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Irvan v. Borman's, Inc.

Supreme Court of Michigan
Feb 1, 1982
412 Mich. 496 (Mich. 1982)

Summary

explaining that a totally disabled claimant would have "no earning capacity"

Summary of this case from Omer v. Steel Techs.

Opinion

Docket No. 64928.

Argued June 2, 1981 (Calendar No. 6).

Decided February 1, 1982.



This case involves the question of whether compensation for injury under the Worker's Disability Compensation Act may be less than the minimum prescribed in § 351 (MCL 418.351; MSA 17.237[351]) when the average weekly wage of the injured employee is less than the statutory minimum.

MCL 418.101 et seq.; MSA 17.237(101) et seq.

We hold that it may not, reverse the decision of the Court of Appeals, and reinstate the award of the Workers' Compensation Appeal Board.

At the time of his injury, plaintiff was a part-time employee of the defendant, earning an average weekly wage of $28. Following the injury, defendant continued to pay plaintiff $28 a week. Plaintiff filed a petition for hearing in November, 1976.

On March 7, 1978, the Administrative Law Judge found that the correct rate of weekly compensation was the statutory minimum, $78. Defendant appealed and the appeal board affirmed. The Court of Appeals reversed and remanded for entry of an order consistent with their finding that plaintiff was not entitled to the statutory minimum.

Prior to our recent decision in Gusler v Fairview Tubular Products, 412 Mich. 270; 315 N.W.2d 388 (1981), the minimum compensation provided for in § 351 of the act had been adjusted upward each year in accordance with the increase in the average weekly wage in covered employment.
In 1976, the minimum for an individual with no dependents was $78 weekly. In Gusler we held the upward adjustment to be erroneous. The minimum for an employee with no dependents is $27 weekly as mandated by the Legislature.

The Court of Appeals panel in this case held that the minimum provided in § 351 applies only to full-time employees, refusing to follow the decision of another panel in Keyzer v Christian Rest Home, 32 Mich. App. 286; 188 N.W.2d 672 (1971), lv den 385 Mich. 758 (1971). They based their decision on our holding in Lahay v Hastings Lodge No 1965 BPOE, 398 Mich. 467; 247 N.W.2d 817 (1976), and Gasparick v H C Price Construction Co, 398 Mich. 483; 247 N.W.2d 824 (1976).

We are satisfied that the cases are distinguishable.

In Lahay the employee worked full-time for one employer and part-time for another. He was injured in his part-time employment and was totally incapacitated for such work. His injury did not affect his full-time work, however, and he continued in that employment.

We held there that a part-time employee's right to compensation was unaffected by earnings in contemporaneous full-time employment, and that his full-time employment should not be a factor in computing the employee's average weekly wage. The question presented here — whether a part-time employee is entitled to the statutory minimum of compensation — was not implicated in Lahay.

Likewise Gasparick. There the injured employee was engaged in seasonal work and the issue was the correct method of computing his average weekly wage in that circumstance under § 371. Entitlement to the statutory minimum was not involved.

There is no dispute here over the computation of this employee's average weekly wage. Plaintiff was employed specifically as a part-time worker, and his average weekly wage of $28 was determined by multiplying his hourly rate by the average number of hours worked.

See MCL 418.371(3); MSA 17.237(371)(3).

Defendant claims that the concluding sentence of § 371(1) prohibits payment to plaintiff of an amount exceeding plaintiff's average weekly earnings. The Court of Appeals majority agreed, stating that to do so would emasculate the last sentence of § 371(1):

"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."

Minor changes in language were made by 1980 PA 357, but the substance of the sentence was unchanged.
This section has been interpreted to mean earning capacity in the same employment or in other employment taken in place of the job in which claimant was injured. It does not apply to the concurrent employment situation. See Lahay v Hastings Lodge, 398 Mich. 467, 474; 247 N.W.2d 817 (1976); Bowles v James Lumber Co, 345 Mich. 292, 294; 75 N.W.2d 822 (1956).

We are not persuaded that our holding today will render ineffective the prohibition in § 371, as that section applies only tangentially to this factual context. A reading of § 371(1) in conjunction with § 351(1) discloses that the former applies only when the disability is partial. Implicit in the language "wage earning capacity after the injury in the same or another employment" is the requisite that the worker have some earning capacity after the injury.

Plaintiff here was totally incapacitated after his injury. The amount of compensation payable to a totally disabled employee is determined under § 351 of the act. That section stated in pertinent part:

"While the incapacity for work resulting from the injury is total, the employer shall pay or cause to be paid as hereinafter provided, to the injured employee, a weekly compensation of 2/3 of his average weekly wages * * *. Weekly payments shall not be less than $27.00 if there are no dependents * * * ". (Emphasis supplied.)

Nothing in the language reveals an intent by the Legislature to limit the payment of minimum compensation to full-time employees. Keyzer v Christian Rest Home, 32 Mich. App. 286, 288 (1971).

Section 371 differentiates between full- and part-time employees while no such distinction exists in § 351. Additionally, the language of § 371(1) implicitly deals with partial disability, whereas § 351 is clear in its use of the word "total". As stated in Keyzer, supra:

"The words employed clearly apply to both full-time and part-time employees. Had the Legislature desired to effect the interpretation now placed upon the act by defendant, it could easily have done so in simple language. It is not for this Court to add language to a clear and explicit statute." 32 Mich. App. 286, 288.

The primary function of the Worker's Disability Compensation Act is to compensate employees for loss of "earning capacity" and not merely lost wages. See Lahay v Hastings Lodge, 398 Mich. 467; Sims v R D Brooks, Inc, 389 Mich. 91; 204 N.W.2d 139 (1973); Gasparick v H C Price Construction Co, 398 Mich. 483; Frammolino v Richmond Products Co, 79 Mich. App. 18; 260 N.W.2d 908 (1977). At the same time the act seeks to avoid windfalls to those still able to work. A partially disabled worker may have his or her working capacity diminished only slightly, and still be able to remain in the work force earning close or equal to his or her pre-injury salary. Payment of the statutory minimum in this situation would net the worker more than his or her pre-injury wages. This situation the act seeks to avoid, and § 371(1) accomplishes that goal.

"Totally incapacitated" persons, having no earning capacity, cannot reap such a windfall. These persons, being unable to undertake substitute employment, would fall under the rule of § 351. The moment such a worker takes any type of substitute work, he or she would no longer be "totally incapacitated" and benefits would be limited under § 371(1).

We agree with the reasoning of Judge KELLY'S dissent where he stated:

"The emphasis should be on earning capacity, not on hours worked or wages earned. Part-time employment may be undertaken for any number of reasons unrelated to capacity.

"I would hold that where an injured worker's disability is total, as here, where we have an uncontested temporary total disability from unskilled labor, he or she is entitled to the statutory minimum. The loss of earning capacity is total. What would be the logic in limiting one who is out of the job market, suffering an employment-related injury, to a penurious fraction of minimum disability benefits merely because at the moment of injury his working time was inconsistent with his capacity? Such a result is incorrect and inhumane." Irvan v Borman's, Inc, 96 Mich. App. 232, 249; 292 N.W.2d 183 (1980).

The consequence which defendant seeks to avoid was recognized by this Court in Gasparick where we stated:

"Consequently, although designed to compensate an employee and not to punish an employer, the act itself reveals a legislative determination to require some employers in certain instances to bear the burden of their employees' incapacitating injuries despite the fact that, at times, the compensation paid will be in excess of the amount of actual wages that would have been earned by an employee." Gasparick v H C Price Construction Co, 398 Mich. 483, 490. See also Keyzer v Christian Rest Home, 32 Mich. App. 286, 288.

When a part-time employee is totally incapacitated the employer for whom he was working at the time of the disabling injury should shoulder the burden by being required to pay the compensatory minimum provided for in the act.

Though we find plaintiff is entitled to the minimum found in § 351 of the act, that amount has been modified by our recent decision in Gusler v Fairview Tubular Products, 412 Mich. 270; 315 N.W.2d 388 (1981). Remanded to the WCAB for computation of benefits in accord with Gusler.

COLEMAN, C.J., and WILLIAMS, LEVIN, FITZGERALD, RYAN, and BLAIR MOODY, JR., JJ., concurred with KAVANAGH, J.


Summaries of

Irvan v. Borman's, Inc.

Supreme Court of Michigan
Feb 1, 1982
412 Mich. 496 (Mich. 1982)

explaining that a totally disabled claimant would have "no earning capacity"

Summary of this case from Omer v. Steel Techs.
Case details for

Irvan v. Borman's, Inc.

Case Details

Full title:IRVAN v BORMAN'S, INC

Court:Supreme Court of Michigan

Date published: Feb 1, 1982

Citations

412 Mich. 496 (Mich. 1982)
315 N.W.2d 521

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