August 29, 1989

FACTS:


You are employed by a municipal sewer department in a city
(City). You are a tenured permanent civil service employee.

You also operate a private business in the City. The function
of this business is to install and repair sewer lines and sewer
connections. You are required to obtain a City permit in order to
enter the sewer and the City sewer inspector inspects your
company's work upon completion

You have been injured while working in the employ of the City
and, pursuant to c. 152, s.34, you have been collecting workman's
compensation benefits in the amount of two thirds of your average
weekly wage at the time of your injury. To date you have not
returned to employment with the City. You have not applied for
disability retirement pursuant to G.L. c. 32, nor has it been
determined that you are totally and permanently disabled pursuant
to G.L. c. 152 such that you are permanently unable to return to
work. While you have been collecting workman's compensation, you
have not been placed on lack of work status by the City. In
general, if a municipal employee who is collecting workman's
compensation submits a physician report certifying that he is able
to perform his prior job duties, he will be able to return to work.

The City is self-insured for purposes of c. 152, and
compensation payments are generally paid by the personnel
department from City funds. The City also continues to pay its
share of your health insurance benefits. You remain liable for the
co-payment at the City rate provided to all City employees. You do
not accrue sick time, vacation time and retirement benefits while
you are on workman's compensation but you are credited with the
benefits you had accrued prior your injury. Although an employee
may use accrued sick leave pay to supplement his weekly
compensation check, you have not done so.[1]


QUESTIONS:


1. For purposes of G.L. c. 268A are you municipal employee
during the time in which you collect workman's compensation
benefits?

2. If you remain a municipal employee, may you receive
compensation from private parties to install and repair sewer
lines in the City in which you are employed?


ANSWER:

1. Yes.

2. No.


DISCUSSION:

1. Municipal Employee Status


G.L. c. 268A, s.1(g), defines a municipal employ "as a person
performing services for or holding office, position,
employment or membership in municipal agency, whether by election,
appointment contract of hire or engagement, whether serving or
without compensation, on a full, regular, part-time:
intermittent, or consultant basis, but excluding (1) elected
members of a town meeting and (2) member of a charter commission
established under Article LXXXIX of the Amendments to the
Constitution" The issue of whether you retain your municipal
employee status depends upon whether you continue hold employment
in the City while receiving workman's compensation benefits.

In a determination of whether one continues to hold employment
within a municipal agency, in Commission will examine the
characteristics of in relationship between the employee and the
agency, the Commission will consider whether a previously
compensated employee continues to receive compensation from the
municipal agency, whether in employee continues to receive the
same retirement, insurance, collective bargaining, sick leave and
other benefits available to municipal employees, whether in
parties have a reasonable expectation that in employee will
return to his municipal position and what actions have been taken
by the parties terminate the employment relationship. No one
factor

Page 271

is dispositive, as the Commission considers the cumulative effect
produced by each factor, as well as analyzing each factual
situation in light of the purpose of the conflict of interest
law. See, EC-COI-84-46; 84-17; N.L.R.B. v. Economics Laboratory,
Inc
., 758 F.2d 931 (3rd Cir. 1988) (for purposes of union voting
employment status continues until there is a manifestation of
intent to terminate clearly communicated to other party);
N.L.R.B. v. Newlyweds Foods, Inc., 753 F.2d 4 (1st Cir. 1985)
(same).

For example, within the context of a leave of absence
situation, the Commission has stated that state employee status
does not continue during a leave of absence where the employee
received no compensation, no fringe benefits and no retirement
credit attributable to the state position during the leave of
absence. EC-COI-84-17. However, a period of absence due to
vacations, holidays, illness, or personal time does not terminate
state employee status as the employee continues to receive state
benefits such as retirement, insurance, collective bargaining and
sick leave benefits attributable to the leave period. EC-COI-84-
46
. The Commission finds that you remain a municipal employee
while collecting workman's compensation benefits because you
continue to receive compensation and employment benefits from the
municipality and no action has been taken to terminate your
employment relationship with the municipality.


a. Compensation


For purposes of G.L.c. 268A, compensation is defined as "any
money, thing of value or economic benefit conferred on or
received by any person m return for services rendered or to be
rendered by himself or another." The definition of compensation
is broadly construed and is not limited to salary or wages. See,
Springfield v. Director of the Division of Employment Security,
398 Mass. 786, 790 (1986). In Springfield v. Director of the
Division of Employment Security
, 398 Mass. 786 (1986),
unemployment compensation benefits payable under G.L.c. 151A
constituted compensation for purposes of G.L.c. 268A. The
Commission concludes that receipt of workman's compensation
benefits also constitutes compensation for purposes of c. 268A.

Workman's compensation benefits, similar to unemployment
benefits, are economic benefits provided by the employer to
compensate for lost wages. Locke, 29 Massachusetts Practice, 53
(1981). The underlying policy of the Workman's Compensation Act
is to provide "adequate financial protection to the victims of
industrial accidents. .. With workman's compensation the employee
and the employee's family acquire a limited, although substantial
right to be insured against the grievous financial impact that
may result from injury in the workplace." LaClalr v Silberline
Manufacturing Co., Inc
., 379 Mass. 21, 27 (1979); see also, Ahmed's
Case,
278 Mass. 180 (1932) (compensation is relief from
inability to earn; employee beneficiary of contract between
employer and insurer). Further, the obligation to pay workman's
compensation benefits accrues within the employment relationship
as a result of and in return for services rendered.[2] An
employee may collect workman's compensation benefits only if he
sustains a personal injury arising out of and in the course of
his employment. See, Madden's Case, 222 Mass. 487, 493 (1916).
Compare, Springfield, 393 Mass. at 790-791 (employer not
obligated to pay employment security benefits except as result of
employee having provided wage earning services).

Finally, in addition to receiving an economic benefit in the
form of workman's compensation payments, you also continue to
receive the same health insurance benefits from the City as you
received before your injury. You do not earn additional vacation
or sick time while receiving compensation benefits but you
continue to hold the benefits which had accrued until your
injury. See, School Committee of Medford v. Medford Public
School Custodians Association
, 21 Mass. App. Ct. 947, 948, 949
(1986) (c. 152 contemplates payment for vacation earned but not
taken at time of injury); Rein v. Town of Marshfield, 16 Mass.
App. Ct. 519,523 (1983) (under c. 41, s.111F injured officer does
not accumulate vacation or sick pay during period of injured on
duty leave).


b. Reasonable Expectation to Return to Work


Retention of municipal status will also depend upon whether
the parties have a reasonable expectation that the employee will
return to his municipal position. Relevant factors indude whether
the employee has been replaced; whether the employee has retained
seniority; and whether the employee's medical status will allow a
return to work. See, eg, N.L.R.B. v. Economics Laboratory, Inc.
857 F. 2d 931,936 (3rd Cir,, 1983); N.L.R.B. v. Newlyweds Foods,
Inc.,
758 F. 2d 4,7(1st Cir., 1985); see generally, Annot. 85
ALR Fed 15
. For example, when a municipal employee collecting
workman's compensation has been declared to be totally and
permanenlly disabled or been replaced or resigned or retired on a
disability or other pension, his municipal employee status will
cease. See, EC-COI-83-84 (Housing Authority member on temporary
leave of absence continues to hold position as his position is
not being filled by another).

The Commission finds that there remains a

Page 272

reasonable expectation that you will return to your position. You
have not retired, resigned or applied for disability retirement.
No determination has been made that you are totally and
permanentiy disabled, nor has the City instituted civil service
proceedings to remove you from your position pursuant to c. 31,
s.41. If you receive the appropriate medical clearance you may
return to your position. In conclusion, because your position
has not been terminated and you receive economic benefits from
the City you continue to hold your municipal position.


2. Private Business


As the Commission concludes that you are a municipal employee,
you are subject to G.L. c. 268A. In particular, G.L. c. 268A,
s.17 is pertinent to your private business. Section 17 generally
prohibits a municipal employee from acting as agent for being
paid by anyone other than the City, in relation to any decision
application, contract or other particular matter[3] in which the
City is a party or has a direct and substantial interest.

The construction, alteration, inspection and use of sewer
connections are matters which the Legislature has delegated to
the cities and towns for regulation. G.L. c. 83 et seq. The City
permits that you must obtain prior to commencing sewer work and
the inspection of your company's work upon completion are
particular matters in which the City has a direct and substantial
interest. The Commission has previously stated that a city or
town has a direct and substantial interest in the application for
and issuance of a permit as the issuance of a permit represents
the local official's determination that the work complies with
all relevant codes, laws, ordinances, rules and regulations and
because work done pursuant to a permit is presumptively "in
relation to" the permit. EC-COI-88-9 (town has direct and
substantial interest In carpentry work which requires building
permit); EC-COI-87-31 (town has direct and substantial interest
in installation of septic system pursuant to permit).[4]

Therefore, the Commission concludes that, while you are a
municipal employee, you may not receive compensation in your
private business for work performed in the City, whether you
perform the work or whether you subcontract the work. Also, you
may not obtain permits on behalf of other contractors or private
parties because you would be acting as the agent for these
parties. See, In the Matter of Robert P. Sullivan, 1987 SEC
312, 315.

---------------

[1] In rendering this opinion, the Commission has relied on the
facts as stated by you and City officials. The advice provided in
this opinion is intended to guide your prospective conduct and
does not purport to review the propriety of your prior
activities.

[2] The Commission notes that the employer ultimately pays for
the benefits, either through insurance premiums or payments as a
self-insurer, such as the City does.

[3] "Particular matter," any judicial or other procecding,
application, submission, request for a ruling or other
determination, contract, claim, controversy, charge, accusation,
arrest, decision, determination, finding, but excluding enactment
of general legislation by the general court and petitions of
cities, towns, counties and districts for special laws related to
their governmental organizations, powers, duties, finances and
property.

[4] The Commission has suggested ht the presumption that all work
done pursuant to a permit is "in relation to" that permit may be
overcome under certain circumstances. For example, if a
municipal employee was one of many independant contractors on a
major project and bad no responsibility for any dealings with the
town on any matters, he might not be considered to be privately
compensated "in relation to" the permit. See, EC-COI-87-31.
Under the circumstances you represent it is highly unlikely that
you can overcome this presumption as the work your company
performs is specific to the permit and is regulated and inspected
by the department in which you are employed. EC-COI-88-4; 87-31.

End Of Decision