CSC v. DEP'T OF LABOR

LEVIN, J.

The questions presented concern the constitutionality of legislation, 1985 PA 103, that removes workers' compensation hearing officers from the state civil service by organizing them in a board.

The constitution provides that the state civil service system consists of "all ... in the state service" other than those specifically excepted or exempted. "[M]embers of boards and commissions" are excepted.1 Act 103 organizes workers' compensation hearing officers in a "Board of Magistrates."2

The circuit judge held that the hearing officers are not members of a "proper" board or commission, and that § 213 (establishing the Board of Magistrates) of Act 103 is an unconstitutional attempt to evade the constitutional limitation. This Court granted bypass of the Court of Appeals. We reverse and hold that § 213 of Act 103 is constitutional.

I

The challenged provisions were enacted in conjunction with a provision of Act 103 that eliminates de novo review by the workers' compensation appellate tribunal (presently the Workers' Compensation Appeal Board), hereafter under Act 103 to be known as the Workers' Compensation Appellate Commission, of decisions of workers' compensation hearing officers (presently the referees), hereafter to be known as magistrates. A magistrate's decision is to be considered conclusive by the appellate commission if supported by competent, material, and substantial evidence on the whole record.3 The Legislature sought thereby to reduce the delay in adjudicating workers' compensation claims, which had been attributed to a large backlog in the WCAB resulting from the appeal of seventy-five to eighty-five percent of referee awards.4

Cases filed after March 31, 1986, are to be heard by members of the Board of Magistrates. The position of hearing referee is eliminated next year, as of March 31, 1987.

A

Act 103 reduces the number of hearing officers from thirty-nine referees5 to thirty magistrates.6 The number of members of the appellate tribunal is reduced from fifteen members of the WCAB to seven members of the appellate commission.7

A qualifications advisory committee, with six members appointed by the Governor, is created to develop a written examination to be administered to applicants for the position of magistrate, to recommend persons for appointment by the Governor to the Board of Magistrates and appellate commission,8 and to evaluate biannually the performance of magistrates. The committee may recommend suspension or removal.9

The Governor is empowered to appoint the magistrates and, as before, the members of the appellate tribunal (the appellate commission).10 The authority of the director of the Bureau of Workers' Compensation to appoint workers' compensation hearing officers11 is, in effect, eliminated.

The term of office of both members of the Board of Magistrates and of the appellate commission is four years.12 Civil service system tenure for workers' compensation hearing officers (the referees) is accordingly eliminated. The continuing tenure in office of hearing officers, as well as (as before) of members of the appellate tribunal, is subjected to the political process. Additionally, the Governor is barred from reappointing as a member of the board or commission a person who has served for twelve years.13 The Governor may remove a member for good cause, including lack of productivity or other neglect of duties.14

A chairperson of the board and a chairperson of the commission are to be appointed by the Governor from among the members who serve in the office of chairperson at the pleasure of the Governor. The chairperson may establish productivity standards that are to be adhered to by the employees and members of the board or commission and has general supervisory control of and is in charge of the employees and the assignment and scheduling of the work of the board or commission.15 The power of the director of the bureau to assign cases to the hearing officers16 is thereby eliminated.

The board and commission are both authorized to employ legal assistants for the purpose of legal research and otherwise assisting the individual members and the board and commission. The board and commission are also both authorized to promulgate rules and administrative hearing procedures.17

B

Magistrates will be required to file concise written opinions stating reasons for decisions, including findings of fact and conclusions of law.18 The referees were expected only to state their decision in conclusory terms and ordinarily did so by filling in the blank spaces on a one-page printed-form order.

As before, the hearing officer's decision is final unless appealed19 and seventy percent of the compensation awarded must be paid to the injured worker or his dependents during the pendency of an appeal to the appellate commission.20

The hearing officer's decision is reviewable, as before, by a three-member panel of an appellate tribunal, the appellate commission.21 A panel's decision is reviewable by the entire commission on request of the chairperson if the chairperson concludes that the decision may establish a precedent with regard to workers' compensation in this state, or upon request of two or more members of the commission.22 Decisions of a panel of the workers' compensation appeal board are the "final decision of the board."23

The workers' compensation appeal board reviews referee decisions de novo, generally on the record made before the referee, although it is authorized to receive additional evidence.24 The findings of fact of a magistrate are to be considered conclusive by the commission if supported by competent, material, and substantial evidence on the whole record, defined as such evidence, considering the whole record, as a reasonable mind will accept as adequate to justify the conclusions. The appellate commission may authorize the receipt of additional evidence, but it is limited to a review of only those specific findings of fact and conclusions of law that the parties have requested be reviewed. The review is to be both a qualitative and quantitative analysis of the evidence to assure a full, thorough, and fair review.25

As before, on application, not as of right, judicial review is obtainable in the Court of Appeals and this Court.26 Findings of fact made by the appellate commission, acting within its powers, in the absence of fraud, shall be conclusive.27

C

Cases filed after March 31, 1986, and those theretofore filed, not heard by March 31, 1987, are to be heard by the magistrates. The referees will continue to hear cases filed on or before March 31, 1986. The position of hearing referee is abolished as of March 31, 1987.28 The Workers' Compensation Appeal Board is eliminated as of July 1, 1989, or earlier if there are no more cases to be decided by the appeal board.29 The Governor may appoint additional members to the appeal board to expedite decision in cases before the board which, in 1984, had a five- to six-year backlog.30

D

Included in the legislation are a number of significant substantive and other procedural reforms. The Legislature anticipated that the establishment of the Board of Magistrates, and the consequent elimination of the position of hearing referee and their civil service tenure, would be challenged. It is provided that if the creation of the Board of Magistrates is found to be invalid by this Court, some of the other amendments shall also be invalid and are not severable, while others shall nevertheless be valid and are severable.31

II

Act 103, reorganizing the adjudicative function in workers' compensation cases, was based on the recommendations in the report on workers' compensation in Michigan, submitted in December, 1984, by Professor Theodore St. Antoine, the Governor's special counselor on workers' compensation.32

A

The author of the report saw no reason for major structural changes at the referee level. The backlog at the referee level was declining, and, with the recent addition of ten additional referees, the bureau's aim of deciding ninety percent of all contests within nine months appeared feasible and satisfactory.33

The situation at the appeal board level was, however, seen as very different. During the past decade, between seventy-five and eighty-five percent of all referee awards were appealed. The board's backlog had increased from 2,000 cases to almost 7,000 in eight years, the equivalent of five to six years' output by the appeal board.34

De novo review, described in the report as an "open invitation to disappointed litigants and their lawyers to seek to retry the case from scratch,"35 was seen as the principal cause. Having in mind that there is now a large body of precedent, that over the years referees were affirmed on questions of law about sixty-six percent of the time and on issues of fact about eighty-two percent of the time, and the backlog at the appellate level, de novo review, Professor St. Antoine said, is no longer "a luxury that can be afforded, or a procedure that is needed" and should be eliminated.36 A referee should become a "true-decision maker," and the decision at that level "a much more dispositive step in the administrative process."37

Drawing on an earlier report by the former Chief Judge of the Court of Appeals, T. JOHN LESINSKI, Professor St. Antoine recommended that the referees be required to support their decisions with findings of fact and conclusions of law. Their findings of fact should be conclusive if supported by competent, material, and substantial evidence on the whole record.38

The appeal board, Professor St. Antoine said, should be "streamlined," by creating a new five- or possibly seven-member board, which should be able to handle the anticipated reduced number of appeals, given the substantially reduced record-reading and fact-finding responsibilities, and the use of legal assistants.39

Although the constitution provides that the civil service commission shall "determine by competitive examination and performance exclusively on the basis of merit, efficiency and fitness the qualifications of all candidates for positions in the classified service,"40 the commission had permitted department heads and the boards and commissions to appoint any member of the state bar as a hearing officer, hearing examiner, or referee.41 Workers' compensation referees had acquired civil service status as a result of appointment in that manner. Although Professor St. Antoine could find no hard data providing significant support for accusations that referees were biased, he "concede[d] that a perception of bias or of political favoritism in their appointment can be almost as damaging to the acceptability of their awards."42 He urged the Legislature or the Civil Service Commission "to establish a bipartisan [administrative law judge][43] Qualifications Advisory Committee to interview and evaluate prospective candidates, with ratings to be transmitted confidentially to the appointing authority."44

B

One month after Professor St. Antoine's report was issued, a bill was introduced in the Legislature incorporating his principal recommendations. The appellate tribunal would be reduced from fifteen members to seven, and would be renamed the appellate commission.45 Workers' compensation hearing officers would be known as hearing judges and would be required to file written opinions stating findings. De novo review would be eliminated, and the findings of fact and conclusions of law46 of a hearing judge would be conclusive if supported by competent, material, and substantial evidence on the whole record.47 Hearing judges and members of the commission would be appointed by the Governor on the recommendation of a newly created seven-member workers' compensation council.48

The bill made virtually no changes in the duties and functions of the hearing officers, except the requirement that a written opinion shall be filed. The bill did not organize the hearing officers in a board.

The first full Senate revision would have created a workers' compensation commission and designated both the hearing and appellate members as workers' compensation commissioners.49 This was done according to the accompanying analysis to remove the hiring and firing constraints of civil service and to ensure accountability of the hearing officers within the "administrative system."50 The House substitute, which became Act 103, separated the single workers' compensation commission into a workers' compensation appellate commission and a workers' compensation Board of Magistrates.51

III

The Civil Service Commission and the referees contend that the Legislature, in removing the workers' compensation hearing officers from the classified service, defied the findings and recommendations of Professor St. Antoine, who saw no reason for major structural changes at the hearing officer level.52 The reforms he recommended were all embodied in the first draft of the amendatory legislation which left the hearing officers in the classified service.53

It is argued that none of the referees' functions or duties are assigned to the board. The sole purpose was to remove the referees from the civil service system. The magistrates are no more a board than were the referees. The legislation does not take the initial decisionmaking function from the classified referees and give it to the board. It keeps that function with the individual hearing officers who act individually and not collectively.54

The Civil Service Commission and the referees observe that the terms "board" and "commission" have been said to be synonymous,55 and to mean a "body of persons" charged with a specific function or with the transaction or superintendence of some particular business.56

It is further observed that the referees perform functions that are not significantly different from those of federal administrative law judges.57 The referees argue that nothing in the act suggests that "all thirty `magistrates' are to hear cases en banc or en masse to preside over each hearing in the interests of `economy' or `administrative efficiency.' The decisive function remains personal and essentially a solitary responsibility. It is not a function of any `board' or `commission.'"

The act in many sections speaks of action to be taken by "a" or "the" workers' compensation magistrate.58 These specific provisions indicate, it is argued, that the work of the magistrates is not a collegial or collective enterprise. The hearing is not before a board, commission, or other collective body, but before a single magistrate.

IV

The circuit judge agreed with the characterization advanced by the Civil Service Commission and the referees. He entered a judgment declaring that § 213 of Act 103, establishing the Board of Magistrates, is unconstitutional. The opinion filed by the judge stated that on consideration of this Court's decision in Case v Liquor Control Comm, 314 Mich. 632; 23 N.W.2d 109 (1946), he had concluded that the board of magistrates was "not a body of importance and dignity.[59] It is merely a tool, an artifice whose sole purpose is to legitimize the removal of positions from the classified service."

The judge observed that the magistrates would "operate almost exclusively as individuals. Essentially, they are administrative law judges who individually conduct hearings." "[T]heir duties and functions are substantially similar to those of their predecessors, the hearing referees who are classified employees." The magistrates have no duties and functions which they "are required to discharge as a collective body," although they "are authorized to act as a collective body" in employing a support staff and promulgating rules on administrative hearing procedures. "In comparison to the many and important functions discharged by the magistrates individually, these two responsibilities, which are of a type commonly entrusted to single officials, and which may be corporately undertaken by the magistrates, are insignificant. In the opinion of this Court, they fall far short of conferring importance and dignity and are insufficient to constitute a proper board." (Emphasis in original.)

V

It does not ineluctably follow from the truisms that magistrates are expected to perform, individually and not collegially or collectively, their principal function of hearing and deciding cases, that boards and commissions ordinarily have two or more members and make their decisions collectively, and that the magistrates were organized in a board to remove workers' compensation hearing officers from the civil service system, that the Legislature acted unconstitutionally in creating a board of hearing officers to perform a function formerly performed by persons covered by civil service.

To be sure, boards or commissions are generally composed of two or more persons, and thus the common understanding of most people would indeed be that a board or commission is composed of two or more persons. But that only replicates the truism that ordinarily boards or commissions are composed of two or more persons. It does not follow that a board or commission cannot be composed of one person or that all members of a board or commission must act collectively in every matter or in some matters.

A

In 1940, when the civil service amendment was added to the constitution, there were two commissions, the Racing Commission and the Corporation and Securities Commission, that were essentially one-person commissions.

The Racing Commission was composed of one person, the Racing Commissioner, who was appointed by and served at the pleasure of the Governor.60

The Corporation and Securities Commission was essentially a one-person commission.61 The one commissioner of that commission was appointed for a fixed term by the Governor.62

The Racing Commissioner, for the Racing Commission, and the Corporation and Securities Commissioner, for the Corporation and Securities Commission, acted alone. There was no decisionmaking by either commission through persons acting collegially as members of a collective body or entity.

Just as there can be a one-person commission, there can be a one-person board. The Business Corporations Act provides that a board of directors "shall consist of 1 or more members."63

The civil service commission, at a meeting on March 6, 1941, adopted an "order" declaring that among the boards and commissions "exempt" from the state civil service are the one-member Corporation and Securities Commission and the one-member Racing Commission.64

B

The Workers' Compensation Appeal Board no longer carries out its function acting as a collective body or entity.

The primary, indeed the only, function of the WCAB — like the employment security appeal board/board of review65 — is adjudicative, to hear and decide appeals from orders of referees and the director66 arising out of claims for workers' compensation filed with the bureau. In discharging that function, the fifteen-member WCAB sits in panels of three. Since 1980, the decision reached by a majority of the three members assigned to hear an appeal is the final decision of the WCAB.67 Thus, two of the fifteen members of the WCAB decide the appeal, and their decision then becomes the decision of the WCAB without consultation or deliberation with, or participation or voting by, the other twelve members of the WCAB. There is no decisionmaking by the entire board acting as an entity.

Act 103 provides that matters now pending before the WCAB shall be heard by a panel of two members of the WCAB and that their decision shall be the final decision of the WCAB. Only if they cannot reach a decision is a third member to be designated, in which event the decision of the third member shall be controlling and shall be considered to be the final decision of the WCAB. Act 103 does not in terms require that the third member participate in a "collective" decision.68

If Act 103 were held to be unconstitutional, the WCAB would continue to act in panels,69 now of two, or on occasion three, and the decision of a majority — two of a three-member panel — would continue to constitute the decision of the fifteen-member WCAB. The WCAB would continue to perform its only function, not as a collective body or entity, but in panels of two or three.

C

Before the WCAB was created in 1955,70 the work thereafter and now done by the WCAB was done by the four-member Workmen's Compensation Commission,71 the successor of the Industrial Accident Board,72 with the aid of deputies who were grandfathered as referees when that office, at the time the WCAB was created, was established.73

The original 1912 enactment provided that a claim for workers' compensation would be heard by a "committee of arbitration" consisting of an employer's and employee's representative and one member of the Industrial Accident Board; unless a claim for review was filed, the committee's decision would stand as the decision of the Industrial Accident Board.74

By 1919, the act had been amended to state that the board could name one of its employees, called a deputy member, to sit as a third member of the committee of arbitration.75 The decision of the committee, none of whom would then be members of the board, would stand as the decision of the board unless a claim for review was timely filed.76

In 1921, the committee of arbitration was eliminated except in name. If the parties could not agree, the hearing was to be conducted by one person, either by a member or deputy member. "The member or deputy member so designated shall be known as a committee of arbitration wherever the phrase `committee of arbitration' is used in the act." The decision of the member or deputy member would, as before, stand as the decision of the board unless review by the board77 or commission78 was timely sought.

Accordingly, from 1912 until 1955 — for over forty years — unless review of a workers' compensation hearing officer's decision was timely sought, the decision of a single member or employee of the board or commission would stand as the decision of the full board or commission without, consequently, any decisionmaking by the board or commission as a collective body or entity.

D

The Liquor Control Commission has been organized as a unified commission with a hearing division, which does not act collectively, and an appellate division, which does, for nearly thirty years, since 1957. There are two hearing commissioners and three administrative commissioners.79 The hearing commissioners replaced the members of the Board of Hearing Examiners established under the 1945 act held to be excepted from civil service in Case, discussed in Part VI.80 An administrative appeal may be allowed in the discretion of the three administrative commissioners who for this purpose are constituted an appeal board.81

The hearing commissioners, as did the hearing examiners, hear individually and not collectively complaints seeking license suspension or revocation. Since 1945, either a member of the Board of Hearing Examiners or (since 1957) a member of the commission described (since 1976) as a hearing commissioner has acted individually in hearing complaints against licensees. There has been no decisionmaking either by the board or the commission as an entity at the hearing level. The only collective action occurs if and when an appeal is allowed by the appeal board. If an appeal is allowed, the decision of two, a majority of the administrative commissioners, stands as the decision of this five-member commission.

If the workers' compensation hearing function had been reorganized, in the manner of the Liquor Control Commission, as a unified commission, with a hearing division and an appellate division,82 there would then be as much collective decisionmaking at the hearing level by the entire unified commission as there was between 1912 and 1955 in workers' compensation cases where, after decision by the member or deputy member who conducted the hearing, no further administrative review was sought. And there would then be as much collective decisionmaking at the appellate level by the entire unified commission as has obtained since 1973, when the WCAB began to sit in panels of five, and 1980, when it began to sit in panels of three.

Surely it is not a constitutional difference — only a difference in form, not substance — that two separate bodies, the Board of Magistrates and the appellate commission, were created rather than a single unified commission, as the Liquor Control Commission, composed of two divisions — a hearing and an appellate division.83

E

Also stated by the Civil Service Commission to be exempt at its March 6, 1941 meeting was the Unemployment Compensation Commission and the Unemployment Compensation Appeal Board created by a 1936 act that was amended in 1937.84

The 1936 act provided for an Unemployment Compensation Commission composed of four members appointed by the Governor and a separate appeal board composed of three persons to be appointed by the commission. In 1937, the power to appoint the members of the appeal board was vested in the Governor. In 1977, the adjudicative function of the appeal board was transferred to a new appellate tribunal, named the Employment Security Commission Board of Review, composed of five persons appointed by the Governor.85

It appears that the only function of the employment security appeal board/board of review was and is adjudicative. Thus, before the 1940 civil service amendment was added to the constitution, a board had been created by the Legislature that had no administrative and only adjudicative functions, and that board had been recognized by the Civil Service Commission as exempt in 1941.

F

The dissenting opinion would require as a precondition to exception from civil service that a statute creating a board or commission require that the members of the board or commission "perform some of their primary decisionmaking functions collectively either as an entire board or commission or through panels of the bodies."86 It thus appears that we all agree that a board or commission need not act as a collective entity in every or indeed any matter. Our disagreement is thus limited to whether some collective decisionmaking is required by a panel of say two or three members of a fifteen- or thirty-member board or commission.

Once it is decided that a board or commission need not act as an entity through the vote of a quorum of the whole board or commission, there is no reason in precedent or logic for seeking to retain the form of collective action by insisting that a board or commission act at least in panels of two or more. The notion that collective decisionmaking is required flows from the concept that a board or commission must act as a collective body. There is no basis for drawing the line at two members rather than one once it is recognized that the exception, in Const 1963, art 11, § 5, for members of boards or commissions does not require collective action by the entire entity acting as an entity. Establishing a collective decisionmaking criterion and announcing that it is satisfied when two members of a fifteen-member board agree would be incongruous.

G

In sum, the Board of Magistrates is composed of more than one person; it is composed of thirty magistrates.

A number of gubernatorially appointed boards and commissions — (i) the Industrial Accident Board, subsequently named the Workers' Compensation Commission, now the Workers' Compensation Appeal Board; (ii) the Board of Hearing Examiners, and subsequently the Liquor Control Commission; (iii) the Racing Commission; and (iv) the Corporation and Securities Commission — and countless corporate boards, have acted either on the decision of one person or on the decision of less than a majority of a quorum of the whole board or commission.

Three boards or commissions, the Industrial Accident Board, subsequently the Workers' Compensation Commission, the Racing Commission, and the Corporation and Securities Commission, acted — before the 1940 amendment to the constitution adding the civil service provision — on the decision of one person.

The sole function of two boards, the Unemployment Compensation Commission Appeal Board (created before 1940), now the Employment Security Commission Board of Review, and the Workers' Compensation Appeal Board, was adjudicating claims of workers seeking compensation.

The WCAB no longer carries out its function of adjudicating particular claims as a collective body or entity, and would continue to act in panels without regard to whether § 213 of Act 103 were to be declared unconstitutional.

VI

In Case v Liquor Control Comm, supra, this Court considered a challenge to the constitutionality of 1945 PA 133 which created a Board of Hearing Examiners for the Liquor Control Commission. There were three members of the board who were appointed for six-year terms by the Governor, with the advice and consent of the Senate. Members were removable by the Governor for misfeasance, malfeasance, and nonfeasance.

The act required the Liquor Control Commission to file a complaint with the board whenever a license was to be either suspended or revoked, and required the board to conduct a hearing limited to the facts and law and rules and regulations of the commission. The findings of the board, to be based on the facts adduced at the hearing and the law and the rules and regulations of the commission, were required to be reported to the commission for decision. It was provided: "Such board of hearing examiners or any member thereof shall conduct hearings on questions referred to the board by the commission, under such rules and regulations as the commission may establish." (Emphasis supplied.)87

This Court said "[i]f there is any invalidity in [the 1945 act], it must appear so clearly as to leave no room for any reasonable doubt that it violates the Constitution, for every reasonable presumption and intendment must be resolved in favor of the constitutionality of the act. Cady v City of Detroit, 289 Mich. 499 [286 NW 805 (1939)]; In re Brewster Street Housing Site, 291 Mich. 313 [289 NW 493 (1939)]."88

The Court first rejected the claim that the creation of the Board of Hearing Examiners infringed on the prerogatives of the Liquor Control Commission under the constitution. Because the Board of Hearing Examiners merely made recommendations which the commission had the right to accept or refuse, the Court saw no infringement on the commission's prerogatives.89

The Court then rejected the Attorney General's challenge to the 1945 act based on the 1940 civil service amendment to the 1908 Constitution.90 The Attorney General had argued that "the legislature may not add [to the constitutional language] by the use of tags or labels; calling the examiners created in [the 1945 act], a `board' does not take them out of civil service," and had further argued that the board of examiners was "ancillary to the Liquor Control Commission" and not an independent "agency or unit of government subordinate to the governor" but rather part of and under the "direction and control" of the Liquor Control Commission.91

The opinion, after noting that the members of the board were appointed by the Governor, their salary, term of office, and the limited grounds for removal, concluded that members of the board were excepted from civil service because they were members of a board or commission. The Court said that the Legislature had

The dissenting opinion in the instant case states that, while the statute construed in Case authorized the board or any member thereof to conduct hearings on questions referred to the board by the commission, "in instances where the commission filed a complaint against a licensee, the statute provided that the board should hold a hearing. Individual members of the board were not authorized to hold such hearings. Hence, the Board of Hearing Examiners was required by statute to conduct hearings on complaints filed by the Liquor Control Commission as a collective entity."92 (Emphasis in original.)

The purpose of the Board of Hearing Examiners, as stated in Case, was to address the "evil in having the liquor commission make the complaint and then take testimony and make the final decision. The Legislature wanted a board of hearing examiners to first take the testimony and make findings for the benefit of the commission" which would then make the decision.93 The 1945 act was a limitation on the authority of the Liquor Control Commission. The act clearly stated that the "board of hearing examiners or any member thereof shall conduct hearings on questions referred to the board by the commission...." (Emphasis supplied.)94 The only kinds of questions that the commission was required to submit to the board for hearing were those involved in a complaint seeking suspension or revocation of a license. There is no evidence that any other kind of question was ever submitted by the commission to the board for hearing.

The practical construction of the act by the commission and the board, embodied in administrative regulations,95 was that any member of the board could conduct a hearing on a complaint against a licensee seeking suspension or revocation of a license. In Napuche v Liquor Control Comm, 336 Mich. 398, 401; 58 N.W.2d 118 (1953), this Court said that Napuche's license was suspended following a "hearing held before a hearing examiner on September 6, 1950, pursuant to the provisions of section 5a [creating the Board of Hearing Examiners] of the Michigan liquor control act, as added by PA 1945, No 133...."96 (Emphasis supplied.) The record in Napuche substantiates that a hearing was conducted by one member of the Board of Hearing Examiners on the commission's complaint against Napuche, and that the member who conducted the hearing forwarded his findings to the commission without any consideration by any other member of the board or any action of or in behalf of the board other than the decision of the member of the board who conducted the hearing.97

The view that the 1945 act creating the Board of Hearing Examiners required all three hearing examiners to hear a routine complaint seeking the suspension or revocation of a liquor license is contrary to the purpose and clear language of the act, the practical construction by the commission and the board reflected in a reported decision of this Court and in the administrative regulations, and is inconsistent with the way hearings of this kind are generally conducted in this country.98

VII

The 1957 amendment, making Liquor Control Commission hearing officers members of the Liquor Control Commission, came only two years after the 1955 amendment designating the deputy members of the workers' compensation commission as workers' compensation referees.99

The difference in legislative approach in enacting the 1955 workers' compensation and 1957 liquor control amendments indicates that the Legislature chose to retain some hearing officers in the civil service system and to remove others from the system by organizing them in a board or commission subject to gubernatorial appointment for fixed terms.

The referees question the precedential value of this Court's decision in Case, holding that Liquor Control Commission hearing officers may be removed from the civil service system, pointing out that their collective-decisionmaking argument was not advanced in Case and therefore was not considered. The rule is indeed well-established that a point not briefed and considered is not decided.100 Case nevertheless — because it is the only decision addressing the meaning of the words "boards and commissions" — has been the focal point of arguments of counsel in this appeal.

This Court in Case obviously was concerned with whether the Board of Hearing Examiners there challenged was a "proper" or, to use the Court's term, "a real board of hearing referees." It saw the problem of labeling "a body of employees as a board." While the collective-decisionmaking argument was not there briefed, considered, or decided, the justices surely knew and understood that the hearing examiner members of that board would act alone.

Be that as it may, what this Court did in Case is as important as what it said. What it did was to sustain the 1945 legislative decision to remove, by organizing them in a board, liquor control hearing examiners from the operative effect of the 1940 amendment to the constitution concerning the state civil service system.

In 1961, the Constitutional Convention met. The delegates were presumably aware of this Court's decision in Case which in effect held that a hearing officer need not be included in the civil service system.101 Nevertheless, the words "boards and commissions" were not modified in the 1963 Constitution to preclude the inclusion of a hearing officer — who acts individually and not collectively — as a member of a board or commission.

VIII

If collective decisionmaking were the determinative criterion, the Legislature could readily create a board of hearing officers whose individual decisions would become "collective" when approved by another hearing officer, with a third to be assigned to the panel if they could not agree.102 Similarly there could be "collective" action by "boards" of parole or probation officers or social workers. Clearly something more or other than collective decisionmaking is required to constitute a real or true board or commission.

Case spoke of "importance," "dignity," and "independence" to distinguish a "real board" from a "body of employees" merely labeled as a board.

Act 103 provides that the Board of Magistrates is created as an "independent body" and an "autonomous entity."103 The members of the board are appointed by the Governor, like the members of most other boards or commissions. Their term of office is four years. That is the maximum term of office authorized under the constitution for a member of a board or commission.104

This Court sustained in Case the validity of the Board of Hearing Examiners because it perceived the role or function of the members of that board to be important and their status — appointment by the Governor, four-year term of office, and salary — to be dignified. The members of the Board of Magistrates established under Act 103 have a role or function of greater importance, and similarly are appointed by the Governor, will be comparatively well-paid, and have stature.

The magistrates, like the hearing examiners in Case, are not subject to removal except for cause.105 In the discharge of their hearing function, the magistrates have as much or more independence, autonomy, and importance as the members of most other boards or commissions.

A

The Civil Service Commission and the referees argue that the magistrates will be performing the same duties — hearing particular cases — as have been performed by the referees. They reason that the position they now hold must therefore remain in the civil service system. Equally true, however, is that the magistrates will be performing the same function — deciding particular cases with a large measure of finality — as has been performed by the members of the WCAB, who are excepted from the civil service system.

This argument by the Civil Service Commission and the referees proceeds on the assumption that because the referees were granted civil service status, the position of workers' compensation hearing officer could not have been organized by the Legislature in a board of referees or hearing examiners. They also seem to be arguing that the referees have a vested right in the decisions that permitted referees to acquire civil service status that precludes the Legislature from creating a board or commission of hearing examiners for workers' compensation cases as it has done for Liquor Control Commission cases.

With the exception of the hearing commissioners of the Liquor Control Commission, who replaced the members of the Board of Hearing Examiners considered in Case, it has indeed been the practice in this state to provide hearing officers with civil service status. It is unclear to what extent that is a result of inertia or a thought-through decision for policy reasons.

It has been approximately fifty years since the growth of administrative law began to accelerate in the days of the New Deal. The proliferation of boards and agencies at the federal level was later paralleled at the state level. There followed a federal administrative procedures act106 and subsequently state administrative procedures acts107 with a requirement of a hearing in contested cases. The procedural guarantees provided by the federal and state constitutions108 and these administrative procedures acts created a need for hearing officers at the administrative level in ever-increasing numbers.

At the beginning of this process, the hearing officer was often an aide to the person or persons charged with making the decision. The aide relieved the person or persons charged with making the decision of the need to hear the evidence. After hearing the evidence, the aide prepared a report with proposed findings of fact and sometimes conclusions or proposed conclusions of law that would then be forwarded to the decisionmaker with or without a recommendation. Such persons were influential in the decisional process, but nominally at least did not make the decision.109

Hearing officers whose decisions are mere recommendations that are reviewable de novo might understandably be regarded as persons performing a function similar to that performed by other civil servants and hence as persons that should be included in civil service and thereby removed from the political process.

The decision of a workers' compensation magistrate will, however, stand as the decision of government, and will not be reviewable de novo. In this connection it is noteworthy that Case did not require that the decision be of that importance — the hearing examiner members of the Board of Examiners filed only findings without a recommendation — to justify placing employees of government performing that role in a separate board or commission and hence removed from the protection of civil service.

B

Since 1940, the Legislature has created at least nineteen commissions or boards to address particular concerns.110 It would be surprising if some department of state government had not theretofore addressed some of those concerns, and some state employee with civil service status was not charged with or had not exercised the responsibility of acting for the state in addressing those concerns or some of them. Surely, the constitutionality of legislation creating a commission or board could not be challenged by a civil servant on the basis that the new agency will politicize the governmental effort to address the concern or will eliminate or reduce the civil servant's role in addressing that concern.

The issuance and revocation of some state licenses is the primary function of independent boards or commissions,111 while other state licenses are issued by a bureau or division of a principal department of state government.112 Where licensing is one of a number of functions of a department, or there are a considerable number of licenses issued by the department, there may be less supervision by the department head of the employees involved in the licensing process than of employees who serve on a board or commission that has no other business. The resultant increase in the power of civil servants who operate relatively free of supervision may lead to legislation creating a board or commission to increase political accountability. Surely a civil servant who formerly exercised considerable power could not be heard to say that the legislation creating the board or commission is unconstitutional either because this might politicize the licensing process or because he might, after years of faithful service and effort, be required to alter his role in government.

C

The civil service system relates to the executive branch of state government. The exceptions for employees of courts of record and employees of the Legislature are exceptions to take out of the civil service system and the control of the Governor, who appoints the members of the Civil Service Commission, employees of the other two separate branches of government, the judiciary and the Legislature. Similarly, to preserve the independence of state institutions of higher education from gubernatorial control, their employees are excepted. Persons in the armed forces of the state are excepted because they are not part of the civil service.113

Turning to the exceptions and exemptions in the executive branch, they appear to be generally characterized by policy-making. Positions filled by popular election, the heads (principal executive officers) of the not more than twenty departments are policy-making positions and by definition all the exempt positions in the principal departments are policy-making except for not more than one position in each department that is not required to be but may be policy-making.114

We all agree that however one characterizes the function of an administrative hearing officer or appellate tribunal member, it is clear that a real or true board or commission may be created to perform no function other than to adjudicate particular cases.

The Unemployment Compensation Commission Appeal Board was extant as a gubernatorially appointed board in 1937, three years before the civil service amendment was added to the constitution in 1940. The Civil Service Commission recognized in 1941 that the members of that appeal board were not covered by the civil service system. The employment security appeal board/board of review has and has had no function other than to adjudicate particular cases.115

Similarly, the WCAB has and has had no function other than to adjudicate particular cases. It is thus clear that persons who have no function other than to adjudicate particular cases may be members of a board or commission that is excepted from the civil service system.

D

A board or commission is generally placed in charge of some business of the government. Whether a board or commission is "important" depends on the nature of the business, and the authority and power entrusted to it. The "dignity" of a board or commission relates to status or stature, as well as the importance of its business, authority, and power.

Members of boards and commissions are generally appointed by the Governor and sometimes by the Legislature. The members are accountable only to the appointing authority. They do not have a supervisor who can tell them how and what to do or decide. They are not part of a bureaucratic hierarchy, and hence are "independent."

A chairperson of a board or commission is not the superior of the other members. He can no more tell the other members how to vote or decide than the chief judge of a court could tell a Court of Appeals, circuit, district or probate judge how to decide. In the exercise of the decisional function, a member is not accountable to the chairperson.116

The members of the Board of Magistrates are appointed by, and are accountable only to, the Governor. They are not part of a bureaucratic hierarchy. In the exercise of the decisional function, they do not have a supervisor who can tell them how and what to decide. They are therefore "independent." The Board of Magistrates is created separate and apart from the appellate commission and the Bureau of Workers' Compensation, and accordingly is a separate autonomous entity within the Department of Labor.

The business of the Board of Magistrates and of the appellate commission is adjudicating controversies that arise under the workers' compensation law. Both the magistrates and the members of the appellate commission have the authority and power to decide those controversies — the magistrates at the hearing level and the members of the appellate commission on appeal. That business, authority, and power is of sufficient importance to justify the establishment of an independent board and commission for the purpose of discharging the governing function involved in resolving those controversies.

E

It is argued that Act 103 will politicize workers' compensation because the magistrates will serve for fixed terms and reappointment is dependent on gubernatorial favor.

The members of the WCAB have always served for fixed terms, with reappointment at the pleasure of the Governor. The decisions of referees were reviewable de novo by members of WCAB panels who serve only for a fixed term. Act 103 does not further politicize the workers' compensation system.

The constitution does not preclude the Legislature from requiring political accountability of persons who make quasi-judicial decisions involving factfinding and law finding.117

The character of the decisions to be made by the magistrates are essentially the same as the quasi-judicial decisions made by the Employment Relations Commission, the Employment Security Commission Board of Review, the Liquor Control Commission, and numerous licensing boards. The members of all those agencies are gubernatorial appointees who serve for fixed terms and do not have civil service tenure.

A decision to revoke a liquor license or a physician's, veterinarian's, nurse's or other professional person's license, to grant or deny relief from an unfair labor practice, to award or deny unemployment compensation benefits, are decisions no less important than whether to award or deny workers' compensation benefits. Those decisions are made by members of boards and commissions whose appointment and tenure are subject to the political process.

F

The reports of some hearing officers state only findings or recommendations. Workers' compensation referees' decisions are, however, of greater importance because they are decisions, not solely findings. Absent an appeal to the WCAB, a judgment can be obtained from the circuit court enforcing a referee's decision.118 Since 1975, when a referee's decision is appealed to the WCAB, seventy percent of any benefits awarded by the referee is required to be paid during the pendency of the appeal.119 Those are decisions of importance.

Workers' compensation hearing officers' decisions will henceforth have even greater importance. A magistrate's decision will no longer be reviewable de novo, and will be reviewable only for errors of law and a determination whether it is supported by substantial evidence on the whole record. A magistrate's decision on a claim seeking $2,000 or less is reviewable only for fraud or error of law in the discretion of the Court of Appeals or this Court.120

The legislative decision to constitute persons whose decisions have that importance as members of a board or commission who serve by gubernatorial appointment for fixed terms for the purpose of removing them from civil service and subjecting their appointment and retention to the political process is entirely consistent with constitutional principles that contemplate that persons exercising certain kinds of power shall or may be made politically accountable. That legislative decision making workers' compensation hearing officers more accountable in the political process was made in conjunction with the legislative decision to make their decisions more final and hence more important.

There is nothing pretextual about the increase in the power of workers' compensation hearing officers. There is a real increase in their power and in the importance of their decisions. The Legislature did not merely transfer the duties of the referees to the magistrates.

G

Hearing officers who have the power to make decisions that become final unless appealed and whose findings are required to be considered conclusive on an appeal if supported by substantial evidence will have a function in state government similar in importance to that of the adjudicative appellate tribunals, the WCAB, and the employment security board of review. They will be deciding particular cases and controversies with a high degree of finality.

A primary purpose of Act 103 is to make the decisions of the magistrates final in most cases. While an appeal can be filed, it is intended that relatively few appeals will be successful. The number of members of the workers' compensation appellate tribunal has been reduced because the appellate role has been reduced from factfinder to a limited review for error. The decision of the magistrates will in most cases constitute the final decision. In making their decisions, the magistrates will be performing a function similar to that performed by the WCAB when the members of that board were thought to be performing a function of sufficient importance and dignity to be removed from the civil service system.

A magistrate, in hearing a workers' compensation claim, will have the same role as a judge when the judge acts as trier of fact in an action brought to enforce a right created by statute. A magistrate, like a judge, will find the facts with a large measure of finality and apply the law to the facts, and in so doing will often find it necessary to construe the workers' compensation act. In so construing the act, the magistrate may not have the guidance of reported appellate decisions. The function of a magistrate and of a judge and their authority and power in hearing a statutory claim are essentially indistinguishable. The findings of fact of a circuit judge are subject to reversal if clearly erroneous (when the Court of Appeals or this Court is left with the definite and firm conviction that a mistake was made),121 while a magistrate's findings of fact can be reversed on appeal only if there is not substantial evidence on the whole record to support the decision.

A magistrate's decision is reviewable by the newly constituted appellate commission under precisely the same standard that applies to judicial review of decisions of administrative tribunals generally.122 His decision has the same dignity and importance in that regard as the decision of the Employment Security Commission Board of Review or the Employment Relations Commission, which are subject to further review (by the circuit court for the Employment Security Commission Board of Review,123 and by the Court of Appeals for the Employment Relations Commission)124 under a substantial-evidence standard.

A magistrate's decision vis-a-vis the appellate commission has thus the same stature as the decisions of the Employment Security Commission Board of Review or Employment Relations Commission. The potential for review or reversal by the appellate commission of a magistrate's decision does not make the decision insufficiently important when the review is under the same limited standard that is applicable to review by a circuit judge of a decision of the Employment Security Commission Board of Review or by the Court of Appeals of the Employment Relations Commission.

H

It is argued that Act 103 destroys rights of the referees in continued employment.

Although the Legislature may not have been required to establish the position of workers' compensation referee in the civil service system, it did so and may thereby have created legitimate expectations of continued employment. Whatever promise of continued employment may have been made to the referees when they were given civil service status can, however, be fulfilled without a decision by this Court that the Legislature could not enlarge the duties and function of workers' compensation hearing officers and require that they be selected by a different process, their tenure be limited, and they be more accountable in the political process.

The referees have civil service status. Act 103 does not deprive them of that status. A year remains before the referee positions are abolished effective March 31, 1987. There are a number of civil service employment opportunities in state government for former referees. They are all lawyers. Some may become employed in other departments of state government either as lawyers or in some other capacity. There are a large number of civil service hearing examiner/officer/referee/ALJ positions in state government. The Civil Service Commission is charged with the responsibility of administering the civil service system.

Some of the referees may be selected by the qualifications advisory committee for recommendation to the Governor for appointment as members of the Board of Magistrates or as members of the appellate commission, and some so recommended may be appointed by the Governor.

Act 103 contemplates that until July 1, 1989, the Governor may appoint, with the advice and consent of the Senate, senior hearing referees and former hearing referees to the WCAB to fill a vacancy or to temporarily increase the number of members on the appeal board to expedite decisions in the large backlog of cases before the board.125

IX

The Civil Service Commission, the referees, and amici curiae make additional arguments.

A

It is argued at some length that the elimination of the position of hearing referee was motivated by racial and sexual bias.

The record in respect of these claims has not been developed.

The referees are not precluded by today's decision of this Court sustaining the facial constitutionality of Act 103 from seeking to establish that Act 103 discriminates racially or sexually in violation of the constitution of this state or of the United States.

B

It is claimed that the Civil Service Commission, not the Legislature, has plenary power to regulate the terms and conditions of the referees' employment.

We agree with the circuit judge that the power of the Civil Service Commission to "regulate all conditions of employment in the classified service"126 does not preclude the Legislature from eliminating a position once it is classified as within the civil service system.

The provisions authorizing the Civil Service Commission to "classify all positions" and empowering the appointing authorities to "create or abolish positions for reasons of administrative efficiency"127 do not in terms bar the Legislature from creating new positions or eliminating old positions and changing the respective duties and responsibilities by law.

As indicated earlier, there is authority that the Legislature is limited by a judge-made rule requiring that it act in good faith, and not merely transfer a civil service position to non-civil service status.128 It is again relevant that the Legislature did not merely transfer the duties of the hearing referees to the members of the Board of Magistrates. It vested the magistrates with the power, presently vested in the members of the WCAB, to determine the facts with substantial finality and the power to determine the facts with full finality in cases involving less than $2,000.

The question whether a position within the civil service system should be abolished for administrative efficiency is a different question than whether a position can properly be created outside of the civil service system. The language concerning abolition of a position for administrative efficiency speaks of the elimination of redundant positions in the classified service. The power to do so is vested in department heads who may see a job that no longer needs to be done. This provision does not limit the authority of the Legislature to provide that a function formerly performed by civil service employees henceforth shall be performed by a board or commission outside the civil service system. The Legislature is not powerless to eliminate a position in government once it is established.

The critical question in the instant case is not whether the Legislature can abolish or eliminate a position, but whether it can transfer duties and power exercised by a person holding a position covered by civil service to a board or commission. It if can do so, then the position is in effect eliminated, whether or not formally abolished, because then no further duty or power is attached to the position, the duties and power of which have been so transferred.

For reasons previously stated, the Legislature validly transferred the duties and power of the office of referee to a Board of Magistrates in connection with a substantial increase in the power and importance of the workers' compensation hearing officer function.

C

We hold that § 206, abolishing the position of hearing referee, and § 213, creating a board of magistrates, of Act 103 do not violate Const 1963, art 11, § 5. The judgment of the circuit court is reversed, and we remand to the circuit court for further consideration of plaintiffs' other claims. The injunction entered December 2, 1985, is dissolved.

Pursuant to MCR 7.317(C)(3), the clerk is directed to issue the judgment order immediately.

WILLIAMS, C.J., and CAVANAGH and BOYLE, JJ., concurred with LEVIN, J.

WILLIAMS, C.J. (concurring).

While I concur with Justice LEVIN'S opinion holding that § 213 of 1985 PA 103, creating the Board of Workers' Compensation Magistrates, is constitutional, I write specially to emphasize several points I think are particularly important.

The issue presented in this case is whether the Board of Workers' Compensation Magistrates, the duties of which are adjudicative, who adjudicate individually, but who may perform certain administrative functions collectively, falls within the "members of boards and commissions" exception of the civil service amendment to the 1963 Constitution, art 11, § 5. My concurrence is based upon the following reasoning.

First, the primary rule of construction in interpreting constitutional language is that, wherever possible, an interpretation that does not create constitutional invalidity is preferred to one that does. Council No 11, AFSCME v Civil Service Comm, 408 Mich. 385, 405; 292 N.W.2d 442 (1980). To the same effect is People v Bricker, 389 Mich. 524, 528; 208 N.W.2d 172 (1973):

Second, in order to clarify the meaning of a constitutional provision, the circumstances surrounding its adoption can be examined. Council No 11, supra. The focus of those who enacted the civil service amendment, Const 1908, art 6, § 22, in 1940 was not only to eradicate the "evils in state civil service under the spoils system," Council No 11, 401, but to provide sufficient exemptions to permit the operation of representative government with public responsibility. Such exemptions included "members of boards and commissions."

At this juncture, it is important to carefully consider the exact language1 of the civil service amendment and the circumstances surrounding its adoption. As to the exact language, the pertinent text reads as follows:

As to the circumstances surrounding the adoption of the civil service amendment, it is important to note that at the time the 1940 amendment was adopted there existed legislation touching upon two points in question here. First, legislation created a board having solely adjudicative duties. Second, legislation created at least two multimember boards or commissions which performed their primary functions through individual members. The Unemployment Compensation Appeal Board consisted of three members, to be appointed by the Governor, and had solely adjudicative duties. See 1937 PA 347.2 At the same time, the decision of an individual deputy member of the Industrial Accident Board (later referred to as compensation commissioners) would stand as the decision of the board or the commissioners unless review was timely sought. 1921 PA 43, 60. In addition, existing legislation provided that "The [liquor control] commission shall have the right and power to suspend or revoke and any commissioner designated by the chairman shall have the right and power to suspend pending a prompt hearing any and all licenses...." 1937 PA 281, § 20. Thus, it was well within the contemplation of those who framed the amendment to "except" from the classified civil service 1) a "board" which performed solely adjudicative functions similar to the one at issue in this case, and 2) a multimember commission which could perform its primary functions through individual commissioners.

Third, the instant Board of Magistrates has the necessary attributes of a "board" as that term has been interpreted by this Court in the only case considering the meaning of that term for purposes of the civil service amendment. In Case v Liquor Control Comm, 314 Mich. 632; 23 N.W.2d 109 (1946), we held that the act creating the Liquor Control Commission and its Board of Hearing Examiners did not violate the amendment because the board was 1) a body of importance and dignity, and 2) independent from the appellate functions of the Liquor Control Commission.3 Notably absent from this Court's discussion was any requirement that the board undertake collective action in order to qualify as a board within the meaning of the amendment. In addition, the enacters of the 1963 Constitution retained the exact language of the 1940 amendment, presumably with knowledge of this Court's construction in Case.

Consonant with Case, the legislation before us creates a board of considerable importance and dignity. The magistrates are appointed by the Governor and may be removed by the Governor only for good cause. MCL 418.213(1), (2); MSA 17.237(213)(1), (2). The magistrates have significant functions which are new responsibilities in comparison with those exercised by their predecessors, the hearing examiners: They must prepare written findings of fact and conclusions of law, MCL 418.847(2); MSA 17.237(847)(2), and their decisions are reviewable only for legal error and are considered conclusive if supported by competent, material, and substantial evidence on the record, MCL 418.861a(3); MSA 17.237(861a)(3). A magistrate's decision in disputes over claims of $2,000 or less is final and nonappealable in the absence of fraud. MCL 418.841(9); MSA 17.237(841)(9). In addition to its adjudicative duties, the newly created board has certain quasi-legislative and quasi-executive responsibilities: It has the authority to make rules and regulations to govern its own administrative hearing procedures, and it has the authority to hire and fire its own employees. MCL 418.213(6), (7); MSA 17.237(213)(6), (7).

The Board of Magistrates is also independent. The legislation characterizes the board as an "autonomous entity" and an "independent body." MCL 418.213(1), (7); MSA 17.237(213)(1), (7). The board is separate from the outgoing Workers' Compensation Appeal Board, the new Workers' Compensation Appeal Commission, and the remainder of the Department of Labor. The chairperson of the board has the general supervisory control over the board's employees and its work schedule. MCL 418.213(3); MSA 17.237(213)(3). In addition, the members' appointment by the Governor and the board's ability to create its own administrative hearing procedures and to hire and fire employees enhance its autonomy from other seats of power. MCL 418.213(6), (7); MSA 17.237(213)(6), (7).

The Board of Magistrates is also independent in its adjudicative role. The outcome of cases heard by the board, while ultimately reviewable by the appellate commission for errors of law or sufficiency of the evidence, is not subject to direction by a supervisory authority.

While the Board of Magistrates is not required to deliberate collectively on matters within its adjudicative authority, it may act collectively in its quasi-legislative and quasi-executive functions. However, Case does not impose a collective-action requirement on the term "board" as it appears in the civil service amendment.4

The fourth and final reason for finding this statute constitutional is that treating this board as exempt from civil service requirements comports with the underlying purpose of the civil service amendment. This purpose was to protect the great bulk of civil servants from partisan hiring and firing while at the same time permitting popular representation and public accountability where appropriate to good government.

This exception not only comports with a reasonable and historically consistent analysis of the constitutional language, but also serves the intended constitutional purpose of permitting necessary flexibility in the system, thereby both providing job protection from partisan politics and maintaining public accountability. In this connection, it is appropriate to note that the Board of Magistrates was the creation of a genuine and widely supported movement, especially by those both in management and labor interested in the effective and economical operation of the workers' compensation system, to make the system more efficient by giving greater public representation and responsibility to those who perform the particular functions clothed in the public interest. These magistrates are key performers, not the "mere employees" that this Court in Case sought to protect from an overreaching, partisan Legislature. Case, supra, 641. The legislation received bipartisan support throughout its history. It was enacted by a Democratic House and a Republican Senate, and signed by a Democratic Governor with the general acclaim of the media and the public.

Lastly, the newly created Qualifications Advisory Committee, which will develop a qualifications examination and forward to the Governor names of qualified applicants for magistrate positions, ensures against the possibility of mere partisan maneuvering. The fixed terms of office for the magistrates, with removal only for cause, will also make their employment secure from partisan swings in government. Thus, the legislation strikes a healthy balance, as intended by the constitution, between insulating the magistrates from partisan pressures and keeping them mindful of their weighty responsibility to the public.

Therefore, because the instant legislation lies within a reasonable construction of the language and intentions of the civil service amendment, and does not open the door for evasion of the protective purposes of the amendment, I would find that the Board of Magistrates is a "board" within the intended meaning of the amendment and is, therefore, properly excepted from the civil service.

In summary, two rules of constitutional construction primarily compelled this analysis: the presumption of constitutionality, and the requirement that the constitution be construed in light of circumstances known to the framers at the time of the enactment of the civil service amendment. Legislation existing at that time permitted "boards" with solely adjudicative functions and boards and commissions which performed their primary functions through individual members. Thus, while the attributes of quasi-legislative or quasi-executive policy-making and collective action are relevant to the determination whether a board is legitimately excepted from the civil service, such attributes are not necessarily determinative of the legitimate exception. Additional attributes which are relevant to this analysis are the independence, importance, and dignity of the board, and the degree to which the legislation strikes the balance intended by the constitution between protection against partisan politics and maintenance of representative and responsible government. Application of these factors to the instant legislation leads to the conclusion that the Workers' Compensation Board of Magistrates is properly excepted from the civil service.

Because the circuit court found the legislation unconstitutional on its face, it did not decide the plaintiffs' other claims for relief. Finding the legislation facially constitutional, we would remand this case to the circuit court for further proceedings on plaintiffs' remaining claims.

CAVANAGH and BOYLE, JJ., concurred with WILLIAMS, C.J.

ARCHER, J. (dissenting).

This litigation arises out of a constitutional challenge to the 1985 legislative reform of the workers' compensation act, 1985 PA 103. Two key sections of the legislation are in dispute: § 206, which abolishes the position of hearing referee currently held by employees within the state's classified civil service, and § 213, which establishes a Board of Magistrates that would be excepted from the civil service.

We are asked to decide whether 1985 PA 103, §§ 206 and 213, MCL 418.206, 418.213; MSA 17.237(206), 17.237(213), violate the civil service provisions of art 11, § 5 of the Michigan Constitution.

We would hold that because the Board of Magistrates created under § 213 is not required to carry out any of its primary functions as a collective body, it is not a true board for purposes of the "boards" and "commissions" exception to the civil service amendment. We would, therefore, declare that § 213 of 1985 PA 103 violates art 11, § 5 of the Michigan Constitution. Our decision would automatically render § 206 of 1985 PA 103, which abolishes the current position of hearing referee, and all other sections contained in 1985 PA 103 that are delineated as nonseverable from § 213 inoperative.

I

FACTS

Since 1980, Michigan's Governors and legislators have evidenced a strong desire to reform the state's workers' compensation system. In response to legitimate business concerns, while balancing the concerns of injured employees, 1980 PA 357, 1981 PA 192-203, 1982 PA 32, and 1983 PA 159 were approved by Governors William Milliken and James Blanchard. In furtherance of the reform of the workers' compensation system, Governor Blanchard, on September 14, 1983 appointed Professor Theodore J. St. Antoine of the University of Michigan Law School to be his special counselor on workers' compensation and to conduct a study and issue a report.

Professor St. Antoine submitted his report on Workers' compensation in Michigan: Costs, benefits and fairness to Governor Blanchard on December 12, 1984. Among other observations contained in his report, Professor St. Antoine noted: Hearing referees issue short-form awards with no statements of reasons for their decision, and as a result of hearings de novo before the Workers' Compensation Appeal Board, which announces its findings of fact and conclusions of law in writing, there was a 7,000-case backlog.1 In order to correct the problem, Professor St. Antoine recommended that findings of fact by the hearing referees be deemed conclusive if "supported by competent, material, and substantial evidence on the whole record" and that the hearing referees be required to prepare written findings of fact and conclusions of law.2

Professor St. Antoine acknowledged expressed concern by some that hearing referees were deficient in objectivity and impartiality of judgment. He concluded, however, that the claims of bias were exaggerated.3 He did, nevertheless, urge the Legislature or the Civil Service Commission to establish a bipartisan Qualifications Advisory Committee to interview and evaluate prospective candidates for the position of hearing referee, with ratings to be transmitted confidentially to the appointing authority.4

Upon receipt of Professor St. Antoine's report, both the House and Senate introduced a series of bills and amendments to effectuate reform of the workers' compensation system. A conference committee of House and Senate members ultimately worked toward a compromise that resulted in the enactment of 1985 PA 103. The position of hearing referee was abolished in § 206. A Board of Magistrates, excepted from civil service, was established by § 213.5 Section 4 of 1985 PA 103 tied § 213 to many other sections of the law, so that if this Court found § 213 to be unconstitutional then most of the changes in the workers' compensation law would not go into effect.

Governor Blanchard approved 1985 PA 103 on July 30, 1985.

On August 8, 1985, plaintiff Civil Service Commission filed a complaint in the Ingham Circuit Court, seeking a declaratory ruling that §§ 206 and 213 are in violation of Const 1963, art 11, § 5. The commission also sought injunctive relief.

On August 16, 1985, plaintiffs hearing referees filed a similar action in the Ingham Circuit Court, seeking a declaratory ruling that §§ 206 and 213 are unconstitutional. The hearing referees also sought a writ of mandamus against defendants6 to direct them to continue employment of the current hearing referees within the Workers' Compensation Bureau and classified civil service.

On September 17, 1985, Governor Blanchard filed an Executive Message with this Court requesting that the Ingham Circuit Court be authorized to certify a controlling question. In lieu of granting the Governor's request, we directed the Ingham Circuit Court to establish an accelerated schedule of proceedings to include discovery7 and trial, and to issue a final judgment in this case. On December 2, 1985, the Ingham Circuit Court issued a final judgment.

Relying on this Court's holding in Case v Liquor Control Comm, 314 Mich. 632; 23 N.W.2d 109 (1946), the circuit court declared § 213 unconstitutional, stating:

The defendants appealed to the Court of Appeals on December 9, 1985. The Governor then filed a request with this Court asking that we certify the following question for immediate appeal here:

We granted leave for immediate appeal on December 20, 1985.

II

ISSUE: DO 1985 PA 103, §§ 206 AND 213 VIOLATE THE CIVIL SERVICE PROVISIONS IN ARTICLE 11, § 5 OF THE MICHIGAN CONSTITUTION?

Defendants assert that because § 213 creates a Board of Magistrates, an independent and autonomous body of importance and dignity, it is exempt from the classified civil service under art 11, § 5 of the Michigan Constitution.

Plaintiffs, on the other hand, argue that § 213 is unconstitutional because it does not create a true board. They assert that § 213 creates a board in name only.8 We believe that the question of the board's constitutionality is to be answered by analyzing the duties of the board, and not by assessing the motives of the Legislature in creating it.

The first paragraph of art 11, § 5 reads in pertinent part:

Defendants rely on the quoted reference to the "boards or commissions" exemption from the classified civil service to support their argument that § 213 does not violate art 11, § 5.

III

HISTORICAL BACKGROUND

A brief review of the historical background of the civil service amendment is necessary before we determine the constitutionality of the challenged section of 1985 PA 103. Prior to the adoption of the civil service amendment by the people of Michigan, the state had experienced a longstanding "spoils system" of state personnel practices. In 1935, the Civil Service Study Commission was appointed by Governor Frank D. Fitzgerald to conduct a study of Michigan's personnel practices. After conducting a year-long study, the study commission reported its findings and recommendations to the Governor. Michigan's civil service system came into being as a result of the 1936 report of the study commission.9

The Legislature responded to the 1936 study commission report by passing 1937 PA 34610 which established the state civil service system. The act purported to eliminate the "spoils system" and to contribute to the merit system in public employment.11 This was accomplished at least in part through the act's prohibition of civil servant participation in political activities and assessment schemes during hours of employment.12 Also, the act exempted boards and commissions required by law to be appointed by the Governor from the classified civil service.

In 1939, Michigan experienced an almost complete reversal in its civil service policy with the passage of 1939 PA 97, which amended 1937 PA 346. While maintaining the ban on political activity by civil servants by banning all political activity during and after hours of employment, 1939 PA 97 contained a number of destructive provisions which seriously weakened the newly created civil service system.13

In 1940, the people of Michigan adopted the civil service amendment to the constitution which superseded 1937 PA 346 and set up a new commission and system.14 The amendment provided that all positions in the state service were a part of the state civil service except specific listed positions,15 including boards and commissions.

The people adopted a new constitution in 1963. Const 1963, art 11, § 5 revised the civil service amendment adopted in 1940 by strengthening the role of the chief executive and the administrator and by providing for limited legislative control of wage increases under specified circumstances. Also provided were additional exempt positions.

IV

ANALYSIS

Turning to the issue presented in this case, we must determine the common understanding of the words "boards" and "commissions" as contained in art 11, § 5.

In Traverse School Dist v Attorney General, 384 Mich. 390, 405-406; 185 N.W.2d 9 (1971), we set forth the following three rules of construction of a constitution: 1) the primary rule is the rule of "common understanding" of the words employed; 2) "to clarify [the] meaning [of the words employed], the circumstances surrounding the adoption of a constitutional provision and the purpose sought to be accomplished may be considered"; 3) "wherever possible an interpretation that does not create constitutional invalidity is preferred to one that does."

In Oakland Co Taxpayers' League v Oakland Co Supervisors, 355 Mich. 305, 323; 94 N.W.2d 875 (1959), a test was formulated to determine whether a statute is constitutional. We held:

See also Case v Liquor Control Comm, supra, 638.

A "board" is commonly understood as a body composed of more than one person which performs its primary functions collectively rather than through individual members. People v Maynard, 15 Mich. 463 (1867). In Maynard, the issue was whether legislation organizing a new township and county was invalid because the county included only one township. The Court held that the new act failed to create a viable "board of supervisors," as required by the constitution, because one supervisor could not act as a "board." It stated that among the necessary incidents of a county are townships "whose supervisors conjointly may exercise the legislative and administrative powers of the corporation." Id., 468 (emphasis added). The county board of supervisors' power could not be delegated to one person, because the board was designed to act as an "aggregation of town officers." Id., 472.

In a separate concurrence, Justice COOLEY further elaborated upon the necessary attributes of a "board of supervisors":

This common understanding of the meaning of "board" is again exemplified in Case v Liquor Control, supra, which analyzed that term for purposes of the civil service exemption at issue here. Both defendants and plaintiffs rely on this Court's holding in Case as authority for their respective arguments concerning the constitutionality of § 213.

In Case, this Court considered whether an amendment to the Liquor Control Act of 1933,16 which created a Board of Hearing Examiners, violated the civil service amendment. The act provided that "the hearing examiners or any member thereof shall conduct hearings on questions referred to the board by the commission...." The act also provided that "[i]n all instances when a license is to be either suspended or revoked the commission shall cause a complaint to be filed with said board whereupon said board shall conduct a hearing...." (Emphasis added.) We held that the statute creating the Board of Hearing Examiners did not violate the civil service amendment, stating:

The statute construed in Case authorized the board or any member thereof to conduct hearings on questions referred to the board by the commission. However, in instances where the commission filed a complaint against a licensee, the statute provided that the board should hold a hearing. Individual members of the board were not authorized to hold such hearings. Hence, the Board of Hearing Examiners was required by statute to conduct hearings on complaints filed by the Liquor Control Commission as a collective entity. In contrast, we note that none of the provisions contained in 1985 PA 103, including § 213, require the Board of Magistrates to function as a collective body.

Relying on Napuche v Liquor Control Comm, 336 Mich. 398, 401; 58 N.W.2d 118 (1953), the majority states that the practical construction of the statute presented in Case was that any member of the board could conduct a hearing on a complaint against a licensee seeking a suspension or revocation of a license. The plain language of the statute in Case indicates that the board or any member could conduct hearings on questions referred to the board by the commission. The statute, however, required the board to conduct hearings on complaints to revoke or suspend a liquor license which were filed by the commission. There was no provision authorizing any member of the Board of Hearing Examiners to conduct a hearing on complaints filed by the commission. Case can be distinguished from Napuche because the Case Court was deciding the constitutionality of the challenged act, the problem we are confronted with in this case. The Napuche Court, however, was not confronted with the constitutionality of the statute which established the Board of Hearing Examiners. Instead, the question presented in Napuche was whether the plaintiffs were afforded due process when the Liquor Control Commission did not conduct its own hearing, but relied on the testimony received at a hearing conducted by a hearing examiner. The Court concluded that plaintiffs did receive their due process rights because plaintiffs were afforded an opportunity to be heard at the hearing conducted by the hearing examiner and the Liquor Control Commission had access to the transcript.

A second rule of constitutional interpretation requires an examination of the circumstances surrounding the adoption of a provision. A review of all Michigan boards and commissions in existence during the time the 1940 civil service amendment was adopted by the people,17 indicates that the boards or commissions were required to perform at least some of their primary functions as a collective body.

We summarize some examples of the duties and characteristics of state boards and commissions as they existed in 1940.

The Unemployment Compensation Commission was created by statute18 in 1936 and consisted of four members appointed by the Governor with the advice and consent of the Senate. Three members constituted a quorum for the transaction of commission business. The commission was authorized to prescribe its organization and methods of procedure. It was responsible for developing rules and regulations to reduce unemployment, to encourage and assist in the adoption of practical methods of vocational training, retraining, and vocational guidance for use during times of business depression and unemployment, and to promote the reemployment of workers throughout the state. Hearings concerning the policies or rules and regulations of the commission were to be held before an appeal tribunal or the commission. Individual members of the commission were authorized to issue subpoenas to persons who were required to appear before the commission or its duly authorized agent to be examined regarding any matter within the scope of inquiry or investigation being conducted by the commission. The commission was required to establish regulations providing for the examination of claims, the determination of their validity, and the amount and duration of benefits to be paid. Unemployment compensation claims were to be examined by representatives designated by the commission. These representatives made determinations of fact which were appealable to a referee employed by the commission. Referee decisions were final decisions of the commission unless timely appealed to the Unemployment Compensation Appeal Board, discussed below. The commission was independent and employed its own staff. The commission was also a policy-making body which was required by statute to transact its business through a quorum of three members. Hence, it was required to carry out at least part of its decisionmaking functions collectively.

A three-member Unemployment Compensation Appeal Board was provided for in a statute19 enacted to amend the statute which created the Unemployment Compensation Commission. The statute required that the appeal board members be appointed by the Governor with the advice and consent of the Senate. The appeal board on its own motion was authorized to affirm, modify, or set aside any decision of a referee on the evidence submitted to the referee, or direct the taking of additional evidence, or permit any of the parties to initiate further appeals before it. The appeal board was empowered to remove to itself or transfer to another referee the proceedings in any claim pending before a referee. Any proceedings so removed to the appeal board had to be heard by a quorum of the board. While the statute provided that any member of the appeal board was authorized to administer oaths, take depositions, and issue and enforce subpoenas, persons appealing a referee decision had to appear before the board and be examined. The appeal board was independent and was required by statute to act as a board to make its own motion to affirm, modify, or set aside any decision of a referee.

The Labor Mediation Board, created by statute20 in 1939, consisted of three members appointed by the Governor with the advice and consent of the Senate. The statute provided that two members constituted a quorum, but "official orders ... require[d] concurrence of a majority of the board." The board was independent and responsible for mediating labor disputes between organized employees and employers in Michigan. The board, each member and each person designated had power to hold public or private hearings, subpoena witnesses, and administer oaths. Yet, official orders of the board required concurrence by at least two of the three members of the board.

The Liquor Control Commission was created by statute21 in 1933 and consisted of five members. Three of the members were appointed by the Governor with the advice and consent of the Senate. The Governor and the Secretary of State served as ex-officio members of the commission. The commission, and not individual members, was authorized by statute to establish policies concerning the sale and distribution of alcoholic beverages in Michigan. The commission was also empowered to issue and revoke or suspend liquor licenses. The policies established by the commission included the fixing of prices of alcoholic beverages to be sold by specially designated distributors, and the uniform pricing of alcohol to be sold by state liquor stores. The commission also designated hours within which liquor could be sold. The policy-making functions of the Liquor Control Commission were carried out through collective decisionmaking.

The State Hospital Commission was created by statute22 in 1937 and consisted of seven members appointed by the Governor with the advice and consent of the Senate. The commission was required to hold not less than ten meetings per year. It had jurisdiction over the state mental institutions. The entire hospital commission, and not individual members, was responsible for making policies concerning the "methods of care, treatment, and prevention of insanity, feeble-mindedness, and epilepsy." It was also responsible for developing a statewide mental hygiene program. The commission carried out its policy-making functions through collective decisionmaking.

The Board of Aeronautics, created by statute23 in 1929, was composed of five members to be appointed by the Governor with the advice and consent of the Senate. The State Highway Commissioner was directed and authorized to cooperate with the board. The Board of Aeronautics was given general supervision and control over all airports and landing fields used for commercial purposes, all state and municipal airports, and all schools of aviation. It was specifically empowered to develop rules and regulations governing commercial airports and the curriculum for the schools of aviation. Additionally, the board reviewed and approved applications to operate airports, landing fields, and schools of aviation. The statute creating the Board of Aeronautics did not authorize individual members of the board to make decisions concerning the rules and regulations or on applications submitted to the board.

Finally, the Athletic Board of Control, created by statute24 in 1939 consisted of five members. Four members were appointed by the Governor with the advice and consent of the Senate. The board was headed by the State Athletic Commissioner. The board had sole jurisdiction over all boxing and sparring matches, wrestling contests, and exhibitions held in the state. The board collectively made decisions concerning the issuance and revocation of licenses. Rulings of the commissioner on matters not covered by the act governing the Athletic Board of Control were to be final only until the next regular meeting of the entire board. Special meetings of the entire board could be requested by any party aggrieved by a ruling of the commissioner.

Our review of the above boards and commissions indicates that they were independent and they were responsible for making policies, or, as in the case of the Labor Mediation Board, settling disputes in their respective areas. At least some of the members on each of these bodies had to be appointed by the Governor. We believe that these boards carried out their primary functions through collective decisionmaking. None of the statutes creating these boards and commissions authorized individual members to carry out all of the board's or commission's primary functions.25

We conclude that the people, in adopting the civil service amendment in 1940, commonly understood the words "boards or commissions" to mean a body which carried out all or some of its primary functions as a collective entity. We do not believe that the common understanding of these two words changed when the people adopted Const 1963, art 11, § 5.

We note that, in declaring that "[t]he classified state civil service shall consist of all positions in the state service ...," art 11, § 5, with numerical specificity, excepts from the covered principal departments of state government only the department head and no more than five additional positions. That leaves within the classified service some 57,000 executive branch state employees, including a wide spectrum of professionals, division and bureau chiefs, institutional directors, and high ranking police officials, many of whom are responsible for the supervision of thousands of employees and the expenditure of millions of dollars of public funds.

The expression of such closely guarded numerical exceptions within the operating departments of state government, leaving within the classified service positions of high importance, leads us to believe that the amendment drafters would not, in turn, undo their work by exempting boards and commissions unless they were uniquely different from other functions of state government. Our review of the boards and commissions extant in 1940 clearly reveals those distinguishing characteristics which we feel motivated the boards and commissions exception.

We agree with the majority that independence or autonomy is one of those characteristics; however, we cannot agree with their dismissal of the collective deliberation requirement, which was so common to the 1940 boards and commissions and which represents the most common understanding, literally and historically, of the words "boards and commissions."

On the basis of the above discussion, we would hold that the following three criteria should be used in determining whether a statute validly creates a civil service exempt board or commission under the Michigan Constitution. Members of the board or commission should be appointed by the Governor or the Legislature. The members of these bodies should be required by statute to perform some of their primary decisionmaking functions collectively either as an entire board or commission or through panels of the bodies. The board or commission should also be independent in the exercise of its principal responsibility and have either a policy-making or an adjudicative role.

CONCLUSION

We would hold that because the Board of Magistrates created under § 213 is not required to carry out any of its primary functions as a collective entity, the board is not a true board for purposes of the "boards" and "commissions" exception to the civil service amendment. We, therefore, would declare that § 213 violates art 11, § 5.26

Our decision in this case would automatically render § 206, which abolishes the current position of hearing referee, and all other sections contained in 1985 PA 103 which are nonseverable from § 213 inoperative.

Our holding would make it unnecessary to address the remaining issues raised by plaintiffs and the various amici curiae because they all challenge the constitutionality of § 206.

BRICKLEY and RILEY, JJ., concurred with ARCHER, J.