Commonwealth Court judges have handed a win to the Philadelphia Federation of Teachers, ruling that the School Reform Commission cannot throw out the teachers' union's contract and impose new terms.

The decision was confirmed by Jerry Jordan, PFT president, on Thursday morning.

"This is a very big victory," Jordan said.

After nearly two years of negotiations, the district had moved on Oct. 6 to cancel the teachers' contract and impose health-benefits changes that would save the cash-strapped system $54 million annually, officials said.

In the decision, judges said that neither the state Public School Code nor the Legislature have expressly given the SRC the power to cancel its teachers' contract.

"This Court is cognizant of the dire financial situation which the Districtcurrently faces and the SRC’s extensive efforts to achieve the overall goal of properlyand adequately meeting the educational needs of the students," Judge Patricia A. McCullough wrote for the court. "There have been numerous difficult decisions that the SRC has been forced to make in an effort to overcome these economic hurdles, including a one-third reduction in staff and theclosing of 31 schools in recent years."

However, the court concluded, "glaringly absent" from the law "is is a referenceto a provision which expressly gives the SRC the right to cancel" a collective bargaining agreement.

To do so, the court said, the Legislature would need to act to grant such powers expressly.

The PFT has long argued that the SRC does not have the power to cancel contracts.

SRC Chairman Bill Green, in a statement, said he was "obviously disappointed" with the ruling.

Still, he said, the SRC has "clear statutory authoirty for its action and was exercising one of the core functions for which it was created: seeking to achieve financial stability for the district amid a crisis of underfunding that prevents our schools from providing basic resources and services to students."

Green said the SRC was still reviewing the ruling, and would "shortly determine" next steps. An ]appeal to the state Supreme Court seems likely.

Last year, however, that court declined to hear a similar argument when the SRC chose to bypass seniority in teacher assignments, layoffs and recalls.

"I don't have any reason to believe they would take this case on appeal," Jordan said of the Supreme Court.

Mayor Nutter, in a statement, said the two sides must move forward.

"As the School Reform Commission reviews its next steps, we urge the PFT and the SRC to get back to the bargaining table immediately and do the work needed to reach agreement on a contract that provides for the changes needed to educate better our children and that also respects the teachers in their work," Nutter said.