Bradshaw v. California Employment Stabilization Commission

SHENK, J.

The petitioner-appellant appeals from a judgment entered after an order sustaining a demurrer to his petition for a writ of mandate to vacate a decision of the California Unemployment Insurance Appeals Board denying his claim for unemployment insurance benefits.

For reasons of economy the petitioner was discharged from his job with the San Francisco Chronicle on or about November 29, 1952. Pursuant to a collective bargaining agreement between his union and the Chronicle, he received upon *610Ms discharge three items of compensation in addition to his final week’s salary: (1) pay for the fraction of his next annual vacation that had accrued as of the date of his discharge (hereinafter called “vacation pay”); (2) pay in lieu of two weeks’ notice; and (3) “dismissal pay” in an amount dependent upon his length of service.

The petitioner filed for unemployment insurance benefits. The claims examiner of the Department of Employment decided that since he had received vacation pay, pay in lieu of notice and dismissal pay equal to his salary for 41% working days, he would not qualify for benefits until 41% working days after his discharge. After a hearing, a Department of Employment referee affirmed the denial of benefits. The Unemployment Insurance Appeals Board in turn affirmed the referee’s decision and denied benefits. Bradshaw petitioned the superior court for a writ of mandate under Code of Civil Procedure, section 1094.5, to vacate the decision of the Appeals Board and grant him benefits for the 41% days covered by the supplemental payments. A demurrer to the petition was sustained, Bradshaw elected not to amend and judgment was entered for the respondents.

The petitioner does not now contest the decisions denying him benefits because he received vacation pay and pay in lieu of notice. This court will therefore consider only the propriety of denying unemployment benefits for a period equal to the number of days’ dismissal pay he received.

This case calls for an interpretation of section 1252 of the Unemployment Insurance Code. In part, that section provides : “An individual is ‘unemployed’ in any week during which he performs no services and with respect to which no wages are payable to him . . . Section 1251 provides that unemployment compensation benefits are payable to “unemployed individuals.” It is conceded by the petitioner that dismissal payments under the contract are “wages” within the meaning of that term as used in section 1252. The question then is whether dismissal payments are payable “with respect to” a period before the employee’s date of discharge or “with respect to” a period after that date. The petitioner contends that dismissal payments are made “with respect to” the weeks during which he admittedly performed services for the Chronicle. The respondents contend that such payments are made “with respect to” the weeks following the petitioner’s discharge. Decisions in other states on the subject herein discussed are not helpful. It is stated *611in 25 American Law Reports 2d at page 1070 that a general rule on the subject “is not justified.”

The state’s purpose in providing unemployment insurance is “to reduce involuntary unemployment and the suffering caused thereby to a minimum.” (Unempl. Ins. Code, § 100.) An unemployed person who satisfies the requirements of the Unemployment Insurance Act is entitled to receive from the Unemployment Fund payments reasonably sufficient to tide him over until he can secure employment.

The parties to the contract involved in this proceeding obviously intended the dismissal payments provided for therein to serve the same purpose as unemployment compensation, namely, to tide the discharged employee over until he could secure employment. Although dismissal pay coverage under the contract was broader than coverage under the Unemployment Insurance Act, the fact still remains that an award of unemployment benefits to the petitioner for the dismissal period would seem to duplicate the dismissal payments he has received.

Section 1252 contemplates that wage payments are to be allocated to specific periods. The week “with respect to which” a wage payment is made by an employer to an employee depends upon the provisions of the employment contract. However, interpretations of employment contracts and of the Unemployment Insurance Act that result in duplication of payments to a discharged employee are not encouraged. This principle finds support in decisions of this court involving duplication of workmen’s compensation by unemployment disability benefits. (Garcia v. Industrial Acc. Com., 41 Cal.2d 689 [263 P.2d 8]; Aetna Life Ins. Co. v. Industrial Acc. Com., 38 Cal.2d 599 [241 P.2d 530]; Bryant v. Industrial Acc. Com., 37 Cal.2d 215 [231 P.2d 32].) The policy against duplication of payments should not be thwarted by any so-called liberal construction of the act, especially when such construction is not justified by the language of the contract. Unemployment insurance was not intended to protect employees already protected for the same period by their private contracts.

The policy against duplication of payments would require an employee who claims what appear to be duplicating payments to show that there is no duplication. The petitioner has not done so. The record discloses that he has seen fit to rely solely on the language of the contract. That lan*612guage alone is insufficient to establish that the dismissal payments were made “with respect to” a period before discharge and thus would not be duplicated by an award of unemployment compensation.

A holding that dismissal payments should be disregarded in determining whether an employee is entitled to unemployment benefits would create an anomalous distinction between dismissal pay on the one hand and “in lieu of notice pay” and “vacation pay” on the other. There is authority in this state to the effect that the receipt of “vacation pay” or “in lieu of notice pay” temporarily disqualifies an employee from claiming unemployment insurance benefits. (See Shand v. California Emp. Stab. Com., 124 Cal.App.2d 54 [268 P.2d 193]; Jones v. California Emp. Stab. Com., 120 Cal.App.2d 770 [262 P.2d 91].) By analogy dismissal pay should have the same effect. The petitioner, however, notes that in Gilliam v. California Emp. Stab. Com., 130 Cal.App.2d 102 [278 P.2d 528], one sort of supplemental payment was held not to disqualify the recipient from claiming unemployment insurance benefits. In that case the employees had the option of working without vacation and receiving pay in lieu thereof. Upon discharge they were given pay in lieu of a vacation they had not taken during a prior period. The court distinguished the Shand and Jones cases by pointing out that in those cases the employee while he was employed did not have the option of taking extra pay in lieu of vacation ■—he could only be sure of getting that extra pay if he was discharged. The factual situation was obviously different in the Gilliam case, and the court there concluded that “in lieu” vacation payments could be allocated to a period before discharge notwithstanding the Shand and Jones cases. The petitioner contends that dismissal pay is more analogous to “in lieu” vacation pay than to the normal vacation pay involved in the Shand and Jones cases. This contention is untenable. As noted, the basis for the Gilliam award was the employee’s option while he was employed to receive the supplemental payments. In contrast, the dismissal payments made to the petitioner were not available to him unless and until his employment was terminated.

The petitioner complains that the Unemployment Insurance Appeals Board has taken inconsistent positions with respect to the treatment of dismissal pay. It is said that when determining whether a claimant has qualified for benefits by earning sufficient money during a base period prior to his discharge *613(see Unempl. Ins. Code, §§ 1277 and 1281), the Appeals Board allocates dismissal pay to the period when it is received. It is enough to say that the propriety of the board’s practice in allocating dismissal pay for the purpose of determining the claimant’s earnings during the base period is not involved in the present proceeding.

Both contracting parties contend that the allocation urged by the opposition is in violation of the constitutional prohibition against impairment of the obligation of contracts. An affirmance of the judgment in this case will not affect the rights of the petitioner under his employment contract. His right to dismissal payments will not be impaired. Nor would the employer be forced to make two payments under the employment contract in the event of a reversal.

It is concluded that the Appeals Board and the superior court properly construed the statute and held that, as a matter of law on the undisputed facts, the receipt of dismissal pay temporarily prevented the petitioner from qualifying for unemployment benefits.

The judgment is affirmed.

Spence, J., and McComb, J., concurred.