First Bank of Commerce v. Labor and Indus. Relations Commission of Missouri, WD
| Decision Date | 02 February 1981 |
| Docket Number | No. WD,WD |
| Citation | 612 S.W.2d 39 |
| Parties | FIRST BANK OF COMMERCE, Respondent, v. The LABOR AND INDUSTRIAL RELATIONS COMMISSION OF MISSOURI, The Division of Employment Security of Missouri and Ruth T. Murray, Appellants. 31225. |
| Court | Missouri Court of Appeals |
Kevin Hare, Catherine Barrie, Jefferson City, for appellant Labor and Indus. Relations Commission of Missouri.
Rick V. Morris, Jefferson City, for appellant Division of Employment Security of Missouri.
Larry M. Woods, Columbia, for respondent.
Before CLARK, P. J., and DIXON and SOMERVILLE, JJ.
The Labor and Industrial Relations Commission appeals the order of the circuit court reversing the decision of the commission which had found claimant Ruth T. Murray entitled to benefits under the Missouri Employment Security Law, Chapter 288, RSMo 1978. At issue is whether the claimant was ineligible to receive unemployment compensation by the proscription of § 288.040.3(1), RSMo 1978 1 because she received termination allowances or a pension upon severance of her employment with respondent, First Bank of Commerce.
The claim for benefits was initially reviewed and approved by the Division of Employment Security. On appeal of the award by the employer, first to the Appeals Tribunal and subsequently to the Labor and Industrial Relations Commission, the payment of benefits was directed and the employer sought judicial review in the circuit court of Boone County. That court found the claimant disqualified from receiving benefits by reason of § 288.040 because a termination allowance had been paid. The commission and the Division of Employment Security appeal.
Appellants contend that the payment which the claimant received on her involuntary termination was a mandatory distribution of her vested interest in a qualified profit sharing plan and that the payment was neither a termination allowance nor a pension within the provisions of § 288.040. They also complain that the trial court erroneously assessed the costs of this proceeding against the state. Reversed.
Ruth T. Murray, the claimant, did not appear in the trial court and she has not participated in this appeal. The cause is, however, appropriately before this court because the commission and the division have an independent right to prosecute an appeal where an order allowing unemployment compensation benefits is reversed. Dubinsky Bros., Inc. v. Industrial Commission of Missouri, 373 S.W.2d 9 (Mo. banc 1963); Mid-Continent Aerial Sprayers, Inc. v. Industrial Commission, 420 S.W.2d 354 (Mo.App.1967).
The sole question in this case is one of law the interpretation and application of § 288.040 to the undisputed facts. While it is the result reached by the circuit court which has generated this appeal, this court reviews the decision of the administrative body, not the judgment of the circuit court. Ingram v. Civil Service Commission of the City of St. Louis, 584 S.W.2d 633 (Mo.App.1979). The scope of review here is the same as it was in the circuit court. The decision of the administrative body on a question of law does not preclude, restrict or control review of the issue by the court. Bussmann Mfg. Co. v. Industrial Commission, 335 S.W.2d 456 (Mo.App.1960); Kroger Co. v. Industrial Commission, 314 S.W.2d 250 (Mo.App.1958). We therefore reach our own determination as to whether the payment received by the employee as her share in the profit sharing plan constituted a termination allowance or a pension within the meaning of § 288.040.
Ruth T. Murray had long been employed by the First Bank of Commerce when, in May of 1977, the bank adopted a policy for compulsory retirement of employees at age 65. Claimant was at that time 72 years of age. She was involuntarily retired in December 1977, following which the claim for benefits here in dispute was filed. Under these facts, it is apparent and uncontested that Ruth T. Murray did not leave her work voluntarily and that no cause attributable to her work, beyond her attainment of the stated age, caused or contributed to cause her termination.
Respondent bank had adopted, more than ten years prior to claimant's retirement, a profit sharing plan whereby the employer set aside annually a portion of profits for the benefit of its employees. The funds so accumulated were paid to a trustee and invested for the benefit of the employee-participants. The plan obligated the employer to no specific contributions but the amounts so paid are tax deductible and tax benefits are a feature attractive to employers who adopt such a plan. The rights of employee-participants depend on years of service and rate of pay. The interest of an employee in his share of the plan vests absolutely after ten years' employment and is distributable to him or to his heirs or estate in accordance with the provisions of the plan.
The interest of Ruth T. Murray in the profit sharing plan had fully vested when she was compelled to retire. Under an available option of the plan, she elected to receive and was paid the cash value of her interest as computed by the trustee, United Missouri Bank of Kansas City. The extent of that interest or share depended on the claimant's years of service and rate of compensation. The value in the case as here where liquidation is required to distribute the share in cash depends on the price of security investments at the date of liquidation. Ruth Murray received payment in the amount of $14,254.07 on April 12, 1978.
The issue is whether that payment from the profit sharing plan is either termination pay or a pension within the language of § 288.040.
The question has not been ruled in this state on comparable facts. Respondent employer relies on Globe-Democrat Publishing Co. v. Industrial Commission, 301 S.W.2d 846 (Mo.App.1957), a case which held a discharged employee ineligible under § 288.040 to receive unemployment compensation because he had been paid a termination allowance. There, as here, the employee contended that the payment was a deferred bonus and was compensation for prior service referable to that service and not to the discharge.
In Globe-Democrat, the employer was obligated under a collective bargaining agreement to pay employee members of the newspaper guild a lump sum dismissal payment where discharge occurred for reasons other than misconduct. Subject to a maximum, the discharged employee was entitled to one week's pay for each six months of last continuous employment. Employees who retired, who voluntarily left for other employment, who were disabled or were discharged for cause were not entitled to the dismissal allowance. No benefit was provided for the heirs or estate of a deceased employee.
The Globe-Democrat case is distinguishable from and inapplicable to the present case both on the facts and the concept of the termination payment allowance. There, the employer assumed an advance, contractual obligation for a fixed sum payment to employees discharged for reasons unrelated to their job performance. Quite obviously, the payment was designed to provide a compensatory adjustment to any employee who, though ready and capable of continuing this work for the employer, is discharged and forced to seek another source of income. Until the event of discharge, no right accrued to any employee and no liability was imposed on the employer. The contingent nature of the payment circumstance included the possibility that no allowance would ever become due.
While the employer in Globe-Democrat contracted to pay a sum to employees when and if discharged under certain conditions, the First Bank of Commerce in the present case assumed no payment obligation referable to the event of leaving the bank's employ. The origin of Ruth T. Murray's payment benefit was not in her separation from employment but in her years of service with the bank by which she acquired a vested interest in the profit sharing trust. The conditions under which her employment ended were irrelevant because they did not affect either her entitlement to the payment or computation of the sum she would receive.
The purpose for which the profit sharing plan was established is recited in the plan document itself. It there states that the plan has been adopted " * * * to reward the loyal, faithful and efficient services of (the bank) employees, to stimulate in them a keen interest in the successful operation of (the bank's) business, and to assist them to create independent estates * * *." No indication appears that the fund is intended to cushion the impact of unexpected unemployment. Moreover, the bank is, in any event, powerless to control ultimate distribution of the funds. As each addition to the profit sharing trust is made, the funds so contributed pass irrevocably to the trustee for administration according to the agreement. Thus, the ownership interest of each employee as beneficiary of a trust share is acquired, not on separation of the employee from employment, but on the date the employer's payment is made to the trustee.
Cases from other jurisdictions do not indicate uniformity in analysis and application of exclusionary statutes where the employee receives payment from a profit sharing plan after discharge or retirement.
In a Massachusetts case, Kerr v. Director of the Division of Employment Security, 332 Mass. 78, 123 N.E.2d 229 (1954), a similar profit sharing plan 2 was construed not to provide "severance pay" to a participant-employee discharged when the department in which he worked was discontinued. The Massachusetts statute disqualified employees from receiving state unemployment compensation benefits while receiving severance pay from the employer. As interpreted by the cases, severance pay and termination allowance appear to be synonymous terms. The court observed that the amount paid to the employee was exactly his share in the trust fund and was unrelated to any period of time following his discharge.
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