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


MICHAEL J HANSON, Employe

ALL AMERICAN MORTGAGE INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 98201300EC


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 the applicable law, records and evidence in this case, and after consultation with the administrative law judge, the commission makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The employe worked less than a year as a loan originator for the employer, a mortgage banking business. His last day of work was August 4, 1998 (week 32).

The employe worked on a draw against commission basis throughout his employment. The employe's commissions did not cover his draw during that time. The parties had never discussed or agreed to an end date to the draw arrangement. The employe ended his employment when the employer notified him on his last day of work that his compensation was being changed from draw against commission to straight commission. He was given the option of working under those conditions or handing in his keys. He handed in his keys.

The issue in this case is whether the employe quit or was discharged and if he quit, whether the quitting was with good cause attributable to the employer or for any other reason permitting the immediate payment of benefits.

The employer offered the employe the option of retaining his employment under the new compensation arrangement. The employe chose not to do so because he would not be earning any compensation. He thereby voluntarily terminated his employment.

The remaining issue is whether the employe's quitting was with good cause attributable to the employer.

"Good cause attributable to the employing unit" means some act or omission by the employer justifying the employe's quitting; it involves "some fault" on the part of the employer and must be "real and substantial." Nottelson v. DILHR, 94 Wis. 2d 106, 120, 287 N.W.2d 763 (1980) (citing Kessler v. Industrial Comm., 27 Wis. 2d 398, 401, 134 N.W.2d 412 (1965), and Hanmer v. DILHR, 92 Wis. 2d 90, 98, 284 N.W.2d 587 (1979)). For the exception to apply, the quitting must be "occasioned by" the act or omission of the employer which constitutes good cause. Hanmer, 92 Wis. 2d at 98 (citing Kessler v. Industrial Comm., 27 Wis. 2d 398, 401, 134 N.W.2d 412 (1965)).

In Farmers Mill of Athens, Inc. v. ILHR Dept., 97 Wis.2d 576 (Ct. App. 1980), the court held that a unilateral change in the conditions of employment on the part of the employer which resulted in a significant pay reduction to the employe constituted good cause attributable to the employer for quitting.

In this case, the employe was never told that the draw was conditional or might end. The employer's decision to place the employe on straight commission represented a change in the conditions of his employment contract and this change resulted in a substantial decrease in wages which resulted in financial hardship. The issue is whether the employe's quitting was a reasonable reaction to this act on the part of the employer, not whether the employer had good cause for the action which resulted in the employe's quitting. If the business was not profitable, that was the employer's responsibility. The risks of business are to be born by an employer and not an employe. The employe acted reasonably in terminating his relationship with the employer despite the fact that the employer may have had a business reason for its actions. (See Richard L. Guy v. Rock Solid Inc., Hearing no. 95001596 (decided August 24, 1995), the employe quit with good cause attributable to the employer when the employer changed his compensation from draw and commission to straight commission.)

The commission therefore finds that in week 32 of 1998, the employe terminated work with the employing unit, but that such quitting was with good cause attributable to the employer within the meaning of Wis. Stat. § 108.04(7)(b).

DECISION

The decision of the administrative law judge is reversed. Accordingly, the employe is eligible for benefits beginning in week 32 of 1998 if he is otherwise qualified.

Dated and mailed: February 2, 1999
hansomi.urr : 178 : 1  VL 1059.20

/s/ David B. Falstad, Chairman

Pamela I. Anderson, Commissioner

/s/ James A. Rutkowski, Commissioner

MEMORANDUM OPINION

The commission consulted with the administrative law judge regarding witness demeanor and credibility prior to reversing. However, the commission's decision is not based on any differing assessment of witness credibility. The commission reaches a different result when applying the law to the same relevant facts.


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