No. 13 E.D. Appeal Docket, 1983, Appeal from the Order of February 1, 1983 of the Commonwealth Court of Pennsylvania, No. 1954 C.D. 1982, vacating and remanding the Order of the Philadelphia County Court of Common Pleas, No. 182, November 1981, issued July 27, 1983.
Miriam L. Gafni, Freedman & Lorry, P.C., Philadelphia, for appellant.
Vincent Salandria, The Philadelphia School Dist., Philadelphia, for appellee.
Roberts, C.j., and Nix, Larsen, Flaherty, McDermott, Hutchinson and Zappala, JJ.
Appellant, The International Brotherhood of Firemen & Oilers, Local 1201, AFL-CIO (hereafter "Union"), is the
collective bargaining representative of certain employees of appellee, The Board of Education of the School District of Philadelphia (hereafter "District"). Pursuant to the Public Employee Relations Act, Act of July 23, 1970, P.L. 563, No. 195, 43 P.S. § 1101.101 et seq. (hereafter "Act 195"), the Union called a three-day strike against the District in February, 1981. The strike ended with the signing of a collective bargaining agreement covering the period from September 1, 1980 to August 31, 1982. The agreement provided that there would be no salary increase for the first year. There would be a four (4%) percent lump sum bonus for the period of January 1 to August 31, 1981, payable on September 1, 1981. The bonus would be incorporated into the salary schedule, and an additional ten (10%) percent increase would be given for the second year of the agreement. The District would make increased payments for health, welfare and pre-paid legal services during the second year.
In March, 1981, after approving the collective bargaining agreement, the District prepared a proposed budget for the 1981-82 school year. The budget reflected $750,207,000.00 in revenues and $902,700,000.00 in net obligations. There was a fund deficit of $71,073,000.00 in addition to the excess of net obligations over revenues reflected in the proposed budget.*fn1 In May, 1981, the District adopted a revised budget reflecting $761,024,148.00 in revenues; $701,005,148.00 in net obligations; and a $60,019,000.00 fund deficit. The District cut its budget by, inter alia, refusing to pay the salary and benefit increases it agreed to for the second year of the collective bargaining agreement with the Union.
Pursuant to the agreement, the Union filed a grievance over the refusal to pay the salary and benefit increases. The grievance was heard by an arbitrator. The District argued that it was excused from paying the increases on the basis of impossibility of performance in that it did not have and could not obtain sufficient funds and that the availability of funds was a condition precedent to performance. The arbitrator determined that the District had not established
impossibility of performance and ordered it to pay the increases. The District filed a Petition for Review in the Court of Common Pleas of Philadelphia. The court dismissed the Petition and confirmed the arbitration award. The Commonwealth Court reversed, holding that the availability of sufficient funds was a condition precedent to the agreement and that the burden was on the Union to establish the occurrence of such condition. It ordered the case remanded to give the Union an opportunity to establish the occurrence of the condition precedent. We granted the Union's Petition for Allowance of Appeal. The issues on appeal are whether there is impossibility of performance, whether there is a condition precedent and, if so, whether the Union has the burden ...