Busch v. Reserve Min. Co., C0-87-1219
| Decision Date | 17 November 1987 |
| Docket Number | No. C0-87-1219,C0-87-1219 |
| Citation | 415 N.W.2d 892 |
| Parties | Ray H. BUSCH, Relator, v. RESERVE MINING COMPANY, Commissioner of Jobs and Training, Respondents. |
| Court | Minnesota Court of Appeals |
Syllabus by the Court
1. A lump sum special payment may be allocated over a period of time pursuant to the terms of a pension agreement, thereby offsetting unemployment benefits for that same period of time.
2. Parties' agreement which, in effect, required that two weeks of vacation pay offset four weeks of unemployment benefits, was void.
John Engberg, Minneapolis, for relator.
Hubert H. Humphrey, III, Atty. Gen., Peter C. Andrews, Sp. Asst. Atty. Gen., St. Paul, for respondents.
Heard, considered and decided by POPOVICH, C.J., and RANDALL and STONE *, JJ.
Ray Busch appeals by writ of certiorari from a determination that he was ineligible to receive unemployment compensation benefits between December 1986 and February 1987 because he had received a pension payment covering those same months. We affirm as modified.
The facts are not in dispute. Relator Ray Busch worked for the respondent Reserve Mining Company ("Reserve") as a mechanical repairman until July 1986, when Reserve shut down its plant and laid off its employees. At that time, Busch was required to take two weeks of his accrued vacation, pursuant to the terms of a collective bargaining agreement between Reserve and Busch's union.
During the layoff, Busch applied for unemployment compensation benefits. Thereafter, he notified Reserve that he was retiring, and filed a claim with Reserve for his company pension. At the time he retired, he had accrued two additional weeks of vacation, which he had not taken.
On or about December 1, 1986, Busch received $4,878.88 from Reserve, pursuant to a "special payment" provision of the pension agreement between Reserve and Busch's union. The issue in this case turns solely upon whether this special payment should reduce Busch's unemployment compensation benefits and, if so, for how many weeks his unemployment benefits should be reduced.
The special payment provision states:
The Special Payment is the payment for the first three full calendar months following the month in which retirement occurs, * * *. It is a lump sum equal to 13 weeks of vacation pay * * *, reduced by any regular vacation pay received for the year of retirement * * *. Under the basic labor agreement a participant entitled to vacation which he has not taken by the time of retirement does not receive that vacation or vacation pay if he is eligible for the Special Payment, but no deduction will be made from the Special Payment for such vacation. * * *
For each month to which the Special Payment does not apply, the pension is the Regular Pension.
* * *
The special payment shall be payable for the first three full calendar months following the month in which retirement occurs. Such special payment shall be made in a lump sum within the first full calendar month following the month in which retirement occurs or within the month following the month in which application for pension is made, whichever is later.
In accordance with such agreement, when Busch retired, he received a special payment of 13 weeks of vacation pay less the two weeks of vacation pay that he had been required to take during the plant shutdown. His total special payment therefore consisted of vacation pay for 11 weeks--the two weeks of vacation pay which he had accrued, but not used, plus nine weeks of additional vacation pay. Nevertheless, pursuant to the above agreement, Busch's special payment was allocated to the first 13 weeks (i.e., three full calendar months) following his retirement.
The Department of Jobs and Training determined that because Reserve had allocated Busch's special pension payment to the 13 weeks following his retirement, Busch was therefore ineligible to receive unemployment compensation benefits during that entire period. Busch has appealed to this court.
Did the Commissioner err by determining that the special pension payment should offset Busch's unemployment compensation benefits for the 13 weeks following his retirement?
Minn.Stat. Sec. 268.08, subd. 3 (1986) provides that unemployment compensation benefits must be offset by certain other benefits received during the same period of time:
An individual shall not be eligible to receive benefits for any week with respect to which the individual is receiving, has received, or has filed a claim for remuneration in an amount equal to or in excess of the individual's weekly benefit amount in the form of
(1) termination, severance, or dismissal payment or wages in lieu of notice * * *; provided that if a termination, severance, or dismissal payment is made in a lump sum, the employer may allocate such lump sum payment over a period * * * not to exceed 28 calendar days;
* * *
(4) * * * pension payments * * *.
Busch argues that the above statute does not permit Reserve's allocation of his special pension payment over a period of time. Busch points to the fact that while allocation is specifically authorized by subdivision 3(1)--the provision governing severance pay--similar language does not appear in subsection (4), governing pensions; thus, Busch argues that his special pension payment may not be allocated.
Busch cites Ackerson v. Western Union Telegraph Co., 234 Minn. 271, 48 N.W.2d 338 (1951) in support of his argument. Ackerson involved the receipt of a lump sum severance payment under a prior version of Minn.Stat. Sec. 268.08, subd. 3(1). At that time, the statute did not expressly provide for allocation of severance payments. The parties' agreement in the Ackerson case stated:
Any employee * * * may choose to be paid a lump sum separation allowance. The separation allowance shall be determined on the basis of four weeks' pay at the regular rate of the position last occupied, for every year of service, and two days' pay for every month in which the employee worked in any period remaining that is less than a full year.
The employer in Ackerson argued that its lump sum severance payments were intended to compensate an employee for, and thus should be allocated over, the same number of weeks which were used to compute the amount of the separation payment.
The Ackerson court disagreed, holding that the severance payment could only be used to offset the employee's unemployment compensation benefits for the week in which the payment was actually received. Subsequently, the legislature revised the severance pay provision, allowing allocation of this type of lump sum payment over a limited period of time.
In revising the statute, the legislature did not also provide for allocation of lump sum pension payments. Thus, Busch argues that the legislature did not intend to allow the allocation of lump sum pension payments over a period of time to offset an employee's receipt of unemployment compensation benefits.
Reserve claims Ackerson is distinguishable, since there the contract did not allocate the lump sum severance payment to specific weeks, as Reserve did here with its lump sum special pension payment. We agree with this distinction, and...
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...reading of the plain meaning of the statutory language finds support in the case law of other jurisdictions. In Busch v. Reserve Mining Co., 415 N.W.2d 892 (Minn.Ct.App.1987), the Minnesota Court of Appeals held that the employer's agreement with the employee's union which obligated the emp......