is whether the employment relationship was in a continuing status as of the calendar week ending November 11, 2006 (week 45); if it was not, the employee's refusal of the offer of new work must be analyzed under Wis. Stat. § 108.04(8)(a); if the employment relationship was continuing, it must be determined whether the refusal constituted a voluntary termination of employment and whether the employee was eligible for benefits under Wis. Stat. § 108.04(7).
For unemployment insurance purposes, an indefinite layoff severs the employment relationship. In Hemstock Concrete Products, Inc. v. LIRC, 127 Wis.2d 437 (Ct. App. 1985), the court dealt with the issue of whether a layoff without a definite date of recall also severs the employment relationship. The court stated:
A specific recall date is not necessary to reestablish an employment relationship if that relationship was never severed in the first instance. There is a presumption that a layoff severs the employment relationship, but both the commission and the court have recognized that the presumption may be rebutted by "evidence that at the time of layoff there existed an assurance, expressed or clearly implied by circumstances, that work and wages would be resumed at an ascertainable time in the not too distant future." Hermann v. Miller Brewing Company, Hearing No. 18852, Decision No. 54-A-38 (Industrial Commission of Wisconsin, Dec. 18, 1953), quoted with approval in A.O. Smith, 88 Wis.2d at 267, 276 N.W.2d at 282. [footnote omitted]
The distinction between indefinite and temporary layoffs was recognized in A.O. Smith. There, the court commented on the facts of a Michigan case - where the employees understood that they would be recalled as soon as materials necessary for the resumption of production became available - stating that under such circumstances, "under Wisconsin law it would be clear that the . . . workers were not in an indefinite-layoff status." Id. at 269, 276 N.W.2d at 283. [footnote omitted]
For the past five years, the employee worked for the employer both in Wisconsin and in Florida. While the exact start and end dates of the Florida and Wisconsin work were not set, the employee testified that the transition between the two was regular; typically, the employee was off work in Wisconsin in the fall for a month or two with Florida work to start sometime after January 1. The owner testified that the length of the Florida season was actually increasing, with a February start over the 2003/2004 winter season, a January start over the 2003/2004 winter season, and a December start over the 2004/2005 winter season. While the 2005/2006 Florida season did not start until January, the owner testified that the season was delayed due to his medical condition.
Since both the employer and the employee understood that the employer had work for the employee in Florida as of week 45 of 2006 and it was the employee's decision to refuse the work, his actions severed the employment relationship at that time. It was a voluntary termination of employment.
Under Wis. Stat. § 108.04(7)(a), an employee who voluntarily terminates employment with an employer is ineligible for benefits unless the quitting was with good cause attributable to the employer or falls within another statutory exception permitting the immediate payment of benefits; thus, the next issue is whether the circumstances of the employee's quitting fall within an exception to allow for immediate benefit payment.
"Good cause attributable to the employing unit" 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, 401, 134 N.W.2d 412 (1965); Hanmer v. DILHR, 92 Wis. 2d 90, 98, 284 N.W.2d 587 (1979).
In this case, given the past practice of the Florida/Wisconsin work and the employee's acceptance of that work, the offer of continuing Florida work in November was not "fault" by the employer that was so detrimental or unreasonable as to justify the employee's quitting. Additionally, the employee's decision to end the employment in order to be more accessible to his daughter may have been a valid personal decision but it is not an exception allowing for the immediate payment of unemployment insurance benefits.
Department records reflect that the employee received benefits totaling $10,169 for the calendar weeks ending November 11, 2006 (week 45) through May 26, 2007 (week 21) that he was not entitled to given the above findings, and the final issue is whether the employee must repay any benefits.
If benefits are erroneously paid without fault on behalf of an employer, the department shall create an overpayment under Wis. Stat. � 108.22(8)(a). See Wis. Stat. � � 108.04(13)(c) and (e). Fault is defined in Wis. Stat. � 108.04(13)(f) as a failure to file a required report, failure to provide correct and complete information on a required report, failure to object to a benefit claim or aiding or abetting a claimant in an act of concealment. In addition, an employer's failure, without good cause, to provide correct and complete information requested by the department during its fact-finding investigation constitutes fault. Wis. Stat. � 108.04(13)(g). (1)
Given the owner's anticipation of offering continuing work to the employee, his actions with respect to the Department's separation notice, the UCB-16R, were proper. The form did not ask for a "recall" date and, when the employee refused to return to work in November, the employer then objected to the benefit claim by contacting the Unemployment Insurance Division. The employee spoke with the adjudicator assigned to investigate the matter and explained the situation. At the hearing, the adjudicator testified that she did not consider the situation to be a continuing employment relationship because there was no definite return date after the layoff. Yet, while a definite date of return may continue the employment relationship, so may a two to three month seasonal layoff with an ascertainable and expected date of recall, even though the date is not precise or guaranteed. Hanseder v. Lieds Nursery Co. Inc., UI Dec. Hearing No. 00400393AP (LIRC April 10, 2000). Thus, even though departmental records reflect that the employer did not respond to her request for additional information, that failure to respond did not result in the erroneous payment of benefits. Instead, the determination and subsequent decision was based upon the mistaken legal conclusion that the employment relationship was no longer in existence as of the time of the offer of work in November 2006.
The commission therefore finds that the erroneous payment of benefits was not due to fault on behalf of an employer and department shall create an overpayment of $10,169.
Next, Wis. Stat. § 108.22(8)(c) provides that the department shall waive recovery of overpaid benefits if:
(1) the overpayment was the result of departmental error and was not the fault of any employer under Wis. Stat. § 108.04(13)(f) and
(2) the overpayment did not result from the fault of the employee under Wis. Stat. § 108.04(13)(f) or because of the employee's false statement or misrepresentation.
When the employee filed his weekly benefit claim for week 45 of 2006, he answered, "No" to the questions whether he worked, quit a job, refused offered work or missed work available. As of week 48, the week of the determination, benefits were paid to the employee based upon the finding that the employee refused an offer of new work with the employer. At the remand hearing, the adjudicator was unable to provide any adjudication policies with respect to identifying an issue as a separation or as a refusal of an offer of work. The record is unclear as to whether the Department requires an adjudicator to specifically address whether an employment relationship was continuing whenever the "offering employer" has been identified as a "recall employer." (2)
The commission therefore finds that the employee did not refuse an offer of new work under Wis. Stat. § 108.04(8) but voluntarily terminated his employment in week 45 of 2006 and his quitting was not within any exception allowing the immediate payment of unemployment insurance benefits as provided in Wis. Stat. § 108.04(7).
The commission therefore further finds that the employee was overpaid benefits for weeks 45 through 47 of 2006, totaling $1,023 that he was not entitled to and that waiver of the benefit recovery is not required under Wis. Stat. § 108.22(8)(c), because the overpayment was not the result of departmental error. See Wis. Stat. § 108.22(8)(c)2.
The commission finally finds that the employee was overpaid benefits as of week 48 of 2006, totaling $9,146 that he was not entitled to and that waiver of the benefit recovery is required under Wis. Stat. § 108.22(8)(c), because, as of week 48 of 2006, the overpayment did not result from the fault of the employee as provided in Wis. Stat. § 108.04(13)(f) and the overpayment was the result of departmental error. See Wis. Stat. § 108.22(8)(c)2.
The appeal tribunal decision is reversed. Accordingly, the employee is ineligible for unemployment insurance benefits beginning in week 45 of 2006, and until four weeks have elapsed since the end of the week of quitting and until he has earned wages in covered employment performed after the week of quitting equaling at least four times his weekly benefit rate which would have been paid had the quitting not occurred. The employee is required to repay $1,023 to the Unemployment Reserve Fund.
The commission remands for investigation the issues of the employee's (1) ability to work and availability for work and (2) self-employment as of week 45 of 2007, given the employee's testimony about performing "side work."
Dated and mailed October 5, 2007
cassito . urr : 150 : VL 1007.01 SW 844
BR 319.4
/s/ James T. Flynn, Chairman
/s/ Robert Glaser, Commissioner
/s/ Ann L. Crump, Commissioner
The commission did not discuss witness credibility and demeanor with the ALJ who held the hearing. The commission's reversal is not based on the credibility or demeanor of the witnesses. The commission has reversed the appeal tribunal for reasons set forth in this decision.
cc:
Attorney Mindy Rowland Buenger
Dean S. Yost Quality Home Innovations (Sullivan, Wisconsin)
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