Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Finance, to which was referred H.B. No. 266, H.D. 1, entitled:

begs leave to report as follows:

The purpose of this bill is to establish clear distinctions between mandatory, excluded, and permissive subjects of collective bargaining. Among other things, this bill:

(1) Eliminates statutory language that prohibits an

(2) Eliminates the prohibition of an agreement between an

(3) Provides that an employer may negotiate over permissive

(A) The merit principle;

(B) Principle of equal pay for equal work;

(C) Qualifications, standards for work, and the nature

(D) Standards to maintain efficiency and productivity;

(E) The method and means by which government operations

The Hawaii State Teachers Association and Hawaii Government Employees Association supported this bill. The United Public Workers supported the intent of this measure. The Department of Human Resources Development, the Judiciary, University of Hawaii, City and County of Honolulu (C&C) Department of Human Resources, C&C Department of Environmental Services, County of Maui Department of Personnel Services, County of Hawaii Department of Civil Service, and the Hawaii State Personnel Council opposed this measure.

Your Committee finds and concludes that the current language in section 89-9, Hawaii Revised Statutes (HRS), that defines the scope and limits on negotiable subjects for collective bargaining purposes in the public sector is contradictory and confusing. Section 89-9 (a), HRS, requires public employers and exclusive bargaining representatives to negotiate over "wages, hours, and other terms and conditions of employment." While section 89-9 (a), HRS, establishes the duty to bargain over these items to be an "obligation" of both employer and employees, section 89-9 (d), HRS, suggests otherwise as to certain "terms and conditions of employment."

The ambiguity in the current statute creates legitimate concerns regarding whether existing contract provisions on such matters as promotion, transfers, demotions, temporary assignments, disciplinary actions, layoffs, and retention are valid under section 89-9 (d), HRS. The "proviso" adopted in 1988 is insufficient to address these concerns (Section 4 of Act 399, Session Laws of Hawaii 1988). Accordingly, this bill clearly delineates what subjects are mandatory, permissive, and excluded for purposes of collective bargaining pursuant to Section 89-9, HRS.

Mandatory subjects are set forth in section 89-9 (a), HRS, as "wages, hours, and other terms and conditions of employment." Permissive subjects are identified in section 89-9 (g), HRS, and represent subject matters over which bargaining is discretionary. (See NLRB v. Wooster Div. of Borg-Warner Corp., 356 U.S. 342 (1958).) Excluded subjects are clearly enumerated in section 89-9 (d), HRS, as amended.

Your Committee recognizes that the right to collective bargaining is a constitutional right under Section 2 of Article XIII of the State Constitution. The amendments made to section 89-9, HRS, and section 89-19, HRS, are intended to implement the rights established by the framers to our constitution since 1968.

As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 266, H.D. 1, and recommends that it pass Third Reading.