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Lahay v. Hastings Lodge

Michigan Court of Appeals
Feb 25, 1975
59 Mich. App. 145 (Mich. Ct. App. 1975)

Summary

In Lahay v Hastings Lodge, 59 Mich. App. 145, 150; 229 N.W.2d 348 (1975), lv granted 394 Mich. 809 (1975), "other employment" was said to "appl[y] only to a job which replaces the job from which the employee was disabled".

Summary of this case from Gardner v. Ford Motor Company

Opinion

Docket No. 19758.

Decided February 25, 1975. Leave to appeal granted, 394 Mich. 809.

Appeal from Workmen's Compensation Appeal Board. Submitted Division 3 January 14, 1975, at Grand Rapids. (Docket No. 19758.) Decided February 25, 1975. Leave to appeal granted, 394 Mich. 809.

Claim by Richard Lahay against Hastings Lodge No. 1965 BPOE and St. Paul Insurance Company for compensation for injuries suffered on a part-time job. From a decision of the Workmen's Compensation Appeal Board affirming the hearing referee's determination that the injury was compensable but reducing his determination of the amount of compensation, the plaintiff appeals. Reversed and remanded.

McCroskey, Libner, VanLeuven, Kortering, Cochrane Brock, P.C. (by Seymour L. Muskovitz), for plaintiff.

Smith, Haughey, Rice Roegge (by Lance M. Mather), for defendants Hastings Lodge and St. Paul Insurance Company.

Before: ALLEN, P.J., and N.J. KAUFMAN and O'HARA, JJ.

Former Supreme Court Justice, sitting on the Court of Appeals by assignment pursuant to Const 1963, art 6, § 23 as amended in 1968.


This is an appeal by plaintiff Richard Lahay from a decision of the Workmen's Compensation Appeal Board which reduced the amount of compensation awarded by the referee. Plaintiff requests this Court to reinstate the referee's award.

At the time he was injured, plaintiff held a full-time job as a claims examiner and a part-time job as a bartender for defendant Hastings Lodge. He was injured at his part-time job with defendant. His injury disabled him from his part-time job but did not significantly interfere with his full-time employment. Prior to his injury, plaintiff was paid $213.46 per week at his full-time job and $32.50 per week, based on 13 hours at $2.50 per hour, plus two meals, at his part-time job. Following his injury, plaintiff was compensated by defendant $32.50 per week for his inability to work as a bartender. A dispute arose as to whether $32.50 was the correct rate of compensation, and a Rule V hearing was held before a referee.

The referee determined that plaintiff was totally disabled from his part-time job, as a result of his injury, from February 13, 1971 to June 9, 1971, and partially disabled thereafter. The referee also found that the amount of compensation, $32.50 per week, was incorrect. Using the formula set forth in the Workmen's Compensation Act, the referee determined the proper compensation to be $70 per week. That figure represented a percentage of plaintiff's "average weekly wage", which the referee found to be $105.

Defendant appealed this determination to the Workmen's Compensation Appeal Board. The appeal board agreed with the referee's finding as to the extent of plaintiff's disability, but, by a three-to-two vote, reversed the referee's determination on compensation. It read the Workmen's Compensation Act formula to set compensation at $32.50 per week.

The sole issue on appeal is whether the appeal board correctly applied the statutory formula for setting compensation. The statute which prescribes the formula is MCLA 418.371; MSA 17.237(371) which provides in relevant part:

"(1) The weekly loss in wages referred to in this act shall consist of such percentage of the average weekly earnings of the injured employee computed according to the provisions of this section as shall fairly represent the proportionate extent of the impairment of his earning capacity in the employment in which he was working at the time of the injury, the same to be fixed as of the time of the injury, but to be determined in view of the nature and extent of the injury. The compensation payable, when added to his wage earning capacity after the injury in the same or another employment, shall not exceed his average weekly earnings at the time of such injury.

"(2) Average weekly wage means the weekly wage earned by the employee at the time of his injury, inclusive of overtime, premium pay, and cost of living adjustment, and exclusive of any fringe or other benefits which continue during disability, but in no case less than 40 times his hourly rate of wage or earning. When it is found that the established normal work week for the employee's classification of employment in the establishment of the employer where the employee suffered a personal injury is less than 40 hours, then the average weekly wage shall be established by multiplying the employee's hourly rate or earning by the number of hours customarily worked in the employee's classification or employment in that place of employment or his actual earned wages, whichever is greater.

"(3) When a hearing referee finds that the employee was employed specifically and not temporarily on a part-time basis, the average weekly wage shall be determined by multiplying the hourly rate or earning by the average number of hours worked in the part-time employment. When it is found that the employee has worked an average of 25 hours or more per week in all of his current employments, he shall not be considered a part-time employee. * * *" (Emphasis supplied.)

Subsections (2) and (3), read together, require that when a specifically employed part-time employee, who works more than 25 hours in "all of his current employments" is disabled, his compensation benefits are computed as if he worked a 40-hour week at the job from which he was disabled. In the instant case, the referee held that plaintiff's two jobs totaled more than 25 hours. The referee thus computed plaintiff's average weekly wage as 40 hours at $2.50 per hour plus meals or $105. Compensation was then computed on a percentage based on the extent of plaintiff's disability.

The appeal board majority agreed with the referee's computation but argued that the law prevents plaintiff from receiving more compensation as a result of being disabled then he earned prior to his disability. Before his injury, plaintiff received $245.96 per week ($213.46 full-time plus $32.50 part-time). After his injury, he received $283.46 ($213.46 full-time plus $70 compensation for part-time disability). This result, the majority argued, was barred by subsection (1) of MCLA 418.371; MSA 17.237(371), supra. The majority specifically cited the part of subsection (1) which requires:

"The compensation payable, when added to his wage-earning capacity after the injury in the same or other employment, shall not exceed his average weekly earnings at the time of such injury." (Emphasis supplied.)

The majority read the words "other employment" to apply to plaintiff's full-time job and set off his full-time salary against the referee's award. It, thus, reduced the amount of the award to limit plaintiff's total weekly compensation to the amount he had received before he was injured.

The crucial question here is whether the set-off provision of MCLA 418.371(1); MSA 17.237(371)(1) is applicable to a case in which an employee is wholly disabled in his part-time job, but not disabled in his primary job. This section will apply if "other employment" refers to plaintiff's full-time job. Plaintiff, as well as the appeal board minority, argues that "other employment" applies only to a job which replaces the job from which the employee was disabled, Pulley v Detroit Eng Machine Co, 378 Mich. 418; 145 N.W.2d 40 (1966), not to a full-time job held contemporaneously with the part-time job. Plaintiff cites the case of Bowles v James Lumber Co, 345 Mich. 292; 75 N.W.2d 822 (1956) as controlling.

We agree with plaintiff and with the well-reasoned minority opinion of the appeal board. We find the facts in Bowles, supra, to be identical to those here and the holding of the Michigan Supreme Court decisive. Bowles also involved an employee who held a part-time job and a full-time job and who was injured at his part-time job. In Bowles, the part-time employer argued that it owed nothing to the employee because after his injury, his full-time job earnings exceeded his earnings from both jobs prior to his injury. The Court disagreed with the employer and noted that the statute requires compensation awards to be determined only with reference to the job at which the employee was injured, not to separate, contemporaneous jobs. It concluded that, inasmuch as compensation may not be increased by taking into account what the employee earned on another, unrelated job, Buehler v University of Michigan, 277 Mich. 648; 270 N.W. 171 (1936), it may not be decreased by taking that other job into account.

Defendant argues that amendments made to the statute, which we construe here, after the Bowles case vitiate the authority of the Bowles opinion. Prior to 1965 and 1969 amendments, which left MCLA 418.371; MSA 17.237(371) as quoted above, the statute read:

"(1) Weekly loss. The weekly loss in wages referred to in this act shall consist of such percentage of the average weekly earnings of the injured employee computed according to the provisions of this section as shall fairly represent the proportionate extent of the impairment of his earning capacity in the employment in which he was working at the time of the injury, the same to be fixed as of the time of the injury, but to be determined in view of the nature and extent of the injury. The compensation payable, when added to his wage earning capacity after the injury in the same or another employment, shall not exceed his average weekly earnings at the time of such injury.

"(2) The term 'average weekly wage', as used in this act, is defined to be the weekly wage earned by the employe at the time of his injury but in no case less than 40 times his hourly rate of wage or earning." MCLA 412.11; MSA 17.161.

This section was repealed by PA 1969, No. 317 § 898 and replaced by MCLA 418.371; MSA 17.237(371).

A comparison of the pre- and post-amendment statutes shows that Section (1), which contains the set-off clause, was left unchanged, Section (2) expanded, and a Section (3) added. What was altered by the amendments was the "40 hour presumption". Prior to 1965, all employees were presumed to work a 40-hour week for purposes of determining their average weekly wage. The expanded Section 2 and new Section 3 provided means for employers to show that the disabled employee actually worked less than 40 hours. Defendant and the appeal board majority point to the last sentence of Section 3 as authority for their claim that Bowles has been legislatively overruled. That sentence reads:

"When it is found that the employee has worked an average of 25 hours or more per week in all of his current employments, he shall not be considered a part-time employee."

They argue that since an employer may look to an employee's other employment to determine the number of hours on which compensation is based, he may also look at the wages earned in those other jobs to determine whether a set-off should be imposed.

We disagree. The amendments modified the "40 hour presumption", but did not change the basic working of the statute. Before the amendments, an employee was presumed to work 40 hours at the job from which he was disabled. After the amendments, only one who worked more than 25 hours at all his jobs was presumed to work a 40 hour week. This change relates only to the compensation status of the employee for purposes of payment, not to the actual computation of his award. Both before and after the amendments, however, the statute looks only to the job at which the employee was injured to determine the lost earnings for which he should be compensated. The amendments did not alter this "job-by-job" viewpoint.

While we share the concern of the controlling members of the appeal board that it is contrary to the basic policy of the Workmen's Compensation Act to allow an employee to earn more while disabled than he earned before disablement, we note that this problem was squarely presented to the Legislature by the result in Bowles. The Legislature's silence in the face of Bowles must be construed as consent to the accuracy of the interpretation. Magreta v Ambassador Steel Co, 380 Mich. 513, 520; 158 N.W.2d 473, 476 (1968).

The decision of the Workmen's Compensation Appeal Board is reversed and the matter remanded for entry of an order for compensation benefits in accordance with this decision. Costs to plaintiff.


Summaries of

Lahay v. Hastings Lodge

Michigan Court of Appeals
Feb 25, 1975
59 Mich. App. 145 (Mich. Ct. App. 1975)

In Lahay v Hastings Lodge, 59 Mich. App. 145, 150; 229 N.W.2d 348 (1975), lv granted 394 Mich. 809 (1975), "other employment" was said to "appl[y] only to a job which replaces the job from which the employee was disabled".

Summary of this case from Gardner v. Ford Motor Company
Case details for

Lahay v. Hastings Lodge

Case Details

Full title:LAHAY v HASTINGS LODGE NO. 1965 BPOE

Court:Michigan Court of Appeals

Date published: Feb 25, 1975

Citations

59 Mich. App. 145 (Mich. Ct. App. 1975)
229 N.W.2d 348

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