Case Name: MALONE v. EMPLOYMENT SECURITY COMMISSION
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1958-06-11
Citations: 352 Mich. 472
Docket Number: Docket No. 43, Calendar No. 47,374
Parties: MALONE v. EMPLOYMENT SECURITY COMMISSION.
Judges: Smith, Black, and Voelker, JJ., concurred with Edwards, J.
Reporter: Michigan Reports
Volume: 352
Pages: 472–487

Head Matter:
MALONE v. EMPLOYMENT SECURITY COMMISSION.
1. Unemployment Compensation — Vacation—Discretion of Employer — Involuntary Unemployment.
A collective bargaining agreement wlioreby the employer was given the discretion to select the time for vacation made the unemployment resulting from vacation involuntary under the employment security act (CLS 1954, §421.48).
2. Statutes — Construction of Later Amendments.
A later and more specific amendment of a statute takes precedence over an earlier and more general provision.
3. Unemployment Compensation — Vacation.
Sums paid employees as vacation pay for 2-week period selected by the employer pursuant to collective bargaining agreement constituted remuneration for such period payable for other purposes than loss of full-time employment, hence, such employees who performed no services for the employer during such period and wore unemployed for months before as well as after such period were also unemployed for such “vacation” period and entitled to 1/2 usual rate of unemployment compensation benefits, as provided by statute then in effect (CLS 1954, § 421.48).
References for Points in Headnotes
[2] 50 Am Jur, Statutes § 467 et seq.
[3] 48 Am Jur, Social Security, Unemployment Insurance and Retirement Funds § 34 et seq.
4. Costs — Public Question — Unemployment Compensation — Construction op Statutes.
No costs are allowed in proceeding to recover unemployment compensation benefits, where construction of amendment to the employment security act presented a public question (CLS 1954, § 421.48).
Dethmers, C. J., and Carr and Kelly, JJ\, dissenting.
Appeal from Wayne; Beers (Henry L.), J., presiding.
Submitted January 14, 1958.
(Docket No. 43, Calendar No. 47,374.)
Decided June 11, 1958.
Certiorari by Betty Malone and others against the Appeal Board of the Michigan Employment Security Commission, the Commission and Champion Spark Plug Company to establish right to unemployment compensation benefits. Prom an order reversing the Appeal Board and finding plaintiff entitled to benefits, defendant Champion Spark Plug Company appeals.
Affirmed.
Zwerdling & Zwerdling, for plaintiffs.
Clark, Klein, Brucher & Waples, for defendant Champion Spark Plug Company.

Opinion:
Edwards, J.
A manufacturing concern, Champion Spark Plug Company, laid off a considerable number of employees, including all of the plaintiffs in this case, in the spring of 1954. Plaintiffs then sought and, except for a period of 2 weeks hereinafter discussed, received unemployment compensation until called back to work in the fall of 1954.
The exception which occasions this appeal concerns the weeks ending July 31st and August 7th which the company determined to be a vacation period and during which it paid these plaintiffs various sums called for by its contract with the union.
A referee who heard plaintiffs' claims for unemployment compensation as to these 2 weeks held that plaintiffs whose vacation pay did not equal the unemployment compensation rate otherwise due were eligible for unemployment compensation, reduced according to statutory formula to 1/2 the usual rate. The appeal board of the Michigan employment security commission reversed the referee's decision, holding that under Michigan case precedent no compensation was payable. On appeal to the circuit court in the nature of certiorari, the judge reversed the appeal board and reinstated the decision of the referee, and the company brings this appeal to us.
Judge Beers recited the facts concisely in his opinion and we adopt his statement:
"The Champion Spark Plug Company, a large industrial concern, entered into a labor contract with Local Union No. 272 of the United Automobile, Aircraft, and Agricultural Implement "Workers of America, C.I.O. This labor contract, among many other provisions, provided for a money payment to employees of the company termed vacation pay. The contract specifically provides:
" 'Section 5. Employees on the company's rolls as of May 31st of each year who have fulfilled their probationary period will be granted vacations and pay as follows: Normally the plant will be shut down 2 weeks each year for vacation sometime during July or August at the company's discretion. During suela shutdowns certain employees may be required aiad they normally will take their vacations at other times.'
"The contract then goes on to specify that the amount of vacatioia pay to be paid to each employee shall be determined by the length of time of service to the company and provides a schedule for such determination. It will be noted here that whether the plant actually shuts down and terminates operations for any vacation period is left wholly in the discre tion of the company, and under this contract if the company did not shut down, the employees would be entitled to a certain amount of money which would be termed vacation pay whether they were actually on vacation or not.
"In the early part of the year 1954, the company made a general layoff of certain employees who are involved in the present litigation. These employees, it is undisputed upon the record, became eligible to receive benefits under the statute. In July and August of the year 1954, the company, in compliance with what it conceived to be the terms of its employment contract, and while these employees were unemployed by it, gave notice to its unemployed personnel that the weeks ending July 31st and August 7th, 1954, would be determined a vacation period, and it paid to the unemployed personnel the amounts of money designated as vacation pay and determined by the provisions of the aforesaid employment contract. The employment security commission thereupon removed these unemployed people from the number receiving compensation benefits under the statute for the period of the above-mentioned 2 weeks on the theory that for this vacation period they were employed and ineligible to receive the aforesaid employment benefits and the present suits were then commenced by the employees and their representatives for the purpose of securing to the employees the payment of compensation benefits for the 2-weeks period mentioned. A hearing was had first before a referee of the employment security commission in which the referee made a finding that the amount of money received by the employees as vacation pay was remuneration within the meaning of the Michigan employment security statute and computed the amount of income to each individual employee for the 2 weeks. He then allowed this amount as income received and computed the benefits in accordance with the provision of the statute, the amount of income for each week thus being determined to be less than the amount called for in the statute to be paid to a beneficiary, he allowed each employee 1/2 of the regular allowance, which provision is, of course, in accordance with the statute. Appeal was then taken from the decision of the referee to the appeal board of the employment security commission. The appeal board heard the matter and rendered a majority decision holding that the employees of the company were actually employed and ineligible to receive any compensation under the statute for the 2 weeks I have mentioned. From this decision of the appeal board, this appeal by certio-rari is taken."
We are confronted here by the relatively simple problem of construing the 1951 amendments to sections 29 and 48 of the employment security act which pertain to vacations (PA 1951, No 251, immediate effect June 17, 1951 rCLS 1952, § 421.29, 421.48 (Stat Ann 1951 Cum Supp § 17.531, 17.552)]).
Prior to the above date the employment security act (then known as Michigan unemployment compensation act) contained a specific provision in its disqualification section applicable to vacations. This provision read:
"(1) An individual shall be disqualified for benefits
"(d) For any week with respect to which he is receiving or has received payments in the form of #
"(2) Vacation with pay." CL 1948, § 421.29 (Stat Ann 1950 Rev § 17.531).
Basing its action upon this language, this Court denied claims for unemployment compensation in a case which is factually nearly identical with our current case. Renown Stove Co. v. Unemployment Compensation Commission, 328 Mich 436.
The Renown Case was decided September 11, 1950. The following year the legislature repealed the vacation disqualification section quoted above (Section 29 [1] [d] [2]). At the same time it added to section 48 of the act the following self-explanatory language:
"An individual shall he 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." CLS 1952, § 421.48 (Stat Ann 1951 Cum Supp § 17.552).
The amendment then went on to spell out the purpose of the legislature to have vacation pay (when, as noted above, less than weekly benefit rate) considered as "remuneration" for the purpose of computing partial unemployment benefits under section 27(c).
The section as applicable in the summer of 1954 was as follows:
"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: Provided, That any loss of remuneration incurred by an individual during any week resulting from any cause other than the failure of his employing unit to furnish full-time, regular employment shall be included as remuneration earned for purposes of this section and of subsection (c) of section 27 of this act: Pro-' vided further, That the total amount of remuneration thus lost shall be determined in such manner as the commission shall by regulation prescribe. For the purposes of this act, an individual's weekly benefit rate shall mean the weekly benefit rate shown in the table in section 27(b), which is applicable to the individual.
"All amounts paid to or due to a claimant from an employing unit or former employing unit for vacation or a holiday, or in the form of retroactive pay, or iw lieu 'of notice, shall be deemed remuneration in determining whether an individual is unemployed under this section and also in determining his benefit payments under section 27(c), for the period designated by the contract or agreement providing for the payment, or if there is no contractual specification of the period to which such payments shall be allocated,, then for the period designated by the employing unit or former employing unit: Provided, however, That payments in the form of termination, .separation, severance or dismissal allowances, and bonuses, shall not he deemed wages or remuneration within the meaning of this section." (Italics supplied.) CLS 1954, § 421.48.
The amendments recited above were in effect at the time of origin of the vacation dispute decided by this Court in I. M. Dach Underwear Co. v. Employment Security Commission, 347 Mich 465. The case was, however, decided upon different factual grounds. The plant shut down in Dach only for the vacation period. The vacation period was specifically set by union-management agreement. The majority, of this Court there held that the period of unemployment was not "involuntary" since the collective bargaining agreement was held to have determined the "vacation"- week. The division in this Court recorded in Dach continues (See Mr.'Justice Smith's dissent in which the writer joined, Dach, supra, p 480), but this case presents a different situation.
In our current case, plaintiffs were unemployed for months preceding and following the 2 "vacation" weeks. The collective bargaining. agreement' made the^ time for vacations discretionary with the company. We do not believe that Dach is controlling on the instant facts.
In deciding the instant ease, the circuit judge cited the 1951 amendments dealing with vacations to which we have already referred. He added:
"It seems to me that it must logically follow that this money having been paid to the employees for vacation must be determined to be remuneration under the statute. It is quite obvious to me that the legislátive intent in placing this provision in the statute-was to reduce the amount of unemployment compensation to be paid and to equalize the' income of beneficiaries under the statute, the statute itself being a relief measure to guard against the hardships of widespread unemployment." • ,
Appellants, however, in this appeal present to us 5 questions, all bearing upon the effect of- language in the preamble to the employment security act r
"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 leg-islature_ 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." (Emphasis supplied.) CL 1948, .§ 421.2 (Stat Ann 1950 Rev §17.502).
It seems obvious- to us that the 1951 amendments acted to spell out the legislative definition df unemployment in a specific fashion pertaining to yaca-tions which we cannot properly ignore.
It is a sound principle of statutory construction that the later and more specific amendment takes precedence over an earlier and more general provision. Crane v. Reeder, 22 Mich 322; Edwards v. Auditor General, 161 Mich 639; Reed v. Secretary of State, 327 Mich 108; 50 Am Jur, Statutes, § 367.
In our view, our current case presents the very situation for which the legislative amendments of 1951 were specifically intended as remedy.
Under what we have written, there is no necessity again to' review cases from outside this jurisdiction which illustrate other State courts' views on whether or not vacations may be termed involuntary unemployment for purposes of their specific statutes.
See majority and dissenting opinions, Each, supra.
In Michigan, this problem has been specifically addressed by the legislature and, as to our current case, plainly answered in the 1951 amendments. In such a situation, the courts need only to give effect to the legislative intent. City of Grand Rapids v. Crocker, 219 Mich 178; Boyer-Campbell Co. v. Fry, 271 Mich 282 (98 ALR 827); Geraldine v. Miller, 322 Mich 85.
The referee and the circuit judge gave the amendments their intended effect.
Affirmed. No costs, a public question being involved.
Smith, Black, and Voelker, JJ., concurred with Edwards, J.
See CLS 1952, § 421.27 (Stat Ann 1951 Cum Supp § 17.529). This section, setting up payment schedule, has been frequently amended. — Reporter.
Note subsequent amendment CLS 1956, § 421.48 (Stat Ann 1957 Cum Supp § 17.552).