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On his second day in office, Gov. Mitch Daniels cancelled the state's collective bargaining agreements with the state's unions.

The action left more than 23,000 state employees represented by unions no longer able to negotiate pay, benefits and work rules with state officials. However, pay raises granted for 2005 are not affected by Daniels' actions.

The workers' bargaining power expired with Democrat Joe Kernan's term in office.

The negotiating authority, not found in state law, depends on each incoming governor to sign a new executive order. Daniels chose not to renew the order.

Daniels also issued executive orders that invalidated existing labor contracts. Those contracts, ratified in executive orders signed by Kernan, ran through June 2007.

"In many ways, this was the most complicated and difficult decision I have had to make," Daniels said.

Daniels said he did away with bargaining rights in order to move ahead more rapidly with his overhaul of state government, including the creation of a separate agency to handle child welfare and child support.

After taking office in 1989, Democrat Evan Bayh became the first of three Democratic governors to sign an order giving state workers collective bargaining rights. This sparked a massive union organizing drive in 1990 that cost the unions more than $21 million in today's dollars.

But Daniels is the state's first Republican governor in 16 years. And during last year's election, the Unity Team and Indiana's other major state workers union, the American Federation of State, County and Municipal Employees, supported Kernan. These groups represent nearly two-thirds of the state's roughly 35,000 executive branch employees.

Francis "Fuzz" LeMay, president of the Unity Team's Local 9212, said the union will close up shop and about 10 union representatives will go back to their regular state jobs. "Obviously we're disappointed," he said. "But there it is. He's the governor."