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decided: October 27, 1981.


Appeal from the Order of the Unemployment Compensation Board of Review in case of In Re: Claim of Michael J. Abaray, No. B-181795.


John A. Lee, with him Lawrence P. Galie, for petitioner.

Charles Donahue, Associate Counsel, with him Richard Wagner, Counsel, and Richard L. Cole, Jr., Chief Counsel, for respondent.

President Judge Crumlish and Judges Craig and MacPhail, sitting as a panel of three. Opinion by Judge Craig.

Author: Craig

[ 62 Pa. Commw. Page 254]

In this unemployment compensation appeal, the employer*fn1 questions an award of compensation to the claimant*fn2 by the Unemployment Compensation Board of Review, which reversed, upon reconsideration, its earlier order which had denied benefits on the ground of voluntary quit.*fn3

The claimant, who had worked for 29 years as a shop mechanic for the employer, retired from his position on October 30, 1979. Earlier that year on May 23, the employer had notified all employees by letter that, due to a change in federal law, the mandatory retirement age would no longer be age 65 but age 70; the letter stated that an employee not working past age 65 should file a retirement request form two months before a proposed retirement date. The claimant signed a request form on September 6, 1979 after being asked to do so by the supervisors in his office.

[ 62 Pa. Commw. Page 255]

The board concluded that the claimant had satisfied his burden of showing cause of a necessitous and compelling nature, stating, "the claimant voluntarily retired because under the existing labor-management agreement, the claimant would have had his fringe benefits frozen if he continued working after the age of 65."

The board found:

[U]nder the Labor-Management contract which had an expiration date of October 1, 1979 all benefits except the employe's wages would be frozen if the employee continued working after the age of 65. A new Union-Management agreement signed on October 8, 1979 effective October 1, 1979 did not change the freeze on benefits of those working beyond the age of 65.

Although the former collective bargaining agreement was silent concerning benefits after age 65, it incorporated the company pension plan, which provided for mandatory retirement at age 65. The employer subsequently revised the plan to adhere to the new federal law. Otherwise, the record does not clearly indicate any freeze of benefits by that agreement.

While the old agreement was in effect, during negotiations for the new one, the claimant testified that he spoke to his union representative*fn4 "to see how things would stand if I would stay after 65." The union representative told the claimant that the employer, during negotiations, had stated that all benefits would be frozen for employees who worked beyond age 65.*fn5

[ 62 Pa. Commw. Page 256]

In view of uncontradicted testimony by the employer's witness, there is no basis for the above-quoted finding as it relates to the new agreement. The representative stated that the discussions with the union about freezing benefits were not final decisions, but proposals. Several weeks before the claimant's retirement date, the final collective bargaining determination was to freeze only the pensions of those who worked beyond age 65, with no freeze on the other benefits.

However, whether the claimant was in fact faced with a benefits freeze if he continued working, as the board found, or was only apprehensive of a management proposal and discussion of such action, we cannot conclude as a matter of law that those circumstances constituted cause of a necessitous and compelling nature justifying the claimant's retirement. Sabella v. Unemployment Compensation Board of Review, 52 Pa. Commonwealth Ct. 258, 415 A.2d 722 (1980).

The controlling case is Unemployment Compensation Board of Review v. Holahan, 20 Pa. Commonwealth Ct. 381, 341 A.2d 587 (1975), where a claimant argued that the elimination of certain fringe benefits by his employer as a requirement of continued employment presented necessitous and compelling cause for leaving work.*fn6

[ 62 Pa. Commw. Page 257]

In Holahan, upon the employee's decision to postpone retirement, the company-provided hospitalization insurance terminated, leaving coverage solely under the Medicare program; in addition, the employer ceased contributions to the employee's profit-sharing retirement plan. We held that these changes "did not present a common sense and prudent reason for leaving work."

Here the employees who chose to work beyond age 65 would actually lose less benefits than those lost by the employee in Holahan.

The claimant, as in Holahan, "will receive as much from [his] benefit plan as he could have ever expected," although he apparently would not have achieved more in pension benefit terms. "It cannot be said, therefore, that his voluntary retirement for the reasons he states was for cause of a necessitous and compelling nature." 20 Pa. Commonwealth Ct. at 384, 341 A.2d at 588.

We must reverse the board's award of compensation.


Now, October 27, 1981, the order of the Unemployment Compensation Board of Review, dated June 23, 1980, Appeal No. B-79-8-I-652, is hereby reversed.



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