Section 1. Any city or town subject to civil service law as provided in chapter thirty-one, or by special law, may exercise the option of establishing a decentralized personnel system and may become exempt from the provisions of chapter thirty-one or special law, provided that such city or town complies with the conditions provided hereinafter.

Local personnel systems developed pursuant to this chapter shall be consistent with accepted merit principles and each municipality shall include in its personnel ordinance or by-law a statement of said principles. Accepted merit principles shall include, but shall not be limited to:

(a) the recruiting, selecting and advancing employees on the basis of their relative ability, knowledge and skills including open consideration of qualified applicants for initial appointment;

(b) providing just compensation for all employees;

(c) providing training and development for employees, as needed, to assure the advancement and high quality performance of such employees;

(d) retaining employees on the basis of adequacy of their performance, correcting inadequate performance, and separating employees whose inadequate performance cannot be corrected;

(e) assuring fair treatment of all applicants and employees in all aspects of personnel administration without regard to political affiliation, race, color, age, national origin, sex, marital status, handicap or religion and with proper regard for privacy, basic rights outlined in this chapter and constitutional rights as citizens, and;

(f) assuring that all employees are protected against coercion for political purposes, and are protected from arbitrary and capricious actions.