Panther Creek Mines, Inc. v. Murphy

• Decision Date: 21 March 1945
• Docket Number: No. 28346.,28346.
• Citation: 390 Ill. 23,60 N.E.2d 217
• Parties: PANTHER CREEK MINES, Inc., v. MURPHY, Director of Labor.
• Court: Illinois Supreme Court

390 Ill. 23

60 N.E.2d 217

PANTHER CREEK MINES, Inc.,

v.MURPHY, Director of Labor.

No. 28346.

Supreme Court of Illinois.

March 21, 1945.

Appeal from Circuit Court, Sangamon County; Victor Hemphill, judge.

Certiorari proceeding under the Unemployment Compensation Act, Smith-Hurd Stats. c. 48, s 217 et seq., by Panther Creek Mines, Inc., against Francis B. Murphy, Director of Labor, Robert L. Gordon, successor, to set aside a decision of the Director of Labor on question as to what should be included in plaintiff's payroll as wages paid its employees. From a judgment for plaintiff, the Director of Labor appeals.

Affirmed.

George F. Barrett, Atty. Gen. (William C. Wines, of Chicago, of counsel), for appellant.

Barber & Barber, of Springfield, for appellee.

MURPHY, Justice.

This appeal is prosecuted by the Director of Labor to reverse a judgment of the circuit court of Sangamon county. The judgment appealed from vacated and set aside a decision the Director had made in a proceeding under the Unemployment Compensation Act. Ill.Rev.Stat.1943, chap. 48, par. 217 et seq. The question is as to what should be included in the payroll of the Panther Creek Mines, Inc., as wages paid its employees. The additional contributions exacted, based upon the increased payroll, are for each of the quarters in the years 1940, 1941, and 1942. The case has followed the course of procedure outlined in section 25(a)(1) and (2), (par. 242,) and comes to this court on an appeal from a judgment entered in the certiorari proceeding.

Appellee was engaged in the business of selling and mining coal taken from its three shaft mines. Some of the employees, such as track layers, drivers, and timbermen, were paid on a per diem basis, and others, such as miners, were paid on a tonnage basis. All coal produced was mined and loaded by hand. Following a designation in the record, the men employed for mining work will be referred to as ‘contract miners.’ Production of coal by hand mining, as distinguished from strip mining and mechanical mining, required the use of powder, caps and fuses. Appellee purchased supplies for use by its contract miners. Each miner drew from the storehouse the items he needed and all articles thus used were charged to the miners' respective accounts. Appellee maintained a blacksmith shop at each mine, where the mining tools used by the miners were sharpened. This service was also charged to each miner. Every payday the items so charged were deducted from each miner's pay and he received appellee's check for the net balance.

During the three years covered by the report in question, appellee made return and paid contributions on its payroll for its day laborers and the net amount paid the contract miners. It did not report or make contribution on the amounts withheld to cover the cost of the powder, caps, fuses and the blacksmithing. Appellee's dealings with its contract miners included deductions for other items furnished, such as coal and other supplies. Deductions were also made for the purpose of buying defense bonds for the miners. In making its original returns, appellee did not deduct any of these items from its payroll and they are not involved. The gross amount withheld from the contract miners' pay for powder, fuses, caps and blacksmithing used in the three-year period was approximately $200,000. This amount added to appellee's payroll would produce additional contributions, including interest, of $6,577.07.

For the period covered, appellee had a collective bargaining contract with the Progressive Mine Workers of America. The first contract covered the period from April 1, 1939, to March 31, 1941, and the latter from April 1, 1941, to March 31, 1943. These contracts governed the wages and other factors pertaining to the employment. They are detailed and cover many subjects, but the only parts pertinent to this inquiry are those which pertain to the wages paid contract miners and the provisions which refer to the powder and blacksmithing work. There is no material difference between the two contracts on these items, except that the wage scale in the latter is higher than it was in the first. Contract miners were to be paid on a tonnage basis. The price varied during the three-year period by reason of the difference in the scale, but the range was from $.967 to $1.12 per ton. The contracts provided that the contract miners should purchase their powder from the operators, provided it was of standard grade and quality. The price per keg was agreed upon. No reference was made to fuses or caps. The price for blacksmithing was also fixed on a tonnage basis. Evidence was introduced which shows that in fixing the wages in the second contract a basic scale of $1 per hour for all underground workers was agreed upon and in fixing the price per ton for contract miners, the basic scale of $1 was applied and there was added a sufficient amount to pay the miner for powder and blacksmithing, thus leaving him a tonnage rate which would be equal to $1 per hour. This evidence is not disputed. Such evidence was evidently offered on the theory that all contract miners were of equal productive capacity. The evidence also shows that the deduction for powder, fuses, caps and blacksmithing was about 15 per cent of the gross.

Section 2, subparagraph (g), (par. 218,) defines wages, as follows: “Wages' means every form of remuneration for personal services, including salaries, commissions, bonuses, and the reasonable money value of all remuneration in any medium other than cash. Where gratuities are customarily received by an individual in the course of his work from persons other than his employing unit, such gratuities shall be treated as wages received from his employing unit. The reasonable money value of remuneration in any medium other than cash and the reasonable amount of gratuities shall be estimated and determined in accordance with rules prescribed by the Director. Such rules shall be based upon the reasonable past experience of such...