[1986] OLRB Rep. February 288
2096-85-M The Ontario Provincial Conference of the International Union of Bricklayers and Allied Craftsmen, Applicant, v. Vincent Spirito & Sons Ltd., Respondent
BEFORE: Paula Knopf, Vice-Chairman, and Board Members I. A. Ronson and 5. 0 'Flynn.
APPEARANCES: J. Zanussi and M. Pruschowsky for the applicant; Pierre Ranger for the respondent.
DECISION OF THE BOARD; February 12, 1986
This is an application under section 124 of the Labour Relations Act seeking remittances, deductions, welfare, pension and vacation payments from the respondent from April 23, 1985 to date under a collective agreement. At the outset of the proceedings, the respondent took the position that it was not bound by any collective agreement with the applicant union on account of alleged misrepresentations made at the time of the signing of a purported voluntary recognition agreement between the respondent and the Union. Counsel for the respondent indicated that the respondent admits that it would be fully liable under the collective agreement if the agreement was found to be binding and enforceable upon the respondent since the respondent admits to having made no remittances since July, 1985. Therefore, since the only real issue in dispute was whether there was any misrepresentation, the Board proceeded to hear evidence on that threshold issue alone.
The undisputed evidence is that the respondent has operated business in the Ottawa area since 1972. It has three divisions dealing with security guards, interior maintenance of buildings, and exterior work, including brick and masonry work. In April, 1984, Vincent Spirito & Sons Ltd. (hereinafter referred to as "Spirito's") were called by VK Masonry, a contractor to do work on an antique masonry wall on Queen Street in Ottawa (hereinafter referred to as the site). Spirito's had worked with VK Masonry for over six years doing one or two jobs per year for them.
VK Masonry is a party to the Provincial Agreement for the Ontario Bricklayers, Stonemasons and Plasterers. Article 1(c) of that collective agreement provides:
Any Employer who is a party to this Agreement desirous of sub-contracting any work encompassing the skills of Members of the Ontario Provincial Conference shall only sub-contract same to a sub-contractor who is bound by the Provincial Agreement with the Ontario Provincial Conference.
Up to the events of this case, Spirito's had never been a party to the Provincial Agreement. However, when the Business Agent of the applicant Union, Mike Pruschowsky attended at the site in April, 1985, he noticed masonry work being done. Upon enquiry, he learned that the work was not being performed by Union men. He contacted VK Masonry to get an explanation about an apparent breach of section 1(c) of the Provincial Agreement. Apparently, VK Masonry immediately advised Spirito's to get in touch with Mr. Pruschowsky at the Union directly. It is conceded by the respondent that it then understood from Mr. Pruschowsky that it could not remain on the site or complete the job unless it employed Union men.
The evidence of the Union and the respondent can be summarized quite simply. According to Robert Spirito, a director of the Company, Mike Pruschowsky led him to believe that Spirito's was entering into a voluntary recognition agreement with the Union that would enable Spirito's to hire Union men, allow three of Spirito's current employees to join the Union and only bind the Company until the end of the Queen Street project. Robert Spirito said he tried to make it clear to Mr. Pruschowsky that the Company did not intend to be bound by a contract that would "unionize all its employees" because this would destroy the Company's "competitive edge" with other janitorial and maintenance companies. Mr. Spirito says also that Mr. Pruschowsky assured him that the contract would only cover men working on the site until the job was completed.
The Memorandum of Agreement that was signed by Robert Spirito on behalf of the respondent Company clearly binds Spirito 's for the duration of the agreement, i.e. until April 30, 1986 and thereafter from year to year unless specified notice of desire to change is given. The Agreement also has the employer recognize the Union as the exclusive bargaining agent for all journeymen and apprentice bricklayers, stonemasons and plasterers and improvers in the Province of Ontario. The position of the respondent is that despite the clear terms of this agreement, the Agreement should be rescinded because of Mr. Pruschowsky's misrepresentations of the terms of the Agreement to Robert Spirito before the Agreement was signed.
Mike Pruschowsky testified that there were no misrepresentations. The thrust of his evidence was that he explained the necessity of entering the agreement to Robert Spirito in order for Spirito's to remain on the site. Further, Mr. Pruschowsky says that he explained to Mr. Spirito that the effect of entering the agreement would be that the Company would be bound in future ICI sector work in the Ottawa area. However, the two men also discussed the fact that most of the masonry work that is done by Spirito's was in the nature of residential work. Thus, Mr. Pruschowsky says that he advised Robert Spirito that this agreement would not bind any of Spirito's residential work and that other arrangements could be made in the future should residential work arise.
The Memorandum of Agreement was signed April 23, 1985. Robert Spirito claims he did not read it, trusting to his understanding of what Mr. Pruschowsky had told him. Mr. Pruschowsky did not dispute that Mr. Spirito may not have read the document because Mr. Pruschowsky recalls Mr. Spirito leafing through the document quickly. Although, the evidence is that Mr. Spirito had the document at the meeting where it was signed for approximately 45 minutes before signing it.
Mr. Vincent Spirito also testified. He is the founder of the respondent company. Hwever, by his own admission, the contract may have already been signed when he first met Mr. ruschowsky. Yet, Vincent Spirito confirms that he stressed to Mr. Pruschowsky that the Company was concerned about being bound in all its divisions by any Union obligations. Mr. Pruschowsky does not contradict this and affirms that he explained that the contract would only bind Spirito's employees engaged in masonry work in the ICI sector.
It was also clear from the evidence that Robert Spirito signed the contract with the impression that the agreement only bound his company for the duration of the project on the site. The only question is whether that impression was the result of any misrepresentations by Mr. Pruschowsky or the result of Mr. Spirito simply misunderstanding the import of the agreement he signed.
Counsel for the respondent Spirito's argues that the case turns on the matter of credibility. He urged the Board to accept the evidence of the Spirito's over that of Mr. Pruschowsky. Further, it was submitted that the facts should lead to the conclusion that the only reason the Union was contacted by Robert Spirito was to enable Spirito's to hire Union employees to finish the job. Then, Mr. Pruschowsky misrepresented both the nature and the purpose of the voluntary recognition agreement in such a fundamental way that the agreement should be declared void and rescinded. Counsel conceded that the logical extension of his argument would be that if the respondent had not been "misled" by Mr. Pruschowsky, the agreement would not have been signed and they would have abandoned the job site. Counsel referred the Board to the decision of Eagle Mountain Contracting Limited, [1981] OLRB Rep. April 442 and cited from the text of Milner on Contracts to stand for the proposition that a material misrepresentation is sufficient to rescind a contract.
On behalf of the Union, it was argued that if any misunderstanding arose during the course of the signing of the voluntary recognition agreement, the misunderstanding was not the result of any misrepresentations by Mr. Pruschowsky. It was stressed that the Union could have required Spirito's to leave the job site by virtue of the contractor VK Masonry's obligations under the Provincial collective agreement to only subcontract to other employers bound by the same agreement. It was pointed out that this protected the Union membership and gave Mr. Pruschowsky no reason to misrepresent any of the terms of the agreement to Mr. Spirito. Thus, it was argued that the contract ought to be considered binding and enforceable upon the respondent.
The Decision
The threshold question in this case is whether there was any misrepresentation by Mr. Pruschowsky on behalf of the Union towards the respondent that induced Robert Spirito to enter the Memorandum of Agreement. In assessing all the evidence, we must conclude that there were no material misrepresentations. Where the evidence of Robert Spirito and Mike Pruschowsky conflict, we must accept the evidence of Mike Pruschowsky. He was forthright in his testimony. He had a clearer recollection of details and conversations than did Mr. Spirito and he was candid in his admissions. For example, Mr. Pruschowsky admitted that he does not often advise companies that entering into the voluntary recognition agreement that was filed before the Board does not bind them to residential work. Further, we can see no motive for Mr. Pruschowsky to have misrepresented the scope of the agreement to Spirito's. As Mr. Pruschowsky himself pointed out, he did not need to have a voluntary agreement with Spirito 's in order to ensure the work for his membership. Spirito' s could have been made to leave the job site. The membership of the Union were already protected on the site by the VK Masonry's contractual obligations under the Provincial Agreement and in particular, Article 1(c). This voluntary agreement with Spirito' s was not necessary to cover the job site. Thus~ there was no incentive for Mike Pruschowsky to misrepresent any of the terms to Spirito's. Nor do we conclude that he did actually misrepresent its terms.
In concluding this, we are not suggesting that Robert Spirito was deliberately misleading the Board. Instead, we feel he simply misunderstood Mr. Pruschowsky when Mr. Pruschowsky explained the scope of the ICI coverage. Mr. Spirito must have concluded that it would only affect his company on the one job site, instead of future ICI jobs. But that misunderstanding on Mr. Spirito's part cannot be accepted as arising from any misrepresentations made by Mr. Pruschowsky. Instead, we are satisfied by the evidence that Mr. Pruschowsky advised Robert Spirito that the Memorandum of Agreement would give voluntary recognition to cover any masonry work performed by Spirito's in the ICI sector. The only thing that is not accurate about that representation is that the language of the agreement does appear to cover the residential sector as well. However, the Union is making no claim for such coverage and clearly represented to Robert Spirito that the agreement would only apply to the ICI sector. Indeed, in that particular area, the Union takes the position that a separate residential agreement must be signed in order to cover residential work. Thus, no effective or material misrepresentation exists in this case even if there may have been some inaccuracy in Mr. Pruschowsky's own understanding of the coverage of the agreement. However, the Union is making no claim for such coverage and clearly represented to Robert Spirito that the agreement would only apply to the ICI sector. Therefore~ no effective or material misrepresentation exists.
Having reached this conclusion, there is no reason why the respondent should not be considered bound by the Provincial Agreement, as of April 23, 1985 and we so declare. The Board shall remain seized with the issue of how much, if anything, is owing to the Union under the Agreement. It is hoped that the parties shall be able to resolve the matter on their own. In the event that this is not possible, this case may be rescheduled at the request of either party within six months of this award.
This panel is not seized with the matter