*1 PITTSBURGH, Appellant, CITY OF
v. Pennsylvania, COMMONWEALTH of PENNSYLVANIA BOARD, LABOR RELATIONS State, County American Federation of Municipal Employees, District Council
84, AFL-CIO, Appellees. Supreme Pennsylvania. Court of
Argued Sept.
Decided Jan. *2 Solicitor, appellant. Asst. Malloy, Marianne S. Lassi, Crawford, Rela- Pennsylvania James L. Labor Peter Haller, Bd., Williams, Willig, William H. tions Alaine S. State, & for American Federation of Coun- Williams Davidson Dist. ty Municipal Employees and Council ZAPPALA, NIX, FLAHERTY, C.J., and Before PAPADAKOS, CAPPY, MONTEMURO, JJ. CASTILLE THE
OPINION OF COURT FLAHERTY, Justice. poses city
This case of whether a which estab- question revised to new lishes a Pension Plan pursuant requirements Municipal (“Act Act, 205”),1 Funding Recovery Standard and into negotiations concerning enter amended, 1984, 1005, 205, 18, P.L. No. 53 P.S. Act of Dec. § 895.101. or may whether it establish its new pension plan upon consultation with the union. State,
The American Federation of County and Municipal Employees, (AFSCME) District Council AFL-CIO is the representative exclusive of a bargaining unit of City of Pitts- burgh employees. From January 1986 to December 1987, AFSCME and city were parties to a collective bargaining agreement which stated that the labor contract was the total agreement parties, between the including wages, salaries, all pensions benefits, fringe and that there was to be no change the contract during its term except by mutual agreement.
In September of city 1987 the enacted an ordinance estab- lishing a revised pension plan with reduced benefits for em- ployees hired on or after January 1988. The ordinance was enacted city after the participate elected to recovery *3 program of Act provides which for the reorganizing financially distressed pension funds in order that the funds may become financially viable. purpose
The of Act 205 is to mandate actuarial funding for municipal pension and to plans “recovery establish a program for municipal pension systems determined to financially be 895.101, § distressed.” Act 53 P.S. note. In order to act, qualify for relief under the a municipality must first have pension plans its by reviewed a commission which is autho- rized to determine whether the plans are distressed and to classify the level of distress. The classifications are “mini- mal,” “moderate” or city’s “severe.” The plan was determined to be severely distressed.
In order to avail itself of state financial assistance under Act 205, a municipality whose pension plan is severely distressed is employ statutorily recovery pro- mandated gram designated “Recovery Program Level III.” 53 P.S. must, § 895.606. Pursuant to this program, the municipality alia, inter pension establish a revised plan benefit which is less costly plan than the applicable 895.606(b)(2). indicated As 53 P.S. employees. to current above, pension plan. such a revised city enacted
However, city not with AFSCME concern- bargain did Rather, city partici- benefit pension the revised ing in discuss” sessions with AFSCME. “meet and pated 31, 1988, charge filed of unfair labor AFSCME On March Pennsylvania Relations Board Labor with practices unfair (PLRB), had committed city alleging Relations Act the Public Employee in violation of practices (“PERA”)2 benefit pension in a revised implementing with the negotiations into entering first without on A hearing proposed union. examiner issued 9, 1989, did not commit an February finding city that the PLRB exceptions, filed AFSCME practice. unfair labor city’s implementa- exceptions, finding sustained the bargaining was pension of the revised without tion unfair under PERA. practice Alleghe- of Common Pleas of city The to the Court appealed 27, 1992 affirmed PLRB. The County, August on ny which March Court. On then to Commonwealth city appealed the lower court. This Commonwealth Court affirmed allocatur order determine whether granted court required, holding city were in error lower courts case, to its union before on the facts new establishing a revised employees. the case are whether the
The essential issues raised provisions are conflict with provisions of conflict, PERA, it must if is a how be resolved. there *4 have man- provides employers 701 of PERA Section hours, respect wages, “with datory duty of 43 P.S. employment.” other terms conditions are in- pensions § disagreement 1101.701. There is no bargaining. cluded within this mandated of PERA provides: Section 23, 1970, seq. § 1101.101 et. July of P.L. No. 43 P.S. 2. Act Public employers shall not be required to bargain over matters of managerial inherent policy, which shall include but shall not be limited to such areas of discretion or policy as the functions and of programs public employer, services, standards of its overall budget, utilization of tech- nology, the organizational structure and selection and di- rection personnel. of however, Public employers, shall be meet and policy discuss on affecting matters wages, hours and terms and conditions of employment as well impact as the thereon upon request by public employee representatives. §
43 P.S. 1101.702. Section 703 of the PERA provides: The parties to the bargaining process shall not effect or implement provision in a collective bargaining agreement if implementation of that provision would be of, with, violation or inconsistent or in conflict with any statute or statutes enacted by the General Assembly Commonwealth of Pennsylvania or the provisions of munici- pal home rule charters. §
43 P.S. 1101.703. hand, on the provides, other in pertinent part: Establishment of a revised benefit for municipal employees. The municipality may establish a revised benefit plan plan applicable any employee first hired on or after the effective date of the instrument establishing the revised plan____ benefit A revised newly hired municipal employees developed shall be representatives consultation with the collective bargaining unit applicable to the type affected municipal employee, any, shall be within the scope if collective bargaining pursuant law subsequent to the establishment 895.607(e) added). 53 P.S. (Emphasis The city argued before Commonwealth Court that since Act 205 allows a participating municipality to establish a revised pension benefit without collective bargaining, establishing
540 policy,” and managerial be matter of “inherent plan must a mandatory negotiation.3 requirement therefore outside stat Commonwealth Court rejecting city’s argument, plan pension a revised establishing that ed while a is budget city’s budget, establishing and while affects the (and exempt therefore policy managerial matter of inherent establishing the revised is mandatory bargaining), from is not a larger budget, of much and only component one argu As the city’s to managerial policy. matter of inherent establishing without permits ment that Court, our relying on Commonwealth bargaining, (1975), Pa. held College, PLRB 461 v. State items excluded bargainable might otherwise be although definitively” “explicitly if the bargaining legislature from them, city’s not remove the new excluded did bargaining.4 from to upon interpret court College, In State this was called to a number of then-recently-enacted respect PERA claimed ex district-employer matters the school were which inherently manageri because were empt bargaining they from claimed College under The union in State these al section 702. they wages, because concerned exempt matters were not under employment conditions of hours and other terms and case, the had offered no legislature In that section 701. subject disputed matters were to as whether the guidance not, or and we held: city’s position The is: present question distinguishing does between case not mandatory illegal subjects rather whether the but legislature subject has directed that this is over which permissible mandatory. but not City's at brief opinion portion College on which Common- 4. The this court’s State wealth Court relies states: [Ijtems bargainable only under section 701 are excluded under statutory provisions explicitly and 703 where other section public making agreement definitively prohibit employer from specific employment. term or condition added.) (Emphasis at A.2d at 270. Pa. A determination of the interrelationship between sections 701 and 702 calls us upon to strike a balance wherein those relating matters directly “wages, hours and other terms of employment” conditions are made sub- jects of bargaining and reserving management those *6 areas public that the sector necessarily requires to be managerial functions.
Based on our reading the above-mentioned statutes and law, case we with disagree city Commonwealth Court that the must in participate mandatory negotiation respect to the establishment of its revised pension 607(e)
Reading section of Act 205 in pari materia with PERA, section 702 of the we conclude city’s to avail itself of the assistance offered is an by inherently managerial not, 607(e), decision. If it were section requiring the establishment of a plan, revised benefit presum ably would require negotiations so as not to be in conflict with the PERA. By allowing city to establish a has, without mandating negotiations, legislature in effect, brought activity within the ambit of section 702 (inherent managerial activity). reject
We that city view because the is not participate in the recovery program of Act it is not required to in that participate portion recovery program which mandates in changes newly benefits for hired Rather, employees. regard legislative we creation of the opportunity to participate authority participate fully, even when so doing expands, however slightly, inherently managerial activity.
PLRB and the lower courts were in error in holding that mandatory activity such was not managerial” pur- “inherently suant to section 702 of the PLRA.5 33, AFSCME, argues Philadelphia 5. PLRB that in v. District Council (1991), rejected argument 528 Pa. this court reasons, order Commonwealth foregoing For the is re- of Commonwealth Court in error. Order Court was versed. J.,
ZAPPALA, concurring opinion. files a J., MONTEMURO, concurring opinion which is files CAPPY, joined by J.
PAPADAKOS, J., opinion. dissenting files a MONTEMURO, J., sitting by designation. Justice, ZAPPALA, concurring. majority. One solely the result reached concur unambiguous look the clear and beyond not need to
does have the municipalities of Act 205 conclude language revised benefit authority establish bargaining. engaging without provides pertinent part as follows: plan of *7 municipality may ... The establish a revised benefit hired on or applicable any employee first pension plan the establishing the the date of the instrument after effective A for plan---- revised benefit revised developed shall with consulta- be municipal employees unit bargaining collective representatives tion if municipal employee, any, type to the affected applicable pursu- bargaining and shall be within the collective subsequent to the establishment of ant to the law plan. the revised benefit 895.607(e). §
53 P.S. clear intent to expresses legislative require This section a implementation the of the revised bargaining collective after provisions public employer could the of Act 205 to excuse its use case, pension plan. employ- In the adoption of unilateral altering enjoined pension plan, preliminarily been from its er had contract, existing was terms of an which controlled the majority reviewing preliminary injunction, of this propriety likely prevail on the merits of case court held that the union was employer improperly breached its contract. because application to this case Philadelphia v. District Council 33 has no bargaining agreement expired when the here the collective had because plan. city implemented the revised benefit To the initial establish revised benefit however, plan, City only required in “consul- engage representatives tation with the of the collective bargaining Mandating unit.” for the establishment bargaining of a revised would render the last of the section phrase surplusage. presume Assembly mere We that the General intends the entire statute to be effective and certain. 1922(a). Thus, Pa.C.S. on the basis of the of Act language alone, was implement authorized to the revised since it met with representatives prior AFSCME to the plan’s adoption. keep purpose
We must mind that the of Act 205 was to recovery establish a program municipal pension systems financially determined to be Although pensions distressed. are generally bargainable, the drafted Act legislature remove the implementation financially of a revised distressed pension plan from the table. sum, I would reverse the order of the Commonwealth solely
Court on the basis of Act language MONTEMURO, Justice, concurring.
I concur in by Majority, the result reached but write to emphasize my belief that our decision out a narrow carves exception general rule that are pensions subjects of under the Public Relations Employee \ (PERA).1 Act
Today reconciling conflicting we are confronted with two statutes, Municipal section 701 of PERA and section 607 of the (Act 205)2, Recovery Pension Plan Funding Standard public employee both of which affect collective over *8 benefits. 701 of PERA pension imposes obligation Section hours, to faith and terms bargain good “wages, over other and conditions of 1101.701. employment.” 43 Pa.C.S. Courts 1970, 563, (1970) Employee 1. Public Relations Act of P.L. No. 195 (codified 1101.101-1101.2301) § at 43 Pa.S. Municipal Funding Recovery Pension Plan Standard and Act of (1984) (as § P.L. No. 205 amended 53 Pa.C.S. 895.101- (Purdon Supp.1994)) 895.803 are “terms conditions have held that benefits long See, subject under section 701. bargaining of to employment” District, Pa. Rose Tree Media School e.g., Appeal of (1980); Edu- A.2d State Pennsylvania Commw. District, 30 v. Whitehall School cation Association Baldwin (1977). Thus, it is that clear Pa.Commw. PERA duty had a under to Pittsburgh the over the revised benefit with District Council 89 subject of mandatory bargaining. are a retirement benefits contrast, to municipality In Act 205 allows a section 607 of newly municipal implement employees a benefit hired employees’ the collective with the “consultation” of the states that clearly unambiguously unit. This section shall be the benefits of to subsequent the establishment Thus, Concurring I the agree with revised benefit Act plain language that the Opinion Zappala of Mr. Justice pension plan a revised municipality implement 205 allows a consulting representative. only employees’ after that However, analy- I Justice disagree Zappala with Mr. Act 205. Section unambiguous language sis ends with in conflict. our clearly 701 of PERA and 205 are Under provisions statutory interpretation, canons of whenever irreconcilable, the two or more statutes are latest statute case, Act 205 1 Pa.C.S. the instant prevails. See would as it is the more recent of two statutes. prevail hold However, unnecessary I that it is that believe provisions of section 701 of repealed these two statutes can Majority PERA. I with the that agree to avail by finding municipality’s be reconciled decision itself of Act 205 is an “inherent decision” under management section 702 PERA. First,
I I today write for two reasons. believe separately forth Majority apply proper fails to set Labor standard of review for a decision of the Relations Second, fails limit its Majority Board. believe only exception carve out narrow properly
545 subject of that retirement benefits are a rule bargaining. of the Labor Relations
It is well settled that
by
are
findings
supported
must be
if the
upheld
Board
Board’s
evidence,
if
of
from
conclusions
law drawn
substantial
reasonable,
illegal.
not
arbitrary
facts are
or
capricious,
those
Pennsylvania Social Services
Bargaining
Joint
Committee of
PLRB,
(1983);
236, 241,
150,
A.2d
152
v.
503 Pa.
469
Union
PLRB,
7, 11,
409, 411
502 Pa.
463 A.2d
v.
Commonwealth
(1983).
case, I
to the
In the
believe that deference
instant
of
PLRB is unwarranted because the conclu
final order
The
therein are
erroneous.
plainly
sions of law contained
“consultation”,
bar
words
“collective
PLRB found that the
205, and
undefined in Act
and “establishment” were
gaining”
therefore,
were,
interpreted
PLRB then
ambiguous. The
Act. I
referring
sources outside the
believe
by
205
finding
ambigu
of
PLRB committed an error
law
according
The
of a statute must be construed
language
ous.
Hill, 481
usage.
v.
to common
Commonwealth
approved
(1978);
1303,
37,
6,
42
n. 6
Fellows
Pa.
n.
391 A.2d
1306
Odd
56 Pa.
Dept.
Welfare,
v.
Public
Pennsylvania
Home
of
of
(1981).
115,
Thus,
although
424 A.2d
Commw.
“consultation”,
and “estab
bargaining”,
“collective
the terms
has a
undefined,
each
they
unambiguous
are
are
lishment”
PLRB’s
approved usage. Accordingly,
find
common
of Act
and the Board’s resolution
interpretation
to be unreasonable.
interpretation,
case which flows from this
pro-
702 of PERA
Majority,
section
recognized by
As
by section
general
rule established
exception
vides
mandato-
employment
and terms of
are
wages,
701 that
hours
“[pjublic
702 states that
subjects
bargaining.
Section
ry
over matters
shall not be
employers
The
...”
43 Pa.S.
1101.702.
managerial policy
inherent
that the determination
correctly recognizes
also
Majority
section
matter
within the
particular
falls
whether
by
applying
than
701 is determined
702 rather
section
Pennsylvania
test
this Court
balancing
established
District,
Area School
College
v. State
Labor Relations Board
(1975).
College
we held
State
Pa.
337 A.2d
fundamental
is a matter of
dispute
an item of
that where
hours and other
wages,
interest
employees’
concern
PLRB in the first
duty
employment “[i]t
terms of
whether the
to determine
the courts thereafter
instance and
*10
in
employe wages,
of the
of the issues on the interest
impact
its
employment outweighs
of
and terms and conditions
hours
as a whole.”
policy
system
the basic
of the
probable effect on
507,
Majority
As State of in and terms and conditions wages, interest hours ees’ benefits I that and retirement pensions believe employment. and conditions of of hours and terms “wages, are at the heart therefore, and, strong have a interest employment,” discussed over these matters. As bargaining in collective consistently have held courts of this Commonwealth supra, subjects bargaining of mandatory benefits are retirement I in the rarest of circum- only under PERA. believe policy in an have an interest the “basic employer stances will to tilt the balance sufficiently strong as a whole” system an “inherent in a decision making pension-related favor In my 702 of PERA. decision” under section management case. Act 205 was instant situation is such a rare opinion, the municipal pension for recovery program as “a established financially Municipal distressed.” determined to be systems 1984, Recovery Act of Funding Plan Standard Pension (1984) (Preamble). case, In 1005, present P.L. No. 205 III which Program to utilize Level City Pittsburgh elected sys- “severely municipal pension distressed is reserved of a 53 Pa.S. 895.604. The establishment tems.” See Act for remedy is under the plan revised benefit a Recovery Program themselves of municipalities availing all in its City’s rescuing III. interest Level believe the interest of the em- pension system outweighs distressed im- collectively in over the strong, albeit ployees, reason, I of a revised benefit For plementation
547 City’s to invoke section 205 is agree that under “inherent decision” section outside management section 701. mandatory bargaining required by course, to itself of Act 205 is municipality’s ability Of avail v. District Philadelphia limited our decision necessarily (1991). 33, In 355, Pa. A.2d District Council to municipality, pursuant attempted Council Act the pension plan which altered establish a revised agreement. We effect under collective municipality adopt refused allow the the revised holding that the matter included collective “[o]nce becomes, like any it other contractual bargaining agreement, agreement.” on the District provision, binding parties (citations at 259-60 528 Pa. 598 A.2d at Council omitted). case, Pittsburgh instant enacted pursuant establishing an ordinance a revised benefit negotiating 205 in with the union September 1987 while The collec for a agreement. successor *11 31, 1987, and agreement expired on December tive 1,1988. January plan go effect on the revised benefit was and the City plan The refused to over revised Thus, I practice complaint followed. instant unfair Majority distinguished case is agree with the instant not attempting from was District Council because merely but abrogate bargaining agreement, a collective expiration previ after adopted a revised benefit properly 33 is negotiated agreement. District Council ously may abrogate not proposition municipality limited to that a agreement by unilaterally existing However, under 205. imposing a revised has the munic bargaining agreement expired, once collective unilaterally adopt itself ipality may avail an “inher without collective decision.” management ent above, result set forth I concur
For the reasons Majority. reached
CAPPY, J., concurring joins opinion. Justice,
PAPADAKOS, dissenting. Court on affirm the Commonwealth dissent would opinion. of its sound
basis Pennsylvania, Appellee, COMMONWEALTH v. ZIMMICK, Appellant.
Kevin Lee Pennsylvania. Supreme Court Argued March Decided Jan.