Eastern Gas & Fuel Associates v. Hatcher, 10994

• Decision Date: 17 March 1959
• Docket Number: No. 10994,10994
• Citation: 107 S.E.2d 618,144 W.Va. 229
• Court: West Virginia Supreme Court
• Parties: EASTERN GAS & FUEL ASSOCIATES v. Lewis A. HATCHER, Clerk, Etc., West Virginia Department of Employment Security, et al.

Page 618

107 S.E.2d 618

144 W.Va. 229

EASTERN GAS & FUEL ASSOCIATES v. Lewis A. HATCHER, Clerk, Etc., West Virginia Department of Employment Security, et al.

No. 10994.

Supreme Court of Appeals of West Virginia.

Submitted Jan. 21, 1959.

Decided March 17, 1959.

Syllabus by the Court

1. 'Vacation pay' received by persons partially or totally unemployed during a contractual vacation period is attributable to such period, and constitutes 'wages' within the meaning of the Unemployment Compensation Act.

2. Where an employer's contribution rate under the unemployment compensation law may be affected by improper charges placed against his account in any previous year or years, for benefits paid to totally unemployed former employees who, though originally eligible to receive benefits, subsequently became ineligible, such employer may, in the absence of any statutory limitation, have such improper charges removed.

Spilman, Thomas, Battle & Klostermeyer, W. Victor Ross, Charleston, Arthur A. Waltenbaugh, Pittsburgh, Pa., for petitioner.

F. Duane Hill, Robert E. Sweaney, Charleston, for respondents.

BROWNING, Judge.

This Court, upon the petition of Eastern Gas & Fuel Associates, hereinafter referred to as petitioner, granted a writ of certiorari to a judgment of the Circuit Court of Kanawha County reversing a decision of the Board of Review of the West Virginia Department of Employment Security wherein the Board held that certain charges to petitioner's account for the years 1949, 1950 and 1951 were improper and should be removed.

This case arose as an administrative proceeding wherein petitioner applied to the Department of Employment Security under Departmental Regulation XV-1 for a redetermination of its contribution rate for the year 1956, and sought to have removed from its account, for merit rating purposes, certain charges for benefits allegedly improperly paid by the Department to former employees of petitioner in the years 1949, 1950, 1951 and 1953 for periods during which such employees drew vacation pay under the provisions of the National Bituminous Coal Wage Agreements for those years.

Departmental Regulation XV, Subsection 1, effective April 1, 1945, provides that an employer desiring to have a review and redetermination of his contribution rate shall file an application therefor within sixty days after notice of its contribution rate. Subsection 2 thereof provides that an employer desiring to have a review and redetermination of the propriety of charges to its account shall file an application therefor within fifteen days after notice of the charging of such benefits. The time within which to apply for a redetermination of charges was subsequently lengthened in 1953 to ninety days.

It is conceded that the charges for the years 1949, 1950, 1951 and 1953 were for benefits paid to former employees of petitioner, who had been totally separated from their employment previous to the contractual vacation period for those years and for whom no notice of their applications for continuing benefits was given to petitioner, during the vacation period. It is also conceded that the charges for the year 1953, which the Board held to have been timely protested and ordered removed from petitioner's account, which action was affirmed by the Cirucit Court of Kanawha County, were properly ordered removed and are not in issue in this proceeding.

The evidence shows that on October 4, 1948, in the case of Howard J. Wolfe, a partial unemployment case, the Board of Review determined that 'vacation pay' constituted wages within the meaning of the unemployment compensation law, which action was subsequently affirmed by the Circuit Court of Kanawha County on May 27, 1949. A like decision was made by that court on the same day in the Paden City Pottery Company cases. Again on October 26, 1950, in the case of John A. Buckley, the Board of Review determined that such 'vacation pay' constituted wages and is applicable to and received with respect to the week or weeks of vacation. Review of this decision was denied by the Circuit Court of Kanawha County on December 21, 1950. All of the above mentioned cases involved employees who were 'partially unemployed' during the vacation period, and there were no applications to this Court to review the decisions of the Circuit Court of Kanawha County.

Previous to the vacation period in 1953, petitioner protested the payment of unemployment benefits to certain specific individuals during the vacation period, describing such individuals as having been drawing unemployment compensation, and who were subject to the National Bituminous Coal Wage Agreement of 1953, and any other similarly situated claimants who were drawing benefits chargeable to petitioner's account.

In the cases of Richard Anderson and Paul V. Carr, a consolidated group of cases arising out of the 1953 vacation period, and in which the specifically listed individuals in petitioner's protest previous to the vacation period were included, the Board of Review determined that totally unemployed ex-employees of petitioner were ineligible for unemployment benefits during the vacation period, which action was affirmed by the Circuit Court of Kanawha County on April 20, 1954, and applications for certiorari were denied by this Court on October 17, 1954. No charges were made to petitioner's account for the employees specifically listed in its protest and who were parties to the Anderson and Carr cases, however, benefits were paid to ex-employees of petitioner who were not specifically listed in its protest and the amount of such benefits was charged to petitioner's account.

In conformity with the decisions in the Anderson and Carr cases, the Director of the Department of Employment Security issued Regulation IX-A, effective April 5, 1956, requiring employers to report to the Department the name and social security number of individuals entitled to 'vacation pay' who would be separated from their employment during the vacation period. The Director also issued Local Office Letter No. 769 to all local unemployment compensation offices directing that the right of all claimants, previously employed in the coal industry, to receive 'vacation pay', be ascertained.

As hereinabove mentioned, petitioner applied under Regulation XV-1 for redetermination of its 1956 contribution rate, seeking relief from the charges entered against its account for benefits paid to those ex-employees not specifically listed in its 1953 protest and who were not parties to the Anderson and Carr cases. The application was subsequently amended to seek relief against charges similarly incurred for the years 1949, 1950 and 1951. The Board of Review ordered all such charges removed from petitioner's account, which order was reversed by the Circuit Court of Kanawha County insofar as the charges for the years 1949, 1950 and 1951 were concerned. It is conceded that all charges to an employer's account from the beginning of the unemployment compensation fund have a bearing upon an employer's contribution rate for any given year. Michie's 1955 Code, Serial Section 2366(65), (21A-5-10.)

Counsel for the Department, in brief and argument, contend that the reviewability of the charges in question is now barred by the provisions of Subsection 2 of Regulation XV, therefore, the initial question for determination is whether the failure of petitioner to file its application for a review and redetermination of the charges against its account within the fifteen day period bars its right to a consideration of the issues upon the merits. It is clear from the record of the hearing before the Special Deputy of the Director that the petitioner sought an adjustment of its contribution rate by having certain improper charges removed from its account, and had been advised by the Chief Counsel for the Department to proceed under Subsection 1 of Regulation XV to attain this end. The Judge of the Circuit Court of Kanawha County in his opinion made no reference to Regulation XV-2. His decision was based upon the proposition that the holding in the Wolfe and Buckley cases, i. e., that the receipt of vacation pay by persons partially unemployed constituted wages and made such persons ineligible for unemployment compensation benefits, was not a binding precedent requiring the Department of Employment Security to deny benefits to a totally unemployed claimant who received vacation pay during some part of his unemployment. As heretofore stated, the Circuit Court of Kanawha County subsequently held in the Carr and Anderson cases that there was no distinction between partial and total unemployment in this regard, and denied benefits to totally unemployed persons for the period they were receiving so-called 'vacation pay'. In this conclusion we concur, and we so hold that 'vacation pay' constitutes 'wages' within the meaning of § 2366(78) Michie's 1955 Code, (21A-6-4), whether claimants are partially or totally unemployed during the vacation period. In the trial court's opinion, however, reference is made 'by way of analogy' to Michie's Code, 1955, § 2366(74), (21A-5-19), which provides that:

'Within two years after the date on which payment of contribution, or interest thereon, is made, an employer, who has paid such payment or interest, may make application for:

'(1) An adjustment thereof in connection with...