Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Labor, to which was referred S.B. No. 290, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to amend the law regarding appropriate issues for negotiations in collective bargaining.

Specifically, this measure:

Testimony in support of this measure was submitted by the United Public Workers, the Hawaii State Teachers Association, and the Hawaii Government Employees Association. Testimony in opposition to this measure was submitted by the Judiciary, the Department of Human Resources Development, the Department of Human Resources of the City and County of Honolulu, the Department of Personnel Services of the County of Maui, the Department of Civil Service of the County of Hawaii, the University of Hawaii, and the Hawaii State Personnel Council.

In 1988 the Legislature amended section 89-9(d), Hawaii Revised Statutes (HRS), to expand the scope of collective bargaining in the public sector, pursuant to Act 399, Session Laws of Hawaii 1988. The intent of the change was to protect contract provisions which would otherwise be considered invalid because of a literal reading of what is commonly referred to as the management rights clause in section 89-9(d), HRS. As explained in relevant portions of the House Standing Committee Report Number 986-88:

1998 House Journal, at 1193.

Your Committee has again conducted a similar review and find that nearly all agreements in the public sector contain or refer to standards, criteria, and procedures relating to the employee hiring, promotions, transfer, assignment, retention, suspension, demotion, discharge, disciplinary actions, layoffs and displacement for lack of work and other similar personnel actions. Based on the history, past practice, and intent of chapter 89, there is no sound reason why these contract provisions should be subject to challenge based on any claim to "management rights." These topics traditionally fall in the category of "terms and conditions of employment" as the phrase is used in section 89-9(a), HRS. They are mandatory subjects of collective bargaining, and retaining reference to them in section 89-9(d), HRS, can only lead to confusion and misapprehension. Accordingly, your Committee believes deleting references to all mandatory subjects of collective bargaining from section 89-9(d), HRS, is necessary and appropriate.

At the same time, your Committee has retained in section 89-9(d), HRS those matters which are considered excluded matters or subjects. Excluded subjects are those over which the legislature has historically established uniform requirements by statute. There is no intent by your Committee to change this category or to modify the intent of subsections 89-9(d), (e), or (f), HRS.

Consistent with the public policy favoring joint decision making between employers and employees, your Committee has clarified section 89-9, HRS, by expressly providing for a category known as permissive subjects of bargaining. These are matters over which an employer may wish to negotiate, at its discretion. For example, while there is no duty to negotiate over the merit principles and the principle of equal pay for equal work, the employer can negotiate over compliance with the merit principles or the principle of equal pay for equal work. The same shall apply to other such topics referred to in section 89-9(g), HRS.

Your Committee, in section 89-9(h), HRS, has added a provision to avoid literal and absurd interpretations of the statute which are inconsistent with the intent and purpose of Article XIII, section 2 of the State Constitution.

Finally, the measure clarifies the intent of section 89-19, HRS, to ensure that the preemption clause is not misconstrued or restricted by arbitrary and capricious considerations like the date of enactment.

As affirmed by the record of votes of the members of your Committee on Labor that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 290, S.D. 1, and be referred to the Committee on Ways and Means.