Ohio.

If Section 123 is so construed, it would be operating unfairly in the case of seamen and depriving them of existing benefits, which is an added reason for its elimination.

ADDITIONAL FACTORS PROVE ABSENCE OF DISCRIMINATION UNDER OHIO LAW

Additional factors attest to the absence of discrimination against Great Lakes seamen. The Federal Government has long recognized the special problems facing certain seasonal industries in connection with the payment of unemploy ment compensation benefits. A bulletin issued by the Social Security Board in 1938 summarizes some of the reasons for imposing seasonal restrictions on the payment of unemployment compensation benefits. These are (1) seasonal unemployment is predictable and certain each year; (2) high wage rates compensate seasonal employees for their periods of unemployment; and (3) benefits paid to seasonal workers during the off season amount to subsidization of seasonal industries and encourage seasonal operation. This criteria for treating an industry as seasonal is particularly applicable to Great Lakes vessel operation.

First, the seasonal nature of employment in the Great Lakes vessel industry is predictable and certain each year. The fact that Great Lakes vessel operations are seasonal is well known. This seasonal characteristic cannot be substantially altered by human desire or business requirements. Vessel operators have long recognized that if efficient complements of officers and crews are to be available from year to year, it is necessary that these men be compensated on a basis which will provide rates during a 40-week navigation period substantially equal to those which shore industry offers during the calendar year. The records of employment longevity and the number of men annually seeking work aboard Great Lakes vessels demonstrates the general effectiveness of this program.

Secondly, the high wage rates paid Great Lakes seamen compensate these employees for the 12 weeks each year they are unemployed because of the end of the Great Lakes shipping season. A man employed the full 40-week season on a Great Lakes vessel works as many as or more hours in those 40 weeks than the shoreside employee does in 52 weeks. He earns more in those 40 weeks than a shoreside employee earns in 52 weeks. To illustrate, the average weekly wage for Great Lakes seamen (total wages divided by 52, i.e., including the 12 weeks during the winter when the Great Lakes seaman receives nothing) in 1964 (the last year for which Ohio figures are available) was $188.43. The average weekly shoreside wage for all covered employment in Ohio was $115.63. The average weekly wage of $188.43 for Great Lakes seamen is, with one minor exception, higher than the average weekly wage in any other industry in Ohio. In no other state do average weekly earnings exceed those of the Great Lakes vessel industry. Beyond this, however, while employed on Great Lakes vessels seamen are furnished board and lodging without charge to them. In terms of total income, particularly for seamen without families, board and lodging represents a significant addition. By its very nature, vessel employment requires long periods away from home and consequently it is more attractive to young men without family attachments. A recent survey covering individuals employed in unlicensed ratings on Great Lakes vessels indicated that 67.9% of such seamen were unmarried.

As we previously pointed out, Great Lakes seamen, while working only 40 weeks a year, devote about the same amount of time to their jobs as do shoreside employees working 52 weeks. The main difference is that most shoreside employees are not asked to work Saturdays, Sundays and holidays throughout the full year, while Great Lakes seamen work all days during the season but are not required to work at all during the 12-week winter interval. The seaman's leisure time, therefore, comes to him in one 12-week stretch while the leisure time of shoreside workers comes two days each week throughout the entire year. How foolish it would seem were a legislative proposal advanced to pay unemployment benefits for Saturdays, Sundays and holidays to a shoreside worker with a full-time job. Yet that, in effect, is what is being now proposed for Great Lakes seamen.

Thirdly, benefits paid to Great Lakes seamen during the off season would amount to subsidization of a seasonal industry. When the Ohio unemployment compensation law was originally extended to seamen, many shoreside employers advocated that the industry be treated as seasonal. These employers contended that the payment of benefits to Great Lakes seamen during the winter or closed season of navigation would result in a marked disparity between benefits to

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seamen and contributions from their employers. Seamen, it was said, would constitute a drain on the total unemployment insurance fund and the Great Lakes vessel industry would, in effect, be subsidized by shore employers.

Our studies indicate that Ohio unemployment compensation taxes if paid into the reserve fund at the maximum rate of 2.7% heretofore provided by Ohio law would approximate $498,000 annually. Assuming that 90% of eligible employees would make application for benefits during the winter or closed season of navigation, our analysis shows that payments from the fund during the 12-week winter season alone would aggregate approximately $2.9 million, or a ratio of benefits to contributions of about 5.8 to 1. This computation makes no provision for benefits paid out during the 40-week navigation season. Based on recent experience, it can be anticipated that the total benefits payable to Great Lakes seamen were the seasonal restriction removed from Ohio law would exceed $3.48 million, with the maximum employers' contributions being 1/7 of that amount. Such a situation would certainly draw heavily on the reserve fund accumulated from the contributions of all employers and would constitute an outright subsidy to a group of employees whose average annual wage, with one minor exception, is already the highest in the state.

The Great Lakes maritime industry wants to pay its own way. It can do so, however, only if the seasonal provisions of Ohio law relating to Great Lakes seamen are preserved, and certainly there is every reason for doing so. Great Lakes seamen are familiar with the seasonal character of the Great Lakes shipping industry and recognize that such employment is not available during the winter months. There is absolutely no economic justification for paying benefits to seamen during the winter or closed season of navigation inasmuch as the shipping season is susceptible of precise definition and the compensation received by Great Lakes seamen for such period is in excess of most shoreside wages paid in Ohio for a full year of employment.

Finally, if Section 123 is retained, we earnestly urge that the judicial review provisions of the bill be broadened to authorize maritime employers to initiate review proceedings. The denial of the Federal unemployment tax credit to maritime employers would not affect the contributions required of such employers under state law. Thus the state, in effect, would have no monetary stake in seeking judicial review of a determination by the Secretary of Labor denying to maritime employers the credit against the Federal unemployment tax. In such a proceeding the real adverse parties would be the Secretary of Labor and maritime employers, and the judicial review provisions of the bill should be amended to reflect this fact. We believe a better solution to be, however, the elimination of Section 123.

Appeals Docket No. 349302-M-1

STATE OF OHIO BOARD OF REVIEW

BUREAU OF UNEMPLOYMENT COMPENSATION

COLUMBUS, OHIO

In re claim of: NED F. BABCOCK, ET AL, 2611 North Main Street, Findlay, Ohio, Employer: NORTHERN OHIO SUGAR COMPANY, Box 89, Findlay, Ohio.

(S.S. No. 272–22-8666)

CORRECTED DECISION

By decisions on reconsideration of various dates between February 18, 1965, and March 30, 1965, the Administrator allowed applications for determinations of benefit rights on a non-seasonal basis for each of these claimants on the ground that claimants were following the same type of work for this employer both in and outside the season provided in the determination of this industry as seasonal. He further assessed charges against this employer based on the combination of seasonal weeks and wages with non-seasonal weeks and wages and allowed such applications as non-seasonal.

On various dates between February 24, 1965, and April 2, 1965, the employer filed timely appeals to the Board of Review.

Hearing on the appeals was had on July 23, 1965, at Findlay, Ohio, after due notice given to all parties of time, place and date.

Appearances: Six of the claimants appeared in person and all of the claimants were represented by Mr. George Freeman, President, Local 293. Northern Ohio

Sugar Company was represented by L. F. Coon, cashier, and Mr. Robert Dose, of E. I. Evans & Company.

FINDINGS OF FACT

On April 11, 1963, in Case Number 214812, in the Common Pleas Court of Franklin County, Ohio, in an action between Northern Ohio Sugar Company and Donald B. Leach, Administrator, Bureau of Unemployment Compensation, the Court found that Northern Ohio Sugar Company is a seasonal employer in the 17 week period beginning the third Sunday in September in each year with respect to the processing of sugar beets into sugar. The Entry in that case reversed the decision of the Administrator of July 18, 1962, and allowed the application for seasonal employment dated September 2, 1960, and left the seasonal period and other details to be determined by the Administrator in conformity with its Journal Entry and the Ohio Unemployment Compensation Law. This Entry was approved by Northern Ohio Sugar Company, William B. Saxbe, AttorneyGeneral and attorneys for Donald B. Leach, Administrator, Bureau of Unemployment Compensation.

Thereafter, the Administrator, on August 20, 1963, issued his Journal Entry, reciting the action of the Common Pleas Court and affirming the seasonal employment in this industry with a seasonal period of 17 weeks beginning the third Sunday in September of each year with respect to the processing of sugar beets into sugar. He amended this Journal Entry on November 4, 1963, and in the Amended Entry, in the third paragraph, excluded from the operation of the seasonal liimtation, "the service of any individual whose nature of employment may be performed during all or a part of the season and outside the season." He further, in the fifth paragraph, set up a provision which limited the right to benefits to such period of 17 weeks in the season in any case where claimant had more than 50% of his base period earnings in the seasonal period set out. He set up the qualifications for a seasonal claim to be 7 weeks of work in the base period with earnings of at least $140.00 and a benefit year of 9 times the weekly benefit amount plus an additional week for any 2 credit weeks worked beyond 7 weeks in the season. This qualification is in place of the normal requirement for a non-seasonal claim of 20 weeks of work in the base period and earnings of at least $400.00.

In

In paragraph 6 of this Order, he set up permission for a claimant to combine seasonal and non-seasonal employment aggregating more than 20 weeks; to provide that such a claimant would be eligible for benefits outside the season. such case, charges for benefits paid during the season were charged to the seasonal employer and all other benefits were charged to the non-seasonal employer. This Order was not appealed.

The evidence at the present hearing establishes that Northern Ohio Sugar Company operates two plants: one at Fremont, Ohio, and another at Findley, Ohio. These plants are concerned only with the making of beet sugar in the season and, outside the season, with the maintenance of the plant and the warehousing and handling of the sugar products for sale. Sugar beets, following their harvest, which date is determined by the growing season in Ohio, must be processed within a very short time or they will spoil. The testimony in the instant hearing clearly establishes that the work performed by all of these claimants during the season is entirely different from the work performed by these same claimants for Northern Ohio Sugar Company outside the season. The normal complement in each of the plants outside the season is from 50 to 60 employees. During the season, each plant employs as many as 200 people. Most of the claimants outside of the season, which the company calls the "Campaign," work in general laborer classifications. During the season they each have a specifically designated job having to do with the reduction of the beets to juice and the reduction of the juice to sugar. None of the classifications occupied by any of these claimants during the season could be followed outside the season as that type of work is not performed outside the season. In all of these claims, the Administrator has combined seasonal and nonseasonal weeks and wages and has charged Northern Ohio Sugar Company as though no seasonal applications had been made, making no separation as to charges for seasonal work as different from non-seasonal and has used the seasonal credits where possible to add to the credit weeks of the claimant although, in some cases, the claimant has sufficient non-seasonal credit weeks to establish a valid application without use of the seasonal weeks. On none of these claims, has the Administrator restricted the liability of the employer or the rights of the claimant by reason of the fact that part of the work was seasonal.

REASON

Issue: Validity of application-charges to employer-seasonal employment. Section 4141.33 (A), Revised Code of Ohio, provides:

"Seasonal employment means employment in an occupation in an industry which because of climatic conditions or because of the seasonal nature of such employment it is customary to operate only during regularly recurring periods of less than thirty-six weeks in any consecutive fifty-two weeks. Any employer who claims to have seasonal employment may file with the administrator of the bureau of unemployment compensation a written application for classification of such employment as seasonal. Whenever in any employment it is customary to operate because of climatic conditions or because of the seasonal nature of such employment only during regularly recurring periods of less than thirty-six weeks duration, benefits shall be payable only during the longest seasonal periods which the best practice of such industry will reasonably permit. The administrator shall ascertain and determine, or redetermine, after investigation and due notice, such seasonal periods for each such seasonal employment. Until such determination by the administrator, no employment shall be deemed seasonal. When the administrator has determined such seasonal periods, he shall also fix the proportionate number of weeks of employment and earnings required to qualify for benefit rights in place of the weeks of employment and earnings requirement stipulated in division (R) of section 4141.01 and section 4141.30 of the Revised Code, and the proportionate number of weeks for which benefits may be paid. The administrator may adopt rules and regulations for implementation of this section."

The Administrator has allowed these applications as non-seasonal applications on the ground that the claimants performed work of a nature that could be performed during all or a part of the season and outside of the season in this industry. In doing so, he has relied on the third paragraph of his Amended Order, “Employer's Exhibit #1," in this hearing.

The evidence clearly shows however that the work of each of these claimants was severable in nature as to its seasonal and non-seasonal employment. The seasonal work could only be performed in the season and the non-seasonal, which was performed outside the season, was such as might have been performed both in and out of the season but was available only outside the season with this employer. Claimants were engaged during the season in the making of sugar in various jobs which could only be performed during that period when the crop was available and could not have been performed at any other time of the year. The season of the industry is determined by the availability of the beets and by the fact that the product, until it is made into sugar will spoil and must be made into sugar in this season.

The testimony will establish that the seasonal work performed by the claimants was not highly skilled; could be taught in a day or two, but the fact that it was not unique or highly skilled does not remove it from the classification of seasonal work. It is seasonal not only because of the nature of the work but because of the time when it must be performed. The work performed by these claimants outside the season dealt with storage, warehousing and handling for sale of the product which had become stabilized and this work could be performed at any time in the year for this or other employers who had the finished product available.

It is therefore clear that the Administrator has not followed in these determinations the third paragraph of his own Order. The exclusion of these claimants from the seasonal order on the basis used in the decisions on reconsideration was improper.

In addition to this error of the Administrator, it appears that his determinations are improper on another ground.

The sole, apparent reason for the seasonal statute in the law was to give protection to a seasonal employer who, because of the limited nature of his work, could offer regular work only during the season and should be charged only for unemployment during that period. The effect of the seasonal order therefore should be to leave the seasonal employer in a protected status and not as liable as the regular employer under non-seasonal employment classifications.

The work of this employer is seasonal in 17 weeks in each year; in 35 weeks he furnishes some non-seasonal work. Like all non-seasonal employers, he is liable for claims to any individual who works in 20 or more weeks in the non

seasonal period of the 35 weeks, and a maximum claim may be perfected against him on a regular basis by working 32 of the 35 non-seasonal weeks. He is also liable to any individual on a seasonal claim who works in 7 or more weeks in the 17 week period of the season. This is a liability the ordinary non-seasonal employer does not bear.

By the Administrator's Journal Entry, the seasonal employer is also liable for an additional type of claim which vitiates entirely any protection he might gain by the Court's decision that he is a seasonal employer.

The sixth paragraph of the Journal Entry permits a valid application based on any combination of seasonal and non-seasonal weeks exceeding 20 weeks, computed as an ordinary claim and payable for unemployment outside the season, the only limitation being that claims outside the season are charged to the nonseasonal employer and in the season, charged to the seasonal employer. However, the weekly benefit amount and duration of benefits are increased for any claim by the addition of the seasonal weeks and wages and, to the extent of this increase in weekly benefit amount and duration of benefits, violate the purpose of the original determination of seasonal employment.

By reason of the employer's liability under this sixth paragraph, he is, with only minor possible differences, liable as widely as a non-seasonal employer and in addition has the burden of paying seasonal claims in the season based on 7 to 17 weeks which the ordinary non-seasonal employer is entirely free of. Any construction of the language of the statute which so subverts its purpose cannot be proper. This statute is clear and unequivocal. It permits seasonal or nonseasonal claims or one in place of the other. It does not provide for combining of the weeks of qualification and earnings in the two types of claim as has been done here. Section (C) of 4141.33, Revised Code of Ohio, does permit such combination in the claims of seamen, but in such combination, all of the claim is seasonal if more than 50% of the base period weeks are seasonal and the claimant can then claim only in the season. In addition, this is a specially legislated section limited only to seamen claims and does not give the Administrator authority to apply it to general claims. The sixth paragraph of the Administrator's Journal Entry is improper and assumes powers not granted under Section 4141.33 (A), Revised Code of Ohio. It furthermore violates the clear provisions of that section which provides only for seasonal claims in place of regular claims. (Referee's italic.)

The validity of the Journal Entry in paragraph 6 is not aided by the fact that it was not appealed and thus became final. Paragraph 6 of the Journal Entry assumed powers not granted and such unauthorized action can never become final. To hold otherwise would be to confirm in the Administrator the power of legislation.

DECISION

Decisions on reconsideration of various dates between February 18, 1965, and March 30, 1965, allowing applications on a non-seasonal basis are hereby modified as follows:

* Ned F. Babcock, seasonal claim basic weekly amount, $42.00; dependency allowance, $6.00; weekly benefit amount. $48.00; duration 9 weeks. Total potential charge is $576.00, all to Northern Ohio Sugar Company.

John R. Bame, non-seasonal claim; basic weekly amount, $32.00; dependents allowance, $3.00; weekly benefit amount, $35.00; duration 23 weeks. Potential charge to Northern Ohio Sugar Company is $832.00. Potential charge to Hancock Brick & Tile is $70.00.

* Carl O. Butler, seasonal claim; basic weekly amount, $42.00; dependents allowance, none; weekly benefit amount, $42.00: duration 9 weeks. Total potential charge is $504.00, all to Northern Ohio Sugar Company.

* Norman Callaway, seasonal claim; basic weekly amount, $36.00; dependents allowance, $11.00; weekly benefit amount, $47.00: duration 9 weeks. Total potential charge is $517.00, all to Northern Ohio Sugar Company.

* Dennis J. Dorman, seasonal claim; basic weekly amount, $42.00; dependents allowance, none; weekly benefit amount, $42.00; duration 9 weeks. Total potential charge is $462.00, all to Northern Ohio Sugar Company.

* Alfonso Flores, seasonal claim; basic weekly amount, $42.00; dependents allowance, $11.00: weekly benefit amount. $53.00; duration 9 weeks. Total potential charge is $636.00, all to Northern Ohio Sugar Company.

Ralph T. Gallegos, non-seasonal claim; basic weekly amount, $33.00; dependents allowance, $8.00: weekly benefit amount, $41.00. Total potential charge is $943.00, all to Northern Ohio Sugar Company.