The sole issue presented by this appeal is whether Virgil Lord was an employer within the definition of ch. 108, Stats., so as to be liable, rather than Price County Telephone Company, for the duly determined amounts of unemployment compensation contribution.
We are not concerned with the status of Lord as a claimant for unemployment compensation benefits. We
Our first resort must be to the statute pertaining to the matter in controversy, namely, sec. 108.02 (3), Stats., which provides:
"(3) EMPLOYE. (a) `Employe' means any individual who is or has been performing services for an employing unit, in an employment, whether or not he is paid directly by such employing unit; except as provided in par. (b). If a contractor performing services for an employing unit is an employe under this subsection and not an employer subject to the contribution provisions of this chapter, a person employed by the contractor in fulfilment of his contract with the employing unit shall be considered the employe of the employing unit.
"(b) Paragraph (a) shall not apply to an individual performing services for an employing unit if the employing unit satisfies the commission as to both the following conditions:
"1. That such individual has been and will continue to be free from the employing unit's control or direction over the performance of his services both under his contract and in fact; and
"2. That such services have been performed in an independently established trade, business or profession in which the individual is customarily engaged.
"(c) This subsection shall be used in determining an employing unit's liability under the contribution provisions of this chapter, and shall likewise be used in determining the status of claimants under the benefit provisions of this chapter.
"(d) Any individual who is, under this subsection, an `employe' of a given employing unit shall be deemed `employed' by that employing unit for the purposes of this chapter."
The department's position in construing the statute gives controlling weight to the test set forth in sec. 108.02 (3) (b) 1 and 2, Stats. The department argues that if Price County Telephone Company fails to satisfy the commission that Lord has been and will continue to
On the other hand, Price County argues that the statute cannot be construed this way. They point out that par. (a) of the above statute states:
"... If a contractor performing services for an employing unit is an employe under this subsection and not an employer subject to the contribution provisions of this chapter, a person employed by the contractor in fulfilment of his contract with the employing unit shall be considered the employe of the employing unit." (Emphasis added by Price County.)
According to Price County, if Lord is an employer subject to the provisions of ch. 108, Stats., then the two tests found in par. (b) of the statute are immaterial and Lord is required to pay the compensation contribution. This was the reasoning adopted by the trial court
The statute seems clear on its face. As applied to the instant case, Price County does not have to pay; Virgil Lord does. We are not here concerned with establishing the right to compensation of the claimants or of Lord. The question is from whom are the claimants entitled to compensation.
In par. (a) the statute provides that if Lord is an employee and not an employer subject to the contribution provisions of the chapter, then Price County would be responsible for the unemployment compensation of the claimants. Thus, two methods are available to Price County to avoid this responsibility: (1) It must either prove to the commission's satisfaction that Lord is not its employee and therefore the claimants look only to him for compensation, or (2) that Lord is an employer subject to the contribution provisions of the chapter. The conjunctive tests of par. (b) would seem to apply only when the question presented is one of initial coverage, e.g., the tests would apply if Lord himself were claiming unemployment compensation from Price County. Then by establishing that he meets the two tests, Price County could avoid paying him compensation. The tests of par. (b) go to establishing the status of employee.
The department devotes the major part of its brief to arguing that Lord is an employee of Price County Telephone Company and that the circuit court was in error in not applying the conjunctive test found in par. (b). There is little doubt that under these two tests Lord was a statutory employee of Price County Telephone Company. It is apparent that the statutory concept of the employment relation includes individuals who were independent contractors at common law.
However, a determination of who should be protected and covered by the unemployment compensation laws does not really answer the question presented by this case: Who pays?
If it can be conceded that Lord was a statutory employee of Price County Telephone Company, that does not necessarily mean that Price County is responsible to the instant claimants. There is nothing in the statute to preclude one from being an employee for purposes of his own unemployment compensation protection and at the same time being an employer subject to the contribution provision of the chapter for the protection of those who work for him. Under this statute these two conditions are not mutually exclusive. If it were impossible to be both at the same time then the phrase "not an employer subject to the contribution provisions of this chapter" in par. (a) would be superfluous. It is submitted that a correct interpretation of this statute is as follows:
Any individual who performs services for an employing unit in an employment is an employee except if he has been and will continue to be free from the employing unit's control over the performance of his services and if these services have been performed in an independently established trade, business or profession in which the individual is customarily engaged. If a contractor performing
Both sides rely on the case of National Guardian Life Ins. Co. v. Industrial Comm.
This court, on appeal, noted that the general agent was clearly an employee of the company within the statutory definition since the company exercised control over the performance of his services and there was no independently established trade or business. This court then considered the requirement that the contractor not be an employer subject to the contribution provisions and stated:
"The company is concededly an `employing unit.' Ciulla (and Beebe before him) were contractors, performing services for the company for pay. Neither of them were employers subject to the contribution provision. At
This italicized portion of the decision indicates the court was concerned with the "employers subject to the contribution provision" criterion but in that case it was not claimed that the agent was such an employer. Here the claim is made that Lord was an employer subject to the contribution provision. In other words, in that case the underlying issue was whether the claimant should receive compensation from the employer; here the question is wholly different: From which employer should the claimants receive compensation?
We now consider the crucial question of whether Lord was an employer subject to the contribution provisions of this chapter. The trial court concluded that he was.
It was stipulated that Virgil Lord, d/b/a Prentice Switching Service, had four employees on each of some twenty days during the taxable year, each day being in the different calendar week, counting the total number of individuals employed by him. Virgil Lord does meet the statutory definition of "employer" set forth in sec. 108.02 (4) (d), Stats., which provides, in part:
"(d) Any other employer, who has employed as many as 4 individuals in `employment' on each of some 20 days during the taxable year, each day being in a different calendar week, counting the total number of individuals who were employed by him in employment for some portion of the day (whether or not at the same moment of time), effective after December 31, 1955, shall become an `employer' subject hereto as of the start of that calendar year in which such employment occurred."
Even if it is conceded that Prentice Switching Service barely fits the popular definition of an employer, the fact remains that it fits the statutory definition as found in sec. 108.02 (4) (d), and as such was an employer subject to the provisions of this chapter. Statutory definitions should be applied in the construction of a statute of which they are a part.
The fundamental objective of unemployment compensation is to mitigate economic loss to the worker and his family.
By the Court.—Judgment affirmed.