The opinion of the court was delivered by: Judge Smith-ribner
Submitted: November 12, 2008
BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, President Judge, HONORABLE BERNARD L. McGINLEY, Judge, HONORABLE DORIS A. SMITH-RIBNER, Judge, HONORABLE DAN PELLEGRINI, Judge, HONORABLE ROCHELLE S. FRIEDMAN, Judge, HONORABLE RENÉE COHN JUBELIRER, Judge, HONORABLE ROBERT SIMPSON, Judge.
Slippery Rock Area School District (School District) appeals from an order of the Unemployment Compensation Board of Review (Board) that reversed the decision of an unemployment compensation referee (Referee) and granted benefits to Heather LiVorio (Claimant), a long-term substitute teacher in the 2006 -2007 school year who was provided a reasonable assurance of her return to work in the fall as a day-to-day substitute teacher. The School District questions whether the Board erred as a matter of law in relying upon 34 Pa. Code §65.161(a)(2) to conclude that Claimant was not ineligible for benefits under Section 402.1(1) of the Unemployment Compensation Law (Law)*fn1 and whether the Department of Labor and Industry (Department) exceeded its authority in promulgating 34 Pa. Code §65.161(a)(2) to amend the Law.
Claimant was employed by the School District from August 28, 2006 through June 13, 2007 as a long-term substitute teacher. Her position was covered by a collective bargaining agreement, and she was entitled to ten sick days. The Board calculated her pay rate as $126.34 per day. On June 11, 2007, the School District sent Claimant a letter of reasonable assurance stating that if she so desired she would again be called upon "on a day-to-day substitute basis during the 2007-08 school year." Employer Ex. 1; Reproduced Record 15a. Claimant returned the accompanying card indicating her wish to remain on the day-to-day substitute list. As a day-to-day substitute, she would receive $80 per day and no sick days. She applied for benefits beginning with the waiting week ending June 16, 2007.
Section 402.1 of the Law, relating to benefits based on service for educational institutions, provides in relevant part:
(1) With respect to service performed after December 31, 1977, in an instructional, research, or principal administrative capacity for an educational institution, benefits shall not be paid based on such services for any week of unemployment commencing during the period between two successive academic years, or during a similar period between two regular terms whether or not successive or during a period of paid sabbatical leave provided for in the individual's contract, to any individual if such individual performs such services in the first of such academic years or terms and if there is a contract or a reasonable assurance that such individual will perform services in any such capacity for any educational institution in the second of such academic years or terms. (Emphasis added.)
The Referee noted that Claimant was made an offer to be placed on a substitute list and that she accepted it. Although Claimant was a long-term substitute before, the Referee determined that she did have reasonable assurance of returning to work for the School District and therefore denied benefits under Section 402.1(1).
The Board on Claimant's appeal quoted Section 402.1(1) of the Law and then concluded that she did "not have a reasonable assurance of returning to work as the terms and conditions of the employment as a day to day substitute are substantially less that [sic] the terms and conditions of a long-term substitute." Board's Decision, p. 2. Although the Board did not cite the regulation at 34 Pa. Code §65.161, adopted January 3, 2003, relating to reasonable assurance, the Board applied it. Section 65.161 provides in part, with added emphasis:
(a) For purposes of section 402.1 of the law (43 P.S. § 802.1), a contract or reasonable assurance that an individual will perform services in the second academic period exists only if both of the following conditions are met:
(1) The educational institution or educational service agency provides a bona fide offer of employment for the second academic period to the individual.
(2) The economic terms and conditions of the employment offered to the individual for the second academic period are not substantially less than the terms and conditions of the individual's employment in the first academic period. ..
(c) For the purposes of subsection (a), economic terms and conditions of employment include wages, benefits and hours of work.
The School District argues that 34 Pa. Code §65.161 is invalid insofar as it establishes an "economic equivalency" requirement.*fn2 It quotes the explanation of Section 402.1 of the Law in Haynes v. Unemployment Compensation Board of Review, 442 A.2d 1232, 1233 (Pa. Cmwlth. 1982): "The intent of the legislature in passing Section 402.1 was to eliminate the payment of benefits to school employees during summer months and other regularly scheduled vacations, on the rationale that such employees are able to anticipate and prepare for these non-working periods." It cites Lyman v. Unemployment Compensation Board of Review, 463 A.2d 1270 (Pa. Cmwlth. 1983), where the Court ruled that a long-term substitute counselor had received reasonable assurance of return under Section 402.1 based on her receipt of a May 1981 letter placing her on the rolls as a per diem substitute in the fall. A fiscal crisis and strike resulted in her receiving no assignments, but she acknowledged that the May 1981 letter was in good faith.
The School District also cites Board of Education, School District of Philadelphia v. Unemployment Compensation Board of Review, 609 A.2d 596 (Pa. Cmwlth. 1992), where long-term substitute teachers were converted to per diem substitutes at the end of the year under the district's policy. The Court considered the meaning of reasonable assurance of performance of service "in any such capacity" in the second year or period in Section 402.1(1), and it concluded that the antecedent was the phrase "in an instructional, research, or principal administrative capacity" in the same sentence. In Neshaminy School District v. Unemployment Compensation Board of Review, 426 A.2d 1245 (Pa. Cmwlth. 1981), the Court had held that Section 402.1(1) does not require reasonable assurance of employment in an identical capacity. As the per diem substitute positions were in an instructional capacity, Section 402.1(1) applied and the claimants were not eligible for benefits.
The School District emphasizes Section 201(a) of the Law, 43 P.S. §761(a), which provides: "[The Department] shall have power and authority to adopt, amend, and rescind such rules and regulations . and take such other action as it deems necessary or suitable. Such rules and regulations shall not be inconsistent with the provisions of this act." (Emphasis added.) See Teledyne Columbia-Summerill Carnegie v. Unemployment Compensation Board of Review, 634 A.2d 665 (Pa. Cmwlth. 1993) ...