[ Previous Page]  [ Home Page ]

The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us)


STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 5941

August 5, 1981

CONSTITUTIONAL LAW:

Const 1963, art 11, Sec. 5

STATE POLICE:

Arbitration of pension benefits

Collective bargaining of pension benefits

STATE POLICE, DEPARTMENT OF:

Arbitration of pension benefits

Collective bargaining of pension benefits

Collective bargaining representatives of State Police troopers and sergeants and the employer, pursuant to Const 1963, art 11, Sec. 5, may bargain modifications in pension benefits for such employees in addition to those provided in 1935 PA 251.

If the collective bargaining representative of the employees and the State employer do not agree on modifications in pension benefits, the services of an arbitrator may be invoked and the arbitrator may order modifications in the pension plan benefits provided for in 1935 PA 251.

Any modification in pension benefits for State Police troopers and sergeants resulting from collective bargaining or an arbitration award must be submitted to the Civil Service Commission for transmittal to the Governor to be included in the budget message and sent to the Legislature. The Legislature has 60 days in which to reject or modify the proposed modifications in pension benefits. Failure of the Legislature to reject or modify the modifications in pension benefits will result in a supplemental retirement plan for State Police troopers and sergeants to come into being by operation of law at the commencement of the next fiscal year.

Colonel Gerald L. Hough

Director

Department of State Police

714 S. Harrison Road

East Lansing, Michigan

Referring to Const 1963, art 11, Sec. 5, paragraph 5, commmonly referred to as the State Police Collective Bargaining Amendment and 1935 PA 251, as amended; MCLA 28.101 et seq; MSA 3.331 et seq, commonly referred to as the State Police Pension, Accident and Disability Fund, you have requested my opinion on the following questions:

'1. Do the parties have the authority, pursuant to the 1978 amendment to Article 11, Section 5, of the Michigan Constitution of 1963, to negotiate modifications in the pension plan affecting employees in the unit?

'2. Can the pension plan be changed to provide for different contributions, benefits, and/or provisions covering some sworn employees of the department (employees in the bargaining unit) and not others (employees not in the bargaining unit)?

'3. If the parties are unable to agree, does an arbitrator have authority to impose modifications in the pension plan?

'4. If agreement is reached or an arbitrator's award is issued requiring modifications in the pension plan, can such modifications be implemented without legislative action?'

The relevant portions of Const 1963, art 11, Sec. 5 are paragraphs 4, 5 and 7 which provide, in pertinent part:

'The commission shall . . . fix rates of compensation for all classes of positions, . . . make rules and regulations covering all personnel transactions, and regulate all conditions of employment in the classified service.

'State Police Troopers and Sergeants shall, through their elected representative designated by 50% of such troopers and sergeants, have the right to bargain collectively with their employer concerning conditions of their employment, compensation, hours, working conditions, retirement, pensions, and other aspects of employment except promotions which will be determined by competitive examination and performance on the basis of merit, efficiency and fitness; and they shall have the right 30 days after commencement of such bargaining to submit any unresolved disputes to binding arbitration for the resolution thereof the same as now provided by law for Public Police and Fire Departments.

'Increases in rates of compensation authorized by the commission may be effective only at the start of a fiscal year and shall require prior notice to the governor, who shall transmit such increases to the legislature as part of his budget. The legislature may, by a majority vote of the members elected to and serving in each house, waive the notice and permit increases in rates of compensation to be effective at a time other than the start of a fiscal year. Within 60 calendar days following such transmission, the legislature may, by a two-thirds vote of the members elected to and serving in each house, reject or reduce increases in rates of compensation authorized by the commission. Any reduction ordered by the legislature shall apply uniformly to all classes of employees affected by the increases and shall not adjust pay differentials already established by the civil service commission. The legislature may not reduce rates of compensation below those in effect at the time of the transmission of increases authorized by the commission.' (Emphasis added.)

In OAG, 1979-1980, No 5430, p 1 (January 9, 1979), it was held that the term 'employer' in new paragraph 5, supra, meant the Governor's designated representative, in his case, the Director of the Department of State Police. Also, in OAG, 1979-1980, No 5499, p 191 (June 11, 1979), it was concluded that the Michigan Civil Service Commission 'may implement the collective bargaining aspects of Const 1963, art 11, Sec. 5 . . ..' Thus, the Michigan Civil Service Commission, on October 12, 1979, added new Part 1.2 to its Employee Relations Policy, (now Part 1-109).

Subsequently, in accordance with the authority granted to the parties by new Part 1.2, supra, an agreement establishing the procedure for holding a representation election was entered into between the Department of State Police and the Michigan State Police Troopers Association on October 23, 1979. This agreement was presented to the Michigan Civil Service Commission for their information and publishing on November 19, 1979.

After the representation election was held and the Michigan State Police Troopers Association was formally designated as the exclusive representative of Michigan State Police troopers and sergeants, several months of negotiations between the two parties ensued. During negotiations the parties entered into another agreement on April 18, 1980 entitled Labor Disputes and Unfair Labor Practice Resolutions and Agreement. Paragraph 1 of this agreement states, in pertinent part:

'1) Pursuant to Civil Service Commission Employee Relations Policy, Article 1, Part 1.2 (as amended by the Michigan Civil Service Commission on October 12, 1979), resolution of all disputes with reference to the implementation of collective bargaining and arbitration for Michigan State Police Troopers and Sergeants mandated by the 1978 Amendment to Article XI, Section 5, of the Michigan Constitution of 1963, shall be implemented and provided for pursuant to 1969 PA 312 and/or 1980 PA 17, and shall be through the mediation and arbitration process set forth in those Acts. Mediation and/or arbitration requests shall be processed and handled by the Michigan Employment Relations Commission and shall be resolved in the manner as provided by law for public police and fire departments, except as hereafter provided.'

This agreement was received and acknowledged by the Civil Service Commission on April 25, 1980.

Finally, on May 22, 1980, the Department of State Police and the Michigan State Police Troopers Association reached a negotiated agreement on numerous subjects including pensions, which was subsequently signed by all parties on June 19, 1980 and received and accepted by the Civil Service Commission on June 23, 1980. This agreement, as well as the provisions of Const 1963, art 11, Sec. 5, p5, covered all sworn officers of the Department of State Police serving in the rank of trooper or sergeant who were not otherwise excluded because they were occupying supervisory, confidential or managerial positions. However, no modification was negotiated to the present State Police Pension, Accident and Disability Fund, supra, but rather a mechanism was established to negotiate modifications in pensions for members of the bargaining unit when the contract is opened for renegotiation in 1982. Thus, the present pension system is operative for all members of the bargaining unit.

Also of importance when pensions are being considered is Const 1963, art 9, Sec. 24, which provides:

'The accrued financial benefits of each pension plan and retirement system of the state and its political subdivisions shall be a contractual obligation thereof which shall not be diminished or impaired thereby.

'Financial benefits arising on account of service rendered in each fiscal year shall be funded during that year and such funding shall not be used for financing unfunded accrued liabilities.'

Const 1963, art 11, Sec. 5, permits the State Police troopers and sergeants to avail themselves of the binding arbitration provisions that are now provided by law for public police and fire departments. The method provided is contained in the Police and Fire Departments Compulsory Arbitration Statute, 1969 PA 312; MCLA 423.231 et seq; MSA 17.455(31) et seq, and permits the involvement of the Michigan Employment Relations Commission and its panel of arbitrators. This form of compulsory, binding arbitration has recently been held to be a constitutional delegation of legislative power by the Michigan Civil Service Commission in City of Detroit v Detroit Police Officers Association, 408 Mich 410; 294 NW2d 68 (1980).

It is also necessary to consider Const 1963, art 5, Sec. 18, which provides:

'The governor shall submit to the legislature at a time fixed by law, a budget for the ensuing fiscal period setting forth in detail, for all operating funds, the proposed expenditures and estimated revenue of the state. Proposed expenditures from any fund shall not exceed the estimated revenue thereof. On the same date, the governor shall submit to the legislature general appropriation bills to embody the proposed expenditures and any necessary bill or bills to provide new or additional revenues to meet proposed expenditures. The amount of any surplus created or deficit incurred in any fund during the last preceding fiscal period shall be entered as an item in the budget and in one of the appropriation bills. The governor may submit amendments to appropriation bills to be offered in either house during consideration of the bill by that house, and shall submit bills to meet deficiencies in current appropriations.' (Emphasis added.)

This constitutional requirement is implemented by 1919 PA 98, Sec. 6, as amended by 1953 PA 116; MCLA 21.6; MSA 3.286, which provides, in pertinent part:

'Within 10 days after the legislature convenes in regular session, it shall be the duty of the governor to transmit to each branch of the legislature the budget herein provided accompanied by such explanations and recommendations relative thereto as he may deem necessary and advisable: . . ..'

Also, OAG, 1979-1980, No 5499, p 191 (June 11, 1979) concluded:

'Changes in compensation or fringe benefits bargained for by state police troopers and sergeants pursuant to Const 1963, art 11, Sec. 5 as amended by Proposal G must be included in the same time frame as is currently observed for changes in compensation for other state classified employees and is subject to the waiver provision accorded to the Legislature by Const 1963, art 11, Sec. 5.

'Increases in rates of compensation arrived at by collective bargaining must be transmitted to the Legislature in the same manner as recommendations for increases in compensation of other state classified employees.'

As previously stated, the Department of State Police pension plan for sworn officers is provided for and administered by the provisions of 1935 PA 251, supra. However, the people of the State of Michigan, by amending Const 1963, art 11, Sec. 5, and adding a new paragraph 5, supra, authorized State Police troopers and sergeants to bargain collectively with their employer over a number of items including pensions.

Therefore, answering questions 1 and 2, since Const 1963, art 11, Sec. 5 has authorized the Department of State Police and the Michigan State Police Troopers Association to bargain collectively the issue of pensions, and based on the foregoing discussion, it is my opinion that the collective bargaining representatives of the State Police troopers and sergeants and the State Employer may bargain modifications in pension benefits for State Police troopers and sergeants provided for in 1935 PA 251, supra, However, any such modification may not diminish or impair the accrued financial pension benefits of any of the State Police troopers and sergeants in the bargaining unit contrary to Const 1963, art 9, Sec. 24. Since I have concluded that a collectively bargained agreement may modify the present pension plan and affects only members of the bargaining unit, it is further my opinion that the present pension plan, as provided for by 1935 PA 251, supra, remains in force and effect as to those sworn officers of the Department who are not members of the bargaining unit.

Answering question 3, if the parties do not agree and the services of an arbitrator are invoked, it is my opinion that an arbitrator's decision may modify the pension plan presently in existence as long as the modification does not diminish or impair the accrued financial benefits of any State Police trooper or sergeant under 1935 PA 251, supra.

Answering question 4, assuming there are modifications in pension benefits, it is my opinion that the Civil Service Commission must consider the modifications and give notice to the Governor of increases in rates of compensation reflected in such modification of pension benefits. The Governor, in turn, is required to include such modifications in pension benefits within the budget message, and the Legislature has 60 days in which to reject or modify the proposed increases in pension benefits as required by Const 1963, art 11, Sec. 5, supra. If the Legislature does not timely reject or modify the proposed modification in pension benefits, the Governor should recommend legislation to the Legislature which would incorporate the modifications within the statute providing pension benefits for state police troopers and sergeants by way of a separate chapter. Amendments to the statute would apply only to sworn State Police troopers and sergeants. If the Legislature declines to amend the statute, a supplemental plan reflecting the modifications in pension benefits for sworn State Police troopers and sergeants would come into being by operation of law at the commencement of the next fiscal year.

Frank J. Kelley

Attorney General

[ Previous Page]  [ Home Page ]