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The article describes how arbitrator actually resolve ability-to-pay issues; it is not a prescription of how they should. It notes that some arbitrators accept the allocations of funds in governmental budgets as definitive, but that a majority critically assess the accuracy of revenue estimates and the reasonableness of budgeted expenditure priorities and allocations. Nonetheless, arbitrators …

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The report of an industrial inquiry commission of the compensation of hospital employees in Ontario (the “Johnson Commission”) concluded that neither government guidelines nor ability-to-pay should be used by arbitrators in settling public hospital employee disputes. Since that report, arbitrators have placed little weight on the employer’s ability-to-pay in hospital and other public sectors. The …

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To control government spending, some states have placed a “cap” on aggregate expenditures. The author examines how such caps affect public sector interest arbitration. For example, in Policemen’s Assn. v. Town of lrvington, where the Arbitrator’s decision exceeded the 5% cap, the New Jersey Supreme Court upheld the decision, ruling that the was supported by …

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The author states that, in substance, a public sector interest arbitrator exercises delegated legislative authority and, as such, is an agent of the legislature in establishing wages and conditions of employment. The courts have routinely held that public-sector interest arbitrators are public officials. As public officials carrying out delegated legislative power, it necessarily follows that …

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Professor Gershenfeld’s observations about interest arbitration. He examines the criteria for making monetary decisions, scope problems in the non-monetary areas, the “coercive comparison,” and the role of “public interest” factors (e.g., the effect of a settlement in one part of an organization on other upcoming bargains in the same organization). The “arb-med tool” is discussed.

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Settlement criteria in public sector interest arbitration must be realistic but also acceptable to the parties. That balance may be difficult to achieve in the public sector, where salaries have lagged behind the private sector and there is significant debate over the inability and unwillingness to pay in the public sector. While the inequity between …

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Smith discusses idiosyncrasies of interest arbitration in the public sector. Economic issues (wages and fringe benefits) present layered problems of wage comparisons, ability to pay, priorities, and uniform wage policy. Resolution of non-economic issues may be complicated by a wide variety of legislation such as teacher tenure legislation, civil service laws, or home rule charters.

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