On certification to the Superior Court, Appellate Division.
For reversal -- Chief Justice Wilentz, and Justices Sullivan, Pashman, Clifford, Schreiber, Handler and Pollock. For affirmance -- None. The opinion of the Court was delivered by Pashman, J.
In this case we address a question left undecided in Ridgefield Park Ed. Ass'n v. Ridgefield Park Bd. of Ed., 78 N.J. 144 (1978), and Bd. of Ed. of Woodstown-Pilesgrove v. Woodstown-Pilesgrove Regional Ed. Ass'n, 81 N.J. 582, 588 n. 1 (1980), namely, whether and to what extent a permissive category of subjects for negotiation exists for police and firefighters under the New Jersey Employer-Employee Relations Act, N.J.S.A. 34:13A-1 to -21. Specifically, the issue in this case is whether a provision in a collective negotiation agreement requiring the City of Paterson to promote eligible police officers within 60 days of the occurrence of a vacancy is enforceable as a permissive subject of negotiation.
On May 5, 1978 the City of Paterson entered into a collective negotiation agreement with the Paterson Police PBA, Local 1, the exclusive representative of its police officers. The agreement applied retroactively and covered the period August 1, 1976 to July 31, 1978. Although the term of the agreement extended only about three months beyond its execution date, another clause of the agreement provided for its continuation during negotiations for a successor agreement.
The agreement required that the City maintain a current list of eligible candidates for positions within the police department, and section 12.2 of the agreement further provided:
The City shall fill any and all vacancies in the Table of Organization above the rank of Patrolman within sixty (60) days of the date a position becomes vacant, by the promotion of an eligible employee to a higher rank, according to existing Civil Service Rules, Regulations and Procedures. If the aforementioned list of eligibles is due to expire during the sixty (60) day period the appointment or promotion to the vacancy must be made before the expiration date of the eligibles list, unless said Civil Service eligible list is incomplete.
During 1978 one captain and several sergeant positions became vacant because of retirements or promotions. The City did not fill these vacancies within the 60 day period required by section 12.2. As a result, several police officers filed grievances
claiming a breach of the collective negotiation agreement by the City. The City denied the grievances and the parties proceeded to binding arbitration under the grievance procedure established by the agreement.
The arbitrator rendered his decision in November 1978. He found that two of the vacancies had been filled 72 days late*fn1 and the others remained unfilled at the time of the arbitration proceedings. Since he found that these facts constituted a violation of the promotion clause of the agreement, he awarded each grievant the difference in pay between the higher ranking position for which he was eligible and his actual salary for the period during which he remained unpromoted. The arbitrator did not order that any officers actually be promoted.
The City failed to comply with the arbitrator's award and the PBA Local filed a complaint in the Superior Court, Chancery Division, to confirm and enforce the award, N.J.S.A. 2A:24-7. Because the City contested the propriety of the promotion clause as a subject of collective negotiations, the trial court, following the procedures we approved in Ridgefield Park, supra, 78 N.J. at 153-55, refrained from passing on the merits of that issue and instead referred the case to the Public Employment Relations Commission (PERC) for a scope of negotiations ruling in accordance with N.J.S.A. 34:13A-5.4(d).
PERC issued its decision in August 1979, ruling that the filling of vacancies by promotion within a designated time is not a mandatory subject of negotiations but that it is a permissive subject. A necessary corollary of PERC's holding was that a permissive category of negotiable subjects exists for police officers and firefighters. Since the City had agreed to include this
permissive subject within the collective negotiation agreement, the promotion clause was enforceable and subject to the grievance procedure, including binding arbitration, established by the agreement. PERC No. 80-16, 5 NJPER para. 10189 (1979).
The City appealed PERC's ruling to the Appellate Division, arguing that under N.J.S.A. 34:13A-16(b) and -16(f)(4) parties may submit permissive subjects to factfinding or arbitration after impasse has been reached but may not negotiate or agree to them prior to impasse. The City further argued that since the parties had not reached impasse during the negotiations, they could not legally agree to a permissive item. The Appellate Division rejected this argument, agreeing with PERC that permissive subjects are available for negotiation and voluntary agreement by the parties. The court also adopted PERC's characterization of the permissive category as encompassing all subjects not contravening any specific statutory mandate to the public employer. Finally, the court held that the promotion clause in dispute in this case comes within the permissive category and is therefore enforceable if included in the agreement.
We granted the City's petition for certification, 85 N.J. 144 (1980), and at the same time invited the participation of various amici curiae to address the issues presented by PERC's ruling below, as approved by the Appellate Division.
In Dunellen Bd. of Ed. v. Dunellen Ed. Ass'n, 64 N.J. 17 (1973), this Court first considered the issue of what subjects public employers must negotiate with the representatives of their employees pursuant to the Employer-Employee Relations Act, L. 1968, c. 303 (codified at N.J.S.A. 34:13A-1 to -21). There we defined the category of mandatorily negotiable subjects, designated "terms and conditions of employment" by the statute, N.J.S.A. 34:13A-5.3, as "those matters which intimately and directly affect the work and welfare of [public] employees,"
and that can be negotiated "without any significant interference with management's . . . responsibilities." 64 N.J. at 25. See Bd. of Ed. of Englewood v. Englewood Teachers Ass'n, 64 N.J. 1, 7 (1973).
Following legislative amendments of the statute, L. 1974, c. 123, we again considered the scope of negotiations for public employment and essentially reiterated the Dunellen definition of mandatory subjects. In State v. State Supervisory Employees Ass'n, 78 N.J. 54 (1978), we said:
[N]egotiable terms and conditions of employment are those matters which intimately and directly affect the work and welfare of public employees and on which negotiated agreement would not significantly interfere with the exercise of inherent management prerogatives pertaining to the determination of governmental policy. [ Id. at 67]
This definition is now entrenched in our public employment relations law. E.g., Woodstown-Pilesgrove, supra, 81 N.J. at 591; Bd. of Ed. of Bernards Tp. v. Bernards Tp. Ed. Ass'n, 79 N.J. 311, 320 (1979); State v. Local 195, IFPTE, 179 N.J. Super. 146 (App.Div.1981).
A second category, designated management prerogatives, was distinguished from the terms and conditions of employment. Employee organizations could not compel their public employers to negotiate with respect to subjects falling within this second category. In addition, State Supervisory Employees, supra, made it clear that the parties may not negotiate and reach an enforceable agreement as to any matter that is fixed or controlled by a specific statute or regulation. 78 N.J. at 80-81.
Together with State Supervisory Employees, we decided Ridgefield Park, supra. There we held, contrary to earlier decisions of PERC, e.g., In re Bridgewater-Raritan Regional Bd. of Ed., PERC No. 77-21, 3 NJPER 23 (1976); In re Bd. of Ed. of Trenton, PERC No. 77-24, 2 NJPER 351 (1976), that there are only two categories of subjects under the generally applicable sections of the Employer-Employee Relations Act, N.J.S.A. 34:13A-5.3, ...