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Hamilton v W.A. Foote Memorial Hospital 4.18

Section 48 and 50

REMUNERATION, Severance Pay, Payment in lieu of notice, Credit weeks

CITE AS: Hamilton v W.A. Foote Memorial Hospital, No. 84-33223-AE Jackson Circuit Court (October 3, 1984).

Appeal pending: No

Claimant: Joseph W. Hamilton

Employer: W. A. Foote Memorial Hospital

Docket No: B83 09754 93402W

CIRCUIT COURT HOLDING: Payments made to claimant after his separation and after he stopped performing services were severance pay, in light of the fact both parties characterized them as such and claimant had no right to payment in lieu of notice.

FACTS: The claimant worked for the employer as a controller. The employer requested the claimant's resignation. After the claimant resigned the employer continued to pay the claimant on a bi-weekly basis for a six month period. Notably, both parties referred to the payments as "severance pay". Upon filing for benefits the claimant asserted the monies received were remuneration under the Act and could be used to establish credit weeks.

DECISION: No remuneration was earned and no credit weeks could be established based on the payments in question.

RATIONALE: It is necessary to determine the understanding of the parties at the time of the separation. Here, both parties referred to the payment as severance pay. Further, the claimant did not perform any services during the six month period.

The court quoted from Bolta Products v Director of Employment Security, 356 Mass 684: "A payment in lieu of dismissal notice may be defined as a payment made under the circumstances where the employing unit, not having given an advance notice of separation to an employee, and irrespective of the length of service to the employee, makes a payment to the employee equivalent to the wages which he could have earned had he been permitted to work during the period of notice. Severance pay, on the other hand, may be defined as a payment to an employee at the time of his separation in recognition and consideration of the past service he has performed for the employer and the amount is usually based on the number of years of service."


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