decided: February 1, 1980.
MRS. SUSAN GROTTENTHALER, APPELLANT,
PENNSYLVANIA STATE POLICE, APPELLEE
No. 33 March Term, 1979, Appeal From the Order of the Commonwealth of Pennsylvania dated January 26, 1979, at No. 1305 C.D. 1977.
Gary M. Lightman, Mancke & Lightman, Harrisburg, for appellant.
David H. Allshouse, Deputy Atty. Gen., Harrisburg, for appellee.
Eagen, C. J., and O'Brien, Roberts, Nix, Manderino, Larsen and Flaherty, JJ. Manderino, J., did not participate in the decision of this case.
[ 488 Pa. Page 20]
Appellant is the widow of a former Pennsylvania State Police Trooper who was stricken with Leukemia in March, 1976, and died as a result of that illness on September 22, 1976. Mrs. Grottenthaler instituted an action against the
[ 488 Pa. Page 21]
Pennsylvania State Police in the Commonwealth Court, in the nature of mandamus, seeking payment of certain benefits claimed to be due as a result of her late husband's illness and death. 40 Pa. Commw. 165, 398 A.2d 220 (1979). A divided Commonwealth Court denied the relief requested and an appeal was taken to this Court. 42 Pa.C.S.A. § 723(a).
The issues raised in this appeal are whether either an arbitration award of December 27, 1973 ("Gershenfeld Award"), or provisions of the collective bargaining agreements for the subsequent years, granted Mrs. Grottenthaler a right to the requested benefits. The Commonwealth Court found that her right to recovery was barred by the provisions of the State Retirement Code (Code), 71 Pa.C.S.A. § 5101 et seq. (Supp.1978-79), sustained a preliminary objection filed by appellee and dismissed the action. For the reasons that follow, we conclude that the Code does not preclude the relief sought and that the action must be reinstated.
The Act of June 24, 1968, P.L. 237, 43 P.S. § 217.1 et seq. (Act III) granted for the first time in this jurisdiction collective bargaining rights for policemen or firemen employed by a political subdivision of the Commonwealth or by the Commonwealth. Section 1 of Act III provided, inter alia, the right to bargain collectively "concerning the terms and conditions of their employment, including . . ., retirement, pensions and other benefits, . . . ." In addition, Section 1 of Act III stated that disputes or grievances were to be adjusted or settled by way or arbitration. In 1973, pursuant to Act III, the Fraternal Order of Police, the bargaining representative for the Pennsylvania State Troopers entered into arbitration with the Commonwealth over a contract dispute. As a result, the Gershenfeld Award dated December 27, 1973, was entered over the dissent of the Commonwealth Arbitrator. See 1968, June 24, P.L. 237, No. 111, § 4(b); 43 P.S. § 217.4(b) (Supp.1978-79). That award provided in pertinent part:
[ 488 Pa. Page 22]
vested, or any suit or prosecution pending or to be instituted to enforce any right or penalty or to punish any offense under the authority of any repealed laws."*fn1
Appellant's first contention is that her entitlement to the benefits flows from the Gershenfeld Award. She argues that the language of Section 5955, which provides that the new provisions of the Code "shall not affect any act done, liability incurred, right accrued or vested" prevents the Code from barring her right of recover. The Commonwealth Court was unanimous in its rejection of her claim for relief based upon the 1973 arbitration award, and its unanimity in this regard is readily understood.*fn2 By its terms, the Gershenfeld Award was limited to the contract year of 1974-75. Trooper Grottenthaler's illness was not contracted until March of 1976, and his death did not occur until September of that year. Regardless of whatever vitality the Gershenfeld Award may have had in the year it was intended to apply, appellant has failed to provide any basis for finding that her right to the award "vested" for an illness and death occurring in 1976.*fn3 The provisions of the award do not provide the slightest suggestion that the benefits to be conferred thereunder were to be vested in an employee or his beneficiary, where the non-service-connected illness causing the disability and/or death occurred beyond the designated year.
Appellant's alternative theory is more persuasive. She claims entitlement under the provisions of the bargaining agreements in effect at the time of her husband's illness
[ 488 Pa. Page 24]
and death. The collective bargaining agreements negotiated for the fiscal years 1975-76 and 1976-77 incorporated by reference items 14 and 15 of the Gershenfeld Award. The legislature appropriated funding for these benefits for the fiscal year 1976-77.*fn4 Payments were withheld under these contract provisions by the Commissioner of the Pennsylvania State Police on reliance upon an opinion of the Attorney General issued on June 30, 1977. Attorney General No. 77-11 (1977). Appellant's right to the benefits under the terms of the collective bargaining agreement is dependent upon the effect of Section 5955 on these terms of the agreement.
The appellees have stressed the invalidity of the arbitration award. As we have indicated, this is not a critical issue in this appeal since we are satisfied that accepting the validity of the award it did not, under its express terms, purport to confer non-service-connected disability and death benefits beyond the fiscal year July, 1974 to June, 1975. Further, it is equally clear that the purport of Section 5955 was to remove as a bargainable item under the provision of Act III matters relating to pension rights of State employees.*fn5 We also agree with appellee's position that if appellant's claim was dependent upon an arbitration award entered in violation of Section 5955, she could not prevail. Washington Arbitration Case, 436 Pa. 168, 259 A.2d 437 (1969). (Arbitration panels may not mandate that a governing body carry out an illegal act.)
[ 488 Pa. Page 25]
The difficult question raised in this appeal, and not directly addressed either by the majority of the Commonwealth Court or appellees, is whether the Commonwealth is to be permitted to ignore its own mandate to secure an advantage in the bargaining process and then escape liability thereunder by asserting the illegality of the provision. We think not. We are well aware of the State's interest in the actuarial soundness of the retirement system provided for its employees,*fn6 but we also recognize that the integrity of the bargaining process in the public sector is of equal importance.
The problem presented in this appeal is analogous to that faced in Pittsburgh Joint Collective Bargaining Committee v. City of Pittsburgh (Joint Bargaining) 481 Pa. 66, 391 A.2d 1318 (1978). In Joint Bargaining, we held that a municipality could not avoid the effect of a term of the collective bargaining agreement it had entered into, by asserting that the contract provision was in violation of State law.*fn7 In reaching the result, after stressing the importance of the development and maintenance of harmonious relationships between the public, employer and employee, we observed:
To permit an employer to enter into agreements and include terms . . . which raise the expectations of those concerned, and then to subsequently refuse to abide by those provisions on the basis of its lack of capacity would invite discord and distrust and create an atmosphere wherein a harmonious relationship would virtually be impossible to maintain.
Good faith bargaining would require that questions as to the legality of the proposed terms of a collective bargaining agreement should be resolved by the parties to the agreement at the bargaining stage. (Footnote omitted)
[ 488 Pa. Page 26]
Accordingly, we reverse the order of the Commonwealth Court sustaining the preliminary objections and direct the action to be reinstated.*fn10 The cause is remanded for further proceedings consistent herewith.