BUTTLER, J.
Petitioner seeks judicial review of the order of the Employment Relations. Board (ERB) in which he challenges the action of his employer in abolishing petitioner’s classified position as Physical Plant Superintendent 2, and reassigning some of his former duties to an unclassified position, and others to what he contends are "inappropriate” classified positions.
Petitioner is (and has been since 1967) an employee of respondent Eastern Oregon State College (EOSC) in the state classified service. The position for which he was hired was created by the respondent in 1967 because of anticipated growth in student enrollment and physical plant construction. That growth never materialized.
Respondent Briggs was employed in 1973 as president of the EOSC. Because the legislature would not support new construction or additional program improvement funds until such time as the college gained enrollment, it became necessary to reorganize personnel. The reorganization was started in 1974, and on July 8, 1976, respondents notified petitioner and the Personnel Division in writing that his position of Physical Plant Superintendent 2 was being abolished.1 Petitioner thereafter took a demotion, in lieu of layoff, to the lower-paying classified position of Plant Operations Foreman and filed a grievance with respondents and the Personnel Division. Following the Division’s acquiescence in respondents’ action, petitioner filed a [826]*826petition with ERB for review, contending that the abolition violated Rule 61-100 of the Personnel Division2 for the reasons stated above, and that respondents did not act in good faith in abolishing the position. ERB found that the action of respondents was taken in good faith and concluded that the action was neither arbitrary not contrary to rule or law. Petitioner does not contest on appeal the findings with respect to good faith. Nor is there any contention here that the proper procedures for changing the classification plan were not followed to accomplish reorganization of the administrative framework at EOSC and the resulting abolition of petitioner’s position.
The only contentions are that abolition was invalid because Rule 61-100 of the Personnel Division does not permit the duties and responsibilities of petitioner’s former classified position to be reassigned to an unclassified position, and does not permit the assignment of the rest of his former position’s duties to other classified positions because they were reassigned to inappropriate classifications.3
[827]*827The Oregon State Merit System Law, ORS chapter 240, divides all employees in the service of the state into three categories: classified service, unclassifed service, and the exempt service.4 The classified service consists of all those positions which are not listed in ORS 240.200 (unclassified service) or ORS 240.205 (exempt service). The body charged with administering the Merit System Law in the Personnel Division of the Executive Department of the state. The Division is vested with the authority (subject to review by ERB) to determine which positions in the state service are properly in the classified service or unclassified service and what duties persons in those positions may perform appropriately.5 One of the duties placed upon the Division is to adopt and maintain a classification plan whereby all of the positions in the classified service are grouped into classes based upon their duties, authority, and responsibilities.6 Thereafter, when an appointing authority desires to create a new position or make any permanent and substantial change in the classification plan or duties, respon[828]*828sibilities, or authority of a position, the administrator of the Division must first be notified. Any affected employee has the right to appeal the change to ERB. Changes are effective only upon approval by the governor.7 Whenever a reduction of employees is required because of a material change in duties or organization, ORS 240.525 requires that the employees affected shall be laid off and that written notice be given to the employees and the Division 15 days prior to the effective date of the change.8
It is clear that the legislature intended the Division to have authority over the state service, particularly the classified service. It is the Division’s duty to monitor the creation and abolishment of positions in the classified service to make certain that the assignment of duties brought about by such reorganizations are not inconsistent with the applicable statutes and the classification plan. In the situation before us, the Division concurred in the respondent’s reorganization which abolished petitioner’s position, finding that "without an ongoing construction program at Eastern Oregon State College, the classification level of Physi[829]*829cal Plant Superintendent 2 cannot be justified at EOSC.” Once the position was no longer justified, it became necessary to reassign the abolished position’s duties to other positions. The Division, after investigation, concluded that the reassignment of petitioner’s former duties was not "inconsistent with duties of unclassified Business Manager and Assistant Business Manager positions in Higher Education.”
Petitioner, however, would have us read the Division’s Rule 61-100 as prohibiting the reassignment of some duties from an abolished classified position to an unclassified position. As we read the statutes, such an action is permitted; ORS 240.525 permits employee layoffs due to reorganizations and ORS 240.215 grants the Division authority to assign duties to positions that it finds appropriate. The position of business manager may be an unclassified position. ORS 240.207(l)(b)(C) and (2) provides:
"(1) In addition to those positions designated by ORS 240.205, the unclassified service shall include:
"(b) All staff members of the state system of higher education in the following positions, whether the type of service is teaching, research, extension or counseling:
"(C) Comptroller, chief budget officer, business manager, director of admissions and registrar.”
"(2) No position may be filled and no appointment made under this section, other than to a position directly imvolved in teaching, research, extension or counseling, unless a determination has been made by the Personnel Division as to whether the position shall be in the classified or unclassified service.”
There is nothing in the statutes prohibiting the assignment of duties of a former classified position to an unclassified position.
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BUTTLER, J.
Petitioner seeks judicial review of the order of the Employment Relations. Board (ERB) in which he challenges the action of his employer in abolishing petitioner’s classified position as Physical Plant Superintendent 2, and reassigning some of his former duties to an unclassified position, and others to what he contends are "inappropriate” classified positions.
Petitioner is (and has been since 1967) an employee of respondent Eastern Oregon State College (EOSC) in the state classified service. The position for which he was hired was created by the respondent in 1967 because of anticipated growth in student enrollment and physical plant construction. That growth never materialized.
Respondent Briggs was employed in 1973 as president of the EOSC. Because the legislature would not support new construction or additional program improvement funds until such time as the college gained enrollment, it became necessary to reorganize personnel. The reorganization was started in 1974, and on July 8, 1976, respondents notified petitioner and the Personnel Division in writing that his position of Physical Plant Superintendent 2 was being abolished.1 Petitioner thereafter took a demotion, in lieu of layoff, to the lower-paying classified position of Plant Operations Foreman and filed a grievance with respondents and the Personnel Division. Following the Division’s acquiescence in respondents’ action, petitioner filed a [826]*826petition with ERB for review, contending that the abolition violated Rule 61-100 of the Personnel Division2 for the reasons stated above, and that respondents did not act in good faith in abolishing the position. ERB found that the action of respondents was taken in good faith and concluded that the action was neither arbitrary not contrary to rule or law. Petitioner does not contest on appeal the findings with respect to good faith. Nor is there any contention here that the proper procedures for changing the classification plan were not followed to accomplish reorganization of the administrative framework at EOSC and the resulting abolition of petitioner’s position.
The only contentions are that abolition was invalid because Rule 61-100 of the Personnel Division does not permit the duties and responsibilities of petitioner’s former classified position to be reassigned to an unclassified position, and does not permit the assignment of the rest of his former position’s duties to other classified positions because they were reassigned to inappropriate classifications.3
[827]*827The Oregon State Merit System Law, ORS chapter 240, divides all employees in the service of the state into three categories: classified service, unclassifed service, and the exempt service.4 The classified service consists of all those positions which are not listed in ORS 240.200 (unclassified service) or ORS 240.205 (exempt service). The body charged with administering the Merit System Law in the Personnel Division of the Executive Department of the state. The Division is vested with the authority (subject to review by ERB) to determine which positions in the state service are properly in the classified service or unclassified service and what duties persons in those positions may perform appropriately.5 One of the duties placed upon the Division is to adopt and maintain a classification plan whereby all of the positions in the classified service are grouped into classes based upon their duties, authority, and responsibilities.6 Thereafter, when an appointing authority desires to create a new position or make any permanent and substantial change in the classification plan or duties, respon[828]*828sibilities, or authority of a position, the administrator of the Division must first be notified. Any affected employee has the right to appeal the change to ERB. Changes are effective only upon approval by the governor.7 Whenever a reduction of employees is required because of a material change in duties or organization, ORS 240.525 requires that the employees affected shall be laid off and that written notice be given to the employees and the Division 15 days prior to the effective date of the change.8
It is clear that the legislature intended the Division to have authority over the state service, particularly the classified service. It is the Division’s duty to monitor the creation and abolishment of positions in the classified service to make certain that the assignment of duties brought about by such reorganizations are not inconsistent with the applicable statutes and the classification plan. In the situation before us, the Division concurred in the respondent’s reorganization which abolished petitioner’s position, finding that "without an ongoing construction program at Eastern Oregon State College, the classification level of Physi[829]*829cal Plant Superintendent 2 cannot be justified at EOSC.” Once the position was no longer justified, it became necessary to reassign the abolished position’s duties to other positions. The Division, after investigation, concluded that the reassignment of petitioner’s former duties was not "inconsistent with duties of unclassified Business Manager and Assistant Business Manager positions in Higher Education.”
Petitioner, however, would have us read the Division’s Rule 61-100 as prohibiting the reassignment of some duties from an abolished classified position to an unclassified position. As we read the statutes, such an action is permitted; ORS 240.525 permits employee layoffs due to reorganizations and ORS 240.215 grants the Division authority to assign duties to positions that it finds appropriate. The position of business manager may be an unclassified position. ORS 240.207(l)(b)(C) and (2) provides:
"(1) In addition to those positions designated by ORS 240.205, the unclassified service shall include:
"(b) All staff members of the state system of higher education in the following positions, whether the type of service is teaching, research, extension or counseling:
"(C) Comptroller, chief budget officer, business manager, director of admissions and registrar.”
"(2) No position may be filled and no appointment made under this section, other than to a position directly imvolved in teaching, research, extension or counseling, unless a determination has been made by the Personnel Division as to whether the position shall be in the classified or unclassified service.”
There is nothing in the statutes prohibiting the assignment of duties of a former classified position to an unclassified position. The quoted statute taken as a whole permits the position of "business manager” to be unclassified, and the Division has concluded that the [830]*830position is in the unclassified service, thereby satisfying ORS 240.207(2).
We do not- understand Rule 61-100 to require a contrary conclusion. The purpose of the rule is to prevent the duties of a laid-off classified employee from being assigned to other classified employees in classes which are inappropriate for the performance of those duties. It does not purport to prohibit the duties from being assigned to unclassified or exempt positions.9
ERB’s findings on this contention are supported by the record, and its conclusion is supported by the findings.
Petitioner’s other contention on appeal is that the assignment of the rest of his former duties (those not assigned to unclassified positions) to other classified positions violated Rule 61-100 because the classification of those positions does not permit performance of such duties; i.e., they are not "appropriate classes.” ERB made no findings of fact as to whether persons in these classified positions could appropriately perform those duties. ERB did conclude that respondents’ actions were not arbitrary or contrary to rule or law. That conclusion, however, is not supported by adequate findings. The cases require that "an agency demonstrate in its order a rational relationship between the facts and the legal conclusions upon which it acts in each case.” McCann v. OLCC, 27 Or App 487, 493, 556 P2d 973 (1976), rev den (1977); Home Plate, Inc. v. OLCC, 20 Or App 188, 190-91, 530 P2d 862 (1975). Therefore, this case must be remanded for findings on the question of whether the assignment of duties to classified positions was to appropriate [831]*831classes. Michelet v. Morgan, 11 Or App 79, 83, 501 P2d 984 (1972).
Reversed and remanded.