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UNITED STATES STEEL CORPORATION v. COMMONWEALTH PENNSYLVANIA (03/29/79)

COMMONWEALTH COURT OF PENNSYLVANIA


decided: March 29, 1979.

UNITED STATES STEEL CORPORATION, PETITIONER
v.
COMMONWEALTH OF PENNSYLVANIA, UNEMPLOYMENT COMPENSATION BOARD OF REVIEW AND JOHN A. FRISCH, RESPONDENTS. UNITED STATES STEEL CORPORATION, PETITIONER V. COMMONWEALTH OF PENNSYLVANIA, UNEMPLOYMENT COMPENSATION BOARD OF REVIEW AND BERNARD A. MOLCHANY, RESPONDENTS

Appeals from the Order of the Unemployment Compensation Board of Review in cases of In Re: Claim of John A. Frisch et al., Nos. B-149047 and B-149048; and In Re: Claim of Bernard A. Molchany et al., No. B-136042, etc.

COUNSEL

James T. Carney, for petitioner.

Ira Silverstein, for respondents.

President Judge Bowman and Judges Crumlish, Jr., Wilkinson, Jr., Mencer, Rogers, Blatt and MacPhail. Judges DiSalle and Craig did not participate. Opinion by Judge Crumlish, Jr.

Author: Crumlish

[ 41 Pa. Commw. Page 432]

Consolidated for our review are two appeals by the United States Steel Corporation (Employer) from separate decisions of the Unemployment Compensation Board of Review affirming payment of benefits to various claimants.*fn1 The issue for determination is whether the claimants were "indefinitely separated from their employment" pursuant to Section 404(d)(ii) of the Unemployment Compensation Law (Act)*fn2 such that benefits received during a plant shutdown would not be reduced by vacation pay.*fn3

[ 41 Pa. Commw. Page 433]

In the appeal at No. 1878 C.D. 1977, it is undisputed that Employer properly determined that a shutdown was required based on an analysis of market conditions and plant inventory. Notice was posted on plant bulletin boards informing that the probable length of the shutdown would be approximately nine weeks. Separation Notice forms (UC-45's) distributed to the employees indicated that the expected date of recall was August 15, 1976. On June 13, 1976, the employees were laid off. The plant, in fact, reopened on July 25, 1976, some three weeks earlier than expected, when an unexpected sale was made enabling Employer to terminate the shutdown earlier than originally anticipated (i.e., August 15, 1976).

Claimants received unemployment compensation benefits between June 13, 1976 and July 25, 1976 which were not reduced by vacation pay received by certain employees during some of the weeks in question. Neither the Bureau of Employment Security (Bureau), referee nor Board reduced the benefits by vacation pay concluding that the layoffs were indefinite under Section 404(d)(ii).

In the related case at No. 2400 C.D. 1977, the only substantial factual difference is that the plant did not in fact reopen on the expected date of recall because a tropical storm caused the layoff to be extended by one week as a response to market conditions occasioned by the storm.

Employer appeals Board's refusal to reduce benefits by vacation pay. We reverse.

[ 41 Pa. Commw. Page 434]

We have addressed the meaning of the phrase "indefinitely separated from his employment" in the context of Section 404(d)(ii) on two prior occasions. In United States Steel Corp. v. Unemployment Compensation Board of Review, 9 Pa. Commonwealth Ct. 206, 303 A.2d 852 (1973), there was no indication of when the plant shutdown would terminate, the layoff was open-ended, and we granted benefits writing:

When, as here, an employee is separated from his job for a period which is indeterminate in extent and for which the time concerned is not clearly fixed, it seems clear that he has been 'indefinitely separated' from his employment. It would also appear to us that the 'indefinite' nature of a separation can be ascertained either from the possibility that the employee will not be called back to work at all or from the lack of knowledge as to when any recall may occur.

9 Pa. Commonwealth Ct. at 209, 303 A.2d at 855.

In United States Steel Corp. v. Unemployment Compensation Board of Review, 28 Pa. Commonwealth Ct. 445, 368 A.2d 1319 (1977), the separation period was fixed, i.e., it was not "open-ended"; with the expected date of recall based on business judgment.*fn4 Notice of shutdown was clearly posted with an approximate

[ 41 Pa. Commw. Page 435]

    period of seven weeks listed as the expected length of the shutdown. UC-45 forms indicated a specific "catch-all-date" as the anticipated date of recall. We denied benefits in reversing the Board indicating that this layoff was clearly distinguishable from the open-ended, indefinite layoff in our 1973 United States Steel Corp. decision, supra.

In the cases now before us, notice was clearly posted on bulletin boards indicating an approximate date of recall.*fn5 The UC-45 forms provided a specific date on which the recall was to occur. An employer-representative testified in both instances that the recall date was based on the best of forecasting abilities and was to the best of his knowledge, at the time of the layoff, correct. There is no indication that, as of the date of the shutdown, the employer, based on marketing research, was less than definite as to the date of recall.

The fact that an employer is constantly in the process of reevaluating variable market conditions or that the recall does not occur exactly on the date specified, where, as here, there was a reasonable explanation of why the recall date was not met, is not relevant. The records reflect that the shutdowns were fixed to terminate

[ 41 Pa. Commw. Page 436]

    on a date certain based on an analysis of market conditions existing at the time of the layoff.

Accordingly, we

Order

And Now, this 29th day of March, 1979, the decisions of the Unemployment Compensation Board of Review, Nos. B-149047, B-149048 and B-136042, are reversed and the matters are remanded for the deduction of vacation pay for the weeks at issue.

Disposition

Reversed and remanded.


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