I. Introduction
The Workers' Compensation Commission has subject matter jurisdiction only where the relationship of employer and employee exists at the time of the alleged injury for which the claim is made.1 The determination of the employer-employee relationship is jurisdictional and the relationship must be proven by the preponderance of the evidence. "The existence of a contract, not the commencement of work, establishes the employer-employee relationship which is the jurisdictional foundation upon which an award is made."2 A party or the court can raise the issue of lack of jurisdiction for the first time on appeal.3
II. Employment Concept
The South Carolina Workers' Compensation Act does not cover every worker who sustains a job-related injury while in the employ of a covered employer. To be covered by the Act, the worker must both come within the statutory definition of "employee" and be excluded from any of the relevant statutory exemptions. An employee of a contractor or subcontractor who sustains an injury while working under the control of someone other than his immediate employer can, in some circumstances, be found to be a "statutory employee" of the organizer of the enterprise and, thus, claim the right to compensation from both his own employer and the organizer. However, not every worker who sustains an injury while performing under contract for an employer is viewed as an employee of that employer because the Act preserves the traditional independent contractor-employee distinction.
Note also that § 42-1-415 was added in 1996 and amended in 1997 to provide that a higher tier subcontractor, contractor, or project owner can be relieved of all workers' compensation liability if a lower tier subcontractor, contractor, or project owner represents himself as having workers' compensation insurance at the time of the work performance.
III. "Employee" Defined
The Act defines "employee" as "every person engaged in an employment under any appointment4 contract of hire or apprenticeship, express or implied, oral or written . . ., but excludes a person whose employment is both casual and not in the course of the trade, business, profession or occupation of his employer . . . ."5 Under the Act, "employment" includes "employment by the State, all political subdivisions thereof, all public and quasi-public corporations therein and all private employments in which four or more employees are regularly employed in the same business or establishment."6
Under the Act, "employee" includes members of the State and National Guard while they are "performing duties in connection with the membership except duties performed pursuant to Title 10 and Title 32 of the United States Code."7
The Act specifically includes legally and illegally hired aliens, minors, and certain prisoners injured while in private employment.8 Sole proprietors and partners of a business whose employees are eligible for benefits can elect to be included as employees if (1) "they are actively engaged in the operation of the business" and (2) they notify the insurer of their election.9
The Act also includes clients of vocational rehabilitation who are involved in a program of assessment or work adjustment, as well as students of high schools, state technical schools, and state-supported colleges and universities while engaged in work study, distributive education, or apprentice programs on the premises ofprivate companies.10
State officers and employees are also specifically and mandatorily covered, except for those officers and employees who are elected by either the people or the General Assembly, or appointed by the Governor.11 Officers and employees of municipal corporations and political subdivisions of the State are also specifically and mandatorily included except those who are (1) elected by either the people, council or other governing body of the municipal corporation or political subdivision; (2) who "serve in purely administrative capacities," and (3) who serve for a definite term of office.12
A. Statutory Exclusions and Exemptions
The Workers' Compensation Act specifically denies employee status to several broad classes of persons such as federal and railway express companies as well as agricultural employees, unless, in the latter case, the employer voluntarily elects to come under the Act. The Act also effectively denies coverage to a number of workers who otherwise would be covered by exempting their employer from the Act, like the state and county fair associations. The Act statutorily excludes the following employees:
(1) Federal Employees;13
(2) State Officers and Employees who are either elected by the people or the General Assembly or appointed by the Governor;14
(3) Employees of municipal corporations and political subdivisions of the state who are elected either by the people or a state or municipal governing body, who act in "purely administrative capacities" and serve a definite term of office;15
(4) Employees "whose employment is both casual and not in the course of trade or business, profession or occupation of his employer;"16
(5) Licensed real estate sales persons engaged in the sale, leasing, or rental of real estate for a licensed real estate broker on a straight commission basis and who has signed a valid independent contractor agreement with the broker.17
(6) Deputy Enforcement Officers;18
(7) Agricultural employees, unless the employer elects to come under the Act;19
(8) Those persons selling agricultural products for the producers of them where the seller is paid by the producer;20
(9) Employees of State and County Fair Associations unless the employer voluntarily elects to come under the Act;21
(10) Railroad and Railway Express Company employees;22
(11) Certain prisoners;23
(12) Those employed by "[a]ny person who has regularly employed in service less than four employees in the same business within the State or who had a total annual payroll during the previous calendar year of less than $3,000"; and24
(13) An individual who owns or holds under a bona fide lease-purchase or installment-purchase agreement a tractor trailer, tractor, or other vehicle, referred to as "vehicle", and who, under a valid independent contractor contract provides that vehicle and the individual's services as a driver to a motor carrier.25
Employers that employ statutorily exempt employees may elect to come under the Act pursuant to § 42-1-380.26 If, after electing to come under the Act, such employer decides he would like to withdraw, he may do so pursuant to § 42-1-390. To withdraw, the employer may give notice in writing to the Commission or to his insurer who must then give notice in writing to the Commission.27
IV. Contract of Hire Requirement
A. General
Before the provisions of the Workers' Compensation Act are applicable, the relation of master and servant, employer and employee, or some appointment must exist.28 A workers' compensation award is authorized only if the employer-employee relationship existed at the time of the alleged injury for which the claim is made.29 Under the Act, "employee" includes only those persons "engaged in an employment under any appointment, contract of hire or apprenticeship, express or implied, oral or written . . . ."30 In Alewine v. Tobin Quarries, Incorporated31 the court stated:
This relation is contractual in character and to constitute one an employee it is essential that there shall be a contract of service. However, no formality is required. The contract may be oral or written. It may be accomplished with a few words, or it may be implied from conduct without words. It is sufficient if the circumstances show unequivocally that the parties recognize each other as employer and employee. "A contract will arise even where the employer does not intend to enter into one, if his conduct is such as to lead claimant, acting as a reasonable man, or in good faith, to believe that he is being employed."32
At issue in Alewine was whether the contractual relation of employer and employee had started when the decedent sustained the accidental injury which resulted in his death. The South Carolina Public Service Authority entered into a number of construction contracts relative to work on the Santee-Cooper project on which the employer, Tobin Quarries, Incorporated, was a subcontractor. On April 16, 1942, the decedent and two other men went into the offices of Tobin Quarries, Inc. and applied to a Mr. Barnes for a job. According to the testimony of the two other men, they were then employed by Barnes as truck drivers, but were informed by him that they could not go to work until they were inoculated and vaccinated. Claimant developed an infection from the vaccination wound which resulted in his death. The employer argued that the vaccinations were a condition precedent to the establishment of an employment contract and that the employer had not exercised the requisite dominion or control over the prospective employees prior to the vaccinations being given. The Supreme Court disagreed, however, finding there was a meeting of the minds regarding the employment contract while the men were in the employer's office prior to the vaccination, and that the vaccinations were merely a condition precedent to starting work rather than their being employed. The court also stated:
Moreover, 'the hiring, or contract for employment, is the jurisdictional factor' and not the actual commencement of work thereunder. In the Simpkins case the following from a decision of another jurisdiction is quoted with approval: "The contract... establishes the relationship between the parties, and not the fact whether work has actually been commenced and the employee's name placed on the payroll and he is already become entitled to wages."33
At issue in Sanders v. Litchfield Country Club34 was whether the contractual relation of employer and employee had ended at the time Claimant sustained her accidental injury...
