PROVIDENCE – R.I. Supreme Court Chief Justice Frank J. Williams today ordered the Carcieri administration and Rhode Island Council 94 into mediation, putting on hold all legal actions over their ongoing contract dispute.

If mediation fails, Williams told both sides they must proceed immediately to non-binding arbitration. The chief justice’s order called for all the parties to “use their best efforts” to complete the entire process within 60 days, but set a deadline of 90 days.

Williams “firmly believes that mediation and negotiation can produce a far better resolution for the parties and for the citizens of the state than any court decision,” court spokesman Craig Berke said in a statement.

In the meantime, Council 94’s unfair labor practices complaint with the R.I. Labor Relations Board has been put on hold. So has the governor’s effort to unilaterally increase health care fees for members of Council 94 of the American Federation of State, County & Municipal Employees, AFL-CIO, who work in the state’s executive branch.

Williams’ order follows two days of meeting with lawyers from both sides. The matter reached the Supreme Court when the Carcieri administration appealed an R.I. Superior Court ruling that would have blocked Gov. Donald L. Carcieri from unilaterally increasing the workers’ health insurance co-shares and co-payments, in an attempt to pare $10 million from the state budget.

The new fees for health care were part of a contract proposal that was rejected in July by most of Council 94’s 5,000 members. The previous contract, which expired July 1, had been terminated by the governor.

The goal of Williams’ order is get a new contract in place, Supreme Court said in its statement today.

“Chief Justice Williams clearly recognizes the financial condition of the state and the urgent budget concerns with not having a signed agreement,” Carcieri said in a statement issued shortly after Williams’ order. “We will move forward with the expedited mediation and interest arbitration in good faith.”

But, Carcieri added, the rejected deal was “the very best financial offer the state can afford in this economic climate.

“While I am hopeful this expedited process will result in a ratified agreement, I continue to have an obligation to balance the budget,” he continued. “The longer we are without an agreement with Council 94 and the other unions, the only options I have to recoup the cost savings are more severe and impactful to employees than the co-share changes. Time is running out. I cannot delay much longer.”

Council 94, the state’s largest public-employee union, had no immediate comment to the judge’s action.

Rhode Island Council 94 of the American Federation of State, County & Municipal Employees (AFSCME), AFL-CIO, represents about 4,100 members or a third of active state employees. Additional information is available from the union at www.RICouncil94.org. News and information from the R.I. Governor’s Office are available at www.governor.ri.gov..