RENDERED: August 9, 1996; 10:00 a.m.

NOT TO BE PUBLISHED

NO. 95-CA-500-MR COMMONWEALTH OF KENTUCKY, KENTUCKY UNEMPLOYMENT INSURANCE COMMISSION; and DANNY F. GIBSON APPELLANTS

APPEAL FROM FRANKLIN CIRCUIT COURT V. HONORABLE WILLIAM L. GRAHAM, JUDGE

ACTION NO. 94-CI-494

SUNRISE COAL COMPANY APPELLEE

OPINION REVERSING AND REMANDING

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BEFORE: GUDGEL, JOHNSTONE, and SCHRODER, Judges. GUDGEL, JUDGE: This is an appeal from a judgment entered by the Franklin Circuit Court in an appeal from a decision of the Commonwealth of Kentucky, Kentucky Unemployment Insurance Commission (KUIC). On appeal appellant KUIC contends that the court lacked subject matter jurisdiction over the employer's appeal, and that the court's decision reversing KUIC was erroneous as a matter of law. Although we disagree with KUIC's first contention, we agree with its second contention. Hence, we reverse and remand.

KUIC determined that appellant Danny Gibson was not disqualified from receiving unemployment benefits for having-2- voluntarily quit his most recent employment without good cause. His employer, appellee Sunrise Coal Company, appealed that decision to the Franklin Circuit Court, alleging that the court possessed jurisdiction over the matter pursuant to KRS 341.460(1) and KRS 341.430(2). Although KUIC admitted in response that appellee's jurisdictional allegation was true, on appeal its first contention is that the Franklin Circuit Court lacked subject matter jurisdiction over this action. We disagree.

It is settled that in determining the existence of subject matter jurisdiction, the pleadings must be taken at face value and, so long as the "kind of case" which is identified in the pleadings falls within the court's jurisdiction, one who claims lack of subject matter jurisdiction must plead it as an affirmative defense in order not to waive it. Gordon v. NKC Hospitals, Inc., Ky., 887 S.W.2d 360 (1994). Here, appellee's complaint clearly identified this case as one over which the Franklin Circuit Court possessed subject matter jurisdiction, and KUIC admitted the truth of the complaint's jurisdictional allegation. It follows, therefore, that KUIC must be deemed to have waived the affirmative defense of lack of subject matter jurisdiction. Id.

KUIC's next and principal contention on appeal is that the court erred as a matter of law by reversing KUIC's decision awarding Gibson unemployment benefits. We agree.

Until KUIC reviewed the matter, this case was treated by all concerned as a simple case of Gibson having voluntarily quit his employment without good cause, and appellee made no claim before either the CHR unemployment insurance division or the referee that the case arose under KRS 341.360(1). However, as an alternative ground for upholding the referee's decision, appellee later argued before KUIC that pursuant to KRS 341.360(1), no worker is eligible for benefits for any week of unemployment "[w]ith respect to which a strike or other bona fide labor dispute which caused him to leave or lose his employment is in active progress in the establishment in which he is or was employed." Appellee asserted that because Gibson left his employment while a strike was in active progress, he was disqualified from receiving benefits until such time as the strike at Sunrise Coal ended.

Without addressing appellee's KRS 341.360(1) argument, KUIC reversed the referee's denial of benefits which was based on the conclusion that Gibson had voluntarily quit his employment position without good cause. In doing so, KUIC found that the employment which Gibson quit was not "suitable" employment for purposes of KRS 341.370(1)(c) since it was available due to a strike, and that Gibson therefore was not disqualified from receiving benefits. In reaching this conclusion, KUIC relied upon KRS 341.100(2)(a), which excludes from the definition of suitable work any position which "is vacant due directly to a strike, lock-out or other labor dispute." In other words, KUIC determined that Gibson had acted with good cause in quitting an unsuitable job, and that he therefore was not disqualified from receiving benefits.

Clearly, unless KRS 341.360(1) applies to this case KUIC's conclusion is not erroneous, as Gibson cannot be disqualified from receiving benefits for voluntarily quitting an unsuitable job which he could not have been required to accept in the first place. KRS 341.360(1) was legislatively intended to have the effect of disqualifying a worker, if unemployed due to a work stoppage caused by a labor dispute, from receiving unemployment benefits only for the period between the commencement of the work stoppage and its settlement. Johnson v. Kentucky Unemployment Insurance Commission, Ky., 367 S.W.2d 253 (1963). Once the labor dispute ends, however, the disqualification period terminates if the worker's continued unemployment is due to a cause other than the strike or labor dispute. Vance v. Kentucky Unemployment Insurance Commission, Ky. App., 814 S.W.2d 284 (1991). We fail to perceive how such a statute, which is intended only to disqualify a worker whose unemployment is caused by a strike or labor dispute, applies to a case such as this in which the worker accepted and then, two days later, voluntarily quit employment which was available because of a strike and which therefore was statutorily defined as unsuitable. Indeed, it is our opinion that since Gibson was unemployed not because of the strike at appellee's mine but instead because he voluntarily quit an unsuitable job at the mine after going to work during a strike, as a matter of law he does not fall within the terms of KRS 341.360(1). It follows, therefore, that the court erred by reversing KUIC's decision.

For the reasons stated, the court's judgment is reversed and remanded with directions to enter an amended judgment consistent with our views.

ALL CONCUR.

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BRIEF FOR COMMONWEALTH OF KENTUCKY, KENTUCKY UNEMPLOYMENT INSURANCE COMMISSION:

Sherri D. Pate Frankfort, KY

BRIEF FOR APPELLEE: Michael A. Luvisi Donna King Perry Louisville, KY