Section 703 of the Public Employe Relations Act Interpretation

Section 703 of Public Employe Relations Act (Act 195) has been the subject of definitive interpretation by the Pennsylvania Supreme Court. In Pennsylvania Labor Relations Board v. State College Area School District, 461 Pa. 494, 337 A.2d 262 (1975), the meaning of Section 703 was raised in the context of a teachers' collective bargaining agreement. The Public School Code of 1949 established an extensive and comprehensive system to meet the educational needs of the citizens of the Commonwealth. This Court held that the duties given to a public school board could not be the subject of collective bargaining. Because it was the duty of the school board to set teacher salaries, teacher salaries could not be established by negotiation. Thus, Section 701 of Act 195, which mandates public employers and representatives of public employees to negotiate "with respect to wages, hours and other terms and conditions of employment" was found not to apply. Section 701 of Act 195 provides: Collective bargaining is the performance of the mutual obligation of the public employer and the representative of the public employes to meet at reasonable times and confer in good faith with respect to wages, hours and other terms and conditions of employment, or the negotiation of an agreement or any question arising thereunder and the execution of a written contract incorporating any agreement reached but such obligation does not compel either party to agree to a proposal or require the making of a concession. 43 P.S. 1101.701. See also City of Pittsburgh v. Pennsylvania Labor Relations Board, 539 Pa. 535, 538, 653 A.2d 1210, 1212 (1995) (noting that pensions are included within the mandatory bargaining provisions of Section 701). The Supreme Court disagreed, finding that, notwithstanding the Public School Code mandate, a school board was required to negotiate wages. It explained why Section 703 did not compel another result. The mere fact that a particular subject matter may be covered by legislation does not remove it from collective bargaining under section 701 if it bears on the question of wages, hours and conditions of employment. We believe that section 703 only prevents the agreement to and implementation of any term which would be in violation of or inconsistent with any statutory directive. State College Area School District, 461 Pa. at 508, 337 A.2d at 269. It further explained that in determining a "violation ... with any statutory directive," courts must examine that "statutory directive" as follows: Items bargainable under section 701 are only excluded under section 703 where other applicable statutory provisions explicitly and definitively prohibit the public employer from making an agreement as to that specific term or condition of employment. Id. at 510, 337 A.2d at 270. Thus, State College Area School District teaches that Section 703 prohibits parties from collectively bargaining a term that another statute "explicitly and definitively prohibits the public employer from making." Id. In the absence of a direct prohibition, an issue must be negotiated under Section 701 if it impacts wages, hours and other terms or conditions of employment. Notably, seniority and furloughs have been held to be matters of fundamental concern, included in the Section 701 list of wages, hours, and other terms and conditions of employment. See, e.g., Commonwealth v. Pennsylvania Labor Relations Board, 125 Pa. Commw. 114, 557 A.2d 1112 (Pa. Cmwlth. 1989).