On remand from the Supreme Court, whose opinion is reported at 76 N.J. 527 (1978).
Fritz, Bischoff and Morgan. The opinion of the court was delivered by Bischoff, J.A.D.
In an earlier opinion concerning this appeal, 159 N.J. Super. 530 (App. Div. 1977), we held that the claimant Michael J. Malady, who was receiving full unemployment benefits while working part-time, was liable to refund the entire amount of the benefits received, even though he would have been entitled to receive partial unemployment benefits pursuant to N.J.S.A. 43:21-3(b) had he reported his earnings truthfully and accurately. At that time we declined to review the propriety of a $480 penalty imposed upon claimant by the Division of Employment Security, Department of Labor (now the Division of Unemployment and Temporary Disability Insurance of the Department of Labor) (hereafter Division), pursuant to N.J.S.A. 43:21-16(a) because we believed that issue was not properly before us.
The Supreme Court granted certification, 74 N.J. 248 (1977), and in an opinion reported at 76 N.J. 527 (1978) affirmed Malady's liability to refund the full amount of the unemployment benefits received for the reasons stated by us. That court held, however, that it was error for us to decline to consider issues relating to the imposition of the penalty pursuant to N.J.S.A. 43:21-16(a) and remanded the appeal for further consideration and "a determination as to the Division's procedures for imposing and reviewing a N.J.S.A. 43:21-16(a) penalty and the validity of the imposition of the fine under those procedures." Id. at 533. The remand included directions to answer specific questions posed by that court and discussed in detail later in this opinion.
The record discloses the following sequence of events relating to the imposition of the N.J.S.A. 43:21-16(a) penalty.
On February 4, 1975 Malady received from the Division a form identified as #B-189D, entitled "Determination and Demand for Refund of Unemployment Benefits and Imposition of Penalty and Disqualification Because of Conflicting Wages." The form stated that Malady had been overpaid and was liable to refund $1,824 in unemployment compensation benefits he had received; that since these "benefits were claimed and collected through false and fraudulent representation," he was disqualified for benefits for 17 weeks. There followed on the form a notice of right to appeal to the Appeal Tribunal. Below the notice of the right to appeal, there appeared the following:
[B]ecause you collected the above payment to which you were not entitled, the Division, in accordance with the provisions of Section 16(a) of the Unemployment Compensation Law, imposes a fine of $480.00.
Malady was directed to pay a total of $2,304. He appealed to the Appeal Tribunal and, at the time of the hearing held on May 23, 1975, sought to question the penalty of $480. The hearing examiner refused to consider the penalty, explaining that the Appeal Tribunal did not have jurisdiction to review a 16(a) fine.
The Appeal Tribunal, in its first decision dated May 29, 1975, disposed of the penalty issue with the single statement: "The Appeal has no jurisdiction over fines." The Board of Review, on appeal to it, remanded the matter to the Appeal Tribunal for rehearing. The decision of the Appeal Tribunal following rehearing again disposed of the penalty issue with the one line: "This Tribunal has no jurisdiction with respect to the fine," and otherwise affirmed the prior determination. Claimant again appealed to the Board of Review and, though the propriety of the fine was placed in issue, no mention of it is made in the final decision of that
Board. When the matter came before us we likewise declined, without discussion, to consider that issue. The Supreme Court, in its remand of that issue to us, said:
The decision to remand the matter on this phase of the case takes into account the post-appeal information furnished by the Attorney General that the Division is already in the process of revising its "Determination and Demand for Refund" form to make clear that its purpose is to give the claimant an opportunity to pay voluntarily the fine being sought by the Division prior to the initiation of any judicial proceedings under N.J.S.A. 43:21-16(a). We cannot assess whether this development is relevant or significant and whether it may serve to alter grounds for adjudication. The Appellate Division should also consider this facet of the case on the remand. [76 N.J. at 534]
This directive requires us to review the procedure followed by the Division in imposing the penalty to see if present-day concepts of procedural due process are being afforded claimants. The basic requirements of procedural due process are:
(2) Opportunity for a fair hearing, and
(3) The availability of ultimate review.