An arbitrator ruled yesterday that the Prince George's County school system used faulty procedures when it fired specialized elementary school teachers in a cost-cutting move last year. The arbitrator ordered the school system to review the layoffs and rehire, with back pay, all those who were improperly fired.

The arbitrator's decision could affect up to 130 reading specialists, librarians, music and gym teachers who were among 507 teachers laid off last spring.

However, the decision is non-binding, and the county school board has the option of not following the recommendation after a public hearing.

Schools spokesman Byron Porter said an equal number of other specialized teachers might have to be fired if others are rehired. Porter also acknowledged that ignoring the recommendation could result in another protracted legal battle.

Teachers union president John Sisson said, "The Board of Education has never failed to accept the finding of an arbitrator, and we don't expect that they will change that policy now."

School board president Susan B. Bieniasz said the board would meet today in closed session to "discuss the contents of the decision and the routes open to us." She said the board has 10 days to decide what to do.

"I'm not agreeing or disagreeing with the arbitrator at this point. It's a very serious ruling. It deals with the rights of teachers, but also with our role to fulfill the right of our children to a good education and how we balance all that together," she said.

The disagreement between the union and the school system arose over the way the system determined each teacher's seniority in a particular subject area. The union maintained that school officials should have considered a teacher's total length of service in the system and credentials in a particular subject area in determining whether the teacher should have been offered a new job.

The school system counted only a teacher's most recent, continuous service in a subject, excluding, for example, experience earned before such periods as maternity leave.

The negotiator, Seymour Strongin of the American Arbitration Association, wrote that his decision may cause the layoffs of other teachers, "a result not uncommon when two employes are in competition for one job."

Sisson said he believed that teachers could be rehired without further layoffs because of subsequent retirements and the approval of additional school funds by the County Council. But Porter said the additional funds have been earmarked to hire classroom teachers rather than specialists.

Neither the union nor school system officials could estimate how much back pay could be involved.

Sisson said he was "elated" by the arbitrator's ruling, which cost about $10,000 to obtain and will be paid for by both parties. "It's certainly not only a victory for teachers but for school children, who will end up with better-educated, better-rounded teachers," he said. "Teachers will be encouraged to go back to school, to get certification in other areas because it will mean better job security."

Sisson said the Prince George's Educators Association sought an arbitrator's ruling after exhausting their grievance rights with the school board. He said they filed the original grievance soon after the firings, in part to learn what procedures had been followed.

"We didn't really understand how they had made their layoff decisions until the arbitration hearings," he said.