Opinion
November 19, 1948. —
December 15, 1948.
APPEAL from a judgment of the circuit court for Dane county: ALVIN C. REIS, Circuit Judge. Reversed.
For the appellants there was a brief by Quarles, Spence Quarles, attorneys, and Kenneth P. Grubb and Norman C. Skogstad of counsel, all of Milwaukee, and oral argument by Mr. Grubb.
For the respondents there was a brief by Stroud, Stebbins, Wingert Young of Madison, and oral argument by Byron H. Stebbins.
Action commenced on May 26, 1947, by Combustion Engineering Company (Raymond Pulverizer Division) and Travelers Insurance Company against John Fritz and Johanna Fritz, parents of John Fritz, Jr., deceased, Franklin Winninghoff Company, Employers Mutual Liability Insurance Company, and Industrial Commission of Wisconsin to have an order of the Industrial Commission directing plaintiffs to pay certain sums as workmen's compensation on account of the death of John Fritz, Jr., set aside. Judgment for plaintiffs entered on June 10, 1948. Defendants, Franklin Winninghoff Company and Employers Mutual Liability Insurance Company, appeal.
Deceased, John Fritz, Jr., was killed while moving some heavy machinery being installed by Raymond Pulverizer Division of the Combustion Engineering Company in a sewage-disposal plant for the city of Sheboygan. Franklin Winninghoff Company was the general contractor for the construction of the plant but the Combustion Engineering Company had a separate contract with the city for the installation of certain equipment.
Combustion Engineering needed some men to do the work installation. C. W. Gordon, its erection superintendent, consulted the Winninghoff Company about obtaining the men. Winninghoff went to the local construction labor union. The union agreed to furnish the necessary employees. Winninghoff found that it would need some extra employees when Combustion Engineering had finished the installation and wanted to keep the men on. The union objected to both companies issuing pay checks to the men for two reasons: Unemployment compensation and the difficulty the union had experienced in receiving payment from foreign corporations.
The result was an agreement between the Winninghoff Company and the Combustion Engineering Company by which the latter agreed to reimburse Winninghoff for all wages paid to the men who did work for Combustion Engineering at a rate of $1.85 per hour for mechanics and masons, and $1.35 per hour for labor. This was to cover not only wages but also unemployment insurance, workmen's compensation insurance, social security, and the cost of handling the items on the pay roll.
The union explained the arrangement to the men and they agreed to work under the direction of the superintendent of Combustion Engineering. They were paid $1.57 1/2 per hour through Winninghoff.
While the men were moving some heavy machinery by means of a rope sling, the rope broke and the machine fell on the deceased killing him.
The Industrial Commission found that the men were employed by the Winninghoff Company but at the time of the accident had been loaned to the Combustion Engineering Company. It ordered payment by the Travelers Insurance Company, the workmen's compensation insurer of Combustion Engineering Company, of the unpaid balance of compensation to John and Johanna Fritz and of $2,000 to the state fund and directed Combustion Engineering to pay Mr. and Mrs. Fritz fifteen per cent increased compensation on account of violation of the safe-place statute.
The circuit court for Dane county ruled that John Fritz, Jr., was an employee of the Winninghoff Company at the time of the accident and that the order of the Industrial Commission should be set aside.
It appears that at the time of the accident John Fritz, Jr., was doing the work which Combustion Engineering Company had contracted to do but was being paid by check from Franklin Winninghoff Company. The Industrial Commission found that he was an employee of Winninghoff but had been loaned to Combustion for that certain job. The trial court held that Fritz was an employee of Winninghoff and that Winninghoff had contracted with Combustion to furnish the labor for the installation of Combustion's equipment; therefore, at the time of the accident Winninghoff, not Combustion, was the employer.
The problem as to which of two contractors was the employer at the time of the accident has been before this court a number of times. In those cases four factors have been considered in determining whether the relation of employer-employee exists between a special employer and an employee who has been "loaned" to him: (1) Did the employee actually or impliedly consent to work for a special employer? (2) Whose was the work he was performing at the time of the injury? (3) Whose was the right to control the details of the work being performed? (4) For whose benefit primarily was the work being done? Seaman Body Corp. v. Industrial Comm. 204 Wis. 157, 235 N.W. 433.
Applying those tests to the facts of this case we find that Fritz must be held to have been the employee of Combustion at the time of his injury.
(1) There must be a consensual relation between the loaned employee and the borrowing employer to establish a new employee-employer relationship. There must be consent, express or implied, by the employee to working for the new employer. The evidence discloses that Fritz agreed to work for Combustion. Mr. Raml, the union representative, testified: "When I had the conversation with John Fritz and Branak and White I told them that there was some work at the present time at the sewerage-disposal plant and I told them that it was for the purpose of moving heavy machinery. I also explained the arrangement regardless of the fact that they were doing work of moving heavy machinery, which would be Raymond Pulverizer Division's job, they would nevertheless be paid by Mr. Winninghoff, that is by his check. I explained that to Mr. Fritz, Mr. Branak, and Mr. White and they all understood that arrangement. . . . As far as I knew they were doing any and all work required of them just as though they were employed by the Raymond Pulverizer Division, with the exception of getting their checks from Mr. Winninghoff."
(2) At the time of the accident Fritz was working for Combustion. Combustion had a separate contract to install the machinery which Fritz and the other men were moving. Winninghoff had nothing to do with that equipment.
(3) The work was done under the sole direction of Mr. Bachman, Combustion's superintendent. Rudolph Branak, one of the workmen, testified: "During the two days before Johnny Fritz was killed I knew of no one from Winninghoff Company that was on the job. The instructions were given by Mr. Bachman. He made out the time slips."
(4) Combustion had the contract to install this machinery. It consulted Winninghoff to see about obtaining some men to do that work. Winninghoff agreed to get the men and went to the local labor union. Because of the union's objection to two pay checks Winninghoff agreed that the men should be paid through it. The single fact that the reimbursement was more than the wages paid the men is not controlling. The work was still primarily for the benefit of Combustion since it was their contract to install the equipment. Winninghoff's agreement to pay the wages and to be reimbursed by Combustion was more for the accommodation of Combustion than anything else. Mr. Raml, the union agent, testified that one of the reasons the union did not want to make an agreement with Combustion was the difficulty that had been experienced in receiving payment from out-of-state corporations. Winninghoff's part in the matter of arranging the agreement between the union agent acting for the men and Combustion was an accommodation by which Combustion secured the men. The men were working primarily for the benefit of Combustion. The only factor pointing to the conclusion that the work was for the benefit of Winninghoff was the wage differential. This is evidence, but in view of the other facts it is not controlling.
Visiting Nurse Asso. v. Industrial Comm. 195 Wis. 159, 217 N.W. 646, Boehck Equipment Co. v. Industrial Comm. 246 Wis. 178, 16 N.W.2d 298, and similar cases deal with a different type of situation than that presented in this appeal. In those cases the general employer had contracted to furnish services — nursing services or renting excavating machines. There was no question of obtaining workers to do the sole work of the other employer. In both those cases the business of the general employer was furnishing such services; in the present case Winninghoff was clearly not in the business of supplying to others laborers for heavy-machinery installation. The fact that Winninghoff was to use the men on its job after they finished their work for Combustion would not destroy or overcome the relation between the men and Combustion.
The Industrial Commission also ordered Combustion to pay fifteen per cent increased compensation because of a violation of the safe-place statute. The violation was in using a rope sling to move the machinery instead of chain or cable. The commission found that "had the employer exercised reasonable care and provided the employees with the necessary safe equipment, such as a cable or chain to be used for slings in place of rope which was used, the accident would not have occurred." The evidence shows that the accident occurred when the machine which was being moved slipped and jerked and broke the rope. In view of the evidence the commission's finding must be upheld.
By the Court. — Judgment reversed. Cause remanded with directions to reinstate and confirm the order of the Industrial Commission.
FRITZ and HUGHES, JJ., dissent.