(Editor’s note: The following commentary appears in the September/October issue of Michigan Capitol Confidential.)

Guards at county jails in Michigan would be covered by a binding arbitration process similar to that used in labor disputes involving police officers and firefighters under legislation passed by the Michigan House on June 26, 2008.

House Bill 6112 stipulates that when negotiations between a county government and union representing county jail guards reaches an impasse, either party may call for the creation of an arbitration panel made up of one county representative, one union representative, and a neutral chairman selected from a list provided by the Michigan Employment Relations Commission. The basic procedures and criteria are essentially the same as those already established for police officers and firefighters under Public Act 312 of 1969.

Research by the Mackinac Center for Public Policy has shown that binding arbitration is a slow and costly process. Arbitration under PA 312 typically takes nearly 15 months to complete. A commission on local government finance appointed by Gov. Jennifer Granholm found that binding arbitration increased the cost of government by as much as 3 to 5 percent.

The arbitration process created by HB 6112 differs from the existing process for police and fire in one important respect: Under HB 6112 the process is all or nothing; the panel is presented with final offers of settlement by the county and the union, and must choose one or the other. This differs from the existing process of PA 312, which allows the arbitration panel to divide the dispute into separate issues, and choose between the union and the municipality’s offers on each issue, or substitute its own proposals on non-economic matters.

Prior to passing the bill, the House rejected an amendment to tie-bar HB 6112 to another bill that would change the process for all arbitration hearings, allowing arbitrators to create their own proposals rather than choose between the offers set before them by unions and local governments. Another would have adjusted the criteria to be used by arbitrators, such as expecting them to look at a longer time frame, consider the county’s unfunded liabilities, and stipulate that they could not base a decision on the county’s ability to raise taxes or shift resources from other departments.

HB 6112 passed the House 78-29 and was referred to the Senate Government Operations and Reform Committee.

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Paul Kersey is director of labor policy at the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.

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