Court Opinion

ID: 9769641
Source: CourtListenerOpinion
Date Created: 2023-08-29 14:56:57.871663+00
Date Added: 2024-06-11T07:31:06.001781
License: Public Domain

Jim Johnson, Associate Justice. This is an unemployment compensation case. The appellants are employees of the International Shoe Company. In the summer of 1963, the shoe company ceased operation of their factories for a two week plantwide vacation shutdown. Appellants had not worked for the company long enough to he entitled to a vacation. During this two week period, appellants performed no work and received no vacation pay or other remuneration from their employer. Appellants initiated or continued claims for benefits under the Arkansas Employment Security Act. From the record it appears that appellants met every qualification of the law required for entitlement of benefits. Ark. Stat. Ann. § § 81-1103 and 81-1105 (Supp. 1963). There was no indication that these appellants voluntarily and without good cause left their work so as to be disqualified under the provisions of the Act. Ark. Stat. Ann. § 81-1106 (Supp. 1963). Upon hearing, benefits were denied by the Employment Security Division, Appeal Tribunal, Board of Review and the Circuit Court. From such denial comes this appeal. For reversal appellants contend that they are entitled to benefits based upon the established law and urge a reconsideration of the pirnciples enunciated in a. prior decision. The sole basis given for the denial of these claims was the case of Thornbrough v. Schlenker, 228 Ark. 1012, 311 S. W. 2d 753 (1958). In that case this court after reviewing cases from other jurisdictions and the annotation in 30 A.L.R. 2d 366, said: “It is impossible to reconcile all of the various cases. A reasonable distinction between the two lines of decisions might be: if, by the contract between the Union (the agent of the workers) and the management of the plant, there ivas reserved by the management of the plant the right to fix, at its own option, a plant wide vacation period, then the employees had agreed to such vacation and been ‘voluntarily unemployed’; and, therefore, not entitled to employment benefits. But if the contract had no provision whereby the management reserved the right to fix, at its own option, a plant wide vacation shutdown, then the employees had not agreed to such vacation period and were ‘involuntarily unemployed’ during such shutdoAvn period; and, being involuntarily unemployed, they Avere entitled to unemployment compensation.” [Emphasis ours.] This opinon concludes with the following language: “We hold that under the contract between the Union and the Shoe Company, here involved, these twenty-four appellees are entitled to unemployment compensation benefits for the week ending July 10, 1954. This is true because there was no provision in the contract whereby the Shoe Company hacl the right to close dotvn its entire plant for a vacation period at any time it elected and thereby force the appellees to take vacations at such time, even though some of them had not worked long enough to be entitled to vacations, and others had taken their vacations with consent of the management. ’ ’ [Emphasis ours.] The same annotation relied upon by this court for the “distinction” found to exist in the Schlenker case, supra, had this to say: ‘ ‘ On this question the courts have been divided some by a process of legalistic hairsplitting concluding that such workers are voluntarily unemployed and therefore not eligible for unemployment compensation, and others taking the more realistic vieiv that such employees are out of work through no fault of their own and therefore are entitled to benefits. ’ ’ [Emphasis ours.] Appellants concede the historic fact that under our free enterprise system the right to close a manufacturing plant is a basic prerogative of management. N. L. R. B. v. New Madrid Mfg. Co., 215 F. 2d 908 (8th Cir.). A leading authority on labor relations, Elkouri, How Arbitration Works (Eev. Ed. 1960), has this to say on pages 338-339: ‘ ‘ One of the prerogatives of management [is] to schedule vacations at such time as best meets the needs of the business.” With these fundamental prerogatives of management thus established, it is our view that a contractual expression of those rights as is implicit in the dictum of the Schlenker opinion is manifestly superfluous. To give weight as a basis for a “distinction” to a contract clause which purports to grant to management that which management already possesses is to create an artificial criterion. From the record in the case at bar it becomes obvious that if appellants and others similarly situated are to confidently meet the test implicit in Schlenher they must insist upon a labor contract which denies the employer the right to close. Such a contract of course would be against public policy and contrary to the economic system of this country. On the whole case appellees urge, and Schlenher seems to hold, that entitlement to compensation during vacation shutdowns should be governed exclusively by the particular Avording of the employment contract. This is in direct contravention to § 81-1118 of the Employment Security Act: “Any agreement by an individual to Avaive, release, or commute his rights to benefits or any other rights under this Act shall be void. ’ ’ See Sallee Bros. v. Thompson, 208 Ark. 727, 187 S. W. 2d 956. Upon reconsideration of Schlenher we find the opinion and its resultant ramifications to be untenable. The first paragraph of the Arkansas Employment Security Act is, in part, as folloAvs: ‘ ‘ § 81-1101. As a guide to the interpretation and application of this act, the public policy of this State is declared to be as folloAvs: Economic insecurity due to unemployment is a serious menace to the health, morals, and welfare of the people of this State. Involuntary unemployment is therefore a subject of general interest and concern Avhich requires appropriate action by the Legislature to prevent its spread and to lighten the burden A\drich may fall Avith crushing force upon the unemployed Avorker and his family. ’ ’ This law is remedial in nature and must be liberally construed in order to accomplish its beneficent purposes. Prince Poultry Co. v. Stevens, 235 Ark. 1034. 363 S. W. 2d 929; Holland v. Malvern Sand & Gravel Co., 237 Ark. 635, 374 S. W. 2d 822. “It seems to us that a Avorker who is ready, Avilling and able to work but is left without work and pay because Ms employer’s plant lias temporarily sliut down comes fairly witMn the broad coverage of the Unemployment Compensation Law. The shutdown may be for a relatively short period or it may be for a relatively long period. In either event the worker does not receive his weekly pay check upon which he and his family are generally dependent for their food and shelter. In good times as well as bad there are unemployed persons who seek work and finally obtain it at plants which they understand may temporarily shut down thereafter. These persons are truly without employment during the payless shutdowns, even though they will resume when the plants reopen.” Teichler v. Curtiss-Wright Corp., 133 A. 2d 320 (N.J., 1957). The Employment Security Division has long been recognized as a primary supplier of temporary labor. Contemplation of permanent employment is not and has never been a prerequisite for qualification *for entitlement for benefits, or for job placement, under the Arkansas Employment Security Act. “Playing with phrases like ‘vacation without pay’ or ‘leave of absence’ stems from want of better terms to avoid the words ‘laid off. ’ This is to say, the act should be liberally construed so as to insure a subsistence bridge for those who have been separated from employment under conditions whereby they are ready, willing and able to work, but cannot conscientiously secure it during the period of separation.” Dahman v. Commercial Shearing Co., 170 N. E. 2d 302 (Ohio, 1960). Strict constructions which result in defeat of the intended purposes of the Act will not be sanctioned by this court. Accordingly, this case is reversed and the cause remanded for further proceedings consistent with this opinion. McPaddin, Ward and Robinson, JJ., dissent.