Oremus v. Oregonian Publishing Company , 11 Or. App. 444 ( 1972 )

POLEY, J.

This case was remanded by this court for the determination of who was or were the true employer or employers of Daniel Oremus. See 3 Or App 92, 470 P2d 162, Sup Ct review denied (1970). The Workmen’s Compensation Board found that The Oregonian was the true employer and should reimburse Mr. Leibrand, the newspaper distributor, for compensation paid or payable. The board based its decision on a test denominated “relative nature of the work.”^① The circuit court reversed the board’s finding and held, according to established principles, that The Oregonian had no contract with Oremns and no right to control his work, and he therefore was not an employe of The Oregonian. Leibrand and his compensation carrier appeal to this court.

ORS 656.002(13) defines an “employer” as:

“* * * [A]ny person * * * who contracts to pay a remuneration for and secures the right to direct and control the services of any person.”

ORS 656.002(21) defines a “workman” as:

* * [A] ny person * * * who engages to furnish his services for a remuneration, subject to the -direction and control of an employer * * *.”

An early and much quoted interpretation of these requirements is found in Landberg v. State Industrial Acc. Com., 107 Or 498, 502, 215 P 594 (1923):

“The relation -that must exist to constitute one person an employer and another person a workman, under the compensation act, is the relation of master and servant, and this relation originates wholly in contract, although the contract may be either express or implied. There must be a contract of hire. The services which the servant contracts to perform are personal services, and the master must have the right to direct and control the details of the work and the manner and mode of its performance. The test of the control, which the employer has the right to exercise and to which the servant is subject, means complete control * * *. In performing the services the servant represents the will of the master and is under his complete control and direction in all of the details of the work and in the mode and manner of its performance.”

Thus, there are two fundamental elements which must be present if an employer-employe relationship is to be found to exist: (1) a contract of hire between the parties, either express or implied; and (2) a right of control. As to the former requirement, if there is no contract, there can be no such relationship. Smith v. State Ind. Acc. Comm., 144 Or 480, 23 P2d 904, 25 P2d 1119 (1933); Vient v. State Industrial Acc. Com., 123 Or 334, 262 P 250 (1927); Landberg v. State Industrial Acc. Com., supra. As to the latter, the important thing is not the actual exercise of control, but rather the right to exercise it. Bauer v. Richardson, 3 Or App 578, 475 P2d 995 (1970); Whitlock v. State Ind. Acc. Com., 233 Or 166, 377 P2d 148 (1962); Harris v. State Ind. Acc. Comm., 191 Or 254, 230 P2d 175 (1951). If the contract element between the parties exists, a court then looks to the right of control over the details and manner of performance. Whitlock v. State Ind. Acc. Com., supra; Bowser v. State Indus. Accident Comm., 182 Or 42, 185 P2d 891 (1947).

In this case, neither element appears to be present. There was no contract between the company and the newsboy. The company’s only dealings were with Leibrand, who in turn made a contract with claimant. There was simply no contractual relationship, no body of rights and duties, existing between the company and the claimant.

Leibrand’s suggested standard of “relative nature of the work” is appealing as a matter of social policy, but in Oregon,- where the common law requirements of the employer-employe relationship have been adopted by statute, implementation of. different standards is obviously a legislative matter.

Affirmed.

① This test is a departure from the contractual, right to control concept of the employer-employe relationship and is based upon the social philosophy that industry should afford compensation protection to those involved directly in the furtherance of the industry’s objectives, the test being whether the relative nature of the work indicated the worker involved was an employe as a matter of “economic reality.”

Professor Larson speaks favorably of the concept. See 1 A Larson, Workmen’s Compensation §' 45.23 (1967).