decided: February 6, 1986.
ANTHONY S. PANE ET AL., PETITIONERS
COMMONWEALTH OF PENNSYLVANIA, UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, RESPONDENT. ELMER REISER ET AL., PETITIONERS V. COMMONWEALTH OF PENNSYLVANIA, UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, RESPONDENT
Appeals from the Orders of the Unemployment Compensation Board of Review in case of In Re: Claim of Anthony S. Pane, No. B-232032, and in case of In Re: Claim of Elmer Reiser, No. B-233028.
Richard E. Gordon, Grossinger & Gordon, for petitioners.
Thomas H. May, for intervenor, AMPCO-Pittsburgh Corporation.
Judges MacPhail and Doyle, and Senior Judge Barbieri, sitting as a panel of three. Opinion by Judge Doyle.
[ 95 Pa. Commw. Page 41]
This is an appeal by Anthony S. Pane (Claimant)*fn1 from an order of the Unemployment Compensation Board of Review (Board) affirming a referee's determination that a special initial payment Claimant received pursuant to his employer's retirement policy is subject to the pension offset provision of Section 404(d)(iii) of the Unemployment Compensation Law,*fn2 43 P.S. § 804(d)(iii).
The facts are not in dispute. Claimant was employed by Wyckoff Steel Division, Ampco-Pittsburgh Company (Employer) for forty-three years as a security guard. Claimant's last day of work was on or about December 19, 1983. Effective February 29, 1984, Employer closed its plant and on March 1, 1984, Claimant officially retired. At the time the plant closed Claimant had acquired certain rights under the Employer's pension agreement. Under the plan in which Claimant was a participant Claimant was entitled to a special initial payment to be calculated as follows:
The amount of special payment for a participant who was entitled to receive a vacation in the year of retirement or who would have been entitled to receive a vacation in the year of retirement except for such retirement shall be calculated as follows:
[ 95 Pa. Commw. Page 42]
(1) The number of weeks of vacation to which the participant was or would have been entitled will be determined.
(2) The number determined in (1) above shall be subtracted from 13 (14 in the case of a participant eligible for more than four weeks of regular vacation in the year of retirement).
(3) The number determined in (1) above shall be multiplied by the participant's vacation pay.
(4) The result determined in (2) above shall be multiplied by participant's adjusted vacation pay.
(5) The amounts calculated in (3) and (4) above shall be added together and then reduced by all vacation pay the participant received in such year.*fn3
Claimant was entitled to five weeks vacation payment at $558.32 per week (totaling $2,791.10). At the time he retired Claimant had not taken his five weeks vacation. Claimant's remaining nine weeks were calculated at the adjusted vacation rate of $356.67 per week (totaling $3,210.03). The referee found that the special initial payment Claimant received was subject in its entirety to Section 404(d)(iii) as a pension payment.*fn4 The referee's decision affirmed the determination of the Office of Employment Security.
[ 95 Pa. Commw. Page 43]
On appeal Claimant argues first that the special initial payment was severance pay rather than a pension payment. He argues in the alternative that even if his nine weeks of adjusted vacation pay constitutes a pension payment under Section 404(d)(iii), the five weeks of regular vacation pay does not, but is, instead, exempted from deduction in the calculation of his weekly benefit rule pursuant to the exception in Section 404(d)(ii). Claimant also argues that Office of Employment Security regulation 65.104, 34 Pa. Code § 65.104, upon which the referee relied, is contrary to Section 404(d) and that the application of Section 404(d)(iii) to Claimant has denied him equal protection.
As to the question of whether the special initial payment is itself a pension we have previously addressed this issue in U.S. Steel Corp. v. Unemployment Compensation Board of Review, 10 Pa. Commonwealth Ct. 553, 312 A.2d 460 (1973) wherein we rejected the argument that such payment was severance pay and held instead that it was a retirement pension. But, although U.S. Steel is controlling here, it controls only with respect to the nine week period. This is because the only issue in U.S. Steel was "whether this 'special payment' is deductible from [claimant's] unemployment compensation benefits as a 'retirement pension' as this term is used in Section 404(d)(iii)."
[ 95 Pa. Commw. Page 44]
pay, whether received by an employee before a forced retirement due to a plant closing or after, is, pursuant to Section 404(d)(ii), not to be deducted in calculating the employee's weekly benefit rate.*fn6
Order in 2122 C.D. 1984
Now, February 6, 1986, the order of the Unemployment Compensation Board of Review, No. B-232032, dated June 27, 1984 is hereby reversed insofar as it imposed a deduction for the five weeks of Pane's regular vacation pay and affirmed in all other respects.
Order in 2539 C.D. 1984
Now, February 6, 1986, the order of the Unemployment Compensation Board of Review, No. B-233028, dated July 27, 1984 in hereby reversed insofar as it imposed a deduction for the weeks of Reiser's regular vacation pay and affirmed in all other respects.
Orders reversed in part and affirmed in part.