Irving Pulp & Paper Limited operates a craft paper mill in Saint John, New Brunswick. In the 15 year period 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 with its workers' union (Communications, Energy and Paperworkers Union of Canada, Local 30) but without any negotiations with the union. The policy imposed drug or alcohol testing for employees holding positions designated by Irving as "safety sensitive".
The policy contained a random alcohol testing component, whereby 10 per cent of the employees in safety sensitive positions were to be randomly selected for unannounced breathalyser testing over the course of a year. A positive test for alcohol attracted significant disciplinary action, including dismissal. Failure to submit to testing was grounds for immediate dismissal.
One of the employees randomly tested was Perley Day, a member of the Union. Mr. Day was a teetotaler who had not had a drink since 1979. His breathalyser 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. The Union did not challenge the rest of the policy which required employees to be subject to mandatory testing if there was reasonable cause to suspect alcohol or other drug use in the workplace.
There were only 8 documented incidents of alcohol consumption or impairment at the workplace over a 15 year period, from April 1991 to January 2006. By December of 2008 (when the arbitration was heard), the testing policy had been in effect for 22 months and not a single employee had tested positively in either a random test or a test for reasonable cause.
The absence of evidence of any real risk related to alcohol led a majority of a labour arbitration board to conclude that there was little benefit to Irving in maintaining the random testing policy. The board measured the employer's interest in random alcohol testing as a workplace safety measure against the harm to the privacy interest of the employees. The board allowed the grievance and concluded that random testing was unjustified.
On judicial review, a New Brunswick court set aside the board's award as unreasonable because of the dangerousness of the workplace. The New Brunswick Court of Appeal dismissed the union's appeal.
By a 6 - 3 majority, the Supreme Court of Canada allowed the union's appeal. Justice Abella, writing for the majority, held as follows:
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. Under a balancing of interests and the 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 the employee's privacy rights. For example, an employer can test an individual employee if there is reasonable cause to believe that the employee was impaired while on duty. However, a unilaterally imposed policy of mandatory random testing is 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.
In this case, the expected safety gains to the employer ranged from uncertain to minimal while the impact on employee privacy was severe. The number of alcohol related incidents in the 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.
Justice Abella held that the applicable standard for reviewing the decision of the labour arbitrator is reasonableness. She held that 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.