The opinion of the court was delivered by: Stein, J.
On certification to the Superior Court, Appellate Division.
This appeal requires us to determine whether a city must negotiate with police unions before implementing a plan to transfer police officers from administrative and non-police positions to operational positions and to fill the administrative and non-police positions with civilian personnel. As part of a claimed reorganization of its police force, the City of Jersey City (City) sought to transfer officers formerly discharging non-police functions such as radio repair, supervision of school crossing guards, and maintenance of police property rooms, to operational or field positions such as patrol duty and community-based policing. The vacant positions were to be filled by civilians. The City did not engage in negotiations with the police unions concerning the plan. The police unions filed unfair practice charges with the Public Employee Relations Commission (PERC), alleging that the City engaged in unfair practices within the meaning of the New Jersey Employer-Employee Relations Act, N.J.S.A. 34:13A-1 to -29, by unilaterally transferring work from police personnel to civilian employees not included in the police officers' bargaining units.
PERC determined that the "unit work rule" required the City to negotiate with the unions before transferring to civilians work that had been performed exclusively by police officers, and concluded that of the ten functions that the City had transferred from police officers to civilians, five had been performed exclusively by police officers and five had not. PERC thereafter issued an order directing the City to reassign to police officers those duties that had been performed exclusively by police officers and ordered the City to negotiate the transfer of such "police unit work" with union representatives.
The City appealed the order. The Appellate Division affirmed, substantially for the reasons set forth in PERC's decision and order. We granted the City's petition for certification. 152 N.J. 8 (1997).
In 1988, Murray and Mayo Associates, a management consulting agency, conducted a study of the Jersey City Police Department (Department). The study revealed that the Department could be run more efficiently if uniformed personnel in administrative positions were moved into field positions and if civilians assumed the uniformed personnel's former administrative duties. In that same year, the Police Director of Jersey City reached the same Conclusion and proposed a departmental reorganization. In September 1992, the Police Chief of Jersey City identified sixty-four clerical, technical, and other non-police positions held by police officers that were to be filled by civilians. The police officers were to be deployed into field positions.
Generally following the Police Chief's recommendations, the City began reorganizing the Department in July 1993. Civilians displaced police officers in the following areas: (1) intra- and inter-departmental mail delivery, (2) the Bureau of Criminal Identification, (3) clerical duties performed by the station lieutenant's desk assistant, (4) the property room, (5) crossing guard supervision, (6) the legal bureau, (7) the motor pool, (8) radio repair, (9) the pistol range, and (10) the fiscal office. The officers whose positions were filled by civilians were transferred to operational or field positions. They were not terminated and did not receive reductions in rank or salary.
At the time of the reorganization, the City was a party to collective negotiations agreements covering the terms and conditions of employment of police officers. In September 1993, the Jersey City Police Officers Benevolent Association (POBA), which represents the bargaining unit for police ranked lower than sergeant, and the Jersey City Police Superior Officers Association (PSOA), which represents the bargaining unit for supervisory police officers holding the rank of sergeant through deputy chief, each filed unfair practice charges against the City. Both unions alleged that the City violated N.J.S.A. 34:13A-5.4(a) by unilaterally transferring to civilians work traditionally performed by police officers and police superior officers. That statute provides in relevant part:
a. Public employers, their representatives or agents are prohibited from:
(1) Interfering with, restraining or coercing employees in the exercise of rights guaranteed to them by this act.
(5) Refusing to negotiate in good faith with a majority representative of employees in an appropriate unit concerning terms and conditions of employment of employees in that unit . . . . [N.J.S.A. 34:13A-5.4(a)(1), (5).]
PSOA further alleged that the non-negotiated transfers violated the terms of its collective negotiations agreement (Agreement) with the City. That Agreement provided in pertinent part:
Section 1. All conditions of employment relating to wages, hours of work and general working conditions presently in effect which are department-wide in nature shall be maintained . . . .
Section 3. Proposed new rules or modification of existing rules governing working conditions which are . . . department-wide in nature shall be negotiated with the duly authorized representative of the [PSOA] before they are established.
Additionally, PSOA relied upon N.J.S.A. 40A:9-154.1, which provides in part: "Every adult school crossing guard shall be under the supervision and direction of the chief of police or other chief law enforcement officer of the municipality wherein he is appointed . . . ."
The cases were consolidated and hearings were held in July and November 1994 before PERC. The hearing examiner made findings of fact, rejected the City's argument that all of the job transfers were part of an overall, systematic reorganization, and conducted a job-by-job review and drew job-by-job Conclusions. In general, the hearing examiner determined that the police department was "civilianizing" the force to maintain the resources of the Department, and intended to "reduce crime or the fear of crime in Jersey City" by improving the level of service and increasing the number of police officers in field positions. At the time of the hearing examiner's findings, 67% of police officers were in operational positions; the goal was to increase that number to 85% by "civilianizing" administrative police positions.
With respect to the specific departmental functions at issue, the hearing examiner made the following findings:
For at least 18 years, police officers picked up and delivered intra- and inter-departmental mail using a marked police car. They also distributed subpoenas to officers for court appearances and picked up money at the car pound every day and delivered it to the Chief of Police. Occasionally, as a courtesy to fellow officers, they picked up evidence and delivered it to the property room. In September 1993, mail duty officers were transferred to patrol duty and mail duties were assigned to civilian employees. One of the displaced officers was required to return temporarily to mail duty because "civilian delivery of police mail was not functioning properly." That officer was returned to patrol duty later that year.
Although the police mail delivery system had historically been operated exclusively by the Police Department, civilians delivered intra- and inter-departmental mail in other City departments. By transferring the police mail delivery to civilians, the City was doing no more than consolidating governmental functions. The City had no obligation to negotiate because consolidation is a managerial prerogative.
B. Bureau of Criminal Identification (BCI)
In 1985, there were 14 police officers in the BCI. Five were on the day tour, five on the evening tour, and four on the midnight tour. Their duties included checking FBI correspondence to verify fingerprint identification, fingerprinting civilians, processing (i.e. photographing and fingerprinting) prisoners, lifting latent prints from evidence delivered to the BCI, and going to crime scenes to secure latent evidence and take photographs. There were also two civilian clerk typists. The clerk typists would take telephone messages, answer mail, draw files, and prepare correspondence. In Spring 1994, two police officers in the BCI retired and, within a month, were rehired as civilians. Except for going to crime scenes, the retired officers performed the same functions at the BCI as they performed when they were active officers.
The City's rehiring of retired police officers in the BCI occurred for purely economic reasons because the City attempted "to keep the same employees doing largely the same jobs for less pay," and was therefore not a legitimate reorganization. The former officers performed "police-related duties" such as processing and fingerprinting prisoners. ...