
    DAVIS v MERRILL SCHOOL SYSTEM
    1. Workmen’s Compensation — Limit on Compensation — Wage-Earning Capacity — Average Weekly Earnings — Actual Earnings.
    A section of the Workmen’s Compensation Act which provides that compensation payable for an injury, when added to a claimant’s wage-earning capacity after the injury, shall not exceed the claimant’s average weekly earnings at the time of the injury does not prohibit awarding a claimant an amount greater than the claimant was actually making in the employment in which he was injured (MCLA 418.371[1]; MSA 17.237[371] [1]).
    2. Workmen’s Compensation — Average Weekly Wage — 40-Hour Week.
    The average weekly wage of a claimant for workmen’s compensation may be less than 40 times his hourly rate of wage where the established normal work week for the employee’s classification of employment in the establishment of the employer where the employee suffered a personal injury is less than 40 hours (MCLA 418.371[2]; MSA 17.237[371] [2]).
    3. Workmen’s Compensation — Average Weekly Wage — Special Circumstances.
    Where there are special circumstances under which the weekly wage of a claimant for workmen’s compensation cannot justly be determined by applying other provisions of the Workmen’s Compensation Act, an average weekly wage may be computed by dividing the aggregate earnings during the year prior to the injury by the number of days when work was performed and multiplying such daily wage by the number of working days customary in the employment, but not less than five (MCLA 418.371[5]; MSA 17.237[371] [5]).
    References for Points in Headnotes
    [1-4] 58 Am Jur, Workmen’s Compensation §§ 284, 309.
    Workmen’s compensation: right to compensation as affected by fact that injured employee earns, or is offered, as much as, or more than, before the injury. 149 ALR 413.
    
      4. Workmen’s Compensation — Part-Time Employment — Disabling Injury — Average Weekly Wage.
    In a workmen’s compensation case against a school system, arising out of a disabling injury to a teacher of an adult education class in upholstery, a determination that $11.88 is the average weekly wage of the claimant teacher is unjust where the injury occurred during her part-time employment but it prevented her from pursuing her full-time employment as an upholsterer and where the claimant teacher actually earned well over $100 a week in both her employments; therefore, the average weekly wage of the claimant teacher, who was paid $11.88 a night and who worked one night a week, is to be calculated by multiplying the claimant teacher’s daily wage of $11.88 by 5, resulting in an average weekly wage of $59.40 (MCLA 418.371[5]; MSA 17.237[371] [5]).
    Appeal from Workmen’s Compensation Appeal Board.
    Submitted November 5, 1975, at Lansing.
    (Docket No. 22062.)
    Decided January 26, 1976.
    Leave to appeal applied for.
    Claim by Ethel L. Davis against Merrill School System and Hartford Insurance Company for workmen’s compensation. A referee’s order awarding compensation was modified by the Workmen’s Compensation Appeal Board. Defendant appeals by leave granted.
    Reversed and remanded for reentry of the referee’s order.
    
      Shanahan & Scheid, for plaintiff.
    
      Davidson & Breen, P. C., for defendants.
    Before: Allen, P. J., and Bronson and R. M. Maher, JJ.
   R. M. Maher, J.

Plaintiff was injured while teaching an adult education class. The Workmen’s Compensation Hearing Referee determined that plaintiff’s average weekly wage was $59.40, entitling her to compensation of $39.60 per week. The appeal board modified the decision of the hearing referee by establishing plaintiffs average weekly wage at $190, entitling her to $84 per week compensation. This Court granted leave to appeal.

While teaching an adult education course in upholstery for defendant, plaintiff caught her right hand in an air compressor. As a result, she lost the first joint of her index finger and up to the second joint of her middle finger. Plaintiff further testified that she could barely move her ring finger and could not return to work. The referee found plaintiff to be totally disabled for work as an instructor and indicated that "the only real question in this case is the manner in which to arrive at an average weekly wage”.

Plaintiff was hired by defendant to work 2-1/2 hours, one night per week, for 6 weeks.at $4.75 per hour. She regularly worked in an upholstery shop. The hearing referee, relying on the formula found in Mora v Fowlerville Public School System, 37 Mich App 371; 194 NW2d 481 (1971), took the 2-1/2 hours at $4.75 per hour to arrive at an $11.88 daily wage. He multiplied that by 5 to reach a weekly wage of $59.40. The appeal board, on the other hand, rejected Mora’s application to the present case. It relied on the first sentence in MCLA 418.371(2); MSA 17.237(371X2) and multiplied plaintiff’s hourly wage of $4.75 by 40 to arrive at a weekly wage rate of $190. We reverse the appeal board’s decision and reinstate the hearing referee’s order for compensation benefits.

MCLA 418.371; MSA 17.237(371) supplies the formula for computing compensation:

"(1) The weekly loss in wages referred to in this act shall consist of such percentage of the average weekly earnings of the injured employee computed according to the provisions of this section as shall fairly represent the proportionate extent of the impairment of his earning capacity in the employment in which he was working at the time of the injury, the same to be fixed as of the time of the injury, but to be determined in view of the nature and extent of the injury. 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.

"(2) Average weekly wage means the weekly wage earned by the employee at the time of his injury, inclusive of overtime, premium pay,' and cost of living adjustment, and exclusive of any fringe or other benefits which continue during disability, but in no case less than 40 times his hourly rate of wage or earning. When it is found that the established normal work week for the employee’s classification of employment in the establishment of the employer where the employee suffered a personal injury is less than 40 hours, then the average weekly wage shall be established by multiplying the employee’s hourly rate or earning by the number of hours customarily worked in the employee’s classification or employment in that place of employment or his actual earned wages, whichever is greater.

"(3) When a hearing referee finds that the employee was employed specifically and not temporarily on a part-time basis, the average weekly wage shall be determined by multiplying the hourly rate or earning by the average number of hours worked in the part-time employment. When it is found that the employee has worked an average of 25 hours or more per week in all of his current employments, he shall not be considered a part-time employee.

"(4) If the hourly earning of the employee cannot be ascertained, or if no pay has been designated for the work required, the wage, for the purpose of calculating compensation, shall be taken to be the usual wage for similar services where such services are rendered by paid employees.

"(5) Where there are special circumstances under which the weekly wage cannot justly be determined by applying the above provisions, an average weekly wage may be computed by dividing the aggregate earnings during the year prior to the injury by the number of days when work was performed and multiplying such daily wage by the number of working days customary in the employment, but not less than 5.”

While we must decide the method for determining plaintiffs "average weekly wage”, in order to avoid as much confusion as possible, we will begin our analysis by pointing out which portions of the statute are not applicable to the case at bar. Subsection (1) provides:

"The weekly loss in wages referred to in this act shall consist of such percentage of the average weekly earnings of the injured employee computed according to the provisions of this section as shall fairly represent the proportionate extent of the impairment of his earning capacity in the employment in which he was working at the time of the injury, the same to be fixed as of the time of the injury, but to be determined in view of the nature and extent of the injury. 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!”

This subsection does not show how to compute the "average weekly wage”. It merely states that the "average weekly earnings” should be computed according to § 371 of the act and that plaintiff should in no way be permitted to get more money after his injury by combining his benefits and his existing wage-earning capacity than he received before his injury. Defendant-employer, in this case, argues that subsection (1) prohibits awarding more to plaintiff than plaintiff was actually making in her employment with defendant. This is not true. See Mora v Fowlerville Public School System, supra, Bowles v James Lumber Co. 345 Mich 292; 75 NW2d 822 (1956), where the award was greater than plaintiffs "average weekly earnings” from the job in which he was injured. Subsection (1) is not applicable to the case at bar.

Subsection (3) provides:

"When a hearing referee finds that the employee was employed specifically and not temporarily on a part-time basis, the average weekly wage shall be determined by multiplying the hourly rate or earning by the average number of hours worked in the part-time employment. When it is found that the employee has worked an average of 25 hours or more per week in all of his current employments, he shall not be considered a part-time employee.”

This gives us the formula for calculating the "average weekly wage” for "part-time employees”. However, the subsection does not apply to employees that work "an average of 25 hours or more per week in all of [their] current employments”. Plaintiff in our case worked more than 25 hours per week as an upholsterer and teacher. Subsection (3) does not apply.

Subsection (4) states:

"If the hourly earning of the employee cannot be ascertained, or if no pay has been designated for the work required, the wage, for the purpose of calculating compensation, shall be taken to be the usual wage for similar services where such services are rendered by paid employees.”

In the present case, plaintiff’s "hourly earning” is readily ascertainable, rendering subsection (4) inapplicable.

Either subsection (2) or subsection (5) is the applicable provision. Subsection (2) is the most difficult to comprehend:

"Average weekly wage means the weekly wage earned by the employee at the time of his injury, inclusive of overtime, premium pay, and cost of living adjustment, and exclusive of any fringe or other benefits which continue during disability, but in no case less than 40 times his hourly rate of wage or earning. When it is found that the established normal work week for the employee’s classification of employment in the establishment of the employer where the employee suffered a personal injury is less than 40 hours, then the average weekly wage shall be established by multiplying the employee’s hourly rate or earning by the number of hours customarily worked in the employee’s classification or employment in that place of employment or his actual earned wages, whichever is greater.”

The appeal board relied upon the first sentence of this subsection to compute plaintiffs "average weekly wage”. It figured that "in no case” could his "average weekly wage” be "less than forty times his hourly rate of wage or earning”. Multiplying plaintiff’s hourly rate ($4.75) by 40, it concluded that his "average weekly wage” was $190. By doing so, the appeal board entirely neglected the second sentence of subsection (2). However, it is this sentence, which seems to specifically deal with the present situation since the "established normal work week” in the schools for an adult education teacher was definitely "less than forty hours”. This being the case, the "average weekly wage” is to be computed by multiplying plaintiffs "hourly rate * * * by the number of hours customarily worked in the employee’s classification” or plaintiffs "actual earned wages, whichever is greater”. Since the record does not indicate the "number of hours customarily worked” by adult education teachers, subsection (2) requires us to use plaintiffs "actual earned wages” which were $11.88 per week.

The appeal board erred in its use of subsection (2) to arrive at an "average weekly wage” of $190 for plaintiff. If this section had been applied properly, the appeal board should have found that the plaintiff’s average weekly wage was $11.88 since her normal work week was less than 40 hours. To find an "average weekly wage” of $11.88, however, would be unjust in this case. Plaintiffs injury occurred during her part-time employment with defendant but it also prevented her from pursuing full-time employment as an upholsterer. An award based on an "average weekly rate” of $11.88, when plaintiff was really earning well over $100 per week is not fair. Thus, we turn to subsection (5):

"Where there are special circumstances under which the weekly wage cannot justly be determined by applying the above provisions, an average weekly wage may be computed by dividing the aggregate earnings during the year prior to the injury by the number of days when work was performed and multiplying such daily wage by the number of working days customary in the employment, but not less than 5.” (Emphasis supplied.)

The referee, in this case, calculated that plaintiff received $11.88 for each day that she worked for defendant. He then multiplied this figure by 5. (Although plaintiff only worked one day a week, subsection (5) sets 5 as the minimum.) Using this calculation, the referee determined that plaintiffs average weekly wage was $59.40. Defendant supports the referee, agreeing that a finding of $11.88 per week would be "unjust”.

As previously mentioned, the appeal board would have us distinguish Mora v Fowlerville Public School System, supra, relied on by the referee as authority for his method of calculation, from the instant case. It claims that this Court reached its decision in Mora because it was impossible to calculate an absolute hourly wage for the decedent. This Court, in Mora, did base its decision on the problems involved in computing an hourly wage and Mora is distinguishable from the case at bar. However, that is no reason for refusing to apply subsection (5) to the facts of this case.

The decision of the Workmen’s Compensation Appeal Board is reversed and the matter remanded for reentry of the referee’s order for compensation benefits. Costs to defendants. 
      
       Formerly MCLA 412.1i; MSA 17.161, § 371 was amended in 1965 to insert the second sentence of the second paragraph and the third paragraph, thus altering the "40 hour presumption”.
     
      
       We are aware of this Court’s opinion in Lahay v Hastings Lodge No 1965, BPOE, 59 Mich App 145; 229 NW2d 348 (1975), iv granted, 394 Mich 809 (Í975). Assuming that case was correctly decided, the "established normal work week for the employee’s classification of employment” in Lahay must have been 40 or more hours. The opinion, however, does not make this clear.
     