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In addition, the methods of contribution differ between the safety assessment and the one for administrative expenses. One is based on gross premium, the other on compensation payments. Both the based on a fiscal year, rather than a calendar year. Figures for compensation payments or premiums are generally kept on a calendar year basis. It would be quite burdensome and difficult to compile these figures on a Federal fiscal year basis, just for the purposes of paying a tax, especially to compute different figures for these two similar assessments.
This would add greatly to the cost of making the assessment pay. ment, but the Government would not receive more money, because of these additional expenditures which would have to be incurred. At least both assessments should be put on the same basis, if they are to be imposed, and they should preferably be based on compensation payments or eliminated altogether.
There is an additional point which I would like to stress. It has been mentioned by a number of speakers here this morning. I personally feel that is the most important question which faces this committee at this time in connection with this legislation, and this is the question of liability in third-party cases.
It is particularly important, because of the far-reaching amendments which this legislation contemplates, which would greatly add to costs.
At the beginning of this statement, we pointed out that workmen's compensation laws were intended to replace the old liability system. This principle was referred to in a statement made by Mr. McGuigan earlier during the subcommittee's hearings, when he stated : "when the Congress of the United States decided—and we think correctly—to substitute a system of compensation for injuries arising out of and in the course of employment in place of the adversary proceedings of an employees' suits against employers in negligence, the Congress assumed the responsibility for determining adequacy of compensation for injury in the employment situation against the jury's opinion of damages due to negligence.”
By reason of the Court decisions, this very basic principle of workmen's compensation has been abrogated. I think it is imperative, if I may use that term, for this committee to remedy that situation which has led to a great multiplicity of suits and very heavy expense of litigation, which is of no benefit to the injured man, or to the parties involved, and adds very greatly to the cost of this whole system.
I don't want to take the time to review the cases which have also been detailed this morning, but wish to refer to an additional case, the case of Holley v. The Manfred Stansfield, as being illustrative of the situation that exists in this field.
This was an instance where a longshoreman was unloading a cargo of potash through the use of a mechanical "payloader." He had hollowed out a cave, creating an overhang in the loose cargo that was present in the hold, even though this particular practice was contrary to the specific instructions of his supervisors.
The Court, however, found that this overhang made the vessel unseaworthy, and therefore, the owner of the vessel liable for such death, which occurred after the cave that he had dug out collapsed on him.
However, because of the employee's contributory negligence, recovery was limited to $12,500, which was less than the widow was
entitled to under the Longshoremen's Act. Thus, she received nothing in addition to what she would have been entitled to without this litigation.
Attorney's fees, however, and expenses in this case amounted to $22,000, I believe only on the stevedoring operations alone; I don't have any figures on what the other parties may have incurred in this action.
Most recently, there have been cases which have permitted suits directly against the immediate employer of the injured man, as well as indirectly through suits by the shipowner himself, trying to recover moneys that he may have paid to the employee.
It has been estimated that the cases based on the Ryan and Yaka doctrine represent approximately 30 percent of the payments in longshoremen's cases.
This is a tentative estimate. There are studies being conducted, trying to get more accurate figures in this field, and it may well be that further payments will be indicated as being made in such cases. The Jackson doctrine, which was recently formulated, sometimes known as the Lykes case, is very likely to increase this total. Yet there are many longshoremen who are injured under circumstances which do not come within the scope of these cases.
Even if suit is brought, recovery is by no means assured, and certainly delayed. Such litigation is bound to delay the compensation payments as well.
We submit that a liberal workmen's compensation system is far preferable, from the viewpoint of employee and employer alike. It is essential, however, that this system be exclusive. We respectfully urge that appropriate amendments to this effect be added to S. 2485.
Senator MORSE. Thank you very much, Mr. Kalmykow. You have made some very helpful legal statements for this committee, as well as a very helpful statement on the substantive problems involved in the legislation.
Thank you very much.
Mr. KALMYKOW. There might be some minor amendments that we might wish to comment on, and I would like to have the privilege of possibly suggesting clarifications, if that would be your pleasure, in the consideration of this bill.
Senator Morse. We would be very glad to receive your memorandum with regard to those amendments. Thank you very much.
We will take a 5-minute recess, and then we will hear Mr. Cummings.
(A brief recess was taken.)
Senator MORSE. The hearing will reconvene. Our next witness will be Mr. William G. Cummings, representing the Pacific Coast Metal Trades District Council, AFL-CIO, the Pacific Coast Iron Shipbuilders District Marine Lodge of the International Brotherhood of Boilermakers, Iron Shipbuilders, Blacksmiths Forgers & Helpers, AFL-CIO, and Boilermakers-Blacksmiths Lodge No. 10 regarding S. 2485 to amend the Longshoremen and Harbor Workers' Compensation Act before the Labor Subcommittee of the Senate Committee on Labor and Public Welfare, November 29, 1967.
I welcome you to the hearing, Mr. Cummings, and want you to proceed in your own way. We are perfectly willing to have you read your statement. I think the best way to present it is to read it, and then you can digress from it at will. You may proceed in your own way. STATEMENT OF WILLIAM G. CUMMINGS, REPRESENTING THE
PACIFIC COAST METAL TRADES DISTRICT COUNCIL, AFI-CIO, THE PACIFIC COAST IRON SHIPBUILDERS DISTRICT MARINE LODGE OF THE INTERNATIONAL BROTHERHOOD OF BOILERMAKERS, IRON SHIPBUILDERS, BLACKSMITHS, FORGERS & HELPERS, AFL-CIO, AND BOILERMAKERS-BLACKSMITHS LODGE NO. 10
Mr. CUMMINGS. Distinguished Senator Wayne Morse of Oregon, I would like first of all to congratulate and commend the chairman, the distinguished Senator Ralph Yarborough, of Texas, and the distinguished Senator, Wayne Norse, for their vision, foresight, humanitarian concepts, and principles in preparing Senate bill 2485 to amend the Longshoremen and Harbor Workers' Compensation Act to improve its benefits and for other purposes. I also desire to commend the articulate and eloquent presentation of Mrs. Esther Peterson, Assistant Secretary of Labor, before this Labor Subcommittee of the Senate on November 16, 1967, for her presentation on behalf of the administration in regards to Senate bill 2485.
Mr. Chairman, members of the subcommittee, it is an honor and a privilege to appear before you in the matter of Senate bill 2485. I am appearing on behalf of the Pacific Coast Metal Trades District Council affiliated with the Metal Trades Department of the AFL-CIO, the Pacific Coast Iron Shipbuilders District Marine Lodge of the International Brotherhood of Boilermakers, Iron Shipbuilders, Blacksmiths, Forgers & Helpers, AFL-CIO, and the subordinate lodge I represent as business manager, Boilermakers-Blacksmiths Lodge No. 10, Oakland, Calif.
The Pacific Coast Metal Trades District Council represents 86 local unions and five local metal trades councils located in California, Oregon, and Washington. These subordinate local unions are represented by 11 international unions affiliated with the AFL-CIO. I have attached to this statement a list of those international unions. They are reprsented by the Pacific Coast Metal Trades District Council.
Eight of these international unions are parties to the Pacific coast master shipyard agreement. Three international unions are parties to independent shipyard agreements with the same employers signatory to the Pacific coast master shipyard agreement that is in effect in the shipyards from San Francisco to the Canadian border. The primary agreement is known as the Pacific coast master shipyard agreement The scope of this agreement encompasses ship construction, ship repair and conversion, and ship breaking, what is commonly known as ship scrapping. It also covers the fabrication and erection of offshore drilling platforms and other types of industrial fabrication. The affiliated organizations that I am representing here today, represent approximately 12,000 employees working in the shipbuilding industry on the west coast. The vast majority of these shipyard employees are engaged in employment on the navigable waters of the United States, and by virtue of this fact, are covered in the erent of a disabling injury or fatality under the Longshoremen's and Harbor Workers' Compensation Act.
We appreciate this opportunity to appear and testify in support of the major provisions contained in S. 2485. This proposed legislation will improve to a great extent the present Longshoremen's and Harbor Workers' Compensation Act that in our opinion is long overdue.
We also desire to commend the distinguished Congressman Philip Burton, who is the author of H.R. 13689, in regard to his fine presentation, comments and recommendations, relative and pertaining to S. 2485 on November 16, 1967.
We concur and support the statement of Mrs. Esther Peterson, Assistant Secretary of Labor, before this subcommittee of the Senate committee on November 16, 1967, with some minor reservations and will propose some amendments to S. 2485, Longshoremen's and Harbor Workers' Compensation Act and to the present act.
We further concur with the excellent presentation of Mr. Howard McGuigan, legislative representative, American Federation of Labor and Congress of Industrial Organizations, in regard to the proposed amendments to the Longshoremen's and Harbor Workers' Compensation Act before the Subcommittee on Labor of the Senate Committee on Labor and Public Welfare that was made on November 17, 1967, with some additional recommendations we believe will substantially improve the benefits and the intent and purpose of the humanitarian concepts of the Longshoremen's and Harbor Workers' Compensation Act.
Referring to the present act, "Medical Services and Supplies,” section 7(a), to be amended to provide the injured employee with the free choice of a competent physician and hospital approved by the deputy commissioner in charge.
Referring to “Compensation for Disability,” section 8, to amend the necessary provisions to provide a maximum compensation payment of $121 per week, with a minimum compensation payment of $60 per week, with the “Determination of Pay," section 10, of the act remaining as is presently contained.
We further recommend to amend “Compensation for Disability": section 8, as follows: Paragraph (a), Permanent total disability: In case of total disability, will be computed not on the wages of injured employee 12 months prior to the injury, but on the basis of maximum amount of weekly compensation, as will be contained in the amended provisions of the act.
We further recommend to amend "Temporary Total Disability,” section 8, paragraph (b). In case of disability total in character, but temporary in quality, amend to provide the intent that irrespective of the average weekly wages earned by the injured employee 12 months prior to the injury, the employee be paid the maximum amount of compensation as will be contained in the amended provisions of the act.
We further recommend to amend "Permanent Partial Disability," section 8, paragraph (c). In case of disability partial in character, but permanent in quality, amend the present provisions of the act to provide that in the event of the foregoing shall be computed on the basis of the maximum amount of weekly compensation, and not based on the weekly compensation paid the injured employee if it is less than the maximum amount of compensation as will be contained in the amended provisions of the act.
The organizations that I am representing, further recommend an amendment to the present provisions of S. 2485, "Increase in Death Benefits," section 9(b):
If there be a surviving wife or dependent and no child of the deceased to such surviving wife or dependent husband 45 percent of the highest weekly wages paid in the industry will be the basis for computing the wages of the deceased.
The balance of section 9(b) to remain as is presently contained in S. 2485.
The reasons for these recommendations are based on the following facts: In many areas of the United States since World War II, the shipbuilding, ship repair, conversion, and ship demolition industries, as any knowledgeable individual knows who is familiar to extent with the industry in question, has deteriorated because of the almost total lack of an adequate shipbuilding program in this Nation.
It is a depressed industry for many employees who have spent their lives in this industry relative to available work, many employees are unable to earn the necessary wages that would entitle them, under the present provisions of the Federal Longshoremen's and Harbor Workers Compensation Act, and even under the provisions, if adopted, as now contained in S. 2485, when they unfortunately sustain a disabling injury, or there is a fatality, many of these shipyard workers would not be entitled to the maximum amount of weekly compensation, or even an equitable amount of compensation to sustain themselves, their families, and their dependents, during this period of human suffering, hardship, and duress, many of them receiving under the present act, compensation as low as $18 per week, $25 per week, $30 per week, and $35 per week.
Senator MORSE. I will have to interrupt for a 10-minute recess. (A brief recess was taken.) Senator MORSE. I am sorry to have had to interrupt. You may proceed. Mr. CUMMINGS. I fully understand the situation you are involved with.
To cite an example of what we contend are extreme inequities in the act, let's take for example the unfortunate employee who would suffer the loss of a member of his body because of an industrial injury, such as a total loss of his leg.
If the employee was fortunate enough to have been employed in the industry, or had earnings from other industries, and was entitled to a weekly compensation rate under the present act of $70 per week, while recovering, he would, of course, receive a permanent partial disability rating for the total loss of a leg equal to 288 times his weekly compensation rate for a total of $20,160.
But, what about the unfortunate victim during the course and scope of his employment, who would suffer the total loss of his leg, and who because of lack of earnings, would receive a weekly compensation rate of $20 per week? Under the present act, this employee would receive $5,760 for the total loss of his leg. Let's take into consideration that both of these employees actually had the same earning capacity.