DIXON , APPELLANT,
vs.

DIXON ET AL., APPELLEES

No. 82-402
SUPREME COURT OFOHIO
447 N.E.2d 756,4 Ohio St.3d 160, 4OhioB. Rep. 402
April 20, 1983, Decided

APPEAL from the Court of Appeals forWashingtonCounty.

HEADNOTE

 

 

 
Unemployment compensation -- Parent employed by child in sole proprietorship business -- Coverage denied, when -- R.C. 4141.01(B)(3)(f) -- Failure of employer to file written election requesting coverage -- R.C. 4141.01(A)(5) -- Cause remanded to determine effect thereof.

STATEMENT OF THE CASE

 

 

 
The facts giving rise to this cause of action follow. Helen L. Dixon, appellant, was employed at the 50-A Carryout inBeverly,OhiofromJanuary 2, 1975untilApril 6, 1979. She worked six days a week from8:00 a.m.until9:00 p.m.as the general manager and clerk.1 Appellant's son, Virgil Ted Dixon, owned the carryout as a sole proprietorship.

 

The business was sold onApril 9, 1979, at which time appellant's position was terminated. OnApril 20, 1979, she filed an application for determination of unemployment compensation benefit rights. OnMay 30, 1979, the Administrator of the Bureau of Employment Services ("administrator" herein) disallowed the claim on the ground that the employment was not covered "employment" according to R.C. 4141.01(B)(3). After a hearing onAugust 3, 1979, a referee of the Unemployment Compensation Board of Review ("board" herein) affirmed the denial of benefits. OnNovember 23, 1979, the board informed appellant that she could institute further appeal. Subsequently, she appealed and onJune 26, 1980, the board affirmed the decision in a two to one vote. The Court of Common Pleas of Washington County affirmed the decision of the board denying benefits. The court of appeals affirmed with one judge concurring in the judgment only and one judge dissenting. The cause is now before this court upon the allowance of a motion to certify the record.

COUNSEL

 

Clayman& Jaffy Co., L.P.A.,and Mr. Stewart J. Jaffy, for appellant.
Mr. William J. Brown,attorney general, and Mr. Marquette D. Evans, for appellee Bureau of Employment Services.

JUDGES

 

CELEBREZZE, C.J., W. BROWN, SWEENEY, MAHONEY, HOLMES and C. BROWN, JJ., concur. DAHLING, J., concurs in judgment only. MAHONEY, J., of the Ninth Appellate District, sitting for LOCHER, J. DAHLING, J., of the Eleventh Appellate District, sitting by assignment.
AUTHOR:PER CURIAM

OPINION

 

 

 
{*161}The issue presented in this appeal is whether appellant's claim for unemployment compensation benefits was properly denied. For the reasons which follow, we conclude that the denial of benefits was premature.

 

Because appellant was employed by her son, R.C. 4141.01(B) applies. It provides, in relevant part that:

 

"(3) 'Employment' does not include the following services if they are found not subject to the 'Federal Unemployment Tax Act,' 84 Stat. 713 (1970), 26 U.S.C. 3301, and if the services are not required to be included under division (B)(2)(j) of this section:

 

"* * *

 

"(f) Service performed by an individual in the employ of his son, daughter, or spouse and service performed by a child under the age of eighteen in the employ of his father or mother;"

 

According to this language, the services appellant performed are not considered "employment" and, therefore, would not entitle her to unemployment compensation benefits.

 

However, this section does not absolutely bar such an employee from benefits because the statutory scheme provides a means by which an employer can request coverage. R.C. 4141.01(A)(5) allows employers to file a form with the administrator for those employees not covered by virtue of section (B). It provides in pertinent part that:

 

"Any employer for whom services that do not constitute employment are performed may file with the administrator a written election that all such services performed by individuals in his employ in one or more distinct establishments or places of business shall be deemed to constitute employment for all the purposes of sections 4141.01 to 4141.46 of the Revised Code, for not less than two calendar years. Upon written approval of such election by the administrator, such services shall be deemed to constitute employment subject to such sections from and after the date stated in such approval. * * *"

 

Thus, appellant's employer could have filed a written election requesting that she be entitled to benefits for her work at the carryout. However, the court of appeals concluded that appellant's employer failed to make this election.

 

Although employers may voluntarily elect to file for coverage for employees under (A)(5), employers subject to the Act are required to pay contributions into the state fund. The state can compel an employer to comply {*162} with the statutory mandate to pay into the state fund.1 However, the state argues that it need not pay benefits under these circumstances unless the voluntary election under (A)(5) was properly filed.

 

In this case, the employer paid the required contributions2 for the years in which appellant was employed at the carryout. It is undisputed that appellant worked long hours, six days a week. However, appellant was denied benefits due to her employer's failure to file a form with the state. Even though contributions were paid into the state fund, appellant was denied benefits through no fault of her own.

 

The result is that the state has been unjustly enriched by receiving the contributions and denying compensation to appellant.3 Allowing the state to benefit at the expense of appellant is against the fundamental principles of fairness and equity.4

 

In considering this situation, we are mindful that the purpose of the Ohio Unemployment Compensation Act is to "provide financial assistance to an individual who had worked, was able and willing to work, but was temporarily without employment through no fault of his own." Salzl v. .Gibson Greeting Cards (1980),61 Ohio St.2d 35, 39 [15 O.O.3d 49].According to this statement, the system was designed to aid an individual in appellant's circumstances. Furthermore, R.C. 4141.46 states that the Act is to be liberally construed and appellant deserves a right to have her claim determined on its merits pursuant to R.C. 4141.26.5

 

We agree with Presiding Judge Grey's dissent in the court below that justice requires that this case be reversed and remanded for a determination on the effect of the employer's failure to file the election under R.C. 4141.01(A)(5).

 

{*163}Accordingly, the judgment of the court of appeals is reversed and the cause is remanded.

 

Judgment reversed and cause remanded.

DISPOSITION
 

Judgment reversed and cause remanded.
 

STATEMENT OF CASE FOOTNOTES

 

 

 
1 According to testimony at the hearing, only one other part-time employee worked at the carryout. The owner did not work on the premises.

OPINION FOOTNOTES

 

1 R.C. 4141.23 provides, in pertinent part: "Any contribution, interest, or forfeiture required to be paid under such sections by any employer shall, if not paid when due, become a lien upon the real and personal property of such employer. * * *"

 

2 A statement from a firm of registered public accountants stated that state unemployment was paid for appellant from the first quarter in 1975 through part of the second quarter in 1979.

 

3 One remedy to prevent unjust enrichment is a constructive trust. See Restatement of Restitution 640, at Section 160. According to Brown v. .Concerned Citizens, Inc. (1978),56 Ohio St.2d 85, 91 [10 O.O.3d 220], a constructive trust may be imposed on funds to prevent unjust enrichment.

 

4 The burden should be on employers to file the proper forms to insure coverage for their employees. Even if the employer could obtain a refund of his contributions paid into the state fund, the purpose of the Act is frustrated unless unemployed workers receive the compensation they are entitled to under the Act. See Brown, supra.

 

5 R.C. 4141.26 provides, in part, that: "Notwithstanding any determination made in pursuance of sections 4141.23 to 4141.26 of the Revised Code, no individual who files a claim for benefits shall be denied the right to a fair hearing as provided in section 4141.28 of the Revised Code, or the right to have his claim determined on the merits thereof."