(a) A local board of education shall be required to participate in collaborative conferencing with professional employees, or their designated representatives, if any, with respect to only those terms and conditions of employment that are specified in this section. Such terms and conditions include and are limited to the following:

(1) Salaries or wages;

(2) Grievance procedures;

(3) Insurance;

(4) Fringe benefits, but not to include pensions or retirement programs of the Tennessee consolidated retirement system or locally authorized early retirement incentives;

(5) Working conditions; except those working conditions which are prescribed by federal law, state law, private act, municipal charter or rules and regulations of the state board of education, the department of education or any other department or agency of state or local government;

(6) Leave; and

(7) Payroll deductions; except as provided in subsection (b).

(b) No other terms or conditions of employment shall be the subject of collaborative conferencing between the board of education and the professional employees or their representatives and no collaborative conferencing shall be conducted on the following subjects:

(1) Differentiated pay plans and other incentive compensation programs including stipends and associated benefits that are based on professional employee performance that exceeds expectations, or that aid in hiring and retaining highly qualified teachers for hard-to-staff schools and subject areas;

(2) Expenditure of grants or awards from federal, state or local governments and foundations or other private organizations that are expressly designated for specific purposes;

(3) Evaluation of professional employees pursuant to federal or state law or state board of education policy;

(4) Staffing decisions and state board of education or local board of education policies relating to innovative educational programs under § 49-1-207; innovative high school programs under chapter 15 of this title; virtual education programs under chapter 16 of this title; and other programs for innovative schools or school districts that may be enacted by the general assembly;

(5) All personnel decisions concerning assignment of professional employees, including, but not limited to, filling of vacancies, assignments to specific schools, positions, professional duties, transfers within the system, layoffs, reductions in force, and recall. No agreement shall include provisions that require personnel decisions to be determined on the basis of tenure, seniority or length of service; and

(6) Payroll deductions for political activities.

(c) The director of schools shall be permitted to communicate with professional employees employed by the local board of education concerning any subject relevant to the operation of the school system, including the terms and conditions of professional service that are subject to collaborative conferencing, through any means, medium or format the director chooses.