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Vanderlaan v Tri-County Community Hospital 4.25

Section 48(2)

REMUNERATION, Pay in lieu of notice, Statutory construction

CITE AS: Vanderlaan v Tri-County Community Hospital, 209 Mich App 328 (1995)

Appeal pending: No

Claimant: James Vanderlaan

Employer: Tri-County Community Hospital

Docket No. B91-00104-117753

COURT OF APPEALS HOLDING: The MES Act does not require a contractual right to notice or payment in lieu of notice in order for monies received to be considered "amounts paid... in lieu of notice" thus rendering claimant ineligible for benefits.

FACTS: Claimant was discharged on June 14, 1990. Employee handbook provided that employer would give four weeks' notice to terminate, but could instead, pay four weeks' salary instead of notice. Claimant continued to receive regular pay checks for six weeks after he stopped working. The first four weeks were considered salary instead of notice by the employer and the last two were severance pay. The issue in this case was whether the four weeks pay were in lieu of notice and, therefore, remuneration. If so, claimant was not entitled to unemployment compensation for those weeks.

DECISION: Claimant received four weeks pay in lieu of notice (remuneration) following his termination and is ineligible for benefits.

RATIONALE: It is not necessary to prove a contractual right to notice in order to show pay in lieu of notice. The rules of statutory construction should be applied to give every word and phrase of Section 48(2) its plain and ordinary meaning. Contractual right is only one factor which may be considered in deciding whether or not claimant received remuneration. Other factors are employer's custom or policy and employee's expectation of payment.


14, 12, d3: N/A

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