On appeal from the Public Employment Relations Commission.
Michels, Ard and Furman. The opinion of the court was delivered by Michels, P.J.A.D.
[179 NJSuper Page 148] The State of New Jersey (State) appeals from a decision and order of the Public Employment Relations Commission (PERC), (1) holding that it may negotiate with Local 195, IFPTE, and Local 518, SEIU (hereinafter collectively referred to as the "union"), concerning minor disciplinary matters so long as such negotiations do not contravene pertinent Civil Service laws and regulations and that disciplinary disputes may be referred to binding arbitration if the parties so provide in their grievance procedure, and (2) ordering the State to negotiate such issues upon demand of the union. The effect of the decision and order is to compel the State to negotiate (1) the standards for minor disciplinary infractions by union members; (2) a grievance and binding arbitration procedure for resolution of disputes involving
the guilt or innocence of such members with respect to both major and minor disciplinary infractions, and (3) a grievance and binding arbitration procedure for resolution of disputes involving the reasonableness of the penalty imposed except in cases of discharge from service.
During the course of negotiations for a collective bargaining agreement between the State and the union a dispute arose as to the negotiability of a contract clause providing for binding arbitration of disciplinary disputes. Although the State had agreed to such a provision with respect to previous contracts, during the negotiations for the 1979 contract the State took the position that a disciplinary grievance procedure was not negotiable. When the parties were unable to reach an agreement the union filed a petition with PERC for a scope of negotiations determination, claiming that the State was disputing the negotiability of matters which had risen during the course of collective negotiations. Specifically, the issues in dispute pertinent to this appeal, both relating to disciplinary determinations, were:
Whether the inclusion of a disciplinary clause in a collective negotiations agreement providing for binding arbitration of disciplinary matters is illegal.
Whether the parties may properly negotiate a disciplinary clause for "minor disciplinary actions," i.e. , those which are specifically exempted from the Civil Service Statute.
Article VIII, which generated the dispute, established a four-step grievance procedure for disciplinary matters. The fourth step, in part pertinent here, permitted the union and the aggrieved employer to elect binding arbitration for disputes concerning any suspensions of more than five days, suspensions or fines imposed more than three times, or for an aggregate of more than 15 days in a calendar year, demotions and discharges. With respect to the arbitrator's powers over such disputes, the arbitrator's decision as to guilt, innocence or penalty was final and binding. The arbitrator was empowered to fashion whatever penalty he deemed appropriate to the circumstances, with the one exception that upon a determination of guilt the arbitrator could not substitute a lesser penalty for the penalty of removal from service imposed by the employer. The article further
provided that if the employee were found innocent or the penalty was modified, the arbitrator could order reinstatement with back pay for all or part of the period of the imposed suspension, dismissal or reduction in grade.
Additionally, with respect to the review of minor disciplinary actions, that is, actions where the penalty imposed was a suspension of five days or less, the article provided for panel consideration of the grievance. The panel was to consist of two union representatives, two state representatives, and one neutral member mutually selected by the parties. A unanimous decision by the state and union panel members was to be binding. In the event of disagreement between the state and union representatives as to disposition of the grievance, the union could submit the matter to binding arbitration if the neutral member decided that the matter raised issues warranting such submission.
PERC held that a disciplinary decision is a term and condition of employment for which binding arbitration could be negotiated and ordered the State to negotiate upon demand of the union a contractual article providing for binding arbitration of major and minor disciplinary grievances. We disagree and reverse.
The New Jersey Employer -- Employee Relations Act (N.J.S.A. 34:13A-1 et seq.) requires collective negotiation with respect to the terms and conditions of public employment. N.J.S.A. 34:13A-5.3. Since the Legislature has not defined the phrase "terms and conditions of employment," our courts have undertaken to do so. In Dunellen Bd. of Ed. ...