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GERALD F. WHITLING v. COMMONWEALTH PENNSYLVANIA (03/07/86)

COMMONWEALTH COURT OF PENNSYLVANIA


decided: March 7, 1986.

GERALD F. WHITLING, PETITIONER
v.
COMMONWEALTH OF PENNSYLVANIA, UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, RESPONDENT

Appeal from the Order of the Unemployment Compensation Board of Review in case of In Re: Claim of Gerald F. Whitling, No. 233529.

COUNSEL

Robert B. McGuiness, with him, James Bukac, for petitioner.

Donna M. Stanek, with her, Charles G. Hasson, Acting Chief Counsel, for respondent.

Judges MacPhail and Colins, and Senior Judge Blatt, sitting as a panel of three. Opinion by Judge Blatt.

Author: Blatt

[ 95 Pa. Commw. Page 501]

Gerald F. Whitling (petitioner) petitions for review of the order of the Unemployment Compensation Board of Review (Board) which affirmed a referee's decision ruling him financially ineligible to receive benefits, pursuant to Section 404 of the Unemployment Compensation Law (Act).*fn1

The facts in this case are not in dispute. The petitioner was last employed with Wade E. Simons (Simons), and that employment ended on October 1, 1983.*fn2 He filed an Application for Benefits, effective April 29, 1984, thereby establishing the calendar year of 1983 as his base year.*fn3 During his base year, he

[ 95 Pa. Commw. Page 502]

    worked only for Simons, earning total base year wages of $5646.00, with high quarterly earnings of $3690.00. During that base year he had also received $331.84 in suppplemental unemployment benefits (SUB pay) under a plan established by agreement between the Oilwell Division, United States Steel Corporation (Oilwell Division), a former employer, and the United Steelworkers of America (union).

The administrative authorities ruled that the petitioner's SUB pay did not constitute wages under the Act and, therefore, could not be utilized in the determination of his financial eligibility. Without the SUB pay, however, the petitioner's total base year wages would be insufficient to establish financial eligibility.*fn4

On review, the petitioner alleges that the Board erred legally in excluding SUB pay from his base year wages and, alternatively, that, if the Act is interpreted to so exclude SUB pay, his due process and equal protection rights have been thereby denied. We will address these questions in the order presented.

[ 95 Pa. Commw. Page 503]

In reviewing the pertinent statutory language, we find that Section 4(x) of the Act*fn5 defines "wages" as "all remuneration . . . paid by an employer to an individual with respect to his employment. . . ." Section 4(l)(1) of the Act*fn6 defines "employment" as "all personal service performed for remuneration. . . ." And, although the Act does not define "remuneration," that term has been judicially defined to mean "payment for services performed." Gianfelice Unemployment Compensation Case, 396 Pa. 545, 555, 153 A.2d 906, 911 (1959), and Beistle Company v. Unemployment Page 503} Compensation Board of Review, 73 Pa. Commonwealth Ct. 205, 207, 457 A.2d 1029, 1030 (1983).

While the Appellate Courts of our Commonwealth have not previously faced the question presented here, we have considered analogous cases under the foregoing statutory provisions.

An employer's provision of salary-continuation payments made on account of a claimant's disability were held not to constitute wages under Section 4(x) in Karamanian v. Unemployment Compensation Board of Review, 46 Pa. Commonwealth Ct. 163, 405 A.2d 1364 (1979), because such payments were not made in consideration of personal service.

In McAnallen v. Unemployment Compensation Board of Review, 86 Pa. Commonwealth Ct. 77, 483 A.2d 1057 (1984), we held that sick and accident benefits paid to the claimant by the employer, and the claimant's National Guard pay, were not paid with respect to employment. Section 1002(8)*fn7 of the Act expressly excludes the National Guard service from the definition of "employment", and we followed the Karamanian analysis with regard to the sick and accident benefits. We concluded, therefore, that funds from neither source could be utilized to qualify the claimant financially.

Most recently, in Swackhammer v. Unemployment Compensation Board of Review, 86 Pa. Commonwealth Ct. 293, 484 A.2d 851 (1984), again relying on Karamanian, we held that workmen's compensation benefits, paid on account of the claimant's disability and not in consideration of personal services rendered, were not wages within the purview of the Act.

Although it is true that the petitioner's SUB pay was a benefit of his employment with Oilwell Division, the disallowed funds in Karamanian, McAnallen (excluding,

[ 95 Pa. Commw. Page 504]

    of course, the National Guard pay) and Swackhammer also would not have been paid but for the existence of an employer-employee relationship. Consequently, we believe that, inasmuch as the petitioner's SUB pay was paid on account of his unemployment, such payments were, necessarily, not made in consideration for personal services.

Moreover, we do not believe that General Teamsters Union Local 249 v. Unemployment Compensation Board of Review, 74 Pa. Commonwealth Ct. 456, 459 A.2d 1363 (1983), is, as the petitioner contends, analogous here. General Teamsters involved payments made by the union to shop stewards to reimburse those union officials for wages lost when they were conducting union business during work hours. Those payments were held to constitute remuneration from the union to the shop stewards for services those individuals performed for the union.

We conclude, therefore, that the Board committed no legal error in excluding the petitioner's SUB pay from his base year wages.

Turning to the petitioner's due process*fn8 and equal protection arguments,*fn9 we note that the test for determining whether or not a challenged social or economic law deprives someone of substantive due process, and for evaluating an equal protection challenge, where, as here,*fn10 no fundamental interest or a suspect classification is involved, is whether or not the legislation

[ 95 Pa. Commw. Page 505]

    has a rational relationship to a valid state objective. See Latella v. Unemployment Compensation Board of Review, 74 Pa. Commonwealth Ct. 14, 459 A.2d 464 (1983), and Novack v. Unemployment Compensation Board of Review, 73 Pa. Commonwealth Ct. 148, 457 A.2d 610 (1983).

Our Supreme Court has approved the Act's use of the base year earnings test to reflect a claimant's general attachment to the labor market as having a rational relationship to a legitimate governmental objective. Martin v. Unemployment Compensation Board of Review, 502 Pa. 282, 466 A.2d 107 (1983), cert. denied, 466 U.S. 952. We view the requirement that base year wages must arise from one's personal service to an employer within the base year as also having a clear relationship to the legitimate governmental objective of financially assisting "employees" unemployed through no fault of their own as provided in the Act's Declaration of Public Policy.*fn11 We discern no constitutional violations, therefore, in excluding money not paid in consideration for personal services performed, such as the SUB pay here involved, from the calculation of the qualifying base year wages.

Accordingly, finding no errors of law or constitutional violations, we will affirm the Board's order.

Order

And Now, this 7th day of March, 1986, the order of the Unemployment Compensation Board of Review, Decision No. B-233529, is affirmed.

Disposition

Affirmed.


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