Communications, Energy v. Paperworkers Union of Canada, Local 30, 2013 SCC 34

SUPREME COURT OF CANADA Citation: Communications, Energy and Paperworkers Union of Canada, Local 30 v.

Irving Pulp & Paper, Ltd., 2013 SCC 34, [2013] 2 S.C.R. 458 Date: 20130614 Docket: 34473 Between: Communications, Energy and Paperworkers Union of Canada, Local 30 Appellant and Irving Pulp & Paper, Limited Respondent - and - Construction Owners Association of Alberta, Construction Labour Relations — an Alberta Association, Enform, Canadian National Railway Company, Canadian Pacific Railway Company, Via Rail Canada Inc., Alberta Federation of Labour, Communications, Energy and Paperworkers Union of Canada, Local 707, Canadian Civil Liberties Association, Alliance of Manufacturers & Exporters of Canada, carrying on business as Canadian Manufacturers & Exporters, Canadian Mining Association, Mining Association of British Columbia, Mining Association of Manitoba Inc., Québec Mining Association, Ontario Mining Association, Saskatchewan Mining Association and Power Workers’ Union Interveners Coram: McLachlin C.J. and LeBel, Fish, Abella, Rothstein, Cromwell, Moldaver, Karakatsanis and Wagner JJ.

Reasons for Judgment: (paras. 1 to 55) Joint Dissenting Reasons: (paras. 56 to 118) Abella J. (LeBel, Fish, Cromwell, Karakatsanis and Wagner JJ. concurring) Rothstein and Moldaver JJ.(McLachlin C.J. concurring) Communications, Energy and Paperworkers Union of Canada, Local 30 v. Irving Pulp & Paper, Ltd., 2013 SCC 34, [2013] 2 S.C.R. 458 Communications, Energy and Paperworkers Union of Canada, Local 30 Appellant

v.

Irving Pulp & Paper, Limited Respondent and Construction Owners Association of Alberta, Construction Labour Relations — an Alberta Association, Enform, Canadian National Railway Company, Canadian Pacific Railway Company, Via Rail Canada Inc., Alberta Federation of Labour, Communications, Energy and Paperworkers Union of Canada, Local 707, Canadian Civil Liberties Association, Alliance of Manufacturers & Exporters of Canada, carrying on business as Canadian Manufacturers & Exporters, Canadian Mining Association, Mining Association of British Columbia, Mining Association of Manitoba Inc., Québec Mining Association, Ontario Mining Association, Saskatchewan Mining Association and Power Workers’ Union Interveners Indexed as: Communications, Energy and Paperworkers Union of Canada, Local 30 v.

Irving Pulp & Paper, Ltd. 2013 SCC 34 File No.: 34473. 2012: December 7; 2013: June 14.

Present: McLachlin C.J. and LeBel, Fish, Abella, Rothstein, Cromwell, Moldaver, Karakatsanis and Wagner JJ. on appeal from the court of appeal for new brunswick Labour relations — Arbitration — Collective agreements — Management rights — Privacy — Employer unilaterally imposing mandatory random alcohol testing policy for employees — Whether unilaterally implementing random testing policy a valid exercise of employer’s management rights under collective agreement — Whether employer could unilaterally implement policy absent reasonable cause or evidence of workplace alcohol abuse.

Administrative law — Judicial review — Standard of review of labour arbitration board’s decision — Employer unilaterally imposing mandatory random alcohol testing policy for employees holding safety-sensitive positions — Whether arbitration board’s decision that harm to employees’ privacy outweighed policy’s benefits to employer was reasonable. The Union brought a grievance challenging the mandatory random alcohol testing aspect of a policy on alcohol and drug use that the employer, Irving, unilaterally implemented at a paper mill.

Under the policy, 10% of employees in safety sensitive positions were to be randomly selected for unannounced breathalyzer testing over the course of a year. A positive test for alcohol attracted significant disciplinary action, including dismissal. The arbitration board allowed the grievance. Weighing the employer’s interest in random alcohol testing as a workplace safety measure against the harm to the privacy interests of the employees, a majority of the board concluded that the random testing policy was unjustified because of the absence of evidence of an existing problem with alcohol use in the workplace.

On judicial review, the board’s award was set aside as unreasonable. The New Brunswick Court of Appeal dismissed the appeal. Held (McLachlin C.J. and Rothstein and Moldaver JJ. dissenting): The appeal should be allowed. Per LeBel, Fish, Abella, Cromwell, Karakatsanis and Wagner JJ.: The legal issue at the heart of this case is the

interpretation of the management rights clause of a collective agreement. The scope of management’s unilateral rule-making authority under a collective agreement is that any rule or policy unilaterally imposed by an employer and not subsequently agreed to by the union

must be consistent with the collective agreement and be reasonable. A substantial body of arbitral jurisprudence has developed around the unilateral exercise of management rights in a safety context resulting in a carefully calibrated “balancing of interests” proportionality approach. Under it, and built around the hallmark collective bargaining tenet that an employee can only be disciplined for reasonable cause, an employer can impose a rule with disciplinary consequences only if the need for the rule outweighs the harmful impact on employees’ privacy rights.

This approach has resulted in a consistent arbitral jurisprudence whereby arbitrators have found that when a workplace is dangerous, an employer can test an individual employee if there is reasonable cause to believe that the employee was impaired while on duty, was involved in a workplace accident or incident, or was returning to work after treatment for substance abuse.

A unilaterally imposed policy of mandatory random testing for employees in a dangerous workplace has been overwhelmingly rejected by arbitrators as an unjustified affront to the dignity and privacy of employees unless there is evidence of enhanced safety risks, such as evidence of a general problem with substance abuse in the workplace. The dangerousness of a workplace is clearly relevant, but this does not shut down the inquiry, it begins the proportionality exercise.

It has never been found to be an automatic justification for the unilateral imposition of unfettered random testing with disciplinary consequences. In this case, the expected safety gains to the employer were found by the board to range from uncertain to minimal, while the impact on employee privacy was severe. The board concluded that eight alcohol-related incidents at the Irving mill over a 15-year period did not reflect the requisite problem with workplace alcohol use. Consequently, the employer had not demonstrated the requisite safety concerns that would justify universal random testing.

As a result, the employer exceeded the scope of its rights under the collective agreement. The applicable standard for reviewing the decision of the labour arbitrator is reasonableness. The board’s decision must be approached as an organic whole, not as a line-by-line treasure hunt for error. In this case, based on the findings of fact and the relevant jurisprudence, the decision was a reasonable one. Per McLachlin C.J. and Rothstein and Moldaver JJ. (dissenting): There is agreement with the majority that the standard of review is reasonableness.

However, there is disagreement as to the application of that standard. In striking down the policy, the board departed from an arbitral consensus that has attempted to strike a balance between competing interests in privacy and safety in the workplace. In so doing, it came to an unreasonable decision. T his case asks whether management’s exercise of its unilateral rule-making power can be justified under a collective agreement. That question is one the New Brunswick legislature has delegated to labour arbitrators.

Their decisions are entitled to a protected zone of deference in which the courts should not willingly enter as competing arbiters of labour policy. Reasonable people may well differ about the wisdom of the legislative choice to entrust labour arbitrators with a policy-making function that potentially carries serious repercussions for public safety. Indeed, t he fact that the public interest — not merely that of employer and employee — is relevant in cases such as this one may counsel a reassessment of that choice. But t hat decision is one for the New Brunswick legislature, not this Court.

Nevertheless, under reasonableness review there is a difference between judicial abdication and judicial restraint. To the extent a particular arbitral award is unreasonable — as this one is — it remains liable to being set aside on judicial review. Where arbitral consensus exists, it raises a presumption — for the parties, labour arbitrators, and the courts — that subsequent arbitral decisions will follow those precedents. Consistent rules and decisions are fundamental to the rule of law.

Therefore, a rbitral precedents in previous cases concerning management’s unilateral adoption of a random alcohol testing policy shape the contours of what qualifies as a reasonable decision in this case. The arbitral jurisprudence does not recognize an unqualified right of employers to unilaterally impose workplace rules on their employees outside of the collective bargaining process. Rather, the onus is on the employer to justify such rules based on compliance with standards established by the arbitral jurisprudence. In this case, the only standard in dispute was the reasonableness of the policy.

The key question is the threshold of evidence that the employer was required to introduce in order to meet its burden to demonstrate reasonableness and thereby justify its random alcohol testing policy. From a review of the relevant arbitral decisions, what emerges is an arbitral consensus that an employer must demonstrate evidence of an alcohol problem in the workplace in order to justify a random alcohol testing policy. That is the evidentiary threshold accepted by arbitrators who have upheld such policies and those who have struck them down.

Thus, barring some explanation, whether implicit or explicit, for its basis for departing from it, that is the evidentiary threshold the board in this case should have applied. That is not, however, what the board did. Though purporting to apply the test emerging from the arbitral consensus, the board elevated the threshold of evidence that Irving was required to lead in order to justify its random alcohol testing policy and offered no reason for doing so. The board required evidence of a “significant” or “serious” problem at the Irving mill.

The standard reflected in the arbitral consensus, however, is evidence of “a” problem. The difference between the two approaches is obviously a marked one and it cannot be ignored. The board then required that the evidence of alcohol use be tied or causally linked to the accident, injury or near miss history at the plant. Again, there is no support for such a requirement in the arbitral jurisprudence. An employer does not have to wait for a serious incident of loss, damage, injury or death to occur before taking action. To require such a causal connection is not only unreasonable, it is patently absurd.

It is the application of this higher evidentiary standard which dictated the board’s decision to strike down the policy. The evidence was the decisive factor. To be clear, it was open for the board in this case to depart from the arbitral consensus in reaching its conclusion, provided it had a reasonable basis for doing so. In so departing, it was thus incumbent upon the board to provide some explanation for its reasoning. Here, the board provided no explanation whatsoever — whether implicit or explicit, reasonable or unreasonable — for the new evidentiary standard that it applied.

In the absence of a reasonable explanation for its novel test, the board must be taken as having misapplied the existing test, which in the circumstances of this case rendered its decision unreasonable.

The reasonableness of the board’s reasoning is further undermined by its inference that the risk at the Irving mill was nothigh based on the fact that only 10% of mill employees in safety-sensitive positions were tested in any given year.

The inference wasunreasonable because it failed to recognize that: even low testing percentages can be highly effective; testing a higher percentage ofemployees in order to establish the reasonableness of a workplace testing policy would perversely incentivize employers and lead to agreater intrusion into the privacy of employees; and the threshold set by Irving is not out of the mainstream for random alcohol testing.

In sum, the board departed from the legal test emerging from the arbitral consensus by elevating the threshold of evidenceIrving was required to introduce in order to justify a policy of random alcohol testing. In the absence of any explanation whatsoever, it isimpossible to understand why the board thought it reasonable to do what it did. In the circumstances of this case, its decision thus felloutside the range of reasonable outcomes defensible in respect of the facts and law. Cases Cited By Abella J. Referred to: Dunsmuir v.

New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190; Nor-Man Regional Health Authority Inc. v.Manitoba Association of Health Care Professionals, 2011 SCC 59, [2011] 3 S.C.R. 616; Newfoundland and Labrador Nurses’ Union v.Newfoundland and Labrador (Treasury Board), 2011 SCC 62, [2011] 3 S.C.R. 708; Entrop v. Imperial Oil Ltd. (2000), (ON CA), 50 O.R. (3d) 18; Re United Steelworkers, Local 4487 & John Inglis Co.

Ltd. (1957), 7 L.A.C. 240; Re United BreweryWorkers, Local 232, & Carling Breweries Ltd. (1959), 10 L.A.C. 25; Re Public Utilities Commission of the Borough of Scarborough andInternational Brotherhood of Electrical Workers, Local 636 (1974), (ON LA), 5 L.A.C. (2d) 285; United Electrical,Radio, and Machine Workers of America, Local 524, in re Canadian General Electric Co.

Ltd. (Peterborough) (1951), 2 L.A.C. 688; ReHamilton Street Railway Co. and Amalgamated Transit Union, Division 107 (1977), (ON LA), 16 L.A.C. (2d) 402;Re Lumber & Sawmill Workers’ Union, Local 2537, and KVP Co. (1965), (ON LA), 16 L.A.C. 73; MetropolitanToronto (Municipality) v. C.U.P.E. (1990), (ON CA), 74 O.R. (2d) 239, leave to appeal refused, [1990] 2 S.C.R. ix;Charlottetown (City) v. Charlottetown Police Association (1997), (PE SCAD), 151 Nfld. & P.E.I.R. 69; N.A.P.E. v.Western Avalon Roman Catholic School Board, 2000 NFCA 39, 190 D.L.R. (4th) 146; St. James-Assiniboia Teachers’ Assn. No. 2 v.

St.James-Assiniboia School Division No. 2, 2002 MBCA 158, 222 D.L.R. (4th) 636; Esso Petroleum Canada and C.E.P., Loc. 614, Re(1994), (BC LA), 56 L.A.C. (4th) 440; Canadian National Railway Co. and C.A.W.-Canada (Re) (2000), (CA LA), 95 L.A.C. (4th) 341; Weyerhaeuser Co. and I.W.A. (Re) (2004), (BC LA), 127 L.A.C. (4th)73; Navistar Canada, Inc. and C.A.W., Local 504 (Re) (2010), 195 L.A.C. (4th) 144; Rio Tinto Alcan Primary Metal andC.A.W.-Canada, Local 2301 (Drug and Alcohol Policy) (Re) (2011), 204 L.A.C. (4th) 265; Imperial Oil Ltd. and C.E.P., Loc. 900 (Re)(2006), 157 L.A.C. (4th) 225; Imperial Oil Ltd. v.

Communications, Energy & Paperworkers Union of Canada, Local 900, 2009 ONCA420, 96 O.R. (3d) 668; Metropol Security, a division of Barnes Security Services Ltd. and U.S.W.A., Loc. 5296 (Drug and Alcoholtesting) (Re) (1998), (ON LA), 69 L.A.C. (4th) 399; Trimac Transportation Services — Bulk Systems and T.C.U.(Re) (1999), (CA LA), 88 L.A.C. (4th) 237; Fording Coal Ltd. v. United Steelworkers of America, Local 7884,[2002] B.C.C.A.A.A. No. 9 (QL); ADM Agri-Industries Ltd. v.

National Automobile, Aerospace, Transportation and General Workers’Union of Canada (CAW-Canada), Local 195 (Substance Abuse Policy Grievance), [2004] C.L.A.D. No. 610 (QL); Petro-CanadaLubricants Centre (Mississauga) and Oakville Terminal and C.E.P., Local 593 (Re) (2009), 186 L.A.C. (4th) 424; Communications,Energy and Paperworkers Union, Local 777 v. Imperial Oil Ltd., May 27, 2000 (unreported); Greater Toronto Airports Authority v.Public Service Alliance of Canada, Local 0004, [2007] C.L.A.D. No. 243 (QL); DuPont Canada Inc. and C.E.P., Loc. 28-O (Re) (2002), (CA LA), 105 L.A.C. (4th) 399; R. v.

Dyment, (SCC), [1988] 2 S.C.R. 417; R. v. Shoker, 2006 SCC44, [2006] 2 S.C.R. 399. By Rothstein and Moldaver JJ. (dissenting) Esso Petroleum Canada v. Communications, Energy & Paperworkers’ Union, Local 614, [1994] B.C.C.A.A.A. No. 244(QL); Entrop v. Imperial Oil Ltd. (2000), (ON CA), 50 O.R. (3d) 18; Canadian National Railway Co. andC.A.W.-Canada (Re) (2000), (CA LA), 95 L.A.C. (4th) 341; Greater Toronto Airports Authority v. Public ServiceAlliance of Canada, Local 0004, [2007] C.L.A.D.

No. 243 (QL); Rio Tinto Alcan Primary Metal and C.A.W.-Canada, Local 2301 (Drugand Alcohol Policy) (Re) (2011), 204 L.A.C. (4th) 265; Nor-Man Regional Health Authority Inc. v. Manitoba Association of Health CareProfessionals, 2011 SCC 59, [2011] 3 S.C.R. 616; Alberta (Information and Privacy Commissioner) v. Alberta Teachers’ Association,2011 SCC 61, [2011] 3 S.C.R. 654; Canada (Canadian Human Rights Commission) v. Canada (Attorney General), 2011 SCC 53, [2011]3 S.C.R. 471; Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190; Toronto (City) Board of Education v.

O.S.S.T.F., District15, (SCC), [1997] 1 S.C.R. 487; St. Anne Nackawic Pulp & Paper Co. v. Canadian Paper Workers Union, Local 219, (SCC), [1986] 1 S.C.R. 704; CAIMAW v. Paccar of Canada Ltd., (SCC), [1989] 2 S.C.R. 983; Canada(Citizenship and Immigration) v.

Khosa, 2009 SCC 12, [2009] 1 S.C.R. 339; Prestressed Systems Inc. and L.I.U.N.A., Loc. 625 (Roberts)(Re) (2005), (ON LA), 137 L.A.C. (4th) 193; Halifax (Regional Municipality) and N.S.U.P.E., Local 2 (Re) (2008),171 L.A.C. (4th) 257; Re Monarch Fine Foods Co. and Milk and Bread Drivers, Dairy Employees, Caterers and Allied Employees,Local 647 (1978), (ON LA), 20 L.A.C. (2d) 419; Trimac Transportation Services — Bulk Systems and T.C.U. (Re)(1999), (CA LA), 88 L.A.C. (4th) 237; Re United Steelworkers and Triangle Conduit & Cable Canada

(1968) Ltd.(1970), (ON LA), 21 L.A.C. 332; Newfoundland and Labrador Nurses’ Union v. Newfoundland and Labrador(Treasury Board), 2011 SCC 62, [2011] 3 S.C.R. 708; Re Lumber & Sawmill Workers’ Union, Local 2537, and KVP Co. (1965), (ON LA), 16 L.A.C. 73; British Columbia (Public Service Employee Relations Commission) v. BCGSEU, (SCC), [1999] 3 S.C.R. 3; Imperial Oil Ltd. v. Communications, Energy & Paperworkers Union of Canada, Local 900, 2009 ONCA 420,96 O.R. (3d) 668; Imperial Oil Ltd. and C.E.P., Loc. 900 (Re) (2006), 157 L.A.C. (4th) 225; Fording Coal Ltd. v.

United Steelworkers ofAmerica, Local 7884, [2002] B.C.C.A.A.A. No. 9 (QL); Continental Lime Ltd. and B.B.F., Loc. D575 (Re) (2002), (MB LA), 105 L.A.C. (4th) 263; Weyerhaeuser Co. and I.W.A. (Re) (2004), (BC LA), 127 L.A.C. (4th) 73; ADMAgri-Industries Ltd. v. National Automobile, Aerospace, Transportation and General Workers’ Union of Canada (CAW-Canada), Local195 (Substance Abuse Policy Grievance), [2004] C.L.A.D. No. 610 (QL); Communications, Energy and Paperworkers Union, Local 777v.

Imperial Oil Ltd., May 27, 2000 (unreported); Provincial-American Truck Transporters and Teamsters Union, Loc. 880, Re (1991), (ON LA), 18 L.A.C. (4th) 412; Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright),2012 SCC 37, [2012] 2 S.C.R. 345.

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Part 382 (2001) (U.S.). Canadian Charter of Rights and Freedoms . Industrial Relations Act , R.S.N.B. 1973, c. I-4, ss. 32(1), 55(1) , 77(1) . Labour Relations Act, 1995 , S.O. 1995, c. 1, Sch. A, s. 48(12)(j). Rail Safety (Adoption of National Law) Regulation 2012 , No. 662 (N.S.W.). Railway Safety Act 2005 (I.). Authors Cited Borack, Jules I. “Costs and Benefits of Alternative Drug Testing Programs”. San Diego: Navy Personnel Research and Development Center, 1998. Brown, Donald J. M., and David M. Beatty, with the assistance of Christine E. Deacon. Canadian Labour Arbitration , 4th ed., vol. 1.

Toronto: Canada Law Book, 2013 (loose-leaf updated March 2013, release 29). Canada. House of Commons. Minutes of Proceedings and Evidence of the Standing Committee on National Health and Welfare , including “‘Booze, Pills & Dope’: Reducing Substance Abuse in Canada”, No. 28, 2nd Sess., 33rd Parl., 1987, p. 25. Canada. Minister of National Health and Welfare. “Government Response to the Report of the Standing Committee on ‘Booze, Pills & Dope’: Reducing Substance Abuse in Canada”. Ottawa: Minister of Supply and Services, 1988. Keith, Norm, and Ailsa Jane Wiggins.

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APPEAL from a judgment of the New Brunswick Court of Appeal (Drapeau C.J. and Turnbull and Robertson JJ.A.), 2011 NBCA 58 , 375 N.B.R. (2d) 92, 348 D.L.R. (4th) 105, 30 Admin. L.R. (5th) 269, 216 L.A.C. (4th) 418, 969 A.P.R. 92, [2011] N.B.J. No. 230 (QL), 2011 CarswellNB 356, affirming a decision of Grant J., 2010 NBQB 294 , 367 N.B.R. (2d) 234, 199 L.A.C. (4th) 321, 946 A.P.R. 234, [2010] N.B.J. No. 331 (QL), 2010 CarswellNB 494, setting aside an award of an arbitration board, [2009] N.B.L.A.A. No. 28 (QL). Appeal allowed, McLachlin C.J. and Rothstein and Moldaver JJ. dissenting.

Daniel Leger , David Mombourquette and Joël Michaud , for the appellant. Neil Finkelstein , Steven Mason , Brandon Kain , Byron Shaw and William Goss , Q.C. , for the respondent. Barbara B. Johnston and April Kosten , for the interveners the Construction Owners Association of Alberta, Construction Labour Relations — an Alberta Association and Enform. Robert Dupont , Simon-Pierre Paquette and Johanne Cavé , for the interveners the Canadian National Railway Company, the Canadian Pacific Railway Company and Via Rail Canada Inc.

Written submissions only by Ritu Khullar and John Carpenter , for the intervener the Alberta Federation of Labour. Ritu Khullar , for the intervener the Communications, Energy and Paperworkers Union of Canada, Local 707. Joshua S. Phillips and Karen Ensslen , for the intervener the Canadian Civil Liberties Association. Norman A. Keith , Ailsa Jane Wiggins and Anna Abbott , for the intervener the Alliance of Manufacturers & Exporters of Canada, carrying on business as Canadian Manufacturers & Exporters. Peter A.

Gall , Q.C. , Andrea Zwack and Melanie Vipond , for the interveners the Canadian Mining Association, the Mining Association of British Columbia, the Mining Association of Manitoba Inc., the Québec Mining Association, the Ontario Mining Association and the Saskatchewan Mining Association. Andrew K. Lokan , Emily Lawrence and Christopher M. Dassios , for the intervener the Power Workers’ Union. The judgment of LeBel, Fish, Abella, Cromwell, Karakatsanis and Wagner JJ. was delivered by [ 1 ] Abella J. — Privacy and safety are highly sensitive and significant workplace interests.

They are also occasionally in conflict. This is particularly the case when the workplace is a dangerous one. [ 2 ] In a unionized workplace, these issues are usually dealt with in the course of collective bargaining. If an employer, however, decides not to negotiate safety measures before implementing them, and if those measures have disciplinary consequences for

employees, the employer must bring itself within the scope of the management rights clause of the collective agreement. [ 3 ] The legal issue at the heart of this case is the

interpretation of the management rights clause of a collective agreement. This is a labour law issue with clear precedents and a history of respectful recognition of the ability of collective bargaining to responsibly address the safety concerns of the workplace — and the public. [ 4 ] A substantial body of arbitral jurisprudence has developed around the unilateral exercise of management rights in a safety context, resulting in a carefully calibrated “balancing of interests” proportionality approach.

Under it, and built around the hallmark collective bargaining tenet that an employee can only be disciplined for reasonable cause, an employer can impose a rule with disciplinary consequences only if the need for the rule outweighs the harmful impact on employees’ privacy rights.

The dangerousness of a workplace is clearly relevant, but this does not shut down the inquiry, it begins the proportionality exercise. [ 5 ] This approach has resulted in a consistent arbitral jurisprudence whereby arbitrators have found that when a workplace is dangerous, an employer can test an individual employee if there is reasonable cause to believe that the employee was impaired while on duty, was involved in a workplace accident or incident, or was returning to work after treatment for substance abuse.

In the latter circumstance, the employee may be subject to a random drug or alcohol testing regime on terms negotiated with the union. [ 6 ] But a unilaterally imposed policy of mandatory, random and unannounced testing for all employees in a dangerous workplace has been overwhelmingly rejected by arbitrators as an unjustified affront to the dignity and privacy of employees unless there is reasonable cause, such as a general problem of substance abuse in the workplace.

This body of arbitral jurisprudence is of course not binding on this Court, but it is nevertheless a valuable benchmark against which to assess the arbitration board’s decision in this case. [ 7 ] It cannot be seriously challenged, particularly since Dunsmuir v. New Brunswick , 2008 SCC 9 , [2008] 1 S.C.R. 190, that the applicable standard for reviewing the decision of a labour arbitrator is reasonableness ( Dunsmuir , at para. 68 ; Nor-Man Regional Health Authority Inc. v.

Manitoba Association of Health Care Professionals , 2011 SCC 59 , [2011] 3 S.C.R. 616, at paras. 31 and 42 ; Newfoundland and Labrador Nurses’ Union v. Newfoundland and Labrador (Treasury Board) , 2011 SCC 62 , [2011] 3 S.C.R. 708). [ 8 ] In a thoughtful and meticulous decision of almost 80 pages, a majority of the arbitration board in this case, applying the arbitral consensus, concluded that the employer, Irving Pulp & Paper, Limited, exceeded the scope of its management rights under a collective agreement by imposing random alcohol testing in the absence of evidence of a workplace problem with alcohol use.

In my view, based on the board’s findings of fact and its reliance on the arbitral consensus for determining the scope of the employer’s rights under the collective agreement in such circumstances, the decision was a reasonable one. Background [ 9 ] Irving operates a kraft paper mill in Saint John, New Brunswick. Between 1991 and 2006, Irving had no formal policy with respect to alcohol and drug use at the mill. In 2006, it unilaterally adopted a “Policy on Alcohol and Other Drug Use” under the management rights clause of the collective agreement without any negotiations with the union.

The policy imposed drug or alcohol testing for employees holding positions designated by Irving as “safety sensitive”. [ 10 ] The policy contained a universal random alcohol testing component, whereby 10% of the employees in safety sensitive positions were to be randomly selected for unannounced breathalyzer testing over the course of a year. A positive test for alcohol, that is, one showing a blood alcohol concentration greater than 0.04%, attracted significant disciplinary action, including dismissal.

Failure to submit to testing was grounds for immediate dismissal. [ 11 ] Among the employees randomly tested under this aspect of the policy was Perley Day, a member of the Communications, Energy and Paperworkers Union of Canada, Local 30. Mr. Day was a teetotaller who had not had a drink since 1979. His breathalyzer test revealed a blood alcohol level of zero. The Union filed a grievance on his behalf challenging only the random alcohol testing aspect of the policy. [ 12 ] The rest of the testing policy was not challenged.

Under it, employees were subject to mandatory testing if there was reasonable cause to suspect the employee of alcohol or other drug use in the workplace, after direct involvement in a work-related accident or incident, or as part of a monitoring program for any employee returning to work following voluntary treatment for substance abuse. [ 13 ] Mr. Day’s inclusion in the class of employees occupying safety sensitive positions was undisputed, as was the fact that the workplace represented a dangerous work environment.

However there were only eight documented incidents of alcohol consumption or impairment at the workplace over a period of 15 years from April 1991 to January 2006. Nor were there any accidents, injuries or near misses connected to alcohol use.

By December 2008, when the arbitration was heard, the testing policy had been in effect for 22 months, during which not a single employee had tested positive on either a random test or a test for reasonable cause. [ 14 ] The absence of evidence of any real risk related to alcohol led a majority of the board to conclude that there was little benefit to the employer in maintaining the random testing policy.

Weighing the employer’s interest in random alcohol testing as a workplace safety measure against the harm to the privacy interests of employees, the board therefore allowed the grievance and concluded that the random testing policy was unjustified: The question is now one of proportionality. What needs to be measured are the benefits that will accrue to the employer through the application of the random alcohol testing policy against the harm that will be done to the employee’s right to privacy. If the random alcohol testing policy is to be justified, these must be in proportion.

Here the employer’s scheme gets into heavier weather. In a word, on the evidence I heard, I do not conclude that any significant degree of incremental safety risk attributable to employee

alcohol use has been demonstrated to exist in this workplace. Taken with the low testing percentages, I believe it is likely that theemployer’s policy will seldom, if ever, identify any employee with a blood alcohol concentration over the 0.04% Policy cut-off limit. Itherefore see little or no concrete advantage to the employer to be gained through the random alcohol testing policy. On the other side of the balance scale, I have to consider the employee’s right to privacy. Rights to privacy and to the related right ofsecurity of the person are important and prized incidents of Canadian citizenship.

Reactions to invasions of them tend to be prompt,visceral, instinctive and uniformly negative. When the testing is random — that is, without articulable cause — as it is here, an alreadyhigh bar is raised even higher. This considerably increases the burden of justification on the employer. The invasion of that privacy by the random alcohol testing policy is not a trifle. It effects a significant inroad. Specifically, itinvolves a bodily intrusion and the surrender of bodily substances. It involves coercion and restriction on movement.

Upon pain ofsignificant punishment, the employee must go promptly to the breathalyzer station and must co-operate in the provision of breathsamples. As we saw with Mr. Day, there can be an element of public embarrassment. Taking its results together, the scheme effects aloss of liberty and personal autonomy. These are at the heart of the right to privacy. On the evidence, the gains likely to result to the employer from random alcohol testing rule[s] run from uncertain to exist at all tominimal at best.

The inroads into employee privacy are significant and out of proportion to any benefit, actual or reasonably to beexpected to be had by the employer and disclosed by the evidence. The employer has not been able to tilt the balance in its favour andtherefore justify the imposition of random alcohol testing as a proportionate response to a demonstrated incremental risk caused by theattendance of employees at work with alcohol in their bodies. I therefore find that the random alcohol testing provisions of the Policy donot meet the KVP reasonableness test, and for that reason are unenforceable.

That portion of the Policy therefore must be, and hereby isset aside. [Emphasis added; A.R., vol. IV, at pp. 71-73.] [15] On judicial review, the board’s award was set aside as unreasonable because of the dangerousness of the workplace. The New Brunswick Court of Appeal dismissed the appeal. The court applied a bifurcated standard of review. It applied a correctnessstandard to the board’s analytical framework for determining the validity of the employer’s random alcohol testing policy and areasonableness standard to the board’s factual findings.

Using this segmented approach, the Court of Appeal substituted its own legalframework and concluded that no balancing of interests was required in a dangerous workplace, whether or not it was unionized. As aresult, it held that employers can unilaterally impose random alcohol testing in any dangerous workplace, unionized or non-unionized,without having to show reasonable cause, such as evidence of an existing problem with alcohol use.

It also found the board’s findingsregarding the degree of dangerousness at the workplace to be unreasonable. [16] In my respectful view, the Court of Appeal erred in disregarding this Court’s direction that decisions of labourarbitrators be reviewed for reasonableness and that deference be paid to their legal and factual findings when they are interpretingcollective agreements.

This misapplication of the standard of review led the Court of Appeal away from its required task of determiningwhether the board’s decision fell within a range of reasonable outcomes, and towards a substitution of its own views as to the properlegal framework and factual findings.

It also led the court essentially to disregard the remarkably consistent arbitral jurisprudence forbalancing safety and privacy in a dangerous workplace, and to impose instead a novel, unfettered and automatic remedy outside theexisting consensus and expectations in the labour relations community about how these issues are to be approached under a collectiveagreement.

Analysis [17] At the outset, it is important to note that since we are dealing with a workplace governed by a collective agreement,that means that the analytical framework for determining whether an employer can unilaterally impose random testing is determined bythe arbitral jurisprudence. Cases dealing with random alcohol or drug testing in non-unionized workplaces under human rights statutesare, as a result, of little conceptual assistance (Entrop v.

Imperial Oil Ltd. (2000), (ON CA), 50 O.R. (3d) 18 (C.A.)). [18] It may be tempting to suggest that dangerous unionized workplaces should be beyond the reach of the collectivebargaining regime, freeing an employer both from the duty to negotiate with the union and from the terms of the collective agreement.

This suggests, Cassandra-like and evidence-free, that collective bargaining is the altar on which public and workplace safety is sacrificedand that only employers have the capacity to address these concerns. [19] But the reality is that the task of negotiating workplace conditions, both on the part of unions and management, aswell as the arbitrators who interpret the resulting collective agreement, has historically — and successfully — included the delicate,case-by-case balancing required to preserve public safety concerns while protecting privacy.

Far from leaving the public at risk,protecting employees — who are on the front line of any danger — necessarily also protects the surrounding public. To suggestotherwise is a counter-intuitive dichotomy. [20] And this without any evidence that dangerous workplaces that are unionized have experienced any, let alone adisproportionate number of, accidents resulting from collectively bargaining safety measures. It also assumes that no balancing isrequired at all once a finding is made that a workplace is dangerous.

This not only negates any recognition of the significant privacyinterests at play, it wrongly assumes that when there is no collective agreement, an employer is free to exercise its own discretion aboutworker safety. All provinces have legislation protecting worker safety, thereby restricting an employer’s wishes. And, as we saw inEntrop, even in a non-unionized workplace, an employer must justify the intrusion on privacy resulting from random testing by referenceto the particular risks in a particular workplace.

There are different analytic steps involved, but both essentially require attentiveconsideration and balancing of the safety and privacy interests.

[21] As the board recognized, the only possible source of the employer’s asserted right to impose random alcohol testingunilaterally was the management rights clause in the collective agreement: 4.01. The Union recognizes and acknowledges that it is the right of the Company to operate and manage its businesssubject to the terms and provisions of this agreement.

The legal issue, as a result, is whether implementing a random alcohol testing policy was a valid exercise of the employer’s managementrights under the collective agreement. [22] When employers in a unionized workplace unilaterally enact workplace rules and policies, they are not permitted to“promulgate unreasonable rules and then punish employees who infringe them” (Re United Steelworkers, Local 4487 & John Inglis Co.Ltd. (1957), 7 L.A.C. 240 (Laskin), at p. 247; see also Re United Brewery Workers, Local 232, & Carling Breweries Ltd. (1959), 10L.A.C. 25 (Cross)). [23] This constraint arises because an employer may only discharge or discipline an employee for “just cause” or“reasonable cause” — a central protection for employees.

As a result, rules enacted by an employer as a vehicle for discipline must meetthe requirement of reasonable cause (Re Public Utilities Commission of the Borough of Scarborough and International Brotherhood ofElectrical Workers, Local 636 (1974), (ON LA), 5 L.A.C. (2d) 285 (Rayner), at pp. 288-89; see also UnitedElectrical, Radio, and Machine Workers of America, Local 524, in re Canadian General Electric Co. Ltd. (Peterborough) (1951), 2L.A.C. 688 (Laskin), at p. 690; Re Hamilton Street Railway Co. and Amalgamated Transit Union, Division 107 (1977), (ON LA), 16 L.A.C. (2d) 402 (Burkett), at paras. 9-10; Ronald M.

Snyder, Collective Agreement Arbitration in Canada (4th ed.2009), at paras. 10.1 and 10.96). [24] The scope of management’s unilateral rule-making authority under a collective agreement is persuasively set out inRe Lumber & Sawmill Workers’ Union, Local 2537, and KVP Co. (1965), (ON LA), 16 L.A.C. 73 (Robinson). Theheart of the “KVP test”, which is generally applied by arbitrators, is that any rule or policy unilaterally imposed by an employer and notsubsequently agreed to by the union, must be consistent with the collective agreement and be reasonable (Donald J. M. Brown and DavidM.

Beatty, Canadian Labour Arbitration (4th ed. (loose-leaf)), vol. 1, at topic 4:1520). [25] The KVP test has also been applied by the courts. Tarnopolsky J.A. launched the judicial endorsement of KVP inMetropolitan Toronto (Municipality) v. C.U.P.E. (1990), (ON CA), 74 O.R. (2d) 239 (C.A.), leave to appeal refused,[1990] 2 S.C.R. ix, concluding that the “weight of authority and common sense” supported the principle that “all company rules withdisciplinary consequences must be reasonable” (pp. 257-58 (emphasis in original)).

In other words: The Employer cannot, by exercising its management functions, issue unreasonable rules and then discipline employees for failure tofollow them. Such discipline would simply be without reasonable cause. To permit such action would be to invite subversion of thereasonable cause clause. [p. 257] [26] Subsequent appellate decisions have accepted that rules unilaterally made in the exercise of management discretionunder a collective agreement must not only be consistent with the agreement, but must also be reasonable if the breach of the rule resultsin disciplinary action (Charlottetown (City) v.

Charlottetown Police Association (1997), (PE SCAD), 151 Nfld. &P.E.I.R. 69 (P.E.I.S.C. (App. Div.)), at para. 17; see also N.A.P.E. v. Western Avalon Roman Catholic School Board, 2000 NFCA 39,190 D.L.R. (4th) 146, at para. 34; St. James-Assiniboia Teachers’ Assn. No. 2 v. St. James-Assiniboia School Division No. 2, 2002MBCA 158, 222 D.L.R. (4th) 636, at paras. 19-28). [27] In assessing KVP reasonableness in the case of unilaterally imposed employer rules or policies affecting employeeprivacy, arbitrators have used a “balancing of interests” approach.

As the intervener the Alberta Federation of Labour noted: Determining reasonableness requires labour arbitrators to apply their labour relations expertise, consider all of the surroundingcircumstances, and determine whether the employer’s policy strikes a reasonable balance.

Assessing the reasonableness of an employer’spolicy can include assessing such things as the nature of the employer’s interests, any less intrusive means available to address theemployer’s concerns, and the policy’s impact on employees. [I.F., at para. 4] [28] In the earliest privacy cases using a balancing of interests approach, arbitrators generally found that employers couldonly exercise a unilateral management right to search an individual employee’s personal effects if there was a reasonable suspicion thatthe employee had committed theft.

Universal random searches — that is, random searches of the entire workforce — were rejected asunreasonable unless there was a workplace problem with theft and the employer had exhausted less intrusive alternative measures foraddressing the problem (Morton Mitchnick and Brian Etherington, Labour Arbitration in Canada (2nd ed. 2012), at pp. 308-9; Brownand Beatty, at topic 7:3625). [29] The balancing of interests approach was subsequently applied in assessing the reasonableness of unilaterallyimposed employer policies calling for universal random drug or alcohol testing of all employees performing safety sensitive work.Universal random testing refers to the testing of individual employees randomly selected from all or some portion of the workforce.

As inthe search cases, arbitrators rejected unilaterally imposed universal random testing policies as unreasonable unless there had been aworkplace problem with substance abuse and the employer had exhausted alternative means for dealing with the abuse. [30] In a workplace that is dangerous, employers are generally entitled to test individual employees who occupy safetysensitive positions without having to show that alternative measures have been exhausted if there is “reasonable cause” to believe that theemployee is impaired while on duty, where the employee has been directly involved in a workplace accident or significant incident, orwhere the employee is returning to work after treatment for substance abuse. (See Esso Petroleum Canada and C.E.P., Loc. 614, Re(1994), (BC LA), 56 L.A.C. (4th) 440 (McAlpine); Canadian National Railway Co. and C.A.W.-Canada (Re)(2000), (CA LA), 95 L.A.C. (4th) 341 (M.

Picher), at pp. 377-78; Weyerhaeuser Co. and I.W.A. (Re) (2004), (BC LA), 127 L.A.C. (4th) 73 (Taylor), at p. 109; Navistar Canada, Inc. and C.A.W., Local 504 (Re) (2010), 195 L.A.C.(4th) 144 (Newman), at pp. 170 and 177; Rio Tinto Alcan Primary Metal and C.A.W.-Canada, Local 2301 (Drug and Alcohol Policy)

(Re) (2011), 204 L.A.C. (4th) 265 (Steeves), at para. 37(b)-(d).) [31] But the dangerousness of a workplace — whether described as dangerous, inherently dangerous, or highly safetysensitive — is, while clearly and highly relevant, only the beginning of the inquiry. It has never been found to be an automaticjustification for the unilateral imposition of unfettered random testing with disciplinary consequences.

What has been additionallyrequired is evidence of enhanced safety risks, such as evidence of a general problem with substance abuse in the workplace. [32] The blueprint for dealing with dangerous workplaces is found in Imperial Oil Ltd. and C.E.P., Loc. 900 (Re) (2006),157 L.A.C. (4th) 225 (“Nanticoke”), a case involving a grievance of the employer’s random drug testing policy at an oil refinery, whichthe parties acknowledged was highly safety sensitive.

Arbitrator Michel Picher summarized the principles emerging from 20 years ofarbitral jurisprudence under the KVP test for both drug and alcohol testing: • No employee can be subjected to random, unannounced alcohol or drug testing, save as part of an agreed rehabilitative program. • An employer may require alcohol or drug testing of an individual where the facts give the employer reasonable cause to do so. • It is within the prerogatives of management’s rights under a collective agreement to also require alcohol or drug testing followinga significant incident, accident or near miss, where it may be important to identify the root cause of what occurred. • Drug and alcohol testing is a legitimate part of continuing contracts of employment for individuals found to have a problem ofalcohol or drug use.

As part of an employee’s program of rehabilitation, such agreements or policies requiring such agreements mayproperly involve random, unannounced alcohol or drug testing generally for a limited period of time, most commonly two years. In aunionized workplace the Union must be involved in the agreement which establishes the terms of a recovering employee’s ongoingemployment, including random, unannounced testing.

This is the only exceptional circumstance in which the otherwise protectedemployee interest in privacy and dignity of the person must yield to the interests of safety and rehabilitation, to allow for random andunannounced alcohol or drug testing. [Emphasis added; para. 100.] [33] There can, in other words, be testing of an individual employee who has an alcohol or drug problem. Universal,random testing, however, is far from automatic.

The reason is explained by Arbitrator Picher in Nanticoke as follows: . . . a key feature of the jurisprudence in the area of alcohol or drug testing in Canada is that arbitrators have overwhelmingly rejectedmandatory, random and unannounced drug testing for all employees in a safety sensitive workplace as being an implied right ofmanagement under the terms of a collective agreement.

Arbitrators have concluded that to subject employees to an alcohol or drug testwhen there is no reasonable cause to do so, or in the absence of an accident or near miss and outside the context of a rehabilitation planfor an employee with an acknowledged problem is an unjustified affront to the dignity and privacy of employees which falls beyond thebalancing of any legitimate employer interest, including deterrence and the enforcement of safe practices. In a unionized workplace,such an extraordinary incursion into the rights of employees must be expressly and clearly negotiated.

It is not to be inferred solely fromgeneral language describing management rights or from language in a collective agreement which enshrines safety and safe practices.[Emphasis added; para. 101.] [34] Significantly, Arbitrator Picher acknowledged that the application of the balancing of interests approach couldpermit general random testing “in some extreme circumstances”: It may well be that the balancing of interests approach . . . would allow for general random, unannounced drug testing in someextreme circumstances.

If, for example, an employer could marshal evidence which compellingly demonstrates an out-of-control drugculture taking hold in a safety sensitive workplace, such a measure might well be shown to be necessary for a time to ensure workplacesafety. That might well constitute a form of “for cause” justification. (Nanticoke, at para. 127) [35] In the case before him, however, since there was no evidence of a substance abuse problem at the oil refinery, therandom drug testing component of the policy was found to be unjustified (Nanticoke, at para. 127).

His decision was upheld asreasonable by the Ontario Court of Appeal (Imperial Oil Ltd. v.

Communications, Energy & Paperworkers Union of Canada, Local 900,2009 ONCA 420, 96 O.R. (3d) 668). [36] The balancing of interests approach has not kept employers from enacting comprehensive drug and alcohol policies,which can include rules about drugs and alcohol in the workplace, discipline for employees who break those rules, education andawareness training for employees and supervisors, access to treatment for substance dependence, and after-care programs for employeesreturning to work following treatment. [37] But I have been unable to find any cases, either before or since Nanticoke, in which an arbitrator has concluded thatan employer could unilaterally implement random alcohol or drug testing, even in a highly dangerous workplace, absent a demonstratedworkplace problem (Esso Petroleum, at pp. 447-48; Metropol Security, a division of Barnes Security Services Ltd. and U.S.W.A., Loc.5296 (Drug and Alcohol testing) (Re) (1998), (ON LA), 69 L.A.C. (4th) 399; Trimac Transportation Services —Bulk Systems and T.C.U. (Re) (1999), (CA LA), 88 L.A.C. (4th) 237; Canadian National, at pp. 385 and 394;Fording Coal Ltd. v.

United Steelworkers of America, Local 7884, [2002] B.C.C.A.A.A. No. 9 (QL), at para. 30; ADM Agri-Industries

Ltd. v. National Automobile, Aerospace, Transportation and General Workers’ Union of Canada (CAW-Canada), Local 195 (SubstanceAbuse Policy Grievance), [2004] C.L.A.D. No. 610 (QL), at para. 77; Petro-Canada Lubricants Centre (Mississauga) and OakvilleTerminal and C.E.P., Local 593 (Re) (2009), 186 L.A.C. (4th) 424 (Kaplan), at pp. 434-37; Rio Tinto, at para. 37(

a) and (d)). [38] In the only two arbitration decisions that have upheld random alcohol testing, the employers were found to bejustified in implementing random alcohol testing for employees in safety sensitive positions because there was a demonstrated generalproblem with alcohol use in a dangerous workplace (Communications, Energy and Paperworkers Union, Local 777 v. Imperial Oil Ltd.,T. J. Christian, Chair, May 27, 2000, unreported (“Strathcona”); Greater Toronto Airports Authority v. Public Service Alliance ofCanada, Local 0004, [2007] C.L.A.D.

No. 243 (QL) (Devlin) (“GTAA”)). [39] In Strathcona, the arbitrator upheld the termination of an employee in a safety sensitive position at an oil refinerywho tested positive on a random alcohol test. Imperial Oil Limited had implemented the random testing policy after surveying employeesacross all its facilities about alcohol-related incidents and near misses.

According to the survey, the plant operations group that includedthe grievor’s position had a disproportionately high rate of accidents due to substance abuse, with 2.7% of employees reporting that theyhad personally had near misses due to substance use in the previous 12 months. The arbitrator accepted the survey results as a “rationaland sufficient foundation for the random testing Policy” (p. 73). He concluded that “there is evidence of a problem with alcohol use byemployees at the Strathcona Refinery” (p. 60).

On that basis, he upheld the reasonableness of the random testing policy and theconsequential discipline. [40] In GTAA, the employer had a random alcohol and drug testing policy for individuals occupying safety sensitivepositions at Pearson International Airport in Toronto.

The arbitrator acknowledged that “the safety-sensitive nature of a particularindustry [is] not, in itself, sufficient to outweigh the privacy interests of individual employees and to support a regime of random testing”(para. 251) and that “[a]rbitrators have required evidence of a drug and/or alcohol problem in the workplace which cannot be addressedby less invasive means” (para. 254). [41] The evidence showed a “pervasive problem” with alcohol (GTAA, at para. 262).

Both employer and union witnessestestified about numerous occasions when they had seen employees drinking on the job or storing alcohol at work, smelled alcohol onother employees’ breath, or found empty liquor containers on site. There were also concerns that alcohol abuse at work often wentunreported. Based on this evidence, the arbitrator concluded that random alcohol testing was a reasonable employer policy.

Becausethere was little evidence of on-the-job drug use, however, the random drug testing aspect of the policy was found not to be justified. [42] This arbitral consensus, which was carefully applied by the board, helps inform why its decision was reasonable onthe facts of this case. [43] The board framed the question using the accepted KVP balancing of interests approach: Was the benefit to theemployer from the random alcohol testing policy in this dangerous workplace proportional to the harm to employee privacy? [44] To assess the employer’s side of the balance, the board canvassed the risks that the employer intended to address byrandom alcohol testing.

It examined both the risk associated with the particular grievor’s position as a millwright and the risk associatedwith the particular workplace. After reviewing the employer’s risk assessments of different safety sensitive positions, the board foundthat the workplace was “one in which great care must be taken with safe work practices”. There were “risks and dangers in theoperations performed both to the incumbent, and to others, as well as to the environment and to property”. The board therefore concludedthat “the mill in normal operation is a dangerous work environment”.

These conclusions have not been challenged. [45] But, as previously noted, the fact that a workplace is found to be dangerous does not automatically give theemployer the right to impose random testing unilaterally. The dangerousness of the workplace has only justified the testing of particularemployees in certain circumstances: where there are reasonable grounds to believe that the employee was impaired while on duty, wherethe employee was directly involved in a workplace accident or significant incident, or where the employee returns to work after treatmentfor substance abuse.

It has never, to my knowledge, been held to justify random testing, even in the case of “highly safety sensitive” or“inherently dangerous” workplaces like railways (Canadian National) and chemical plants (DuPont Canada Inc. and C.E.P., Loc. 28-O(Re) (2002), (CA LA), 105 L.A.C. (4th) 399), or even in workplaces that pose a risk of explosion (ADM Agri-Industries), in the absence of a demonstrated problem with alcohol use in that workplace.

That is not to say that it is beyond the realm ofpossibility in extreme circumstances, but we need not decide that in this case. [46] This obliged the board to consider whether there was evidence of an alcohol-related problem in the workplace. Therewere eight documented alcohol-related incidents at the mill from April 29, 1991, to January 11, 2006.

Only one witness, a formeremployee, gave any evidence about alcohol use in the workplace, but the board found his evidence to be “dated” and “not persuasive”. [47] The board concluded that these eight incidents over a 15-year period did not reflect a significant problem withworkplace alcohol use.

As a result, the board concluded that there was a “very low incremental risk of safety concerns based on alcohol-related impaired performance of job tasks at the site”. [48] While the employer had argued that deterrence was a major benefit of random alcohol testing, the board was notsatisfied that there was any evidence of a deterrent effect at the mill. The only evidence supporting the employer’s view was that of itsexpert witness, who described deterrence as the main theoretical goal of random alcohol testing policies, but had no information aboutthis particular workplace.

In the board’s view, the lack of any positive test results in almost two years of random alcohol testing wasequally consistent with the opposite conclusion: that there was no workplace alcohol abuse to deter. [49] On the other side of the balance was the employee right to privacy. The board accepted that breathalyzer testing“effects a significant inroad” on privacy, involving coercion and restriction on movement. Upon pain of significant punishment, the employee must go promptly to the breathalyzer stationand must co-operate in the provision of breath samples. . . .

Taking its results together, the scheme effects a loss of liberty and personalautonomy. These are at the heart of the right to privacy.

[50] That conclusion is unassailable. Early in the life of the Canadian Charter of Rights and Freedoms, this Courtrecognized that “the use of a person’s body without his consent to obtain information about him, invades an area of personal privacyessential to the maintenance of his human dignity” (R. v. Dyment, (SCC), [1988] 2 S.C.R. 417, at pp. 431-32). And inR. v.

Shoker, 2006 SCC 44, [2006] 2 S.C.R. 399, it notably drew no distinction between drug and alcohol testing by urine, blood orbreath sample, concluding that the “seizure of bodily samples is highly intrusive and, as this Court has often reaffirmed, it is subject tostringent standards and safeguards to meet constitutional requirements” (para. 23). [51] In the end, the expected safety gains to the employer in this case were found by the board to range “from uncertain . .. to minimal at best”, while the impact on employee privacy was found to be much more severe.

Consequently, the board concluded thatthe employer had not demonstrated the requisite problems with dangerousness or increased safety concerns such as workplace alcoholuse that would justify universal random testing. Random alcohol testing was therefore held to be an unreasonable exercise ofmanagement rights under the collective agreement. I agree. [52] This is not to say that an employer can never impose random testing in a dangerous workplace.

If it represents aproportionate response in light of both legitimate safety concerns and privacy interests, it may well be justified. [53] Moreover, the employer is not only always free to negotiate drug and alcohol testing policies with the union, as wassaid in Nanticoke, “such an extraordinary incursion into the rights of employees must be expressly and clearly negotiated” (para. 101(emphasis added)).

But where, as here, the employer proceeds unilaterally without negotiating with the union, it must comply with thetime-honoured requirement of showing reasonable cause before subjecting employees to potential disciplinary consequences. Given thearbitral consensus, an employer would be justifiably pessimistic that a policy unilaterally imposing random alcohol testing in the absenceof reasonable cause would survive arbitral scrutiny. [54] The board’s decision should be approached as an organic whole, without a line-by-line treasure hunt for error(Newfoundland Nurses, at para. 14).

In the absence of finding that the decision, based on the record, is outside the range of reasonableoutcomes, the decision should not be disturbed. In this case, the board’s conclusion was reasonable and ought not to have been disturbedby the reviewing courts. [55] I would therefore allow the appeal with costs throughout.

The reasons of McLachlin C.J. and Rothstein and Moldaver JJ. were delivered by [56] Rothstein and Moldaver JJ. (dissenting) — Where labour and management fail to agree on the introduction of a newworkplace policy, legislatures have delegated the task of adjudicating their dispute to labour arbitrators. In this case, a union challengedmanagement’s proactive adoption of a random alcohol testing policy at a paper mill, which the union accepts is inherently dangerous,carrying risks that go beyond the mill’s four corners.

An arbitral board struck down the policy. [57] In striking down the policy, we conclude that the board departed from an arbitral consensus that has attempted tostrike a balance between competing interests in privacy and safety in the workplace. The board put its thumb on the scales and upset thecareful balance established in the arbitral jurisprudence. In so doing, it came to an unreasonable decision. Accordingly, we respectfullydissent from the majority opinion upholding the board’s decision. I. Overview [58] Irving Pulp & Paper, Limited (“Irving”) operates a paper mill in Saint John, New Brunswick.

The mill is locatedalong the banks of the Saint John River, near the point where the river empties into the Bay of Fundy. The mill’s operations involvehazardous chemicals and gases, heavy machinery and equipment, high-pressure boilers and steam lines, and high-voltage electric lines. It is uncontroversial that the mill, in normal operation, is a dangerous environment that presents risks not only to the employees of themill, but also to the public, to property, and to the environment.

The evidence discloses that malfunctions at the mill carry “a potentialfor ‘catastrophic failures’” (board’s reasons, [2009] N.B.L.A.A. No. 28 (QL), at para. 101). [59] On February 1, 2006, Irving adopted a comprehensive policy concerning employee drug and alcohol use at the mill. The company was not unique in this regard.

After the Exxon Valdez ran aground in Prince William Sound in 1989, spilling hundreds ofthousands of barrels of crude oil into the ocean, Imperial Oil Ltd., the Canadian subsidiary of Exxon Mobil Corporation, beganimplementing similar policies at its Canadian oil refineries (Esso Petroleum Canada v. Communications, Energy & Paperworkers’Union, Local 614, [1994] B.C.C.A.A.A. No. 244 (QL) (McAlpine), at para. 5; Entrop v. Imperial Oil Ltd. (2000), (ON CA), 50 O.R. (3d) 18 (C.A.), at para. 5). The operators of dangerous facilities in a variety of other industries have taken similarsteps.

See, e.g., Canadian National Railway Co. and C.A.W.-Canada (Re) (2000), (CA LA), 95 L.A.C. (4th) 341(M. Picher) (“C.N.R.”) (rail operations); Greater Toronto Airports Authority v. Public Service Alliance of Canada, Local 0004, [2007]C.L.A.D.

No. 243 (QL) (Devlin) (“GTAA”) (airport ground operations); Rio Tinto Alcan Primary Metal and C.A.W.-Canada, Local 2301(Drug and Alcohol Policy) (Re) (2011), 204 L.A.C. (4th) 265 (Steeves) (aluminum smelter). [60] In explaining its decision to employees, Irving said that “the implementation of this policy is one more component ofour overall safety program, which minimizes the risks associated with our operations in order to ensure a safe, healthy and productiveworkplace” (A.R., vol. II, at p. 70).

The policy included both proactive and reactive components and addressed various issues fromvoluntary assessment and rehabilitation to drug and alcohol testing in defined circumstances. One aspect — the one that gave rise to thiscase — required that employees in designated “Safety Sensitive Positions . . . be subjected to unannounced random tests for alcohol”using a breathalyser (A.R., vol. II, at p. 76 (emphasis added)). A positive test showing a blood alcohol concentration greater than 0.04percent would lead to disciplinary action, determined on a case-by-case basis.

The policy did not provide for random drug testing. It didrequire testing of employees in safety-sensitive positions for drug or alcohol use after an accident in the workplace (“post-incident”testing) and where there was a reasonable basis to suspect alcohol or drug use or possession (“reasonable cause” testing). [61] On March 13, 2006, Perley Day, who worked in the mill’s maintenance department in a safety-sensitive position,was informed by his supervisor that he had been randomly selected for a breathalyser by a computer program managed off-site by an

independent third party. This upset Mr. Day, who has been a teetotaler since 1979. He nonetheless went along with the test, becausefailing to do so could have led to disciplinary action. He tested negative. On April 12, Mr. Day’s union, Communications, Energy andPaperworkers Union of Canada, Local 30 (“Union”), filed a grievance with Irving on his behalf. Mr. Day grieved that “there was noreasonable grounds to test or a significant accident or incident which would justify such a measure” (A.R., vol. II, at p. 62). At bottom,Mr.

Day objected to the random alcohol testing component of the policy; he had no quibble with those aspects concerned with so-calledreasonable cause or post-incident testing. [62] Mr. Day’s grievance ultimately went before a labour arbitration board, where a majority of the board set aside therandom alcohol testing portion of the company’s policy.

The board applied what it understood to be the existing test in the arbitraljurisprudence for review of employer rules concerning drug and alcohol testing and concluded that “[t]he inroads into employee privacyare significant and out of proportion to any benefit, actual or reasonably to be expected to be had by the employer and disclosed by theevidence” (para. 123).

On judicial review, the court did not take issue with the board’s articulation of the legal test, but it quashed theboard’s decision because it was “unreasonable in that it is not an outcome which is defensible in the context of their earlier findingsregarding the dangerous nature of the workplace and the minimally intrusive nature of the testing” (2010 NBQB 294, 367 N.B.R. (2d)234, at para. 70).

On appeal, the New Brunswick Court of Appeal applied a standard of correctness to the board’s decision andconcluded that the test in the arbitral jurisprudence was flawed because “[e]vidence of an existing alcohol problem in the workplace isunnecessary once the employer’s work environment is classified as inherently dangerous” (2011 NBCA 58, 375 N.B.R. (2d) 92, at para.52). On the strength of its new test, the Court of Appeal found the board’s decision incorrect and thus dismissed the appeal. [63] We would affirm the decisions of the two courts below quashing the board’s decision, but do so for differentreasons.

We agree with the majority that the appropriate standard of review is reasonableness. In our view, however, the board madetwo findings that are fatal to the reasonableness of its decision. First, though purporting to apply the test emerging from the arbitralconsensus, the board misstated an element of the test that was essential to its ultimate decision. More specifically, the board elevated thethreshold of evidence that Irving was required to lead in order to justify its random alcohol testing policy, but it offered no reason fordoing so.

Second, in applying the evidentiary element of the test, the board supported its conclusion by making an unreasonableinference from the factual record. Because these findings rendered the board’s decision unreasonable, we would dismiss the appeal andaffirm the order of the court below quashing the board’s decision. II.

Analysis [64] At the heart of the dispute between Irving and the Union is the quantum of evidence that the operator of a dangerousworkplace is required to introduce before it can exercise its management rights under the parties’ collective agreement to adopt aproactive (that is, random) as opposed to a reactive (that is, a reasonable cause or post-incident) alcohol testing policy. In our view, theconsensus reflected in the arbitral jurisprudence provides an answer to that question.

Before turning to that jurisprudence and the board’sdeparture from it, we begin our analysis with the standard of review, which occupied much attention at the Court of Appeal and beforethis Court. A. The Standard of Review for Labour Arbitration Awards Is Reasonableness [65] There is no question in this case about the appropriate standard of review: it is reasonableness.

As Fish J.emphasized for a unanimous Court only two years ago, “[p]revailing case law clearly establishes that arbitral awards under a collectiveagreement are subject, as a general rule, to the reasonableness standard of review” (Nor-Man Regional Health Authority Inc. v. ManitobaAssociation of Health Care Professionals, 2011 SCC 59, [2011] 3 S.C.R. 616, at para. 31). This case is no exception. [66] The Court of Appeal’s conclusion that a standard of correctness is warranted in this case rests, at bottom, on itsassertion that “at its core this appeal is of importance to the public at large” (para. 56).

With respect, the prospect that this dispute maybe of wider public concern because of the risks posed by the mill cannot, on its own, transform the legal question here into a “questio[n]of law that [is] of central importance to the legal system as a whole and that [is] outside the adjudicator’s expertise” (Alberta (Informationand Privacy Commissioner) v. Alberta Teachers’ Association, 2011 SCC 61, [2011] 3 S.C.R. 654, at para. 30, citing Canada (CanadianHuman Rights Commission) v. Canada (Attorney General), 2011 SCC 53, [2011] 3 S.C.R. 471, at para. 18; see also Dunsmuir v.

NewBrunswick, 2008 SCC 9, [2008] 1 S.C.R. 190, at paras. 55 and 60). On the contrary, this case asks whether management’s exercise of itsunilateral rule-making power can be justified under a collective agreement. That question is plainly part of labour arbitrators’ bread andbutter.

This dispute has little legal consequence outside the sphere of labour law and that, not its potential real-world consequences,determines the applicable standard of review. [67] The privileged position of labour arbitrators is a product of “their distinctive role in fostering peace in industrialrelations” (Nor-Man, at para. 47), which “is important . . . to society as a whole” (Toronto (City) Board of Education v. O.S.S.T.F.,District 15, (SCC), [1997] 1 S.C.R. 487, at para. 36). Since at least St. Anne Nackawic Pulp & Paper Co. v.

CanadianPaper Workers Union, Local 219, (SCC), [1986] 1 S.C.R. 704, this Court has been unequivocal in emphasizing therespect that courts must show for the legislative choice to delegate such decisions to labour arbitration boards. As Estey J. observed: The more modern approach is to consider that labour relations legislation provides a code governing all aspects of labour relations . . . . . . . What is left is an attitude of judicial deference to the arbitration process. . . .

It is based on the idea that if the courts are available to theparties as an alternative forum, violence is done to a comprehensive statutory scheme designed to govern all aspects of the relationship ofthe parties in a labour relations setting. Arbitration . . . is an integral part of that scheme, and is clearly the forum preferred by thelegislature for resolution of disputes arising under collective agreements. [Emphasis added; pp. 718-21.]

[68] As a consequence of this legislative choice, labour arbitrators are entitled to a “protected zone of deference” (Nor-Man, at para. 43) in which the courts should not willingly enter as competing “arbiters of labour policy” (CAIMAW v. Paccar of CanadaLtd., (SCC), [1989] 2 S.C.R. 983, at p. 1005, per La Forest J.).

That is especially so because unwarranted judicialintervention risks short-circuiting negotiations between management and labour by delivering through judicial fiat what the legislaturehas said should be subject to collective bargaining between the parties. [69] The Court of Appeal was of the view that “[a]s matter of policy, this Court must decide whether an employer isunder an obligation to demonstrate sufficient evidence of an alcohol problem in the workplace before adopting a policy requiringmandatory random alcohol testing” (para. 52 (emphasis added; emphasis in original deleted)). We respectfully disagree.

That policychoice is one that the Legislative Assembly of New Brunswick has delegated to the collective bargaining process and, where disputesemerge, to labour arbitrators, whose decisions the legislature has shielded with a privative clause. See Industrial Relations Act, R.S.N.B.1973, c. I-4, ss. 32(1), 55(1) and 77(1).[1] [70] Reasonable people may well differ about the wisdom of the legislative choice to entrust labour arbitrators — orcourts, for that matter — with a policy-making function that potentially carries serious repercussions for public safety and theenvironment.

One leading arbitrator has suggested that the “sensitive treatment” of drug and alcohol testing policies by arbitral boardsand human rights tribunals “has given a sufficiently fair and balanced protection to the interests of both employees and employers, so asto avoid the need for the more blunt and draconian alternative of legislative regulation” (C.N.R., at p. 366 (emphasis added)).

That maywell be the case. [71] But the fact that the public interest — not merely that of employer and employee — is relevant in cases such as thisone may counsel a reassessment of the legislative choice to delegate policy-making for drug and alcohol testing to the collectivebargaining process and to labour arbitrators. It is one thing for employers and employees to negotiate a balance as they see fit withrespect to their own privacy and safety. It is a different matter, however, to leave the public interest to the vicissitudes of the bargainingtable.

Of course, it would be counterintuitive to suggest that employees do not care for their own safety or, indeed, the safety of theirneighbours. The point is simply that employees, employers, and the public may each strike the balance between privacy and safetydifferently.

And where disputes between employers and employees emerge, it is not immediately apparent to us why an adjudicativebody that is expert in the resolution of private labour disputes, but not in weighing broader considerations concerning the safety andenvironmental interests of the public at large, is best positioned to serve as the guardian of the public interest.

Indeed, nothing in therelevant legislation even requires, let alone suggests, that labour arbitrators should assume this role. [72] The New Brunswick legislature has within the scope of its legislative authority the power to take drug and alcoholtesting outside the purview of the collective bargaining process, as some other legislative bodies have done in certain contexts. See, e.g.,Code of Federal Regulations, 49 C.F.R.

Part 382 (United States); Rail Safety (Adoption of National Law) Regulation 2012, No. 662(New South Wales); Railway Safety Act 2005 (Ireland). Indeed, some experts have suggested there is an “overwhelming argument” inthis country for “legislative direction and definition that would add consistency, uniformity of meaning, and predictability for allworkplace stakeholders” (N. Keith and A. J. Wiggins, Alcohol and Drugs in the Canadian Workplace: An Employer’s Guide to the Law,Prevention and Management of Substance Abuse (2008), at p. 240).

That decision, however, is one for the New Brunswick legislatureand not for this Court — no matter how strongly we might favour such a step. [73] Nevertheless, under reasonableness review there is a difference between judicial abdication and judicial restraint. We reiterate that “the domain reserved to arbitral discretion is by no means boundless” (Nor-Man, at para. 52). To the extent a particulararbitral award is unreasonable — as we would hold the award here is — it remains liable to being set aside on judicial review. B.

The Role of Arbitral Consensus in Defining the “Range of Reasonable Outcomes” [74] In recent years, this Court has emphasized that reasonableness is “a single standard that takes its colour from thecontext” (Canada (Citizenship and Immigration) v. Khosa, 2009 SCC 12, [2009] 1 S.C.R. 339, at para. 59; see also Alberta Teachers, atpara. 47). The factual and legal context in which a decision is made is critical to assessing its reasonableness for the simple reason that“[r]easonableness is not a quality that exists in isolation” (Paccar, at p. 1018, per Sopinka J.).

Rather, when a reviewing court brands adecision as “reasonable” or “unreasonable”, it is necessarily making a conclusion about the relationship between the ultimate decisionand the facts and law that underlie it.

The context of a decision thus shapes the “range of possible, acceptable outcomes which aredefensible in respect of the facts and law” (Dunsmuir, at para. 47) or, more simply, the “range of reasonable outcomes” (Khosa, at para.4). [75] The context of this case is informed in no small part by the wealth of arbitral jurisprudence concerning the unilateralexercise of management rights arising under a collective agreement in the interests of workplace safety.

We will say more about the“balancing of interests” test that has emerged from that jurisprudence in a moment, but for now the salient point is that arbitral precedentsin previous cases shape the contours of what qualifies as a reasonable decision in this case. In that regard, we agree with our colleague,Abella J., who describes this “remarkably consistent arbitral jurisprudence” as “a valuable benchmark against which to assess thearbitration board’s decision in this case” (paras. 16 and 6). [76] The arbitral cases themselves stress the importance of arbitral consensus in shaping subsequent awards.

Forexample, in Prestressed Systems Inc. and L.I.U.N.A., Loc. 625 (Roberts) (Re) (2005), (ON LA), 137 L.A.C. (4th)193, Arbitrator Lynk spoke of a “‘common law’ of the unionized workplace” and observed: While statutes and collective agreements form the foundation for the law of the unionized workplace in Ontario today, as well asproviding the source for arbitral authority, any statement on the scope of labour arbitration law would be defici[en]t and incompletewithout also including the interpretative function that arbitration awards play in building upon and adding to the law on workplacerelations.

When an arbitral rule or principle has emerged through industrial relations practice and become broadly accepted in a series ofarbitration awards, then, even though the governing statute, the broader common law and the collective agreement may be silent on thematter, this principle at some point crystallizes and becomes part of the law of the unionized workplace. The duty of management to actfairly and reasonably, the estoppel doctrine, the KVP principle on company rules and the doctrine of the culminating incident, to name

but only a few, have all become part of the legal regime of the workplace through the arbitral “common law”. [Emphasis added; pp. 206-7.] [77] Thus no arbitral board is an island unto itself. As it is with the common law, which matures with the benefit ofexperience acquired one case at a time, so it is with the arbitral jurisprudence. Indeed, in this case, the arbitral board cited multiple priorarbitral awards for the proposition that Mr.

Day had a right to privacy in his workplace (para. 19, citing Halifax (Regional Municipality)and N.S.U.P.E., Local 2 (Re) (2008), 171 L.A.C. (4th) 257 (Veniot), which referred to Prestressed Systems; Re Monarch Fine Foods Co.and Milk and Bread Drivers, Dairy Employees, Caterers and Allied Employees, Local 647 (1978), (ON LA), 20L.A.C. (2d) 419 (M. Picher); Trimac Transportation Services — Bulk Systems and T.C.U. (Re) (1999), (CA LA), 88L.A.C. (4th) 237 (Burkett)). [78] Respect for prior arbitral decisions is not

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