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Temporary and lessee worker same under act

March 25, 2009

In what appears to be the first time the Indiana Court of Appeals has been presented with a joint employer argument in the context of Indiana Code Section 22-3-6-1(a), the Worker's Compensation Act, the appellate court determined that "temporary employee" and "leased employee" are not mutually exclusive terms and are interchangeable.

The main issue in Kenwal Steel Corp. v. John M. Seyring, No. 45A03-0806-CV-294, is whether Elwood Staffing, a staffing agency that places temporary employees, and Kenwal, where Seyring was placed, were joint employers for purposes of the Workers' Compensation Act.

Seyring was injured in an accident while working at Kenwal, filed a worker's compensation claim against Elwood, and filed a complaint alleging Kenwal was negligent. Default judgment was entered against Kenwal; Kenwal's motion to set aside default judgment was granted, but the trial court denied its motion to dismiss.

Kenwal's argument is that because Seyring was a temporary employee, Elwood and Kenwal were joint employers pursuant to I.C. 22-3-6-1, and as his joint employer, the act provides the exclusive remedy for his injuries. The company also argued within the context of the act, temporary employees are equated to leased employees. Seyring argued that temporary employees and leased employees, the term used in the act, are not interchangeable.

The appellate court examined the statutory language of the Workers' Compensation Act and the "Guide to Indiana Worker's Compensation" handbook to rule that the act's reference to "lessor" and "lessee" isn't meant to exclude temporary employees. As such, Elwood was the lessor of Seyring, Kenwal was the lessee, and they were joint employers of him for purposes of the act, wrote Judge Michael Barnes. Seyring is therefore limited to the exclusive remedy provision of the act.

The appellate court also determined Kenwal didn't intentionally waive its right to enforce the exclusive remedy provision of the act in the terms of the company's contract with Elwood. Nothing in the contract could be construed to suggest the company intentionally relinquished its right to enforce that provision of the act, wrote the judge.

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