REMUNERATION, Allocation of vacation pay, Bonus, Contractual
specification, Designation of vacation, Payment in lieu of vacation, Vacation shutdown
CITE AS: Blanding v Kelsey-Hayes Co, No. 80 022124 AE, Wayne Circuit Court (February 18, 1981).
Appeal pending: No
Claimant: James Blanding, et al
Employer: Kelsey-Hayes Co.
Docket No: B76 13949(1) 60456 et al
CIRCUIT COURT HOLDING: Where a contract requires payment of vacation pay in March of each year, and allows designation of a vacation shutdown period, the March payment is not remuneration.
FACTS: The claimants received their vacation pay in March of each year, as specified in the union contract. Section 19 of the contract allowed designation of a vacation shutdown period. "At various times in 1975 and 1976 the management at the three plants invoked the company's option, as provided in Section 19, to require vacations to be taken during a plant shutdown period."
DECISION: The payments in question are not remuneration under Section 48 of the Act.
RATIONALE: The Court cited Renown Stove Co v UCC, 328 Mich 436 (1950), and Hubbard v UCC, 328 Mich 444 (1950). "The lesson of the Hubbard and Renown Stove cases is that the questioned payments, being payable at the specific time and without regard to whether vacation time is also taken, do not qualify in the first instance under Section 48 as 'amounts paid ... for a vacation,' are bonuses instead, and are therefore not subject to the employer's right of allocation." "The rationale of the Supreme Court's interpretation of Section 48 seems clear. Although vacation pay is deemed remuneration, a payment cannot be considered remuneration for the period of unemployment if the employee is entitled to the payment in all events without regard to the period of unemployment."