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Tuesday, April 5, 2016

Arbitration Award to Pay Wage Increase Violated Public Policy

40,000 state employees are members of the AFSCME union, which in 2010 entered into a collective bargaining agreement with the state of Illinois. That agreement was effective 2008 - 2012. However, in 2010, AFSCME and the State agreed to modify the wage increase portion of the CBA to reduce the 4% increase that would have started on July 1, 2011 to a 2% increase for fiscal year 2012. A year after the CBA amendment, the State notified AFSCME that state appropriations for fiscal year 2012 were insufficient to implement the 2% salary increase. 

AFSCME initiated a labor arbitration, which issued a ruling in favor of AFSCME. Specifically, the arbitrator directed the State to pay the wage increase based on the CBA provisions. The State appealed, and the case made its way to the Illinois Supreme Court, which issued a ruling last week. The Court reversed the arbitrator's ruling, and vacated the arbitration award. The Court found that multi-year CBA's are subject to the appropriation power of the State. The arbitrator's order to the State to pay the 2% increase violated public policy in this case because the State had not appropriated funds for that wage increase.  State of Illinois v. AFSCME, 2016 IL 118422.

Post Authored by Julie Tappendorf 


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