Bartholf v. Board of Review, Division of Employment Sec., A--122

• Decision Date: 01 July 1955
• Docket Number: No. A--122,A--122
• Citation: 115 A.2d 618,36 N.J.Super. 349
• Parties: Frank BARTHOLF, Plaintiff-Appellant, v. BOARD OF REVIEW, DIVISION OF EMPLOYMENT SECURITY, and New Jersey Bell Telephone Company, Defendants-Respondents. . Appellate Division
• Court: New Jersey Superior Court — Appellate Division

Page 349

36 N.J.Super. 349

115 A.2d 618

Frank BARTHOLF, Plaintiff-Appellant, v. BOARD OF REVIEW, DIVISION OF EMPLOYMENT SECURITY, and New Jersey Bell Telephone Company, Defendants-Respondents.

No. A--122.

Superior Court of New Jersey Appellate Division.

Argued May 31, 1955.

Decided July 1, 1955.

James Mercer Davis, Jr., Mount Holly, argued the cause for appellant (Mayer, Weiner & Mayer of the New York Bar, New York City, attorneys; Abraham Weiner, New York City, and Thomas J. Murphy, Riverside, on the brief).

Clarence F. McGovern, Trenton, argued the cause for respondent Board of Review, Division of Employment Security, Department of Labor and Industry.

Frederick W. Nixon, Newark, argued the cause for respondent New Jersey Bell Tel. Co.

Before Judges GOLDMANN, FREUND and CONFORD.

The opinion of the court was delivered by

GOLDMANN, S.J.A.D.

Plaintiff appeals from a decision and order of the Board of Review, Division of Employment Security, Department of Labor and Industry, denying his claim for unemployment compensation benefits because he could not establish 17 base weeks of emploment in his base year. In so holding, the board rejected his contention that weeks during which he received disability benefits under his employer's state-approved private plan should be counted along with the 14 weeks in which he actually worked and received more than $15 a week remuneration.

Plaintiff had been employed by defendant New Jersey Bell Telephone Company for more than 40 years. On June 30, 1953 he was retired on pension, having that month reached the age of 65. At the time of retirement plaintiff was earning $96 a week.

On September 28, 1953 plaintiff filed a claim for unemployment compensation benefits with the Division of Employment Security. His base year, determined in accordance with R.S. 43:21--19(c)(2), N.J.S.A., ran from September 21, 1952 to September 19, 1953. To succeed in his claim he was required by law (R.S. 43:21--4(e), N.J.S.A.) to establish, with respect to his base year, 17 base weeks as defined in R.S. 43:21--19(t), N.J.S.A.:

"Base week' means any calendar week of an individual's base year during which he earned in employment from an employer remuneration equal to not less than Fifteen Dollars ($15.00); * * *.'

Plaintiff was intermittently absent from his job because of illness during several weeks in the period from September 21, 1952 to February 24, 1953, and continually thereafter until the termination of his employment on June 30, 1953. It is undisputed that during such periods of absence plaintiff was carried on the company's payroll as an employee. Nor is it disputed that the payments made to him during his illness were based upon his weekly pay; when he was absent for the entire week he was paid disability benefits in the same amount as his weekly pay, $96; when he was absent only part of the week, the benefits were prorated to that amount. In any case, plaintiff received a full $96 a week, minus income tax withheld, whether he was on the job or absent therefrom because of illness.

The disability benefits to plaintiff were made in accordance with the defendant company's 'Plan for Employees' Pensions,Disability Benefits and Death Benefits.' The plan has been in effect since 1913, with minor changes to keep it up-to-date. It therefore antedated the adoption of the Temporary Disability Benefits Law, L.1948, c. 110 (R.S. 43:21--25 et seq., N.J.S.A.), and currently complies with the requirements of that act, having been approved by the Division of Employment Security. L.1948, c. 110, § 8 (R.S. 43:21--32). Section 6 of the company plan provides that all employees with more than two years of employment shall receive sickness disability benefits thereunder for designated periods of absence because of illness. These payments are on a graduated scale, running from four weeks of full pay and nine weeks of half-pay for those employed from two to five years, up to full pay for 52 weeks in the case of an employee who, like plaintiff, had been with the company for 25 years or more. The same section provides that employees 'shall not be entitled to receive sickness disability benefits for time for which any wages are paid them by the Company.' The company representative testified that employees with less than two years' service are covered by the state plan for disability benefits, those with more than two years' service being covered by the company's state-approved private plan.

Inasmuch as plaintiff's pension after his retirement on June 30, 1953 would have amounted to less than the sickness disability benefit of $96 a week, the company continued to pay that amount to him through September 22, 1953, when the reduced pension amount came into effect. It was then, on September 28, 1953, that plaintiff filed his claim for unemployment compensation benefits. The company thereupon reported to the Division of Employment Security that plaintiff had only 14 base weeks of employment in his base year. It did not count as weeks of employment those weeks when plaintiff was absent because of illness. The state agency accordingly sent plaintiff a notice of invalid claim on October 6, 1953 because there were less than 17 base weeks within his base year. He did not dispute the determination at the time, but accepted the 14 base weeks as a true record of his employment. It was only after his request for a predating of his claim from September 28 to June 9, 1953 was denied that he appealed, and in his appeal raised the question as to the erroneous calculation of the number of base weeks of employment with which he should have been credited. After considering the appeal, the Appeal Tribunal of the Division of Employment Security affirmed the state agency's determination that the claim for unemployment compensation was invalid and that there could be no predate to June 9, 1953.

On appeal to the Board of Review the decision of the Appeal Tribunal was affirmed. Plaintiff then moved that the board reconsider its decision, whereupon the board on April 12, 1954 held that the weeks during which plaintiff received sickness disability benefits from the company had to be counted as weeks of employment and his claim was therefore valid. It also held that after filing his claim he had been able to work, wanted to work and was actively seeking work, so that he was 'available for work' within the requirements of the Unemployment Compensation Act, R.S. 43:21--4(c), N.J.S.A. The Board thereupon reversed the decision of the Appeal Tribunal. The employer was then granted an order to show cause why this decision should not be set aside and a new decision made. The claimant and the company appeared, both represented by counsel. After hearing, the board set aside its decision of April 12, 1954 and held plaintiff's claim invalid because he had shown only 14 weeks of undisputed employment. In doing so it refused to accept completely the company's argument that services must be performed in order for disability benefit payments to be characterized as 'remuneration' under R.S. 43:21--19(i), (o) and (p), N.J.S.A., referred to hereafter. It held that 'remuneration may be paid for services either actually performed or which the individual must be available to perform even though he is not actually called upon to do so (as in the case of vacations or holidays)'; that it was immaterial what the company's practice was before the adoption of the Temporary Disability Benefits Act, L.1948, c. 110 (R.S. 43:21--25 et seq., N.J.S.A.) in 1948; that when the company plan was accepted as a private plan (L.1948, c. 110, § 8 (R.S. 43:21--32 N.J.S.A.)) it became a method of paying benefits, regardless of its former character; and that the benefit payments made during the weeks of plaintiff's illness were clearly not 'remuneration' so as to entitle plaintiff to have those weeks counted in determining whether he had 17 base weeks of employment in his base year. The rationale of the board's decision thus appears to be that a claimant must be available for services even though not performing them, in order to be in employment during a period when, as here, there was a conceded employment relationship; and that plaintiff, being ill, was not available and therefore not in employment during the weeks he was absent because of illness.

The determination of the question before us requires consideration of other statutory definitions besides that of 'base week' (R.S. 43:21--19(t), N.J.S.A.) quoted above and which refers to the minimum amount of weekly remuneration 'earned in employment.' R.S. 43:21--19(i)(1), N.J.S.A., defines 'employment' as 'service * * * performed for remuneration or under any contract of hire, written or oral, express or implied.' Under R.S. 43:21--19(o), N.J.S.A., 'wages' means 'remuneration payable by employers for employment.' And R.S. 43:21--19(p), N.J.S.A., defines 'remuneration' as 'all compensation for personal services, including commissions and bonuses and the cash value of all compensation in any medium other than cash.' The payment to plaintiff of sickness disability benefits under the company's state-approved plan cannot, in the light of these statutory definitions, be considered as remuneration 'earned in employment,' nor as wages or compensation 'for personal services.'

The stated purpose of the Temporary Disability Benefits Act, as set out under L.1948, c. 110, § 2 (R.S. 43:21--26, N.J.S.A.), lends further support to this conclusion. The Legislature there announced that it was 'desirable and necessary to fill the gap in existing provisions for protection against the loss of earnings caused by involuntary unemployment by extending such protection to meet the hazard of earnings loss due to inability to work caused by nonoccupational sickness or accident.' The disability benefits voluntarily paid by the company were made under a plan designed to relieve its employees, among them the present claimant, from economic loss...