This cause is before us for determination upon two questions of doubt and importance certified by the superior court in accordance with general laws 1938, chapter 545, § 5. Similar provision for certification is made by article III, § 12 of the workmen's compensation act, G.L. 1938, chap. 300.
The proceeding was begun by the employer's filing with the director of labor, under art. III, § 13 of the workmen's compensation act, a petition to review a certain preliminary compensation agreement. Such petition alleged, in substance, that on October 11, 1940 the respondent suffered an injury by accident arising out of and in the course of his employment; that thereupon petitioner and respondent entered into a preliminary agreement which was approved by the director of labor on November 13, 1940; that the petitioner had paid all medical and hospital bills of the respondent and also had paid the stipulated compensation "for 5 4/12 weeks, which was the duration of the respondent's incapacity"; that the respondent was absent from work from October 14 to October 22, 1940 and from October 31 to December 2, 1940; that the respondent as employee was earning a wage rate equal to or in excess of that which he was earning at the time of his injury and had received such wage rate since he returned to work. It then prayed that the preliminary agreement be reviewed, upon the ground that respondent's incapacity had subsequently ended or diminished, and that the director of labor make such order in the premises as the justice of the case may require.
At the hearing before the director of labor the petitioner offered to introduce evidence in support of the above allegations. The director of labor, on objection by respondent, ruled that petitioner was in technical default in payments *Page 380 of compensation called for by the terms of the preliminary agreement, and that it was not entitled to be heard on its petition without first paying or tendering the amount due the respondent thereunder up to June 3, 1941, when respondent suffered a second disabling injury for which he was receiving compensation. A written decision to that effect was rendered later by the director of labor, relying upon the provisions of the act as construed in Carpenter v. Globe Indemnity Co.,65 R.I. 194, Gobeille v. Ray's, Inc., 65 R.I. 207, and HingecoMfg. Co., Inc. v. Haglund, 65 R.I. 218. From that decision the petitioner appealed to the superior court.
At the hearing in that court testimony was introduced tending to support certain of the allegations in the petition for review. Testimony was then offered in support of other allegations concerning the cessation of respondent's physical disability. On respondent's objection, it appeared to the court and to counsel for each party that the admissibility of such evidence, as indeed the decision of the cause, depended upon the answer to a serious question of law. Therefore, upon motion of the petitioner, two questions of doubt and importance were certified to this court for determination in accordance with G.L. 1938, chap. 545, § 5.
These questions read: "I. Where an employee receiving compensation under the Workmen's Compensation Act voluntarily returns to work with the employer from whom he has been receiving compensation, and earns wages equal to or greater than his average weekly wages at the time of the injury, but where no final agreement has been filed, is the employer obliged to continue making the payments of compensation while the employee is so employed or until a final agreement is filed? II. Where an employee receiving compensation under the Workmen's Compensation Act voluntarily returns to work with the employer from whom he has been receiving compensation and earns wages equal to or greater than his average weekly wages at the time of the injury, but no final agreement has been filed, must the employer, *Page 381 before being permitted to proceed with a petition for review of the preliminary agreement, pay to the employee the compensation fixed in the preliminary agreement for the period during which the employee has been working for the employer for wages equal to or greater than his average weekly wages at the time of the injury?"
At the hearing before us it appeared that the first of these questions was too broad and did not so affect the merits of the controversy presently involved in this cause as to justify certification and to require our answer at this time. Our consideration therefore will be confined to the second question.
The petitioner concedes that the above-mentioned cases relied upon by the director of labor in his decision were correctly decided; but it contends that there is a factual distinction between those cases and the one at bar, in that in each of those cases "no payments either of compensation or wages were being made to the employee under a preliminary agreement during a time when the right of the employer to a modification or termination of the compensation payments was still undetermined"; whereas in the case at bar "payments, either of wages or compensation, have been made to the employee from the date of the injuries and such payments are still being made." It also contends that the act does not contemplate payments at the same time of both compensation and wages equal to or greater than the average earnings of the employee at the time of the accident, since the object is merely compensation and not profit to an employee; and that none of the decisions in the above-mentioned cases requires a ruling in principle that an employer, while in default under an approved preliminary agreement, has not the right to have the director of labor hear its petition to review such agreement.
The respondent contends that the instant cause is governed in principle by the rulings in the above-mentioned cases and that the director of labor was correct in deciding that this employer, who was in default under the preliminary *Page 382 agreement for compensation, which was duly approved and was never modified thereafter under the act, was not entitled as of right to be heard on a petition to review that agreement, so long as such default continued.
In our opinion the matter here, being merely a certification of a question of law of doubt and importance and not a certification of the entire cause, must be approached from the viewpoint of the legislature's policy as found in the requirements of the act, rather than from any consideration of particular facts and equitable principles as if the transaction were merely between individuals and were not governed by the act. Upon such view we find that the legislature definitely required that all compensation agreements, whether preliminary, supplemental, or final, must be approved by the director of labor in order to have the status of effective compensation agreements under the act. Nowhere in the act do we find any compensation agreement provided for which, directly or indirectly, dispenses with the necessity of the director of labor's approval.
Accordingly we have held, in substance and effect, that a compensation agreement, as contemplated by the act, is not a simple contract between individuals and cannot be considered as such; but that such an agreement under the act requires the solemnity and formality of approval by the director of labor as the representative of the state, and that it must be so treated.Carpenter v. Globe Indemnity Co., supra. We also have held that an agreement entered into by employer and employee and approved by the director of labor under the act has the force and effect of a decree of court; that until it is modified or terminated in accordance with the provisions of the act, it must be complied with and is enforceable as a decree; and that a party in default thereunder may not invoke and receive affirmative relief under the act. See Carpenter v. Globe Indemnity Co.,Gobeille v. Ray's, Inc. and Hingeco Mfg. Co., Inc. v.Haglund, supra.
A corollary to these rulings, it seems to us, is that an agreement for compensation, or for wages in lieu thereof, that has *Page 383 not been approved by the director of labor is not recognized by the act as a procedural substitute for an agreement for compensation that requires approval by the director of labor. If that be so, it follows that a party in default of an approved compensation agreement, which has not been modified or terminated in accordance with the provisions of the act, has not the right to invoke and receive affirmative relief by a petition for review, while such default continues. See Hingeco Mfg. Co.,Inc. v. Haglund, supra.
These requirements may seem harsh, but in reality they were enacted to promote uniformity of decision and application by the director of labor, as well as to insure adequate protection to employer and employee alike in the administration of the act. We agree that the act contemplates compensation and not profit; but it also contemplates compliance with its terms as the salutary means of insuring that end. If any inequity might seem to result, where there has been a failure to comply with the terms of the act, it flows from such failure rather than from enforcement of the act.
After much consideration we think that a negative answer to the question, as urged by the petitioner, cannot be made unless a mere contract for wages between the individual parties, which has not been approved by the director of labor, is to be given the same effect and standing that the law expressly gives only to compensation agreements approved by the director of labor in accordance with the act. In our opinion such a view would lead to possible nullification of the express requirements of the act.
For the reasons stated, we are constrained to answer the second certified question in the affirmative. A further confirmation of this conclusion is found in an amendment to the act, namely, P.L. 1941, chap. 1064, which was approved May 7, 1941. Among other things, this statute permits an employer, upon the filing of a petition for review, to cease, for a reasonable time, payments of compensation; and provides for enlarged powers to the director of labor, upon hearing such a petition, in that he may "increase, diminish, or discontinue *Page 384 the compensation payment in accordance with the facts, or make such other order as the justice of the case may require."
The papers in the cause, with our decision certified thereon, are ordered to be sent back to the superior court for further proceedings.