November 1, 2011
Recently, the Indiana legislature amended the law defining "just cause" for the purpose of Indiana's unemployment compensation system to potentially include termination for excessive absenteeism, even if that absenteeism is due to illness. Today, the Indiana Court of Appeals addressed whether a policy is "reasonable" under the new law in
P.M.T., Inc. v. Review Board of the Ind. Dep't of Workforce Dev., ___ N.E.2d ___ (Ind. Ct. App. 2011), Cause No. 93A02-1105-EX-389. The answer is fairly worker-friendly.
less..
An employee received leave from her employer under the FMLA to care for her terminally ill husband. Through August 19, 2010, the employee had used 471.03 of the 480 hours of FMLA leave and had accumulated six absences. After August 19, 2010, the employee had two emergency absences, one to treat a severe rash due to psoriasis and another when her son called to inform her that her husband was unconscious on the floor in their home. These absences exhausted the employee's FMLA leave and put her over her employer's limit of seven allowed absences. The woman was terminated for excessive absenteeism.
The woman applied for unemployment compensation benefits, was awarded those benefits, and the employer appealed. On appeal, the Court noted that the statute held that a rule had to be "reasonable and uniformly enforced" for a termination under that rule to be for "just cause." The Court relied heavily upon cases decided prior to the statutory amendment to hold that a rule must protect "the interests of the employees as well as those of the employer" to be reasonable and that the circumstances justifying a termination based on excessive absenteeism should not be "the result of circumstances beyond that employee's control."
In this case, the employer's policy did not contain any exemptions for extended personal illness or verified emergencies. The Court held that this supported the conclusion that the employer's attendance policy was unreasonable. In order for a policy to be reasonable, it must do the following:
protect employees with legitimate reasons for an absence and [to satisfy] the stated intention of the legislature to "provide for payment of benefits to persons unemployed through no fault of their own."
The employee was entitled to unemployment compensation benefits.
Although the Court stated that a rule against excessive absenteeism is not per se unreasonable if it subjects an employee to termination for excused as well as unexcused absences, it is difficult to see how excused absences based on illness will not be protected by the Court's interpretation of "reasonable." This will be a boon to Indiana's employees and it will be interesting to see if there are attempts to amend the definition of "just cause" again in the near future.
Lesson:
A policy covering absenteeism is not reasonable for the purposes of Indiana's unemployment compensation system if it does not make exceptions for absences incurred through no fault of the employeee.
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