Hite v. Evart Products Co.
| Decision Date | 21 June 1971 |
| Docket Number | Docket No. 8358,No. 2,2 |
| Parties | Barbara HITE, Plaintiff-Appellant, v. EVART PRODUCTS COMPANY, Defendant-Appellee |
| Court | Court of Appeal of Michigan — District of US |
Jerry S. McCroskey, Marcus, McCroskey, Libner, Reamon, Williams & Dilley, Muskegon, for plaintiff-appellant.
Edward D. Wells, Cholette, Perkins & Buchanan, Grand Rapids, for defendant-appellee.
Before HOLBROOK, P.J., R. B. BURNS and KELLEY, * JJ.
In August, 1960, plaintiff received an injury which arose out of and in the course of her employment by defendant, and which caused the industrial loss of the use of her left hand. She had six children dependent on her for support. Disputes arose over the amount of plaintiff's average weekly wage and as to whether she was entitled to mileage and meal allowances in travelling to secure necessary medical care.
After a hearing the referee refused to consider alleged fringe benefits totalling $7.91, determined plaintiff's average weekly wage to be $60, and allowed only a part of the claimed travel expenses.
On appeal the Workmen's Compensation Appeal Board modified the referee's decision by including in plaintiff's average weekly wage the value of pension and group insurance payments, but affirmed rejection of the value of vacation and holiday pay. The Appeal Board also affirmed the referee's award of 8 cents per mile for travel and awarded an additional $1.25 per trip as a meal allowance.
Plaintiff was granted leave to appeal to this court. Defendant cross-appealed. Apparently no appellate court of this State has decided the issues presented.
The Workmen's Compensation Act, as other statutes, should be construed reasonably in the light of the purpose which it seeks to accomplish. Benjamin v. Huntington Woods (1957), 349 Mich. 545, 555, 84 N.W.2d 789. Our task, therefore, is to determine the purpose of the Act and then to apply the test of reasonableness.
Upon its enactment, the compensation act was proclaimed as a means of determination of right to compensation of workmen for industrial injuries upon the basis of trade risks relating to the industry, to be charged against it as part of the cost. Sheppard v. Michigan National Bank (1957), 348 Mich. 577, 579, 83 N.W.2d 614. The theory of the act is that the consuming public, not charity, public or private, must foot the bill for work-incurred injuries. Crilly v. Ballou (1958), 353 Mich. 303, 308, 91 N.W.2d 493. In order to carry out the legislative intent and to construe the act properly, its humanitarian objectives and beneficent purposes 1 must be kept in mind, and 'compensation' must be understood in its broader sense. Munson v. Christie (1935), 270 Mich. 94, 99, 258 N.W. 415.
I. In determining an employee's weekly wage for the purpose of workmen's compensation should the value of remuneration in the form of vacation pay, holiday pay, and the employer's contributions to insurance and pension plans be included?
The applicable portion of the workmen's compensation law 2 in effect in 1960 provided:
'The weekly loss in wages referred to in this act shall consist of such percentage of the average weekly earnings of the injured employee computed according to the provisions of this section as shall fairly represent the proportionate extent of the impairment of his earning capacity in the employment in which he was working at the time of the injury, the same to be fixed as of the time of the injury, but to be determined in view of the nature and extent of the injury. * * * The compensation payable, when added to his wage earning capacity after the injury in the same or another employment, shall not exceed his average weekly earnings at the time of such injury.
'The term 'average weekly wage', as used in this act, is defined to be the weekly wage earned by the employee at the time of his injury but in no case less than 40 times his hourly rate of wage or earning.'
Faced with the problem of construction of a similar statute, the enlightened court of another state determined that 'wage' or 'earnings' must be deemed to include all items of compensation or advantage agreed upon in a contract of hiring which are measurable in money, whether in the form of cash or as an economic gain to the employee. Leslie v. Reynolds (1956), 179 Kan. 422, 430, 295 P.2d 1076, 1083. We approve this definition.
Testimony of defendant's personnel manager established that pursuant to her employment contract, plaintiff received her weekly pay plus additional benefits of a weekly dollar value as follows:
Pension payment $2.60
Group insurance 2.63
Vacation pay 1.13
Holiday pay 1.55
-----
Total $7.91
All these have ceased because of the injury.
For each week of plaintiff's employment her employer paid $2.60 into a pension fund for her benefit. After 10 years of employment plaintiff would have obtained a vested interest in the fund.
Defendant argues that this item should not be considered because plaintiff, who began work less than 2 years before the injury, had contributed nothing to the fund and had no interest in it at the time of her injury.
The earning capacity of an employee who completes the 10th year of employment and thus becomes eligible for the pension, does not thereby suddenly increase by $2.60 or by the amount of a periodic pension payment. On the contrary, during the 10 years of work the $2.60 per week reflects the employee's service and worth, and therefore, increased wage capacity, accruing credits that convert to subsequent pension benefits.
We may only speculate whether plaintiff would have worked a full 10 years for defendant had she not been injured. However, the Facts are that at the time of the injury her employer was putting aside this potential benefit for her and that the injury prevented a continuation of this potential toward a vested interest. As the result of her injury she must find some other way of providing income for retirement. The pension payment was a part of her weekly wage.
For each week of plaintiff's employment the defendant contributed $2.63 as one-half of the premium for a group plan which provided insurance coverage for the plaintiff. Plaintiff paid the other half of the premium.
The defendant argues that because the plaintiff has not chosen to pay her share of the premium after her injury, she should not be given credit in the form of increased compensation benefits. This contention cannot be sustained.
Had the employer not made these weekly payments, plaintiff, in order to provide the same protection, would have been required to pay premiums therefor out of her own funds. These payments by one defendant are likewise included in plaintiff's weekly wage.
Each year on 7 holidays and for a one-week vacation period, defendant company would close but would pay its employees the usual weekly pay. An official of defendant company translated into dollars and cents the vacation and holiday pay which plaintiff received in addition to her weekly pay check. The total was $2.68 per week.
Plaintiff claims these items represent part of her compensation for the days on which she actually worked, and, therefore, should be included.
Defendant says that to include these items would be to allow plaintiff a larger wage base than if she had not been injured and were still employed by the defendant, and would actually give her double compensation for vacations and holidays.
Upon obtaining a job an employee usually gears his monetary obligations and future plans to the total of his recompense. Vacation and holiday pay must be considered in the same class as a pension. All three involve an employee's future. In each instance for every week the employee worked he earned something to be enjoyed in the Future.
If at any particular time the plaintiff did not work on a vacation or holiday, and yet was paid therefor, it was only for the reason that, prior thereto, she had earned the paid free time under the terms of her working agreement with her employer at the rate of $2.68 per week.
As long as she continued to work she could look forward to 12 days of paid free time each year. Her injury obliterated this pleasant prospect.
A day such as these cannot be equated with a day on which she is physically unable to work and to enjoy other pursuits and for which she receives compensation in a substantially less amount than the wages she could earn if she had not been injured. In this respect, plaintiff also lost an advantage which was recompensed under the contract of employment and measurable in money. Nor can such a day be equated with a day for which an employee receives compensation on lay-off. 3
Holiday and vacation credits should have been included in determining plaintiff's average weekly wage.
Plaintiff's weekly hourly rate of earning, $60, plus fringe benefits totaling $7.91 per week, made plaintiff's average weekly wage the sum of $67.91.
II. Should plaintiff be allowed travel expenses at 8cents per mile and a meal allowance for trips taken to receive medical care?
M.C.L.A. § 412.4 (Stat.Ann.1968 Rev. § 17.154) required that 'The employer shall furnish, or cause to be furnished, * * * reasonable medical, surgical and hospital services and medicines or other attendance or treatment recognized by the laws of this state as legal, when they are needed.'
Plaintiff received medical treatment at Evart and at Grand Rapids. There was no practical form of public transportation over the 18 1/2 miles from her home to Evart. Between these points she made 108 trips via automobile, a total of 3996 miles. Plaintiff presented no evidence as to the cost of travel.
The Referee arbitrarily allowed 8cents per mile. The Appeal Board confirmed on the basis that this did not exceed the 9cents per mile...
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