Opinion
No. 40681
Decided December 20, 1967.
Workmen's compensation — Procedure rules adopted by Industrial Commission — Section 4123.32 (D), Revised Code — Employer applying for coverage, protected, when — Liability for payment of compensation awarded by commission to employee.
Under Rule 5 of the General Procedure Rules, adopted by the Industrial Commission pursuant to the authorization and direction of Section 4123.32 (D), Revised Code, an employer amenable to the Workmen's Compensation Act who first applies for workmen's compensation coverage is not protected thereunder until his premium payment is actually received by the Industrial Commission, and he is liable in an action brought by the state for the payment of compensation and medical expenses awarded by the commission to one of his eligible employees who sustains an injury in the course of and arising out of the employment prior to the time the employer's first premium is received by the Industrial Commission.
APPEAL from the Court of Appeals for Hamilton County.
This action was instituted in the Court of Common Pleas of Hamilton County under the provisions of Section 4123.75, Revised Code, by the state of Ohio against the Brand X Corporation, an Ohio corporation doing business in the city of Cincinnati and an alleged noncomplying employer under the Workmen's Compensation Act, to recover from it the amount of compensation and medical expenses awarded one of its injured employees by the Industrial Commission.
Judgment was rendered for the defendant employer by the trial court, and that judgment was affirmed on an appeal on questions of law by the Court of Appeals.
The cause is now here for determination by the allowance of a motion to require the Court of Appeals to certify the record.
Mr. William B. Saxbe, attorney general, and Mr. James W. Rickman, for appellant.
Mr. John J. Sullivan, for appellee.
The facts are that the employee was injured on November 7, 1960. Brand X Corporation, an employer amenable to the Workmen's Compensation Act, first filed application for State Insurance Fund coverage on November 3, 1960, but without any accompanying remittance. Such application was received by the bureau on November 7, 1960. A premium payment by check of $42 was sent to the commission on November 17, 1960, and insurance fund coverage was granted the employer, effective November 21, 1960, the date on which payment was received.
It is the contention of the state that, in the absence of a certificate of coverage on the date of the injury, the defendant as an amenable employer under the law is a noncomplying employer without benefit of coverage and must pay the award made against it.
That part of Section 4123.01, Revised Code, which is pertinent, provides:
"(B) `Employer' means:
"* * *
"(2) Every person, firm, and private corporation, including any public service corporation, that (a) has in service three or more workmen or operatives regularly in the same business or in or about the same establishment under any contract of hire, express or implied, oral or written, or (b) is bound by any such contract of hire or by any other written contract, to pay into the insurance fund the premiums provided by Sections 4123.01 to 4123.94, inclusive, of the Revised Code."
Applicable parts of Section 4123.32, Revised Code, read:
"The Industrial Commission shall adopt rules and regulations with respect to the collection, maintenance, and disbursements of the State Insurance Fund among which rules and regulations shall be the following:
"* * *
"(D) Such special rules as the commission considers necessary to safeguard the fund and as are just in the circumstances, covering * * * an employer [who] first makes application for state insurance * * *."
Surely, under the above-quoted section, the formation, adoption and enforcement of such rules are left largely to the sound discretion of the Industrial Commission.
The Ohio State Workmen's Compensation Insurance Fund Manual, covering Rating Rules, Premium Rates and Index of Classifications, under the heading, "General Procedure Rules," at page 21, under I, provides:
"Rule 1. To secure the initial quotation of rate and premium, the employer shall complete and return to the Columbus central office of the Industrial Commission of Ohio and Bureau of Workmen's Compensation an application prepared by the commission and bureau and entitled `Application for Classification of Industry and for Premium.'
"* * *
"Rule 2. Upon receipt of the completed application as indicated under Rule 1, the underwriting section shall forthwith issue premium advice and pay-in-order on same setting forth the classification, rate and the eight months' advance estimated premium of applicant.
"* * *
"Rule 5. The applicant's protection shall date from the time the payment of premium is actually received by the bureau and/or commission." (Emphasis supplied.)
Since, under Rule 5, the employer was not protected by the State Insurance Fund on the date of the injury to its employee, viz., November 7, 1960, it was a noncomplying employer at that time and liable for the payment of the award made against it, and in the circumstances the state properly brought suit for the payment of the award and was entitled to recover. This may seem a harsh result, since the application for coverage was made on November 3, 1960. Nevertheless, it is in accordance with statutory law reflected in the rules of the Industrial Commission adopted and promulgated upon statutory authority.
The judgment of the Court of Appeals is reversed and final judgment is rendered for the appellant.
Judgment reversed.
MATTHIAS, O'NEILL, HERBERT and BROWN, JJ., concur.
TAFT, C.J., and SCHNEIDER, J., dissent.