General Motors Corp. v. Erves

• Decision Date: 01 January 1976
• Docket Number: No. 11,11
• Citation: 249 N.W.2d 41,399 Mich. 241
• Parties: GENERAL MOTORS CORPORATION, Plaintiff-Appellant, v. John ERVES, Defendant. GENERAL MOTORS CORPORATION, Plaintiff-Appellant, v. Billy Joe LAWSON and Michigan Employment Security Commission, Defendant-Appellees. GENERAL MOTORS CORPORATION, Plaintiff-Appellant, v. Elmer BLOOMER, Defendant-Appellant, and Michigan Employment Security Commission, Defendant-Appellee. ,
• Court: Michigan Supreme Court

Page 41

249 N.W.2d 41

399 Mich. 241

GENERAL MOTORS CORPORATION, Plaintiff-Appellant, v. John ERVES, Defendant.

GENERAL MOTORS CORPORATION, Plaintiff-Appellant, v. Billy Joe LAWSON and Michigan Employment Security

Commission, Defendant-Appellees.

GENERAL MOTORS CORPORATION, Plaintiff-Appellant, v. Elmer BLOOMER, Defendant-Appellant, and Michigan Employment Security Commission, Defendant-Appellee.

No. 11, Jan. Term. 1976.

Supreme Court of Michigan.

Dec. 30, 1976.

John A. Fillion, Jordan Rossen, Detroit, for individual appellant and appellee (claimants); General Motors Corp. by J. R Wheatley, E. L. Hartwig, E. J. Dilworth, Jr., Ross L. Malone and Edwin G. Fabre, Leonard Page, M. Jay Whitman and Stephen I. Schlossberg, Detroit, of counsel.

Frank J. Kelley, Atty. Gen., State of Michigan, Robert A. Derengoski, Sol. Gen., Felix E. League, Asst. Atty. Gen., Detroit, for Michigan Employment Security Commission.

COLEMAN, Justice.

Plaintiff, General Motors Corporation, appeals a judgment of the circuit court ordering payment of back-to-work benefits to five individual defendants. The Court to Appeals reversed as to the claims of Bloomer, Kartsonas and Erves and affirmed as to the claims of Lawson and Griffith.

In each case, the controlling statute is M.C.L.A. § 421.27(c)(2); M.S.A. § 17.529(c)(2), which provides:

'(2) When an individual has had a period of unemployment: (i) For which he has been paid benefits for 1 or more weeks or has received a credit for a waiting week, (ii) which commenced with a layoff by an employing unit that continued with such employing unit for more than 3 weeks, and (iii) which has been terminated by his accepting and engaging in full-time work with any employing unit within the 13 weeks immediately following his last week of employment with such employing unit, such individual shall be paid, for the most recent week in such period for which benefits are payable or were paid to him or for which he was entitled to credit for a waiting week, an amount equal to his currently applicable weekly benefit rate in addition to any benefits otherwise payable or paid to him for such week. * * *'

The questions before the Court are how this enactment falls upon the following situations:

(1) Employes receive their layoff notice at the end of the shift on Friday, while receiving full pay for that week. They return to work exactly three weeks from the next work day, Monday, or three weeks and two days after receiving notice of layoff.

(2) Employes receive their notice of layoff at the end of the Wednesday shift and are paid for those days plus 80% Of wages for two remaining days pursuant to contract ('short-week' benefits). They return to work on a Wednesday and again receive short-week benefits for Thursday and Friday, thereby being 'unemployed' for three weeks by definition, although not working for four weeks.

Bloomer-Kartsonas-Erves

Because two factual situations exist, we consider first the Bloomer-Kartsonas-Erves matters.

The specific question arising from these claims is:

When an employe is notified of a 'layoff' at the end of the regular work day on Friday, does his 'period of unemployment' commencing with a layoff begin on Friday, Saturday or on the next regular work day, Monday, for the purposes of M.C.L.A. § 421.27(c)(2); M.S.A. § 17.529(c)(2)? ¹

We agree with the Court of Appeals that the 'period of unemployment which commenced with a layoff' began on Monday.

Defendants were hourly employes of General Motors Corporation, Cadillac Motor Car Division. All were laid off during the annual model changeover period in the summer of 1968. ²

Bloomer and Kartsonas received their layoff notices at the end of their shift on Friday, August 2. They were paid for that entire week. On Monday, August 26, the twenty-fourth calendar day later, they returned to work. Erves received his notice at the end of his shift on Friday, July 5, and, similarly, returned to work on a Monday, twenty-four calendar days later.

Each defendant filed a claim for back-to-work benefits pursuant to § 27(c)(2) of the Michigan Employment Security Act, the interpretation of which is the subject matter of this appeal.

The Appeal Board and the Wayne circuit court found that defendants were entitled to back-to-work benefits, reasoning that their layoff became effective on the last day worked and so they would have been laid off more than three weeks. The Court of Appeals reversed, 47 Mich.App. 591, 209 N.W.2d 713 (1973), reasoning that the next regularly scheduled work day for which defendants would have received pay was Monday and so they would not have been laid off for purposes of this subsection for more than three weeks. Exactly three weeks of pay would have been received if claimants had been working. Underlying the Court of Appeals decision is the theory of economic impact.

Legislative Policy:

In deciding this issue, we look to the expressed declaration of policy of the Michigan Employment Security Act.

MESA § 2; M.C.L.A. § 421.2; M.S.A. § 17.502 is explicit:

'The legislature acting in the exercise of the police power of the state declares that the public policy of the state is as follows: Economic insecurity due to unemployment is a serious menace to the health, morals, and welfare of the people of this state. Involuntary unemployment is a subject of general interest and concern which requires action by the legislature to prevent its spread and to lighten its burden which so often falls with crushing force upon the unemployed worker and his family, to the detriment of the welfare of the people of this state. Social security requires protection against this hazard of our economic life. Employers should be encouraged to provide stable employment. The systematic accumulation of funds during periods of employment to provide benefits for periods of unemployment by the setting aside of unemployment reserves to be used for the benefit of persons unemployed through no fault of their own, thus maintaining purchasing power and limiting the serious social consequences of relief assistance, is for the public good, and the general welfare of the people of this state.'

In Renown Stove Co. v. Unemployment Compensation Commission, 328 Mich. 436, 440, 44 N.W.2d 1, 3 (1950), a unanimous Supreme Court set forth the purpose of the MESA in this manner:

'In brief, the objective sought to be gained is protection against the evils incident to involuntary unemployment and the fostering of social and economic security by the payment of benefits to individuals who have suffered a loss of pay resulting from involuntary unemployment.'

With the Legislature and the Stove Co. Court, we believe this objective to be economically and socially sound. The costs involved are considered part of the cost of doing business and are reflected primarily in the price of the product to the consumer.

The welfare of the employes and the employer are interlocked. Each is dependent upon the other and each is vital to free enterprise and to a free society. Therefore, a balancing of benefits and duties should be the ultimate goal of legislative enactments and labor contracts. It follows that labor and management cannot successfully be true adversaries. It also follows that a balanced, reasonable interpretation of such statutes and contracts should be the goal of this Court.

Therefore, we approach the problem of back-to-work pay in this (and another) factual contest in the spirit of the legislatively pronounced policy towards the 'public good and general welfare of the people of this state'.

The Michigan Employment Security Act softens the economic burdens of those who through no fault of their own find themselves unemployed. This softening is obtained through the payments of benefits to those unemployed in order that they might maintain purchasing power and limit the social and economic consequences of unemployment.

'Layoff'--'Unemployment'--Definitions

Counsel on both sides couch their respective arguments as if these terms are incompatible. Namely, plaintiffs' 'unemployment' theory and claimants' 'layoff' theory are presented as alternatives. ³ However, we do not find the theories incompatible and, therefore, not alternate.

Although 'layoff' has not been defined in the Act or elsewhere ⁴ by statute or contract, we do find a definition by the United States Bureau of Labor Statistics, Handbook of Labor Statistics:

'A 'layoff' is a termination of employment at the will of the employer, without prejudice to the worker. Layoffs may be due to lack of orders, technical changes, or the failure of flow of parts or materials to the job, as needed.'

The Missouri Supreme Court in Irwin v. Globe-Democrat Publishing Co., 368 S.W.2d 452, 455 (Mo.1963), defined the term 'layoff' in a similar fashion:

'A 'layoff,' as distinguished from a discharge, contemplates a period during which a working man is temporarily dismissed, Fishgold v. Sullivan Drydock & Repair Corp., 2 Cir., 154 F.2d 785, 788, and it also refers to that suspension of work or employment during a part or season of the year when business activity is partly or completely suspended (citing cases). An employee 'laid off' does not have his employment status completely and finally terminated. He ordinarily is entitled to re-employment when the temporary situation calling for the layoff has been corrected or eliminated.'

We agree that a 'layoff' is a temporary dismissal by the employer which anticipates reemployment and therefore is distinguished from unemployment by reason of discharge, resignation or other permanent termination.

Unemployment' is defined in M.C.L.A. § 421.48; M.S.A. § 17.552 (§ 48):

'An individual shall be deemed 'unemployed' with respect to any week during which he performs no services and with respect to which no remuneration is payable to him, or with respect to any week of less than full-time work if the remuneration payable to him is less than his weekly benefit rate.'

Statutory...