H.E. NO. 94-22

STATE OF NEW JERSEY

BEFORE A HEARING EXAMINER OF THE

PUBLIC EMPLOYMENT RELATIONS COMMISSION

In the Matter of

CITY OF NEWARK,

Respondent/Petitioner,

-and-	Docket Nos. CO-H-94-125 and

SN-94-45

NEWARK COUNCIL NO. 21, NJCSA,

IFPTE, AFL-CIO,

Charging Party/Respondent.

Appearances:

For the Respondent, City of Newark,

Joanne Watson, Assistant Corporation Counsel

For the Charging Party, Newark Council No. 21,

Fox and Fox, attorneys

(Dennis J. Alessi, of counsel)

HEARING EXAMINER'S REPORT

AND RECOMMENDED DECISION

On October 25, 1993, Newark Council No. 21, NJCSA, IFPTE, AFL-CIO filed an unfair practice charge with the Public Employment Relations Commission, alleging that the City of Newark committed unfair practices within the meaning of the New Jersey Employer-Employee Relations Act; specifically, N.J.S.A. 34:13A-5.4(a)(1) and (5)1/ when on September 13, 1993 employees in

1/	These subsections prohibit public employers, their representatives or agents from: "(1) Interfering with,

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the title Recreation Leader received notification that the City was reducing their work week from 40 hours to 20 hours. The charge alleged that the employees' loss of full-time status would also result in their loss of contractual health insurance coverage. The reduction in hours and insurance coverage was in contravention of the collective negotiations agreement.2/

The City denies it committed an unfair practice. It denies that work hours were reduced. Rather, employees were laid off pursuant to Department of Personnel regulations and the City purportedly had a managerial prerogative to take that employment action. The City also filed a Scope of Negotiations Petition on November 4, 1993, after Council 21 sought to arbitrate this matter. It argues the matter is a non-negotiable, managerial prerogative and it seeks to restrain arbitration. It further contends the contract was not violated.

A Complaint and Notice of Hearing and an Order Consolidating the Scope of Negotiations Petition with the unfair

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restraining or coercing employees in the exercise of the 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, or refusing to process grievances presented by the majority representative."

2/	The charging party also filed an Application for interim restraint of the City's action. That Application was denied. I.R. No. 94-6, 19 NJPER (¶ 1993)

practice complaint were issued and a Hearing was held on January 26, 1994. Both parties submitted post-hearing briefs.3/

The City of Newark operates five recreation centers staffed by Recreation Leaders. In May 1993, the City employed 22 full-time Recreation Leaders; they worked 40 hours per week and were represented in collective negotiations by Council #21.

In May 1993, John D'Auria, the Personnel Director of the City, met with the President of Council 21, Evelyn Laccitiello and told her that the City was considering laying off the Recreation Leaders and rehiring them as 20 hour per week part-time employees. Laccitiello replied, "[the City] can't do that." D'Auria responded that it believed that it could. Laccitiello answered that, "[the union] will have to take you to court because we have a contract." Laccitiello did not advise that the union wanted to negotiate over the reduction in hours.

By letters dated July 27, 1993, each of the Recreation Leaders were notified that, effective September 10, 1993, he or she would be laid off from their full-time position, Recreation Leader, at 40 hours per week and retained as a part-time 20 hours per week, permanent Recreation Leader. The letters stated the Recreation Leaders were being laid off from their full-time position for reasons of economy and efficiency. The Recreation Leaders were also notified that pursuant to the collective negotiations agreement

3/	The record closed on March 7, 1994 with the receipt of the transcript.

between the City and Council 21, only full-time employees are entitled to health benefits. Accordingly, health benefits will cease (CP-14). The Recreation Leaders were ultimately reduced to 20 hour part-time employees on November 13, 1993 by a mayoral executive order and they were no longer covered by the City's health insurance plan.

Laccitiello testified as to the history of the Article VI work week. Her testimony was credible and not rebutted.

In the late 1960's and early 1970's, most City employees worked 9 a.m. to 4 p.m. or 30 hours a week. However, some employees worked 37.5 hours, and other, specifically, the Recreation Leaders, worked 40 hour weeks.

In 1968, the City attempted to unilaterally increase the workweek of 30 hour employees to 35 hours. Council #21 successfully brought suit and the City was ordered to return the affected employees to 30 hours per week (CP-1 and CP-2 in evidence).

At least as far back as 1972 and throughout the 1970's, the contracts between the City and Council #21 contained contract provisions which preserved the work week.

The 197273 contract (CP-3) provided:

Article VI - Work Week

A. The present normal work week for individuals employed at the date of the signing of this Agreement shall be continued for the life of this Agreement.

The 1976-78 agreement (CP-4) provided:

Article VI - Work Week

The present normal work week for individuals including number of hours per day per week employed at the date of signing of this Agreement shall be continued for the life of this Agreement.

In negotiations for the 1979 to 1982 contract, the City and Union agreed to increase the hours of 30 hour employees to 35 hours. The affected employees received a greater salary increase than those negotiated for the 37.5 and 40 hour employees. The change in the hours was memorialized in Article VI - Work Week in the 1979-82 Agreement. It states:

Those employees covered by this Agreement for whom the current work week is thirty (30) hours per week, six (6) hours per day exclusive of the lunch period shall continue such work week until September 1, 1980. Effective September 1, 1980, the work week shall be thirty-five (35) hours per week, seven (7) hours per day exclusive of the lunch period. Those employees covered by this Agreement whose work week was thirty-five (35) hours or more prior to September 1, 1980, shall continue working the same number of hours as heretofore, during the life of this Agreement.

This contract language has been carried forward without change to the current collective negotiations agreement (CP-11).4/

D'Auria testified, and I credit his testimony, that the City initiated the lay-off because the recreation leaders had very little to do during the hours school was in session. The City had a budget crisis in 1990 and 1991 and it was compelled to lay-off employees. The City is sensitive to its expenses and a savings could be made if the hours of the personnel in question were cut.

4/	Part-time employees are also covered by this agreement having been listed in the appendices of previous agreements.

Accordingly, D'Auria filed the lay-off plan with the Department of Personnel. His meeting with Laccitiello complied with the Department of Personnel requirement that an employer meet and confer with the union representatives of the employees affected by a lay-off.

ANALYSIS

The City argues that it had no obligation to negotiate with Council 21; it had a managerial prerogative to make the lay-offs. The recreation leaders hours were not simply reduced; they were laid-off and re-hired as part-time employees. Lay-offs are a non-negotiable, managerial prerogative. Therefore, they had a non-negotiable, managerial right to take this action.

Alternatively, it argues that Article VI does not preserve a 40 hour work week for Recreation Leaders.

In Madison Borough Bd. of Ed., P.E.R.C. No. 88-29, 14 NJPER 401 (¶19158 1988), an employer argued that, when it reduced the hours of work and compensation of an employee, it made a reduction in force, i.e. a lay-off, pursuant to N.J.S.A. 18A:28-9, and therefore its actions were non-negotiable and not arbitrable. The Commission, citing Piscataway Twp. Bd. of Ed., 164 N.J. Super. 98 (App. Div. 1978), rejected this argument and found the Borough's action was not a true reduction in force; rather, it was simply a unilateral reduction in hours and compensation.

Madison is analogous to the facts here. The notification of lay-off included notice that the affected employees would continue to work part-time with reduced compensation and benefits. Although the City has the non-negotiable right to reduce the size of its work force through lay-offs, it only used the language of lay-offs to reduce the workweek of the Recreation Leaders.

Work hours are a mandatorily negotiable and arbitrable term and condition of employment. Although an employer has a prerogative to determine the number of part-time and full-time employees in its employ, a contractual provision addressing the work hours of employees is a legal, arbitrable contract provision. Gloucester Cty, P.E.R.C. No. 93-96, 19 NJPER 224 (¶24120 1993).5/

5/	Where an unfair practice charge alleges on an (a)(5) violation based upon contractually derived rights, it is Commission policy to defer such a charge to the contract's grievance resolution mechanism provided the employer agrees to allow that mechanism to resolve the underlying grievance. However, here, the employer claims that the contract clause in dispute is outside the scope of negotiations and refused to defer to arbitration. Therefore, the issue of negotiability must be resolved by the Commission. An employer's decision to abrogate a contractual clause, based on an erroneous belief that the clause is outside the scope of negotiations, constitutes a contract repudiation and therefore a potential unfair practice. State of New Jersey (Human Services), P.E.R.C. No. 84-148, 10 NJPER 419 (¶15191 1985).

Having found the issue here is negotiable and arbitrable, one might argue the meaning of the contract should now be deferred to arbitration. (Neither party has argued that this matter should be so deferred.) However, to defer now after a full hearing would be self-defeating; two major rationales of the deferral policy are economy and speed of dispute resolution. It would better serve both the legislative mandate of the Commission (to promptly resolve labor disputes) and judicial economy to interpret the contract in this decision to determine if the City unlawfully altered a term and condition of employment.

The City argues that the current contract should be read so only those employees who were hired prior to 1980 are covered by Article VI. It asks that the history of Article VI not be considered in deciding the unfair practice charge. It offers no legal theory as to why the history of the contract article should not be considered. However, it is entirely proper to consider oral testimony which gives meaning and sense to contract language so long as, "the intent of the parties as clearly expressed in the writing controls." Kearny PBA Local #21 v. Twp. of Kearny, 81 N.J. 208, 221-222 (1979); Jersey City Bd. of Ed., P.E.R.C. No. 84-64, 10 NJPER 19 (¶15011 1983); County of Burlington.

It is apparent that "September 1, 1980" negotiated into Article VI of the 1979-82 agreement refers to the work week change for 30 hour employees. The parties carried over this contract language into the current document without change.

Considering the history of Article VI, I am satisfied that its intent is to preserve the work week of all full-time employees, including Recreation Leaders, and the parties simply never sought to update its language after the 1979-82 modification. The interpretation urged by the City does not explain the contract language as a whole.

Furthermore, at their May 1993 meeting, D'Auria told Laccitiello that the reduction in hours was non-negotiable. He never indicated that the City had a contract right to make the change. When D'Auria testified at the hearing as to his rationale

for the reduction in hours, he did not testify he had a contractual right; rather, he testified he had a right under Department of Personnel regulations to lay-off these employees.

I disagree. Based upon the case law and my reading of Article VI, I find that the City unilaterally altered an existing term and condition of employment, the Recreation Leaders' work hours.

Finally, the City argued that Council #21 never demanded negotiations. When Laccitiello was informed of the impending City action, she replied, "you can't do this. We'll see you in court. We have a contract." The City argues that if there was an obligation to negotiate, it was waived by Council #21's failure to demand negotiations. However, the unfair practice occurred when the City unilaterally altered a term and condition of employment as memorialized in the contract. There was no obligation on the part of the union to demand negotiations here. In fact, a union may decline an invitation to re-negotiate an existing contract term. Under such circumstances, it is an unfair practice for an employer to alter the express terms of the contract. Middlesex Bd. of Ed., P.E.R.C. No. 94-31, 19 NJPER 544 (¶24256 1993).

Accordingly, I recommend the Commission find that the City of Newark violated 5.4(a)(5) and derivatively (a)(1) when it unilaterally reduced the workweek of Recreation Leaders without negotiations. However, having addressed the dispute which gave rise

to the demand for arbitration, I recommend the Commission find the demand is moot.6/

RECOMMENDED ORDER

The Hearing Examiner recommends that the Commission ORDER:

A.	That the Respondent City of Newark cease and desist from:

1. Interfering, restraining or coercing its employees in the exercise of their rights by unilaterally reducing the hours of work of Recreation Leaders employed by the City.

2. Refusing to negotiate in good faith with a majority representative concerning terms and conditions of employment by unilaterally reducing the hours of work of Recreation Leaders employed by the City.

B.	That the Respondent City of Newark take the following affirmative action:

1. Restore all Recreation Leaders to full-time 40 hours per week position and make them whole for all salary and benefits lost retroactive to November 13, 1993.

2. Post in all places where notices to employees are customarily posted, copies of the attached notice marked as Appendix "A." Copies of such notice shall, after being signed by the Respondent's authorized representative, be posted immediately and

6/	There is no dispute that full-time employees are entitled to health benefits. The Recreation Leaders reinstatement to full-time status will resolve issues raised about health benefits.

maintained by it for at least sixty (60) consecutive days. Reasonable steps shall be taken to ensure that such notices are not altered, defaced or covered by other materials.

3. Notify the Chairman of the Commission within twenty (20) days of receipt what steps the Respondent has taken to comply with this order.

Edmund G. Gerber

Hearing Examiner

Dated: March 28, 1994

Trenton, New Jersey

WE WILL NOT interfere, restrain or coerce employees in the exercise of their rights by unilaterally reducing the hours of work of Recreation Leaders employed by the City.

WE WILL NOT refuse to negotiate in good faith with a majority representative concerning terms and conditions of employment by unilaterally reducing the hours of work of Recreation Leaders employed by the City.

WE WILL restore all Recreation Leaders to full-time 40 hours per week position and make them whole for all salary and benefits lost retroactive to November 13, 1993.