Present h i t terms for employees side in the following negotiation between employees and employer

Another way to minimize the impact of unemployment claims following an across-the-board cut in hours would be to use a shared work plan, an alternative to layoffs that allows employees whose hours have been reduced by a standard amount between 10% - 40% to remain employed and receive a percentage of their unemployment benefits equal to the cut in hours. The advantage is that the employer has a better chance of keeping good employees if they remain employed that way. Program requirements are online at https://twc.texas.gov/businesses/shared-work.

F. Severance Pay / Wages in Lieu of Notice    Top of Page

Employers sometimes make termination payments of various kinds to departing employees. The only termination payments that affect a claimant's benefit rights are severance pay (only the kind that is unilaterally promised by the employer) and wages in lieu of notice. This disqualification extends throughout the period represented by the payment. Other payments, such as incentives to sign a release/waiver agreement or payments made under negotiated contracts, are not severance pay or wages in lieu of notice and have no effect on a claimant's unemployment benefits.

Generally, severance pay is a payment that the employer has unilaterally obligated itself to give upon an employee's work separation (such as severance pay promised in a job offer letter or policy handbook). It is often based upon a set formula such as length of prior service. Wages in lieu of notice, on the other hand, is a payment that the employer has never obligated itself to give, either verbally or in writing. It is not based upon any particular formula, but rather upon whatever amount the employer deems appropriate. Just as the name implies, it is given to make up for the lack of advance notice of termination. It disqualifies a claimant because it is basically wage continuation, and the claimant can be regarded as still on the payroll for the period covered by the payment. The effect of such payments is to delay payment of benefits � during the period of coverage of such wages, the claimant is on "hold", and the benefits will not start until the wage period runs out.

Employers may run into some issues in termination payment cases if the payment was negotiated in some way (such as with a union agreement, a bilateral employment contract, or certain claim or lawsuit settlements, for example). Severance pay does not include a payment that was made to settle an existing claim or litigation, or was required under a negotiated contract. Neither term applies to other types of post-termination payments made for special reasons, such as an early leave incentive (which can result in a voluntary leaving disqualification), or an incentive paid to obtain a release or waiver of liability from the departing employee with regard to the Civil Rights Act of 1991, or to settle a claim or lawsuit that has already been filed, or in connection with a written contract that was negotiated between the employer and employee prior to the date of the work separation. There has been no clear position yet regarding the treatment of wages paid in lieu of the notice required under the WARN Act. Such payments are not the same as traditional wages in lieu of notice, which are purely voluntary, since the WARN payments are obligatory if the employer does not give the required notice. Despite variations over the years in the agency's rulings on whether WARN payments constitute disqualifying wages in lieu of notice, employers should mention any such payments when responding to an unemployment claim. Conversely, an employer will likely have no problem if the above factors are not present and if the check by which payment is made describes the payment as "[severance pay] / [wages in lieu of notice] from (date) to (date)". Since this can be a tricky area of unemployment law, employees and employers considering any kind of severance pay or release agreement in conjunction with unemployment claims should consult legal counsel prior to any final action.

IV. FOCUS: TELEPHONE APPEAL PROCEDURES    Top of Page

It has long been common for claimants and employers to criticize TWC appeal hearing procedures as being long on convenience for the agency, but short on consideration for the concerns of the parties. Every once in a while, changes come to those procedures, either through evolutionary change within the agency, statutory change, or through court action. Into the latter category falls the 1998 case of Narcisso Gutierrez, et al v. TWC, Civil Action H-96-2308 (U.S. District Court, Houston, Texas - not published). Four claimants for unemployment benefits had lost their appeal hearings for one reason or another, but had banded together with the assistance of Gulf Coast Legal Aid and Texas Legal Services to file a lawsuit against TWC charging, among other things, that the agency's appeal hearing procedures were so flawed that they effectively robbed claimants of due process. Specifically, they took exception to hearing procedures that allowed employers to refer to documents that the claimants did not have, that required claimants to call in for hearings, rather than be able to present their cases in person, that required claimants to spend money to send copies of evidentiary documents to both the hearing officer and the employers, and various other procedures that allegedly made it difficult for low-income parties to effectively participate in unemployment benefit appeal hearings. The district court was sympathetic, even questioning the underlying sufficiency of telephone hearings, leading TWC to enter into negotiations with the parties and their representatives that resulted in very broad and sweeping changes to the way the entire appeal process within TWC is handled. The changes went into effect on August 13, 1998, and include the following:

1. TWC will mail copies of documents that are relevant to the hearing and to the determination under appeal to all parties. "Parties" include the claimant; the claimant's representative if there is one; any employer involved in the claim, regardless of whether the employer happens to be a "party of interest" with respect to the initial claim; and the employer's representative, if there is one.

2. The above documentation will be mailed to the parties in the same envelope that contains the notice of hearing.

3. The packet includes the following:

1. the date of the claim notice

2. any claim protests

3. any information received by TWC in response to a claim

4. fact-finding statements taken by TWC during the claim investigation

5. any appeal letters or forms

4. The documents contained in the packet will be formally entered into the record of the case.

5. The procedures for hearings, including the Gutierrez settlement procedures, will be outlined in a variety of documents sent to parties in connection with claim filing, determinations, and hearing notices, as well as posted on TWC's Web site at https://twc.texas.gov/businesses/introduction-unemployment-benefits-appeals-employers.

6. Parties who need access to a telephone, speakerphone, or fax machine in connection with the hearing need only call the TWC Appeals Department to have arrangements made, up to and including private space in TWC local offices.

7. Witnesses giving testimony will first have to give identifying information to verify their identity. The nature of such information is explained and, if necessary, modified by the hearing officer.

8. The hearing officer will inform the parties that they have the right to request that witnesses be placed "under the rule" (sequestered somewhere else where they cannot hear the testimony of others). Of course, a party may not be excluded from any portion of the hearing.

9. The hearing officer must also remind parties that they may not prompt their witnesses or refer to documents not previously disclosed to the other party.

10. Documents sent in by the parties to the hearing officer will be entered into the record only if relevant and must be disclosed to the other party. Irrelevant documents will be excluded from the record and not considered in any way.

11. If the hearing officer has a relevant document from one party that is not in the possession of the other party, the hearing officer will first attempt to fax a copy to the other party. Failing that, the hearing officer will ask the other party if the party is willing to waive receiving a copy of the document. If a waiver is not granted, the hearing officer must grant a continuance to allow the other party a chance to receive a copy of the document.

Pay close attention to the hearing notice. Call in during the half-hour prior to the start time using the toll-free number highlighted on the notice, leave your name and number, and wait for the hearing officer to return the call. Make sure to get the name of the TWC employee who takes your first call. Ensure that the incoming call line stays clear and that your staff knows to put the hearing officer's call through. Have all of your witnesses ready to go, complete with phone numbers of witnesses at other locations. Be sure to have your notes with you in case you have to call from a location other than your office.

If you miss a hearing and lose the case, you may request a reopening of the hearing, but the first issue at the new hearing will be whether you had good cause to miss the previous hearing. To have a better chance of doing that, you should call the hearing officer beforehand if you know you cannot participate. Ask for a postponement, even if you feel there is little chance one will be granted, and document the call. Good cause to miss a hearing is generally something that was outside the party's power to control.

There has been a positive development in the aftermath of the Gutierrez settlement. A strategy largely untapped by employers has been to carefully review the claimant's statements to TWC at various levels of the claim and appeal process and to bring any discrepancies to the attention of hearing officers and the Commission. With the advent of the new procedure that automatically brings to the employer copies of the fact-finding statements of the claimant, more employers than ever before are learning to use claim statements in the appeal process.

V. WHAT HAPPENS DURING THE APPEAL TRIBUNAL HEARING?    Top of Page

This is the first level of appeal. If you lose the initial determination, the appeal you file is to the Appeal Tribunal. A hearing officer will be appointed to hear your case. The Appeals Department will send you and the claimant a hearing notice, usually about 10 - 14 days in advance of the hearing. Most hearings are held by telephone. Follow the instructions on the hearing notice exactly, including the correct number to call (it is the toll-free number in bold print beside the telephone icon in the black-bordered box - do not call the hearing officer's number shown below the hearing officer's name unless you are calling for some reason other than to participate in the hearing). You should call in during the half-hour before the start of the hearing and leave your phone number with the receptionist. Be sure to take down the name of the person who handled your call, and note the time of your call for your records. The hearing officer will then call you and the claimant and any witnesses at other locations and hold a "teleconference".

Ensure that when the hearing officer calls, the incoming phone line is clear, and that your staff expects the call and is ready to properly handle it.

It is vitally important that you have all of your evidence ready to present at the AT hearing. If you have written documentation to offer as exhibits for your case, you must send copies to both the hearing officer and to the claimant in advance of the hearing. Send the copies to the claimant by registered mail, return receipt requested for your own protection. If you will not be at your office when you call, have copies of your important documents with you.

Have any witnesses ready to go, complete with phone numbers of witnesses at other locations. Nothing is worse than to claim you have somebody who can support your version of the facts, only to have to confess that you do not have that person ready to testify or do not know where the witness is. The very worst thing is to have to admit that you did not know that witnesses were necessary. Of course, witnesses are necessary. This is the United States; under our legal system, an accused has the right to face his or her accusers. If you allege that the claimant was fired for some type of misconduct, but have no eyewitnesses, and the claimant is giving what sounds like a credible denial, your company will lose the case. It is as simple as that. To have a good chance of winning a case, you need what are known as "firsthand" witnesses. Firsthand witnesses have direct, personal knowledge of what the claimant did to bring about his discharge or of what happened to cause the claimant to quit.

EXAMPLE OF LOSING TESTIMONY: "We fired the claimant after his supervisor told us he saw the claimant removing company property without permission." The claimant then wins by stating "No, I didn't."

EXAMPLE OF WINNING TESTIMONY: "I was the claimant's supervisor. I saw him removing boxes of company property, and he did it without my permission." At this point, the claimant either knows he is going to lose, or else tries a last-ditch excuse by stating that he had permission from someone else, whereupon the well-prepared employer immediately offers to let the hearing officer take testimony from that person as well.

It is not a sufficient excuse for failing to present firsthand testimony that you cannot believe the claimant would deny the charges of misconduct; that you thought written statements or even notarized affidavits would be "good enough"; that the eyewitnesses no longer work for you; or that you thought testimony from people who only heard the reports was "firsthand". Claimants have been known to deny misconduct when their UI benefits are on the line. The problem with written statements and affidavits is that they cannot be cross-examined; sworn testimony subject to cross-examination carries by far the greatest weight in a case. If the eyewitness is a former employee, call him or her and ask for their testimony. If they refuse to cooperate, contact the hearing officer and ask that the person be subpoenaed. If they cannot be located in time for the hearing, then and only then will you have a decent argument that a rehearing should be granted if and when you locate them.

Remember, testimony based on reports from others is secondhand. The person who made the original report is the firsthand witness.

During the hearing, remain calm. It might help to make an outline of your testimony to assist you in hitting all the important points. However, do not read from a prepared statement. It will sound obviously scripted and artificial and might create an unfavorable impression in the mind of the hearing officer.

In addition, hearing officers appreciate brevity. Employers who sound well-organized and in command of their facts always appear more credible. In a close case, that might well tip the balance in your favor.

If the claimant seems to be trying to provoke a confrontation, do not accept the invitation. How the parties conduct themselves during the hearing has at least a subtle effect on how the hearing officer evaluates the relative credibility of both sides. Again, if the case is a close one, that can make all the difference.

AT hearings are meant to be informal hearings and are designed to bring out all the important facts without getting bogged down in courtroom-style procedures. Here is the way a normal hearing proceeds:

1. Identification of the parties and witnesses; confirmation of addresses; explanation of the law and basic hearing procedures; oath or affirmation given by witnesses; designation of who the parties' primary representatives will be.

2. Brief statement of case history.

3. Determination of whether the work separation was voluntary or involuntary; if voluntary, the claimant testifies first; if involuntary, the employer testifies first.

4. Whoever testifies first gives their explanation of the work separation; the party representative then presents testimony from each witness in turn; after each witness testifies, the representative can ask them questions and the other party's representative can cross-examine them.

5. The other party then presents its side of the story and presents any witnesses in turn; the party representative can ask questions and the other party's representative can cross-examine those witnesses.

6. The parties are asked if they have anything to add, and a final opportunity for cross-examination is given if more new testimony comes up.

7. The hearing officer tells the parties to expect a written decision and closes the hearing.

All hearings are recorded. If a further appeal is necessary, it can sometimes help to order a copy of the recording so that the party filing the appeal can determine what might have gone wrong. Do not be concerned about being under oath and about being recorded. Presumably, you followed your own policies and were fair with the claimant, and thus you have nothing to worry about. In the absence of a court order, the recording of the hearing cannot be released to anyone but the claimant and employer, or their representatives.

Most employers do not hire attorneys to represent them during appeal hearings. As noted before, the hearings are designed to bring out the facts, not to subject ordinary people to strict courtroom procedures. However, if the situation involves a disgruntled former employee who has threatened a lawsuit over the discharge or related matters (see the following paragraph), it might be a good idea to hire an attorney. This is especially true if the claimant hires an attorney and is represented by the attorney at the hearing -- there is always the risk of saying the wrong thing with a hostile attorney listening to every word. If you hire an attorney, be sure that the attorney is at the very least an experienced employment law attorney; it would be preferable if the attorney also has experience with TWC claims and appeals. If the attorney serves as the party representative during the hearing, that person can be the one to cross-examine the claimant. To be effective, the attorney will of course have to be very familiar with the facts of the case and with the employer's "take" on the events leading to the work separation.

Although the TUCA provides in Section 213.007 that the doctrine of collateral estoppel does not apply to rulings of TWC and courts in unemployment claims, i.e., rulings made on unemployment claims have no preclusive or evidentiary effect in legal proceedings unrelated to the unemployment claim, employers should still be careful about how they handle unemployment claims and appeals. There are two main reasons for caution: first, unemployment claims are known as good ways to get information that can be used in other types of legal actions, and second, inconsistencies between what an employer says to TWC and what it says in another type of claim or lawsuit can give an ex-employee's attorney a way to attack the employer's credibility in the other proceeding.

Once the hearing is completed, the hearing officer makes the decision as promptly as possible, usually within a day or two. The decision is always made in writing and is signed by the hearing officer. If a further appeal is necessary (the so-called "Commission appeal" - the second level of appeal), there is a 14-day deadline from the date the Appeal Tribunal decision is mailed.

VI. CONCLUSION    Top of Page

By keeping certain basic principles in mind before, during, and after employees are employed, an employer can prepare itself against the day when an unemployment claim is filed. It can also know which claims are likely to be winners, which ones run the risk of being losers, and which are simply timewasters. By developing sensible workplace policies, documenting problems as well as successes, being consistent in employee relations, and keeping on top of developments in the law, an employer can approach TWC claims and appeals with much greater confidence.

Return to Businesses & Employers
Return to TWC Home

Why is collective bargaining important for both the employee's and the employer?

What bargaining is used in negotiations between labor and management?

Which type of bargaining promotes win win situation for employer as well employee?

What are the 4 stages of collective bargaining?