[1989] OLRB Rep. august 857
0071-89-U Niagara Bronze Limited, Complainant v. Glass, Molders, Pottery, Plastics and Allied Workers International Union and Jack Erskine, et al, Respondents
BEFORE: Patricia Hughes, Vice-Chair, and Board Members R. W. Pirrie and K. Davies.
APPEARANCES: B. W. Adams and R. Tallman for the complainant; Edward C. Witthames for the respondents.
DECISION OF THE BOARD; August 21, 1989
Ralph Tallman is the President and owner of the complainant, Niagara Bronze Limited ("the company"), a non-ferrous foundry located in Niagara Falls, Ontario. In 1987, Mr. Tallman, on behalf of the company, and Jack Erskine, an individually named respondent who is the staff representative for Glass Molders, Pottery, Plastics & Allied Workers International ("the union"), on behalf of the union, signed a collective agreement for 1986-1988 which contained a cost-of-living allowance ("C.O.L.A.") clause but which was subject to a Memorandum of Settlement which suspended the operation of the C.O.L.A. clause. The 1988-1990 collective agreement also contains the C.O.L.A. clause. Mr. Tallman was surprised to find out after the collective agreement had been executed that the union believed the C.O.L.A. clause to be operative. Mr. Tallman acknowledged that he had made a mistake, but contends that the union knew that and its failure to tell him so during bargaining and then claiming the benefit of the C.O.L.A. is bargaining in bad faith. The company therefore filed this complaint under section 89 of the Labour Relations Act ("the Act") alleging that the union, Mr. Erskine and Rudolfo Sorge, Hircy McRae, and Eugene Krzemien, who with Mr. Erskine made up the union's negotiating committee, have breached section 15 of the Act.
Mr. Tallman had negotiated for the company since 1975 and had been at negotiations as an observer for about seven years previously. He said there had been a C.O.L.A. clause in the collective agreements since 1974 or 1976. Negotiations for the 1988-1990 collective agreement began with the union's notice to bargain to the company dated September 29, 1988. Subsequently, Mr. Erskine met with the employees to develop the union's proposals; he told Mr. Tallman about the monetary proposals that evening, following that communication with a written statement of the proposed changes. At the bottom of that document is the following:
NOTE: Articles and sections not referred to in these proposals are considered unchanged and would continue to form part of the Collective Agreement.
The union's proposed changes made no reference to the C.O.L.A. clause. The Memorandum of Settlement dated November 21, 1988, signed by representatives of both the company (including Mr. Tallman) and the union, also made no reference to the C.O.L.A. and, indeed, it is agreed that the C.O.L.A. was not raised by either the company or the union at any time during negotiations.
- In the previous agreement the C.O.L.A. clause, was subject to the following provision in the handwritten Memorandum of Settlement signed by representatives for the company (including Mr. Tallman) and the union, dated November 3, 1986:
C.O.L.A. FREEZE FOR LIFE OF AGREEMENT ONLY TO BE REINSTATED JANUARY 1989 AS PER ARTICLE 25-03-5
Article 25-03-5 in both the 1986-1988 and 1988-1990 collective agreements provides for the manner in which cost of living adjustment are to be made "[c]ommencing with the pay period beginning on or after January 1989" and for the base for the calculation of the adjustments (the September 1988 and September 1989 Consumer Price Index).
The most recent agreement was signed by the parties on January 24, 1989 and was distributed by Loretta Hicks, the company's controller, to the employees on January 26, 1989. The last employee to leave the plant was Hircy McRae, the plant chairman, and he made some comments to Ms. Hicks about the C.O.L.A. She related this conversation to Mr. Tallman the following Monday and after examining the collective agreement, Mr. Tallman realized that he had made a mistake. He had assumed, without giving any real thought to the matter, and without re-reading the previous agreement, that the C.O.L.A. clause was not operative. It seemed now that it was operative. He thought, however, that once the union understood the situation, it would not take advantage of his mistake except perhaps to obtain another benefit in exchange for giving up the C.O.L.A.
That Mr. Taliman had underestimated the union's view of the situation was made clear when Mr. McRae filed a grievance dated February 20, 1989, claiming that the company was in violation of the collective agreement by not paying the employees the cost-of-living allowance. Mr. Tallman attempted to convince the employees not to pursue the matter but the union remained firm. We were advised that an arbitrator has now been appointed but the arbitration hearing has not been scheduled, pending the disposition of this complaint.
The issue before us, as characterized by counsel for the company, is "whether one party's capitalizing on an error it sees being committed by the other party" constitutes a violation of section 15 of the Act. There is no allegation that the union made any misrepresentation upon which the company relied. There is no suggestion that the union did or said anything that could lead Mr. Tallman to make the assumption he did that the freeze on the C.O.L.A. applied. Rather, the argument is that the nature of the monetary package offered by the company was such that the union knew or must have known that the company did not believe C.O.L.A. had to be paid and that the union should have known that it and the company were negotiating based upon two different (and opposing) set of assumptions. The argument is that there was no "mutality of intent"; the parties were not ad idem on this aspect of the contract. The union's conduct in proceeding to capitalize on Mr. Tallman's mistake is, says counsel, contrary to the legislative policy underlying the Act: harmonious labour relations.
Neither party was able to provide us with any case on point with the situation before us. The company's counsel suggested that the closest analogy lies in the "disclosure" cases: see, for example, Inglis Ltd., [1977] OLRB Rep. Mar. 128; Westinghouse Canada Limited, [1980] OLRB Rep. Apr. 577; Consolidated Bathurst Packaging Ltd., [1983] OLRB Rep. Sept. 1411 (quashed on an unrelated matter, Re Consolidated-Bathurst Packaging Ltd. and International Woodworkers of America, Local 2-69 (1985), 1985 CanLII 2157 (ON HCJ), 51 O.R. (2d) 481 (Div. Ct.); appeal allowed (1986), 1986 CanLII 2498 (ON CA), 56 O.R. (2d) 513 (C.A.); application for leave to appeal to the Supreme Court of Canada allowed, March 26, 1987, (1987), 59 OR. (2d) 736 note). As counsel acknowledged, the underlying thrust of these cases is the obligation on a party - in each of these cases, the employer - to disclose information, such as plans for relocation or shut down of the plant, of which it has knowledge and the other party - the union - does not, where the union asks questions about such plans or where the decision has been effectively made and the employer can see that it will have a significant impact on the bargaining unit. The failure to disclose in such situations impairs the capacity of the union to bargain in a rational and informed way and may constitute a form of misrepresentation.
The disclosure cases are simply not applicable to our situation. Here, both parties had all the same information and at least as far as this issue is concerned, this is not a situation in which one party had access to information or had the ability or capacity to form an intent to make decisions which could affect the other without the other's knowledge. A more comparable case is Interior Systems Contractors' Association of Ontario, [1981] OLRB Rep. July 879, in which the union made a deliberate decision to use a strategy of silence in relation to whether the employees or the employer was responsible for providing screws and nails. The obligation on employees was part of the piece work provisions in earlier agreements. The union's proposed piece-work provision contained no reference to the obligation. The Board said in that case:
24.... The employer in this case must be taken to have been aware of the terms of the preceding collective agreement upon which the union's proposals were based. The piece rate provisions and schedules were contained in the two amending agreements. To evaluate the union's new piece rate proposals the employer would have to have regard to, for the purposes of comparison, the two amending agreements as well as the original collective agreement. In any event, in responding to the union's proposals the employer, in the Board's view, had the responsibility for knowing the terms of its collective agreement, as amended, and for evaluating the effect of the union's proposals on that agreement, including the effect of leaving articles from the preceding agreement out of the proposed agreement.
The fact is that Mr. Tallman, for the company, did not check the preceding agreement; he gave no consideration to the effect of the limited freeze provision in the predecessor agreement; there was nothing preventing his doing so and certainly nothing the union did prevented his doing so. Even if the union did know he was operating under a mistake, the union is not obliged to question the employer's thinking when it makes a monetary offer, in effect to ask "are you sure you mean to offer us this much": the union is entitled to expect that the employer is familiar with the collective agreement and has compared the provisions of the previous agreements.
This complaint is therefore dismissed.
COMMENT OF BOARD MEMBER R. W. PIRRIE; August 21, 1989
I concur with the decision.
The union did nothing overt to mislead Mr. Tallman. He was simply lax in his administration vis-a-vis his labour relations responsibilities. It is my view the union was well aware of the error Mr. Tallman was committing in agreeing to the monetary terms of the November 21, 1988 Memorandum of Settlement, and in signing on January 24, 1989 the 1988-90 Collective Agreement incorporating these monetary terms. I do not believe a union's failure to bring an obvious employer error to the employer's attention, or vice versa, is a definition of a failure to bargain in good faith that the Board should attach to Section 15.
That said, one wonders at the wisdom of the Glass, Molders, Pottery, Plastics and Allied Workers International Union and their officials capitalizing on Mr. Tallman's error. At the very least, by so doing they have seriously impaired whatever relationship may have existed between themselves and Mr. Tallman.
More serious however is the impairment of the relationship between Mr. Tallman and the employees of the company. I only hope that by insisting on the operation of the C.O.L.A. clause as well as the substantial across-the-board wage increases, compounded by the substantial
costs inherent in the insurance company error concerning the back service pension improvement, that the livelihood of some or all of the long service employees is not put in jeopardy.