Cеrtiorari was granted to review the decision of the Court of Appeals in
Caldwell v. Sarah Coventry, Inc.,
The specific issue to be determined here is: who are "employees” within the meaning of the Employment Security Law (Code Ann. Ch. 54-6; Ga. L. 1937, p. 806 et seq.)?
The background of the case, which is sеt forth fully in the Court of Appeals opinion, is, briefly, as follows: The Superior Court of Fulton County reversed the decision of the Employment Security Agency. The superior court held that "fashion show directors” employed by Sarah Coventry were not employees who perform services for wages, within the meaning of Code Ann. § 54-657 (h) (6) (Ga. L. 1937, pp. 806, 840; as amended), so that Sarah Coventry was not liable for unemployment insurance tax. The Court of Appeals reversed the judgment of the superior court, thereby reinstating the agenсy’s holding of liability for the tax.
1. The trial court’s holding was based on the finding that under the facts and terms of agreement between the employer and employee, the status of the individual
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fashion show director,
"when viewed in light of common law principles,
is that of an independent contractor and not that of an employeе.” (Emphasis supplied.) This finding has some support in a line of cases which hold as follows — in determining whether an individual comes within the scope of the Employment Security Law, it must be ascertained whether "wages” were paid; this in turn must be determined by whether the status of the individual,
when viewed in the light of common law principles,
was that of employee, rather than that of independent contractor. This major premise must be established before the "A, B, C” exceptions of § 54-657 (h) (6) become material. See, e.g.,
Williamson v. Modern Homes Const. Co.,
On the other hand, there is another line of cases, exemplified by
Moore v. Williams,
This court has not had many occasions to pass on this issue. In
Zachos v. Huiet,
This line of cases comports with public policy as well as the principles of statutory construction. "The Employment Security Acts, being remedial in character, are to be given a liberal construction.”
Dalton Brick &c. Co. v. Huiet,
2. The Court of Appeals did err, however, in reversing the superior court’s finding, based on the undisputed facts, that the fashion show directors were not covered by the Employment Security Act.
Although there were determinations made at two levels beneath the superior court (first by the Employment Security Agency of the Georgia Department of Labor, and then by the director of the Unemployment Insurance Service Division of the Georgia Department of Labor, following an evidеntiary hearing), the-'superior court was the first impartial tribunal in the proceedings. The first two adjudications were made by an agency of the executive branch of government, with an interest in broadening the base of revenues from the unemployment security tax. Accordingly, if there is any competent evidence to support the superior court’s conclusions of law, even if they were based upon an erroneous conception of the applicable standard (i.e., common law rather thаn statutory), we will uphold that court’s judgment.
Since the definition of "wages” in Code Ann. § 54-657 (n), supra, is broad enough to include the commissions paid the fashion show directors in the present case, their services are deemed to be employment subject to Code Ann. Ch. 54-6 unless all three of the elements in Code Ann. § 54-657 (h) (6) (A, B, C) are established by the employing unit. See
Young v. Bureau of Unemployment Comp.,
(a) Element (A) of the statute is as follows: "Such individual has been and will continue to be free from *433 control or direction over the performance of such services, both under his contract of service and in fact.”
It is clear from a reading of the contract of service here — which provides that it contains the complete agreement bеtween the parties — that the fashion show director is not considered an employee, but rather a self-employed, independent contractor, free to carry out his or her business as salesperson in a manner of his/her own choosing. The testimоny adduced upon the hearing supports the finding of freedom from control or direction. The labor commissioner and the Court of Appeals point out several facts which are urged as evidence of such control or direction, such as that the fashion show directors receive commissions from the employer, rather than from the customers; that the employer sets the terms of sales, which cannot be altered by the fashion show director; that the employer supplies to the fashion show director, sales equipment which remains the employer’s property; that the purchase order forms direct a customer to address any complaints and warranty claims to the employer rather than to the fashion show director; that, if a refund is madе by the employer, it is charged against the commission account of the fashion show director; and that, although no minimum order requirements are imposed, if a fashion show director is unproductive, he/she receives "encouragement” from the employer’s branch manager (an admitted employee), and continued unproductivity may result in attempted confiscation of loaned sales equipment by the branch manager. These minimal controls are no more than would be imposed in a consignment relationship, however, to which this situation may be analogized.
On the other hand, absence of significant control or direction is evidenced by the facts that there are no territorial assignments or geographical restrictions, no prescribed number оr time of hours to work, no minimum number of orders to be obtained, and no prohibition against selling other companies’ products or holding other employment contemporaneously; that the fashion show director must furnish his/her own models and sales gimmicks, if he/she chooses to use them, and his/her own transportation; that the merchandise ordered is shipped
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to the hostess at whose home the show is conducted, not to the fashion show director; that the checks for the merchandise are made payable to the fashion show director, who assumes the liability of the checks’ being good, and then he/she pays the employer company; and that the two individuals directly above the fashion show director — the unit director and the branch manager — are, by contraсt and in fact, employees of the company, which pays unemployment tax on their earnings. The above evidence demands the finding that the fashion show director in question was free from any significant control or direction over the performanсe of her services, both under her contract of service and in fact, so as to establish element (A). Cf.,
Babb & Nolan v. Huiet,
(b) Element (B) of the statute is as follows: "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.”
As to the first alternative of this element, the service was clearly not "outside the usual course of the business for which such service is perfоrmed.” In construing the second alternative provision, we must give effect to the legislative intent thereof, which we deem to be to enable the employer to effectively administer the activities of the individual by limiting the area of performance оf services to such areas as the employer can practically oversee and maintain some surveillance and supervision. This case is distinguishable from
Huiet,
(c) Element (C) of the statute is as follows: "Such individual is customarily engaged in an independеntly established trade, occupation, profession or business.”
The labor commissioner cites us to a Virginia case, holding that, under a similar statute, in order to meet this test it was necessary to show that the individual has a
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proprietary interest in the business, something in which he has a right of continuity, which he can sell or give away, and which is not subject to cancellation or destruction upon severance of the relationship with the principal. Life & Cas. Ins. Co. v. Unemployment Comp. Comm.,
*435 This court is not bound by the construction put on a similar or even an identical statute of a foreign jurisdiction by a court of that jurisdiction. Even if this construction be adopted, however, there is sufficient evidence to show compliance therewith. Under the contract, the fashion show direсtor is free to sell the products of other companies, even of competitors of the employer company. The fact that the contract recognizes this freedom, plus the fact of the intermittent and almost casual relationshiр to the company, indicate that it is the common practice for such individuals to be "customarily engaged in an independently established trade, occupation, profession or business.” We believe that it would be unduly restrictive to construe this provisiоn so as to require a formal, legal organization in order to comply with it, which would exclude even a one-person occupation of salespersons. Therefore, we hold that element (C) was established by the evidence.
Accordingly, the three (A, B, C) elements having been established, the judgment of the Court of Appeals reversing the superior court’s finding of no coverage under the Act, is reversed.
Judgment reversed.
Notes
Code Ann. § 54-657 (f).
" 'Wages’ means all remunerations for personal services, including commissions and bonuses and the cash *431 value of all remuneration paid in any medium other than cash...” (subject to six exceptions not here relevant). Code Ann. § 54-657 (n).
Code Ann. § 54-657 (h).
"Services performed by an individual for wages shall be deemed to be employment subject to this Chapter, unless and until it is shown to the satisfaction of the commissioner that... [subsections (A), (B) and (C) apply].” Code Ann. § 54-657 (h) (6).