Appeal from the Order of the Court of Common Pleas of Philadelphia County in the case of Board of Education of the School District of Philadelphia v. International Brotherhood of Firemen and Oilers, Local 1201, AFL-CIO, No. 182 November, 1981.
Vincent J. Salandria, Assistant General Counsel, with him, Eugene F. Brazil, General Counsel, for appellant.
Michael Brodie, with him, Mark P. Muller, Freedman and Lorry, P.C., for appellee.
President Judge Crumlish, Jr. and Judges Rogers, Blatt, Craig and Doyle. Opinion by President Judge Crumlish, Jr. Judges Rogers and Blatt dissent.
[ 71 Pa. Commw. Page 498]
The Philadelphia County Common Pleas Court, by order, affirmed a grievance arbitration award favorable to the International Brotherhood of Firemen and Oilers, Local 1201, AFL-CIO (Union).*fn1 The Board of Education of the School District of Philadelphia (District) appeals. We vacate and remand.
Following a three-day strike in February of 1981, the Union and the District entered into a collective bargaining agreement (Agreement) for the period from September 1, 1980 to August 31, 1982. This Agreement provided, inter alia, for: (1) no wage increase from September 1, 1980 to August 31, 1981; (2)
[ 71 Pa. Commw. Page 499]
a four percent lump sum bonus payable by September 1, 1981; (3) an additional ten percent wage increase effective September 1, 1981; and (4) increased contributions by the District to the Union's hospitalization, health and welfare, and legal services funds.
Since its proposed budget for the 1981-1982 school year did not receive full funding approval from the Philadelphia City Council, on May 29, 1981, the District adopted a revised budget reflecting a $60 million funding deficit. In order to balance its budget as required by law,*fn2 the District negated certain benefit commitments made to the Union, including the ten percent wage increase and the additional contributions to the Union's medical and legal funds. As a result, the District realized a saving (and the Union members a corresponding loss) of approximately $7.3 million.*fn3
The Union, alleging that the District had violated the Agreement, filed a grievance. The District argued that, since City Council had failed to appropriate the entire amount requested for its originally-proposed budget, full satisfaction of its contractual promises was legally impossible. The arbitrator, although recognizing
[ 71 Pa. Commw. Page 500]
that proven impossibility of performance may excuse a party from meeting its negotiated commitments, found that the District had failed to demonstrate that its obligations to the Union could not be met out of existing revenues. Accordingly, the arbitrator upheld the Union's grievance and ordered that, "unless and until such proof [of impossibility of performance] is presented and/or the District bargains with the Union for the elimination, modification or deferral of the ...