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decided: March 15, 1977.


Appeal from the Order of the Unemployment Compensation Board of Review in case of In Re: Claim of Joseph J. O'Brien, No. B-129787.


Robert A. Seiferth, with him Gail R. Simon, for appellant.

Charles G. Hasson, Assistant Attorney General, with him Sydney Reuben, Assistant Attorney General, and Robert P. Kane, Attorney General, for appellee.

Judges Kramer, Wilkinson, Jr. and Rogers, sitting as a panel of three. Opinion by Judge Kramer.

Author: Kramer

[ 29 Pa. Commw. Page 273]

This is an appeal by Joseph J. O'Brien (appellant) of an order of the Unemployment Compensation Board of Review (Board), dated February 4, 1976, which affirmed, without opinion, a referee's determination that the appellant had become self-employed and was ineligible for continued benefits under Section 402(h) of the Unemployment Compensation Law (Act).*fn1

[ 29 Pa. Commw. Page 274]

In October of 1975, while receiving unemployment benefits resulting from a qualifying separation from a previous employer, the claimant began working on a commission basis as a part-time "enrollment representative" (salesman) for Commercial Trades Institute, Chicago, Illinois, soliciting enrollments in the educational courses offered by Commercial Trades. The claimant testified that he was under contract to Commercial Trades; that he was remunerated purely on a commission basis; that he was working part-time while on the three-month probationary training period; and that he received no reimbursement for his expenses.

On the basis of this testimony, the referee found as a fact that the claimant was under contract with Commercial Trades and worked strictly on a commission basis. Under the heading "Reasoning," the referee stated, "Inasmuch as claimant is under contract and works on a commission basis, he must be considered self-employed and therefore disqualified from receiving benefits."

We cannot affirm the determination of the compensation authorities, because we conclude that the referee's findings of fact are inadequate to support the legal conclusion that appellant was self-employed.*fn2

[ 29 Pa. Commw. Page 275]

The Legislature has not defined "self-employment," but the decisional law has resolved the issue by excluding from benefit status those persons whose work circumstances do not fall within the statutory definition of "employment," e.g., Unemployment Compensation Board of Review v. Kessler, 27 Pa. Commonwealth Ct. 1, 365 A.2d 459 (1976); Laswick v. Unemployment Compensation Board of Review, 10 Pa. Commonwealth Ct. 356, 310 A.2d 705 (1973).

The Act defines an employe as one who is performing services for an employer in employment. Section 4(i), 43 P.S. § 753(i). "Employment" is defined to mean "all personal service performed for remuneration by an individual under any contract of hire. . . ." Section 4(l)(1), 43 P.S. § 753(l)(1). (Emphasis added.) The Act further refines the definition of employment in Section 4(l)(2)(B), 43 P.S. § 753(l)(2)(B), which provides pertinently:

Services performed by an individual for wages shall be deemed to be employment subject to this act, unless and until it is shown to the satisfaction of the department that -- (a) such individual has been and will continue to be free from control or direction over the performance of such services both under his contract of service and in fact; and (b) as to such services such individual is customarily engaged in an independently established trade, occupation, profession or business.

It is clear from the language of Section 4(l)(1) that the mere existence of a contract between appellant and Commercial Trades does not serve to classify

[ 29 Pa. Commw. Page 276]

    appellant as "self-employed." Furthermore, the cases dealing with traveling salesmen have repeatedly held remuneration on a straight commission basis to be wholly consistent with the status of "employe" within the coverage of the Act. Kessler, supra; Marr v. Unemployment Compensation Board of Review, 12 Pa. Commonwealth Ct. 82, 314 A.2d 596 (1974); Laswick, supra; Leinbach v. Unemployment Compensation Board of Review, 146 Pa. Superior Ct. 237, 22 A.2d 57 (1941). As this Court noted in Kessler, the language of Section 4(l)(2)(B) makes it clear that a commission-salesman claimant can be classified as self-employed when it is established that: (1) he is not subject to the control of his employer; and (2) he is "customarily engaged in an independent trade." Kessler, supra, at 5, 365 A.2d at 461. The referee in the present case failed to make any findings as to these two criteria and, moreover, our review of the record discloses a dearth of evidence upon which such findings could be based.*fn3 Therefore, we must remand this case to the Board for the taking of additional testimony and for the making of the appropriate findings of fact.

[ 29 Pa. Commw. Page 277]


And Now, this 15th day of March, 1977, the record in the above-captioned matter is remanded to the Unemployment Compensation Board of Review for further proceedings consistent with this opinion.



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