Employment Sec. Commission v. Valley Nat. Bank of Arizona

• Decision Date: 13 September 1973
• Docket Number: CA-CIV,No. 1,1
• Citation: 20 Ariz.App. 460,513 P.2d 1343
• Parties: EMPLOYMENT SECURITY COMMISSION of Arizona, Appellant, v. The VALLEY NATIONAL BANK OF ARIZONA, Appellee. 1798.
• Court: Arizona Court of Appeals

Page 1343

513 P.2d 1343

20 Ariz.App. 460

EMPLOYMENT SECURITY COMMISSION of Arizona, Appellant, v. The VALLEY NATIONAL BANK OF ARIZONA, Appellee.

No. 1 CA-CIV 1798.

Court of Appeals of Arizona, Division 1, Department B.

Sept. 13, 1973.

Rehearing Denied Oct. 23, 1973.

Gary K. Nelson, Atty. Gen., by James A. Tucker and Walter A. Chapko, Asst. Attys. Gen., Phoenix, for appellant.

Meyers & Curtis, by Donald D. Meyers, Phoenix, for appellee.

OPINION

JACOBSON, Chief Judge, Division 1.

The sole question raised on this appeal is whether the employer discharged an employee for 'compelling personal reasons' under A.R.S. § 23--727, subsec. D, which would preclude the employer's experience rating being charged for employment security benefits paid the employee.

Appellee, Valley National Bank of Arizona (Bank), as the employer, initiated an action in the Superior Court of Maricopa County seeking a judicial review of a decision of the appellant, Employment Security Commission of Arizona (Commission), which held that the Bank had discharged an employee, Donna Shelor, ¹ under conditions which would subject the Bank's experience rating to charges for unemployment benefits paid to the employee. The Superior Court reversed this decision, holding, in part:

'. . . that the employee, Donna Shelor, was discharged from her employment by the Valley National Bank, her employer, for compelling personal reasons not attributable to the employer and not warranting disqualification from benefits to the employee and that the benefits paid to the employee shall not be used as a factor in determining the future contribution rate of the employer, the Valley National Bank . . ..'

It is this judgment which the Commission seeks to review by this appeal.

Before discussing the facts of this case, it is necessary to lay the statutory background upon which the facts operate. In 1936, the Arizona Legislature enacted the Employment Security Act (A.R.S. Title 23, Chapter 4), for the avowed purpose of lessening the burdens of involuntary unemployment and to encourage employers to provide more stable employment. A.R.S. § 23--601. The Act provided that an employee who, under stated conditions, becomes unemployed is entitled to receive certain unemployment benefits for stated periods of time. See, A.R.S. § 23--771 et seq. The payment of these employee benefits, is funded, in part, by contributions made by the various employers in the state. A.R.S. § 23--726. The Commission maintains a separate account for each employer which reflects all contributions made by the employer and all charges for benefits paid to former employees of that employer. A.R.S. § 23--727, subsec. A.

The standard rate of contribution by employers is set at 2.7% Of the wages paid by the employer during the calendar year. A.R.S. § 23--728. However because deficiencies or excesses may occur in a particular employer's accounts, adjustments in the standard rate paid by an employer may be made, either increasing or decreasing that rate, depending upon the employer's experience rating in the Commission's payment of benefits to ex-employees of that employer. A.R.S. §§ 23--730, 23--731.

The legislature realized, however, that unemployment may occur under circumstances which would have no bearing on the policy of encouraging stable employment, and for this reason the employer's experience rating for determining future contributions of the employer should not be charged for benefits paid such a separated employee. It is with this non-chargeability policy that we are concerned in this appeal. In particular, the Bank relies upon the provisions of A.R.S. § 23--727, subsec. D as authority that the unemployment benefits paid Donna Shelor should not be charged to its experience rating. This statute, in pertinent part, provides:

'Benefits paid to an individual whose separation from work with any employer occurs under conditions found by the commission to be within the provisions of paragraphs 1 or 2 of § 23--775, or For compelling personal reasons not attributable to the employer and not warranting disqualification for benefits, shall not be used as a factor in determining the future contribution rate of the employer from whose employment the individual so separated . . ..' (Emphasis added.)

With this statutory background and the legal issues thus framed, the basically undisputed facts in this case are as follows. Donna Shelor was first hired by the Bank in February, 1967, first as a clerk and later as a teller, and was initially regarded as a good employee. However, beginning in January 1968, the employee started missing work. During the first seven months of 1968, she was absent a total of 29 full days and three partial days. In addition, her work showed a decline in performance, having a total of 63 cash differences, as a teller, from February to August, a figure over five times the average for a normal teller.

The decrease in attendance and efficiency was at first attributed to the illness of the employee's son during the winter and early spring of 1968. However, the employee herself began to feel increasingly run down and tired and came under a doctor's care. Her condition was diagnosed as a strep throat and a vaginal infection.

Both the employee's attendance and performance record were called to her attention by her immediate supervisor and she attributed these to her rundown condition. Because her record did not improve, she was placed on probation on June 1, 1968.

Finally, in July, 1968, the employee took a two-weeks unpaid leave of absence in order to completely regain her health. She returned to work on Monday, August 5 1968, stating she had recovered and needed to go to work because of money problems. On August 7 and 8, the employee left work early, complaining of being tired, and on Monday, August 12, she missed work entirely because she was overly tired. On August 13, 1968, she was discharged by the Bank. When applying for unemployment benefits she stated that her discharge was for 'health reasons.' The Commission's deputy found that the evidence furnished by the employee's doctor substantiated her statement that she had been ill and that her inability to perform her work in a satisfactory manner had been due to her physical condition. Her doctor had released her for work as of August 5, 1968, and fully discharged her as of September 8, 1968.

While the Bank initially contested the charging of its experience rating on the grounds that the employee was guilty of misconduct (also a ground under A.R.S. § 23--727, subsec. D for non-chargeability), the Commission's deputy found that the employee was not guilty of misconduct, but that her decline in performance was due to a physical inability. The Bank stipulated to the number of days missed from work to the number of days missed from work and the number of her shortages as a teller would constitute the only evidence to be considered by the Commission in determining whether its experience rating should be charged. This was the same record upon which the Superior Court made its rulings. A.R.S. § 23--681, subsec. C.

The Bank contends that illness is a 'compelling personal reason, not attributable to the employer' which would justify its discharging this employee without having unemployment benefits paid to that employee charged to its experience rating. The Commission, on the other hand, while conceding that the non-chargeability features of A.R.S. § 23--727, subsec. D are as applicable where the employer discharges an employee as where the employee terminates the employment, contends that the illness in this case did not reach the proportions of 'compelling personal reasons' to satisfy the application of that statute.

We have...