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Krauss v. A. & M. Karagheusian Inc.

November 2, 1953


On appeal from Superior Court, Appellate Division.

For reversal -- Chief Justice Vanderbilt, and Justices Heher, Oliphant, Burling, Jacobs and Brennan. For affirmance -- None. The opinion of the court was delivered by William J. Brennan, Jr., J.


The Division of Employment Security allowed plaintiff's claim for unemployment compensation. Upon the employer's appeal, an Appeal Tribunal, after hearing, found that it did not appear that plaintiff was "available for work" as required by R.S. 43:21-4(c) and therefore held him to be "ineligible" for benefits. The Board of Review, on plaintiff's appeal, reviewed the Appeal Tribunal's decision on the record made before that body, reversed it, and allowed the claim. The employer appealed to the Superior Court, Appellate Division, which sustained the Board of Review. 24 N.J. Super. 277 (1953). We allowed certification on the employer's petition. 12 N.J. 351 (1953).

Plaintiff worked for defendant for 22 years. During the last 15 years of his employment he was a pump operator stationed in a cold, wet place full of heavy odors from wet washed wool. On January 12, 1951, at the age of 68 years, he voluntarily quit the defendant's employ. He has since received a monthly pension of $10.90 under the terms of a pension agreement entered into between plaintiff's union and the employer, which agreement became effective 11 days earlier on January 1, 1951. The agreement allowed an employee then 68 years of age the option of retiring on pension, or, if the union and the company agreed, to continue in his employment. The pension fund is provided by the employer without contribution by employees. The plaintiff is also receiving social security benefits of $93 per month.

The Appeal Tribunal and the Board of Review disagreed as to plaintiff's reason for quitting. The Appeal Tribunal found that it was "to take a pension." The Board of Review

concluded that "headaches and other ailments" due to exposure to the cold and wet caused him to leave. The Appellate Division considered that the board's finding should not be disturbed, as in its view there "was competent evidence undersetting the finding." Our own study of the record persuades us, however, that in this instance it is appropriate that we make an independent finding. R.R. 1:5-3(a).

Plaintiff's uncorroborated word is the only evidence to support his assertion that illness was the reason he quit. Several of his own admissions, however, taken with the other evidence in the record and considered in the light of his retirement so shortly after the effective date of the pension agreement, demonstrate that illness was not the reason. He admitted that he did not consult a physician at any time, or ever complain of his work conditions or ask to be transferred to other work. His employment records show that he lost virtually no time from work over several years. He testified, but the personnel manager denied, that he told the personnel manager on two occasions that the work was causing him headaches and that for that reason he could not go on. It is significant that he admitted that on both occasions, the first several months earlier and the second a week before he quit, he discussed retirement with the personnel manager. He admitted also that on another occasion he had sought to be laid off to qualify him for unemployment compensation. After he left he remained idle for several months before starting to look for other work. He stated at the hearing that he would not return to defendant's employ in his old job or in any other job. It is noted that under the terms of the pension agreement pension payments cease if the pensioner accepts reemployment with the company. We are satisfied, and find, that plaintiff did not leave because of illness but that he elected the alternative which was his under the pension agreement to retire and to take the pension, knowing that he was also eligible for social security benefits.

Unemployment benefits are not allowable unless the claimant meets the conditions for "eligibility" provided

in R.S. 43:21-4 and is not "disqualified" for any of the reasons set forth in R.S. 43:21-5. "Eligibility" has relation to "a status indispensable to the operation of the act," Muraski v. Board of Review, 136 N.J.L. 472 (Sup. Ct. 1948); "disqualification" is the penalty suffered by an otherwise eligible claimant involved in any of the specific affirmative acts enumerated in subsection 5. The distinction has importance in the instant case since a claimant who has voluntarily left work without good cause is "disqualified" for benefits under the New Jersey statute. Under the laws of a number of other states, such a claimant is "ineligible" for benefits. Of the several eligibility criteria in R.S. 43:21-4 we are here concerned only with subsection 4 (c) providing that it must appear that the claimant is "able to work, is available for work, and has demonstrated that he is actively seeking work," and, more particularly, with the requirement that the claimant must be "available for work." The disqualification provision involved, subsection 5 (a), provides that an individual shall be disqualified for benefits "for the week in which he has left work voluntarily without good cause, and for each week thereafter until he has earned in employment * * * at least four times his weekly benefit rate * * *."

The Unemployment Compensation Act provides social insurance, for the common good as well as in the interest of the unemployed individuals, against the distress of involuntary unemployment for those individuals who have ordinarily been workers and would be workers now but for their inability to find suitable jobs. Ludwigsen v. N.J. Department of Labor and Industry, 12 N.J. 64 (1953); W.T. Grant Co. v. Board of Review, 129 N.J.L. 402 (Sup. Ct. 1943); Valenti v. Board of Review, 4 N.J. 287 (1950); cf. Workmen's Compensation Act, R.S. 34:15-1 et seq., Nagy v. Ford Motor Co., 6 N.J. 341 (1951). The provisions for eligibility and disqualification are purposed to preserve the fund for the payment of benefits to those individuals and to protect it against the claims of others who would prefer benefits to suitable jobs. The basic policy of

the law is advanced as well when benefits are denied in improper cases as when they are allowed in proper cases. The contest of a claim before the agency is not, therefore, an adversary proceeding in the usual sense. The statutory scheme commits the administration of the eligibility and disqualification provisions to the Division of Employment Security, which is clothed with broad investigatory powers and the power of subpoena to enable its personnel charged with original and appellate determinations to get the facts necessary to a proper decision in each case. Each employing unit is required to keep employment records containing information prescribed by the agency, and these records may be inspected and copied by the agency. R.S. 43:21-11(g). Such information may not "be published or be open to public inspection * * * in any manner revealing the employing unit's identity, but any claimant at a hearing before an appeal tribunal, the commission or the board of review, shall be supplied with information from such records to the extent necessary for the proper presentation of his claim."

The briefs contain much argument as to the respective burdens of proof of claimant and employer upon the several issues raised before the agency. But the matter of burden of proof must necessarily be viewed in the light of the superior position in which the statute places the agency to enable it to know and get the facts to assure the correct discharge of its duty properly to allow or disallow benefits. The interested parties should ordinarily be expected to furnish the information required to determine the claimant's eligibility and whether there are any disqualifying factors. When this plaintiff's claim was filed, the original determination upon the claimant's eligibility was made without prior notice to the employers to be affected by a favorable determination. They were first entitled to be heard upon appeal. R.S. 43:21-6. An amendment ...

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