
76 Mich. App. 526 (1977)
257 N.W.2d 153
BOYCE
v.
ROYAL OAK BOARD OF EDUCATION
Docket No. 27656.
Michigan Court of Appeals.
Decided July 6, 1977.
Beer & Boltz (by Louis D. Beer and Thomas L. Boyer) (Sander M. Levin, of counsel), for plaintiffs.
Burton R. Shifman, P.C. (by Burton R. Shifman and Philip J. Goodman), for defendant.
Before: V.J. BRENNAN, P.J., and J.H. GILLIS and D.C. RILEY, JJ.
V.J. BRENNAN, P.J.
On January 4, 1976, plaintiffs filed suit against defendant board of education claiming that they were improperly laid off under the Michigan teachers tenure act. MCLA 38.71, et seq.; MSA 15.1971, et seq. Defendants filed a motion for summary judgment claiming that under each teacher's individual contract the school board had the authority to lay off the teachers due to economic reasons. Moreover, the defendants claim that in situations involving economic hardship, the teachers tenure act is inapplicable. After briefs were submitted, the trial court ruled in favor of defendant school board, finding that the teachers tenure act did not prohibit reductions in staff due to economic reasons and that the school board had not violated the valid individual contracts. From this decision granting the motion for summary judgment, plaintiffs appeal as a matter of right.
The facts in this case are relatively simple. *528 Plaintiffs Boyce, Klegon, Kozlowski, Popovich, Brusca and Cerveny were probationary teachers employed by defendant board of education; plaintiffs Korn, Savage and Adams, who are not participating in this appeal, were tenured teachers employed by the board of education.
On December 16, 1975, these teachers received a letter indicating that programs and positions were to be eliminated due to economic considerations. State aid had been reduced by $292,000 and as school districts are prohibited by law from operating at a deficit budget, all extracurricular activities were eliminated. However, this elimination of programs did not save enough money, and the teachers had to be laid off. All the probationary teachers in the school district were laid off first, then the three tenured teachers.
Each probationary teacher signed a contract with the school district. This contract set out the rights and duties of each party and provided:
"This contract is subject to termination by either party upon written notice at least ten (10) days prior to the effective date of termination, except for termination caused by failure to perform under the terms of the contract which will require no notice of termination. The School District will not terminate this contract except for breach of the contract unless there is in the judgment of the Board of Education of the School District insufficient revenue during the school year to continue the payment of the salary called for in this contract. In case of termination, salary will be paid for the period that services are performed on a pro rata basis based on the entire school year."
Plaintiffs do not complain that the school board violated the terms of the contract. The plaintiffs were notified on December 16, 1975, that they would be laid off on January 23, 1976. This decision *529 was ratified on January 7, 1976. Consequently, the teachers were given the notice provided by their negotiated contract. What plaintiffs contend is that their termination violated the Michigan teachers tenure act. In their complaint, plaintiffs allege that the board failed to comply with MCLA 38.83; MSA 15.1983, as the plaintiffs were given no notice prior to the end of the last school year that they would not be allowed to teach the entire next school year.
On appeal, then, we must decide first if the trial court erred in concluding that MCLA 38.83; MSA 15.1983, which provides that school boards must give probationary teachers 60-days notice in regard to whether their work product has been satisfactory, does not apply to a situation where the school board laid off probationary teachers during the school year because of economic hardship.
This Court has considered whether tenured teachers must be given 60-day notice and a hearing before the board of education when their contracts were not renewed due to economic reasons. Steeby v Highland Park School District, 56 Mich App 395; 224 NW2d 97 (1974). The Court there stated:
"Plaintiffs do not seriously contest the fact that the board of education can eliminate teaching positions because of economic factors. While there is no express statutory authority for terminating a teaching position because of lack of funds, MCLA 38.105; MSA 15.2005 provides:
"`Any teacher on permanent tenure whose services are terminated because of a necessary reduction in personnel shall be appointed to the first vacancy in the school district for which he is certified and qualified.'
"Implicit in this language is the conclusion that school districts are excused from offering a tenure *530 teacher a contract of employment when it is necessary to reduce personnel. See Bruinsma v Wyoming Public Schools, 38 Mich App 745; 197 NW2d 95 (1972), See also generally Anno., Right to dismiss public school teacher on grounds that services are no longer needed, 100 ALR2d 1141, §§ 7-16, pp 1158-1181 and Funston v District School Board, 130 Or 82; 278 P 1075 (1929)." Steeby v Highland Park School District, supra at 397.
Thus, we have concluded that a school board may lay off tenured teachers if economic conditions required. While the Court in Bruinsma recognized that there is no express statutory authority for terminating a teaching contract because of lack of funds, there exists the implication that the school board and the teachers association can provide for such a contingency in their contract. Bruinsma v Wyoming Public Schools, supra at 748. Section V of the master agreement between the local teachers association and the Royal Oak School Board did provide for such a contingency. Moreover, the school board has clearly complied with the contract provisions of the master agreement and the individual contracts. Therefore, under Steeby, we see no reason why the school board may not effect layoffs of nontenured teachers due to economic reasons.
The question then remains whether the notice provision of MCLA 38.83; MSA 15.1983 applies to such situations. In Steeby, the Court concluded that this provision of the statute did not apply, but based its decision upon the fact that tenure teachers were involved in that case rather than probationary teachers. The Court held:
"As to the question of notice, it must be noted that we are here concerned with whether notice must be given 60 days before the end of the school year. There is no question that notice was in fact given, the only *531 question being whether it was timely given. Plaintiffs argue that the 60-day notice provisions of MCLA 38.83; MSA 15.1983 and MCLA 38.102; MSA 15.2002 should be applied. As appealing as their argument might be, it is clear that neither of these sections are applicable here. MCLA 38.83, supra, is specifically limited by its own language to probationary teachers or teachers not on continuing contracts, and is thus not applicable to tenure teachers." Steeby v Highland Park School District, supra at 397-398.
We further hold in the case before us now that MCLA 38.83; MSA 15.1983 is not applicable to lay-offs of probationary teachers due to economic considerations. See OAG 1957-58, No 3,297, p 265. On its face, MCLA 38.83; MSA 15.1983 indicates that its protection only applies where the school board is in the year-end process of evaluating whether a probationary teacher's work is satisfactory, a circumstance to which all teachers inevitably find themselves susceptible because of the two or three year period of probation required by statute. MCLA 38.81 et seq.; MSA 15.1981 et seq. Reason for substantial notice plainly exists when a teacher's livelihood and reputation are at issue. Such protection is necessary to allow the probationary teacher to prepare and present an adequate defense in a situation where future employment may depend upon challenging an adverse evaluation of competence.
No such circumstance exists in this case. The board has made no judgment about plaintiffs' competence. Plaintiffs have been laid-off due solely to general economic considerations existing in the school district. Indeed, some of the original teachers laid-off now have teaching positions elsewhere. We would do great violence to this statutory provision, clearly intended for the limited purpose of protecting probationary teachers under yearly *532 evaluation, were we to extend its notice requirement to literally any situation in which the school board decides before year end to terminate a probationary teacher's contract. We are not going to do that. Further, we are not going to follow the recent decision from this Court to the extent its reasoning conflicts with our holding today. East Detroit Federation of Teachers v East Detroit Board of Education, 55 Mich App 451; 223 NW2d 9 (1974). See also Freiberg v Big Bay De Noc Board of Education, 61 Mich App 404, 414, n 1; 232 NW2d 718 (1975).
In East Detroit, supra, the board complied with MCLA 38.83; MSA 15.1983 and provided notice to the teachers more than 60 days before they were discharged. The Court held this action was not arbitrary and capricious. We agree. The statute should not apply to teacher firings based on inadequate financing. In our mind, the Legislature's concern in drafting the statute was to inform fired teachers that their performance was not satisfactory. The statute can have no bearing where, as here, the firings are prompted by insufficient funds rather than teacher performance.
The problems created if we conclude that this statute applies to layoffs of probationary teachers due to economic conditions are readily apparent. We would give probationary teachers greater protection than tenured teachers. This result would arise in any situation in which the determination to lay off teachers was made within the 60-day period prior to the close of the present school year. We need only note that this Court on several occasions has affirmed the proposition that probationary teachers do not have greater rights than tenured teachers. See Shippey v Madison District Schools, 55 Mich App 663, 667; 223 NW2d 116 *533 (1974), Bruinsma v Wyoming Public Schools, supra at 749, Freiberg v Big Bay De Noc Board of Education, supra at 414, n 1. This consequence would be highly anomalous, considering the entire purpose of the tenure act and the otherwise greater control the school board has over probationary teachers as opposed to tenured teachers. This position we cannot accept.
We fully understand the need to eliminate the arbitrary dismissal of qualified teachers for other than good cause shown. Rehberg v Board of Education of Melvindale, 330 Mich 541, 545; 48 NW2d 142 (1951). However, we see no threat here to that implicit purpose of the tenure act. Rather, we see the need for economic leverage in a situation where the plain intention of this particular provision does not apply.
Therefore, we must conclude that in situations such as the present, where the school board in good faith shows and acknowledges that dire financial problems exist in the school district, MCLA 38.83; MSA 15.1983 does not apply. If allegations of bad faith or subterfuge are made, the teachers have recourse to the Teacher Tenure Commission or circuit court. See Freiberg v Big Bay De Noc Board of Education, supra at 415 (tenure teachers), Lipka v Brown City Community Schools, 59 Mich App 175, 178-179; 229 NW2d 362 (1975) (nontenure teachers). We believe this result consistent with both the purpose of the tenure act and the purpose of this particular provision of that act.
Plaintiffs also argue that the protections and rights preserved by the Michigan teachers tenure act may not be waived by contract. See MCLA 38.172; MSA 15.2054. What they argue is that the 60-day notice provision may not be waived and, therefore, precludes the school board from laying *534 off probationary teachers if the school board is no longer able to comply with the provision. This contention is a different twist on the argument already addressed.
Affirmed.
