The Supreme Court of Canada released this morning its decision in Irving Pulp & Paper Limited v. Communications, Energy and Paperworkers Union of Canada, Local 30 dealing with random alcohol testing in a workplace. It held that a unilaterally imposed policy mandating random alcohol testing with disciplinary consequences for either a failure to take the test or for a positive test result was unjustified, even in a dangerous workplace, in the absence of evidence of the requisite safety concerns that would justify such random testing.

Irving operates a pulp mill in New Brunswick. In 2006 it unilaterally adopted a workplace policy that mandated random alcohol testing of employees that held safety sensitive positions in the mill. Random testing was achieved by using an off-site computer which, in any 12 month period, randomly selected 10% of those persons on a list of employees who held safety sensitive positions. The policy provided that a positive test for alcohol could give rise to significant disciplinary consequences including dismissal and further provided that a failure to submit to testing was grounds for immediate dismissal.

An Irving employee who held a safety sensitive position was randomly tested and although the test revealed he had a blood alcohol level of zero, a policy grievance was nevertheless filed challenging the without cause aspect of the alcohol testing policy. The grievance proceeded to arbitration. A majority of the arbitration board determined that Irving had established that the mill was a dangerous work environment but had failed to demonstrate that it was within the ultra-dangerous category of workplaces at which random testing might be permissible. Accordingly, the board went on to consider the evidence of alcohol use in the workplace. It found that there was insufficient evidence of alcohol use to justify the alcohol testing policy on the basis that there was a safety risk that outweighed an employee's right to privacy. The board therefore found the policy to be unreasonable and unjustified.

The decision of the arbitration board was quashed on judicial review. The matter proceeded to the New Brunswick Court of Appeal. The New Brunswick Court of Appeal began its analysis by noting that in arbitral jurisprudence it is clear that an employer has the unilateral right to adopt workplace rules provided that those rules fall within the analytical framework set out in a decision known as KVP Co. v. Lumber and Sawmill Workers Union, Local 2537 (the "KVP Rules"). In that case it was held that the enforceability of a workplace rule depends upon compliance with six criteria, only one of which - the reasonableness of the policy - was at issue in Irving. As to reasonableness, the union argued that:

  1. arbitrators in Canada have overwhelmingly rejected mandatory, random and unannounced drug and alcohol testing; and,
  2. sufficient evidence of a pre-existing drug or alcohol problem at a workplace is a precondition to the enforceability of such policies unless the workplace qualifies as ultra-dangerous, such as, for example, a nuclear power plant.

The New Brunswick Court of Appeal rejected the union’s argument. It held, from its review of the relevant arbitral jurisprudence, that arbitrators and arbitration boards had not overwhelmingly rejected mandatory, random and unannounced alcohol testing in a workplace. It went on to hold that such random, mandatory alcohol testing in a workplace is justified once the employer establishes that its workplace operations are inherently dangerous. It held that once that determination was made there was no need on the part of the employer to adduce evidence of an alcohol problem in the workplace in order to justify the alcohol testing policy. The court held that the Irving mill was inherently dangerous and that the drug testing policy imposed by Irving was reasonable as the testing was done by breathalyser and applied only to those employees who held safety sensitive positions.

The union appealed. The Supreme Court of Canada allowed the appeal and set aside the decision of the New Brunswick Court of Appeal. In a six to three holding, the majority of the Supreme Court held that the fundamental legal issue at stake was the interpretation of the management rights clause of the collective agreement. It held that the arbitral jurisprudence that had developed with respect to the unilateral imposition of management rights with respect to safety rules had produced what it described as a “…carefully calibrated ‘balancing of interests’ proportionality approach” under which workplace safety had to be balanced as against privacy rights. The court held that an employer may only discharge or discipline an employee for just or reasonable cause and, as a result, rules unilaterally enacted by an employer that may result in discipline must both be consistent with the applicable collective agreement and meet the requirement for reasonable cause.

The Supreme Court held that employing a KVP reasonableness analysis, arbitrators have, when considering unilaterally imposed employment rules, adopted the balancing of interests approach. As a result, alcohol and drug testing of individual employees in safety sensitive positions have been held to be reasonable if the employer has reasonable cause to believe that an employee is impaired while working, has been directly involved in a workplace accident or significant incident or is returning to work after a treatment for alcohol or substance abuse. That said, on the reasonableness analysis the Supreme Court held that there were no arbitral authorities to support the proposition that in a dangerous workplace there is an automatic right granted to an employer to unilaterally impose universal random alcohol or drug testing. While the court left open the possibility of such testing in extreme circumstances, it held that, in the Irving fact situation, ultra-dangerous or highly safety sensitive does not, without evidence of a demonstrated problem with respect to alcohol in the workplace, justify an employer unilaterally imposing random alcohol testing. While the inherent dangers of a workplace were certainly relevant to that balance, a finding of danger does not end the balancing of interests inquiry but, according to the Supreme Court of Canada, only constitutes the starting point of the proportionality exercise.

It is to be noted there was a dissent. The dissenting opinion would have affirmed the decisions of the lower courts and quashed the decision of the arbitration board. Those in dissent found that it was incontrovertible that the arbitrators hearing the grievance had applied an evidentiary standard unknown at law and, in their view, an employer should not have to show that there is a “significant problem” with respect to alcohol in the workplace or show that there is a nexus between alcohol use in the workplace and an injury, incident or near miss history. As stated in dissent “…to require that an employer tie alcohol use to actual incidents at the mill, as the board in this case did, is not only unreasonable, it is patently absurd.”

While the Irving decision is, obviously, within the context of a unionized workplace at which there is a collective agreement, the Supreme Court made plain that it would be wrong to conclude that an employer in a non-union environment is free to exercise its own discretion about worker safety. As the Supreme Court pointed out, all provinces have legislation protecting workplace safety that need be balanced as against privacy and human rights considerations. In the end, as the court stated, there will in all cases be a requirement for a balancing of the safety and privacy interests. As stated by the Supreme Court “…even in a non-unionized workplace, an employer must justify the intrusion on privacy resulting from random testing by reference to the particular risks in a particular workplace.”