Appeal from the Circuit Court of Sangamon County, the Hon.
Simon L. Friedman, Judge, presiding.
MR. JUSTICE KLUCZYNSKI DELIVERED THE OPINION OF THE COURT:
Rehearing denied May 30, 1979.
This is an appeal from a judgment of the appellate court in an action under the Unemployment Compensation Act (Ill. Rev. Stat. 1965, ch. 48, par. 300 et seq.). The defendant Director of Labor ruled that plaintiff was an employing unit subject to the provisions of the Act insofar as the services of a certain salesman and canvassers are concerned. The circuit and appellate courts> affirmed and we allowed plaintiff's petition for leave to appeal.
Plaintiff, Griffitts Construction Company, is in the home-improvement business. Much of its business is generated through the efforts of salesmen and canvassers, whose services during the first two quarters of 1965 are the basis of this litigation.
Pursuant to the request of plaintiff's accountant, a field agent of the Division of Unemployment Compensation conducted a review of plaintiff's records to determine whether plaintiff was liable to pay money into the unemployment compensation fund because of services performed by a certain salesman and canvassers. As a result of his examination of the records, the agent made a determination of liability in the amount of $181.54. Plaintiff agreed to make the payment immediately to stop the accrual of interest, but indicated that it would seek a refund.
On August 4, 1965, plaintiff filed a claim for refund with the defendant Director of Labor. The claim was denied. On December 4, 1965, plaintiff filed a protest and requested a hearing. The hearing was conducted on October 8, 1969, before Helen Peckler, a representative of the Director. In her report filed December 4, 1970, Ms. Peckler recommended that the Director's previous determination of liability be affirmed. Ms. Peckler's recommendation was based on her findings that the salesman and canvassers in question were employed by plaintiff within the meaning of the Unemployment Compensation Act and that the services of these individuals were not exempt as being those of an independent contractor (Ill. Rev. Stat. 1965, ch. 48, par. 322). Plaintiff filed objections, but the Director adopted Ms. Peckler's recommendation as his decision. Plaintiff filed a complaint for administrative review in the circuit court of Sangamon County. That court affirmed, and plaintiff appealed to the appellate court, which also affirmed (58 Ill. App.3d 1114).
In this court, plaintiff asks us to rule that the services of the salesman and the canvassers are exempt from coverage under the Act. Plaintiff admits that the relationship between it and the salesman and canvassers constitutes "employment" within the meaning of the Act. That word is defined broadly as "any service * * * performed by an individual for an employing unit * * *." (Ill. Rev. Stat. 1965, ch. 48, par. 316.) Plaintiff contends, however, that the services are exempt under section 212 of the Act (Ill. Rev. Stat. 1965, ch. 48, par. 322), the so-called "independent contractors" exemption. The section provides:
"Service performed by an individual for an employing unit, whether or not such individual employs others in connection with the performance of such services, shall be deemed to be employment unless and until it is proven in any proceeding where such issue is involved 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. Such service is either outside the usual course of the business for which such service is performed or that such service is performed outside of all the places of business of the enterprise for which such service is performed; and
C. Such individual is engaged in an independently established trade, occupation, profession, or business." Ill. Rev. Stat. 1965, ch. 48, par. 322.
As prior cases have pointed out, this statutory definition supplants the common law concept of independent contractor, and because the conditions specified in section 212 are in the conjunctive, all three must be satisfied to entitle an employing unit to an exemption (A. George Miller, Inc. v. Murphy (1942), 379 Ill. 524, 527). Because the Act was passed with the public welfare in mind, construction of its provisions should favor inclusion, and there is a strict burden of proof placed upon one claiming an exemption (Grant Contracting Co. v. Murphy (1944), 387 Ill. 137, 143, 148). The inquiry should be directed at determining the actual rather than the alleged relationship of the employing unit and the person whose services are in question; designations and terminology used by the parties are not controlling (Murphy v. Daumit (1944), 387 Ill. 406, 415). Our task as a reviewing court is to determine whether the decision of the Director of Labor is against the manifest weight of the evidence or is not supported by evidence in the record. Mohler v. Department of Labor (1951), 409 Ill. 79, 85.
The report of the Director's representative, adopted by the Director as his decision, states that plaintiff has failed to prove that it has met any of the three conditions of section ...