AKZO SALT, INC.,
Plaintiff-Appellant
vs.
ADMINISTRATOR, OHIO BUREAU
OF EMPLOYMENT SERVICES,
Defendant-Appellee
NO.
67221
COURT
OF APPEALS OF OHIO, EIGHTH APPELLATE DISTRICT, CUYAHOGA
COUNTY
1995
Ohio App. LEXIS 1718
April
27, 1995
CHARACTER OF
PROCEEDING: Civil appeal fromCommon Pleas
Court. Case
No. CV-231102.
COUNSEL
For
Plaintiff-Appellant: TIMOTHY A. MARCOVY, SCOTT M. YOUNG, Willacy
& LoPresti,Cleveland,Ohio.
For
Defendant-Appellees: BETSEY NIMS FRIEDMAN, Assistant Attorney
General,Cleveland,Ohio. ALAN
BELKIN,
EVELYN D. MOORE, Shapiro, Turoff & Belkin,Cleveland,Ohio.
JUDGES
TERRENCE
O'DONNELL, JUDGE. HARPER, P.J., and NAHRA, J., CONCUR
AUTHOR:
O'DONNELL
OPINION
JOURNAL ENTRY
AND OPINION
O'DONNELL,
J.:
Appellees
are members of Local 436, International Brotherhood of Teamsters
and employees of Akzo Salt, Inc., the appellant, who, in this
appeal, challenges their entitlement to receive unemployment
benefits. OnApril 17, 1991, Akzo announced that the
Cleveland Salt Mine would be closed fromMay 6, 1991untilJune 2, 1991due to economic problems
and that, pursuant to terms of the collective bargaining agreement
between Akzo and Local 436, all unused 1991-92 vacation pay would
be paid at the time of layoff. Specifically, the agreement
states:
"6. In the
event an employee *** is laid off during the year and is entitled
to vacation pay under this Article, such vacation pay shall be paid
to him at the time of such *** layoff."
Akzo then
closed the plant onMay 6, 1991and paid all unused
vacation pay in lump sums. We note that this plant closing created
three categories of Akzo employees--those who had vacation prior
to, during, and after the closing; since Akzo does not contest the
right of those who had already taken their vacation to receive
unemployment benefits, we are only concerned in this appeal with
the employees in the latter two categories, who, upon receipt of
the layoff notices, filed individual claims for unemployment
benefits with the Administrator of the Ohio Bureau of Employment
Services and received a determination of entitlement to benefits.
Akzo appealed the Administrator's determination and onApril 6, 1992the Unemployment
Compensation Board of Review affirmed appellees' entitlement to
benefits, but modified the Administrator's decision, finding that
vacation pay received by employees for vacations scheduled during
the layoff period should be deducted from their unemployment
benefits.
Akzo pursued
appeal toCommon Pleas Courtand the able trial
judge entered the following order onApril 1, 1994.
"Appellant's
appeal from the decision of the Unemployment Compensation Board of
Review, granting unemployment compensation to claimants who were
separated from Akzo Salt, Inc., due to lack of work, is
denied."
Akzo now
appeals the trial court's ruling to this court and has assigned as
error that the decision of the trial court is unlawful,
unreasonable, and against the manifest weight of the
evidence.
We begin our
consideration of this matter by defining the standard of review for
an administrative appeal from a decision of theCommon Pleas
Court. In
this instance, while the trial court's duty is to determine the
decision appealed from is not unlawful, unreasonable or against the
manifest weight of the evidence, our review is conducted to
determine if the court abused its discretion in entering its
judgment. Prihoda v. Admr., OBES (May 16, 1991), Cuyahoga App. No.
58542, unreported.
We conclude,
therefore, that the appropriate standard of appellate review for an
administrative appeal from a decision of theCommon Pleas Courtis to ascertain if
the trial court correctly determined the decision was not unlawful,
unreasonable or against the manifest weight of the evidence and
that the court did not abuse its discretion in entering its
judgment.
We begin our
consideration of this appeal by setting forth the relative
positions of the parties.
Akzo does not
believe the appellees are entitled to unemployment benefits because
each received a lump sum distribution of vacation pay at the
beginning of the layoff period. Pursuant to R.C. 4141.01(H) and the
holding of Nunamaker v. United States Steel Corp. (1965), 2 Ohio
St.2d 55, 206 N.E.2d 206, Akzo concludes that the lump sum vacation
pay constitutes "remuneration" which precludes appellees' receipt
of benefits.
Appellees on
the other hand, first suggest the Supreme Court holding in
Nunamaker, supra, is not controlling because it interprets an
obsolete statute, and then contend the trial judge correctly
dismissed Akzo's appeal because the Board of Review correctly
determined benefit entitlement with appropriate reductions for
appellees who were on scheduled vacations during the period of the
layoff.
We begin our
review and analysis of this case by considering the statutes which
deal with eligibility for unemployment compensation.
R.C. 4141.29
provides in relevant part:
"Each
eligible individual shall receive benefits as compensation for loss
of remuneration due to involuntary *** unemployment ***. (Emphasis
added).
Further,
R.C. 4141.01 contains the following two paragraphs:
"M. An
individual is totally unemployed in any week during which he
performs no services and with respect to such week no remuneration
is payable to him.
"N. An
individual is partially unemployed in any week if due to
involuntary loss of work the total remuneration payable to him for
such week is less than his weekly benefit amount."
Thus, the
statutory scheme established by the legislature for an individual
to receive an unemployment benefit consists of a two-part
determination on eligibility, both involuntary unemployment and
either no remuneration or remuneration less than weekly wage. In
this case, all parties agree that appellees were involuntarily
unemployed and performed no services during the layoff. The parties
here disagree on whether appellees received remuneration during the
layoff and this becomes the central issue for our determination.
Akzo claims that the lump sum vacation pay received by appellees
constitutes remuneration to them, cites Nunamaker v. United States
Steel Corp. (1965), 2 Ohio St.2d 55, 206 N.E.2d 206, in support of
its position, and concludes appellees should not be entitled to
receive benefits.
The syllabus
in Nunamaker, supra states:
"2. An
employee who voluntarily elected to receive and accepted vacation
pay, received "remuneration", was not "totally unemployed," and,
therefore, was ineligible for unemployment benefits pursuant to
Sections 4141.01 ***." (Emphasis added)
The court
went on to stress that
"*** each was
paid remuneration with respect to such week in the form of vacation
pay as a result of his unilateral and voluntary election." Id. at
57. (Emphasis added)
Our review
demonstrates that the facts in Nunamaker, supra, refer to the
voluntary election by employees to receive vacation pay which is a
different circumstance than is presented in this case. Here, we
find that pursuant to the collective bargaining agreement,
appellees were entitled to select vacation dates by seniority
subject to Akzo's approval, and each employee had an expectancy to
receive compensation for the selected time of vacation. By closing
the plant, Akzo compelled all those who had planned vacation after
June 2, 1991 to take their vacation during the time of the layoff
and to be paid at that time. This was contrary to the employees'
choice. Akzo, however, views the action of accelerating the
vacation pay to the layoff period as defeating the otherwise lawful
claim to unemployment benefits for these appellees because Akzo
considers it to be remuneration received by them.
The record
reveals that the Unemployment Compensation Board determined,
presumably in accord with R.C. 4141.01(N) and Nunamaker, supra,
that employees who had chosen their vacations during the period of
the layoff were entitled to benefits reduced by any vacation pay
they received. The Board further held that employees who had chosen
their vacations after the period of the layoff were entitled to
full benefits, presumably because they were not voluntarily
electing to accept vacation pay.
We, next
consider the propriety of the reduction in benefits.
R.C.
4141.31(A)(5) governs benefit reductions and states in relevant
part:
(A) Benefits
otherwise payable for any week shall be reduced by the amount of
remuneration a claimant receives with respect to such week as
follows:
* * *
(5) Vacation
pay or allowance payable under the terms of a labor-management
contract or agreement, or other contract of hire, which payments
are allocated to designated weeks. (Emphasis added)
In this
case, only those employees who had previously scheduled their
vacations for the May 8 to June 2, 1991 layoff period could have
their accelerated, lump sum vacation payment allocated to the
layoff period. All other employees who received the accelerated
lump sum vacation payment had an expectancy of receipt of those
monies at times other than the layoff period.
In
Cincinnati v. Lowry (May 10, 1989), Hamilton App. No. C880254,
unreported, the court there affirmed the Board's allowance of
unemployment benefits without a deduction for a lump sum payment of
accrued vacation and compensatory time which the employer allocated
to a period following a layoff.
Our
conclusion in this case is that the accelerated lump sum vacation
pay received by appellees at the time of layoff pursuant to the
collective bargaining agreement can only be allocated to their
previously selected vacation period. Thus, for those who planned
vacation during the layoff period, the reduction in unemployment
entitlement benefits is lawful and reasonable. See R.C. 4141.01(N).
And, for those who planned vacation after the layoff period, the
determination of no reduction is likewise lawful and reasonable.
Hence, we conclude that these lump sum payments made to appellees
constituted accelerated payments to them of their vacation pay and
as such did not constitute remuneration within the meaning of R.C.
4141.01(M) and (N) such as would defeat their entitlement to
unemployment compensation.
Thus, we
determine that the decision of the trial judge does not constitute
an abuse of discretion and it is not unlawful, unreasonable, nor
against the manifest weight of evidence. Accordingly, we affirm
that judgment.
Judgment
affirmed.
It is
ordered that appellee(s) recover of appellant(s) costs herein
taxed.
The Court
finds there were reasonable grounds for this appeal.
It is
ordered that a special mandate issue out of this Court directing
the Common Pleas Court to carry this judgment into
execution.
A certified
copy of this entry shall constitute the mandate pursuant to Rule 27
of the Rules of Appellate Procedure.
HARPER, P.J.,
and
NAHRA, J.,
CONCUR
JUDGE
TERRENCE
O'DONNELL
N.B. This
entry is made pursuant to the third sentence of Rule 22(D), Ohio
Rules of Appellate Procedure. This is an announcement of decision
(see Rule 26). Ten (10) days from the date hereof, this document
will be stamped to indicate journalization, at which time it will
become the judgment and order of the court and time period for
review will begin to run.
DISPOSITION
JUDGMENT:
AFFIRMED.