(dissenting). I agree with the majority that collateral estoppel (issue preclusion) does not foreclose this appeal. However, because I believe that the litigation below did not adequately resolve the question whether the employer’s conduct created through practice a term of employment unamenable to unilateral change, I respectfully dissent.
Labor law has long prohibited an employer from unilaterally changing a term or condition of employment embracing a mandatory subject of bargaining. NLRB v Katz, 369 US 736; 82 S Ct 230; 8 L Ed 2d 230 (1962). A unilateral change by an employer violates the duty to bargain and thus contravenes "[o]ne of the primary purposes of the Act [designed to] promote the peaceful settlement of industrial disputes by subjecting labor-management controversies to the mediatory influence of *467negotiation [in awareness that] refusals to confer and negotiate had been one of the most prolific causes of industrial strife.” Fibreboard Paper Products Corp v NLRB, 379 US 203, 211; 85 S Ct 398; 13 L Ed 2d 233 (1964).
In the instant case, however, the employer did not viólate the duty to bargain over a term or condition. The union and the employer did in fact bargain to vest an unconditional right of the employer to discharge probationary employees.1 The employer’s exercise of discretion in establishing an orderly and fair disciplinary procedure for probationary employees short of discharge did not comprise a unilateral change of a material term or condition under the facts presented. Rather, it constituted an exercise of an agreed-upon provision of the collective bargaining agreement.
Unilateral change of term or condition cases generally appear in two factual configurations. In the first configuration, the contract/collective bargaining agreement is silent or ambiguous with respect to the alleged term or condition created by a past practice. However, the fact that the contract does not explicitly allow a term or condition is of no practical import, since "[the] statutory duty to bargain is independent of any obligation the employer may incur under [the] contract.” Road Sprinkler Fitters Local Union v NLRB, 219 *468US App DC 228, 233; 676 F2d 826 (1982). Thus, for example, an employer that consistently provides Christmas bonuses to employees, and then rescinds those bonuses without bargaining may commit an unfair labor practice. NLRB v Nello Pistoresi & Son, Inc, 500 F2d 399 (CA 9,1974).
In the second configuration, the contract may explicitly allow or prohibit a particular practice. Even so, courts have found that a consistent policy or practice contrary to the contractual provision may yet ripen into a term or condition which if unilaterally changed initiates an unfair labor practice violation. Thus, in Mid-Michigan Ed Ass’n v St Charles Community Schools, 150 Mich App 763, 767, 769; 389 NW2d 482 (1986), the Court of Appeals held that "the [employer’s] past practice of providing health care benefits, although contrary to the contract provision, constituted a term of employment which could not be unilaterally changed.” The Court reasoned that "[b]ecause the district instituted the practice and permitted it to continue, knowing that it was contrary to the contract, the district cannot now rely on the contractual language to unilaterally change the practice.”
The Employment Relations Commission relied on St Charles in concluding that in the instant case "[w]hile the broad language of Article 6 gave [the employer] discretion to discharge probationary employees, it did not give [the employer] the explicit right to change a disciplinary policy which constituted an established term or condition of employment without giving [the union] notice and an opportunity to demand bargaining.” 1987 MERC Lab Op 721, 730. This statement, of course, begs the question. The obvious answer is that the language of article 6 did give the employer the discretion to discharge probationary employees, *469and the appropriate question is having been given that discretion in very clear and unmistakable language, is the rule relating to unilateral change of a term or condition applicable?
The instant case is distinguishable both from cases in which the contract does not refer to the alleged term or condition created by past practice and cases in which a contractual provision conflicts with an established term or condition. Here, the parties bargained, and the resulting bargain provided the employer unfettered discretion to establish any policy to discharge probationary employees during the probationary period, or no policy at all. In exercise of that discretion, the employer chose to utilize the seven-step procedure of article 37 for failure to report for duty, and apparently did so in a fairly consistent manner. However, under the analysis of the merc, as adopted by the majority, an employer confronts a Hobson’s choice. Either an employer could establish no policy regarding discharge, and discharge probationers for the first infraction, or the employer could strive for perfect inconsistency in meting discipline to probationers. Only these courses would avoid the establishment of a uniform past practice and prevent an obligation to bargain over what had previously been bargained.
Under the analysis of the merc and the majority, an employer that bargains for and obtains discretion to act independently relinquishes that discretion the moment it exercises discretion in a consistent fashion. If the employer exercises bargained-for discretion in an arbitrary and inconsistent manner, the creation of a term or condition through practice does not arise. In the instant case, the employer did not act contrary to the collective bargaining agreement, but in accordance with its terms. Under these circumstances, it can*470not be said that the employer’s conduct created a term or condition of employment. Such an analysis frustrates the preeminent goal of fostering peaceful and orderly collective bargaining.
The majority states that "while the parties may by contract agree to grant the right to take unilateral action, it is well established that neither party may take unilateral action on such a subject unless it either has satisfied the statutory obligation or has been freed from it.” Ante, p 450, citing NLRB v C & C Plywood Corp, 385 US 421; 87 S Ct 559; 17 L Ed 2d 486 (1967). If that were a correct reading of the Plywood Court, it would be the end of the matter. I read the case differently, however, and, in fact, believe that it supports the opposite conclusion.
In Plywood, a classified wage scale had been agreed upon in the contract, and management had reserved the right to give premium pay to some employees. It subsequently attempted to give such premium pay to a class of employees, and the union brought an unfair labor practice petition. In granting the petition, the nlrb ruled that "the union had not ceded power to the employer unilaterally to change the wage system as it had.” Id. at 425. The Supreme Court said, "In refusing to enforce the Board’s order, the Court of Appeals did not decide that the premium pay provision of the labor agreement had been misinterpreted by the Board.” Id. (Emphasis added.) Because the United States Supreme Court accepted the factual finding of the meaning of the contract, it reversed the decision of the United States Court of Appeals and reinstated the decision of the nlrb. In doing so, the United States Supreme Court further stated,
But in this case the Board has not construed a labor agreement to determine the extent of the *471contractual rights which were given the union by the employer. It has not imposed its own view of what the terms and conditions of the labor agreement should be. . . . The Board’s interpretation went only so far as was necessary to determine that the union did not agree to give up these statutory safeguards. Thus, the Board, in necessarily construing a labor agreement to decide this unfair labor practice case, has not exceeded the jurisdiction laid out for it by Congress. [Id. at 428. Emphasis added.]
It seems to be implicit in this nlrb case before the Supreme Court that if the contract had specifically given the employer the discretion to give this premium pay in the manner in which it did, it would not have had to bargain before instituting the premium pay. The Supreme Court seemed to think that that was the controlling factor. Plywood clearly suggests that the merc should have made a determination of whether or not the employer was changing its seven-step procedure to a four-step procedure pursuant to the contract. The hearing referee’s conclusion, affirmed by the merc, about the meaning of article 6 is as follows:
In my view, the contract language here simply removed Respondent’s obligation to demonstrate, with respect to discharged probationary employees, that the discharges were fair and in accord with established policies. [1987 MERC Lab Op 737.]
The specific language of article 6 by any fair and objective reading does not permit such a watering down of its obvious intent.
The parties in this case vested in the employer the sole authority to establish how and under what conditions probationary employees could be discharged. No violation of the duty to bargain *472exists under these facts because the parties bargained over the terms, and the employer’s conduct clearly is consistent with the bargain. Even under the mutuality analysis applied by the majority, it cannot be said that the employer’s conduct created a reasonable expectation that the probationers were entitled to the seven-step procedure for failure to report for duty.
The rule requiring compulsory bargaining over terms created by past practice is designed to foster collective bargaining and ought not be distorted to obliterate a term of a contract that results from the process of collective bargaining. Such a result places the cart before the horse, or, better stated, allows the end to serve the means. For these reasons, I respectfully dissent.
I would hold that an exercise of a practice that is clearly pursuant to, consistent with, and in fulfillment of a term or terms of a collective bargaining agreement does not become a term or condition of employment apart from the collective bargaining agreement that requires midterm bargaining.
I would reverse the decision of the Court of Appeals and remand the case to the merc for the application of this standard to the case at hand.
Griffin, J., concurred with Brickley, J. Riley and Mallett, JJ., took no part in the decision of this case.Article 6, §§ 1-2, of the contract provided:
All new operators coming within the scope of this Agreement shall be on probation for a period of ninety (90) calendar days from the date they complete their training requirements. Such probationary period shall constitute a trial period during which the authority judges the ability, competency, fitness, and other qualifications of new operators to do the work for which they were employed. . . .
During such probationary period, the authority may discharge the operator at any time and its right to do so shall not be questioned by the union; nor shall the union assert or present any grievance on behalf of any such new operator.