Conford, Kilkenny and Leonard. The opinion of the court was delivered by Kilkenny, J.A.D. Conford, S.j.a.d. (dissenting).
Claimant Robert C. Schock appeals from a final decision of the Board of Review, Division of Employment Security, holding that he is disqualified under N.J.S.A. 43:21-5(b) from receiving unemployment benefits for the period between March 10, 1964 and April 18, 1964 because he was discharged on March 10, 1964 for violation of the rules of his employer, Public Service Electric and Gas Company, presumably known by him, in that he left his employer's truck with the motor running unattended on a public street and was found by his supervisor in a nearby tavern drinking beer with a co-worker at a time when he should have been on the outside working on his job assignments.
N.J.S.A. 43:21-5(b) provides:
"An individual shall be disqualified for benefits:
(b) for the week in which he has been discharged for misconduct connected with his work, and for the 5 weeks which immediately follow such week (in addition to the waiting period), as determined in each case." (Italics ours)
Claimant contends that this disqualifying provision of the statute is not applicable herein because he was not finally and absolutely "discharged," but merely subjected, after an arbitration hearing, to a "disciplinary lay off" for this misconduct connected with his work. This contention is based upon the fact that, following his discharge, Schock challenged the right of his employer to discharge him, claiming that the discharge was not "for just cause," as required under the terms of the collective bargaining agreement between the Gas Workers Union, Inc., of which he was a member, and his employer, Public Service Electric and Gas Company.
Schock's claim of wrongful discharge was processed, pursuant to the grievance procedure set forth in the labor agreement, to a hearing before an arbitrator. Schock admitted leaving the company truck across the street from a tavern, unattended and with its motor running, and going into the tavern at 2:30 P.M. when he should have been working, and having a beer there. However, he asserted by way of defense or mitigation that he was having trouble with the motor and the company mechanic had advised him to leave the motor running, and that his going into the tavern was to borrow a time sheet from a co-worker, who was in the tavern eating a sandwich and who bought him a beer which he drank. He was doing this while waiting for the co-worker to go out to his truck for the time sheet. The arbitrator decided that Schock's deficiencies did not warrant a discharge, but that a suspension or disciplinary lay-off for the three months while the grievance procedure was pending was a severe and "more appropriate penalty" and would serve as a warning to Schock that "he must be careful in the future to live up to the letter of the rules and regulations of the Company and that any further infractions of the rules may well lead to his discharge." The arbitrator directed that Schock "be reinstated one week from the receipt of the award," which was dated June 13, 1964.
If the word "discharged" in N.J.S.A. 43:21-5(b) was intended by the Legislature to mean only an absolute,
final termination of the employment relationship, it is clear that Schock was not discharged within that limited meaning. The pronouncement by the employer that Schock was discharged did not make his discharge a binding finality. The grievance procedure under the collective bargaining procedure, whereby Schock's dismissal was subject to review, reversal or modification by an arbitrator, represented a contractual surrender by the employer of the absolute right to make the discharge of an employee conclusive by its own unilateral action. Donnelly v. United Fruit Co., 40 N.J. 61, 95 (1963). See also William J. Burns International Detective Agency, Inc. v. New Jersey Guards Union, Inc., 64 N.J. Super. 301 (App. Div. 1960). The arbitrator's decision directing Schock's reinstatement, binding by contract upon the employer, demonstrates the lack of finality in the employer's qualified right to discharge.
At most, the employer's discharge of Schock on March 10, 1964 was inchoate. It would not become consummate unless Schock elected not to challenge it under the grievance procedure of the labor agreement, or, having pursued that remedy, the matter was resolved by the arbitrator in favor of the employer. In the instant case the arbitrator reversed the penalty of an absolute discharge, substituted a disciplinary lay-off for three months, and directed Schock's reinstatement. Hence, Schock's employment relationship with Public Service Electric and Gas Company was only temporarily discontinued. It was not permanently terminated without any right to reinstatement, within the literal meaning of the word "discharged."
The Board and the employer contend that the Board is not "bound" by the arbitrator's determination but "must reach its own decision on the evidence adduced at the hearing and the law." No one disputes those propositions. The arbitrator's ruling is not a quasi-judicial application of the Unemployment Compensation Act to which the Board must defer. But the arbitrator's ruling was ...