The Supreme Court of Canada’s June 14th decision in Irving Oil represents a remarkable elevation of arbitral precedent to near binding law, contributing clarity on an issue that has been heavily litigated by employers and unions for years.
The ratio, at paragraph 31, is that an employer with a safety-sensitive workplace needs proof of “enhanced safety risks” (such as a workplace substance abuse problem) to implement universal random substance testing. Although the judgment was split, both majority and minority agree that this is the evidentiary burden endorsed in “remarkably consistent arbitral jurisprudence.”
The Supreme Court of Canada wanted to deliver “peace in the valley” without causing too much upset in its established deference-favouring principles of judicial review.
Upset is exactly what the Court of Appeal of New Brunswick had created by issuing an unprecedented standard of review decision in its handling of the case. The lower court applied the correctness standard of review because labour arbitrators had not been able to reach a consensus. Justice Robertson said:
In the present case, it is evident that the arbitral jurisprudence is not consistent when it comes to providing an answer to the central question raised on this appeal. Hence, it falls on this Court to provide a definitive answer so far as New Brunswick is concerned.
In response, the Supreme Court of Canada held that the reasonableness standard applies to the interpretation of a collective agreement based on its established jurisprudence. It did not mention Justice Robertson’s novel approach to addressing an inconsistency in arbitral jurisprudence nor did it explain how it reached the opposite conclusion about the existence of arbitral consensus. Did it find the jurisprudence to be consistent as step one in its aim to promote clarity in the law?
Step two involves the Court’s treatment of arbitral precedent in assessing the reasonableness of Arbitrator Veniot’s decision. The Court unanimously held that the reasonableness of a labour arbitrator’s decision will be judged in light of established arbitral consensus.The majority felt that Arbitrator Veniot’s decision was consistent with the consensus, which supported its reasonableness. The minority felt that Arbitrator Veniot’s decision was inconsistent with the consensus, an error given he did not provide a rationale for his departure: “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.” This treatment of arbitral precedent as so central is novel and significant, though both the majority and minority specified that precedent was particularly important “in this case,” presumably given the deemed “remarkably consistent arbitral jurisprudence.”
Arbitrators are technically free to reason their way around the ratio of Irving Oil, but why would they? For practical purposes, the Court has delivered near binding precedent.
Of course, the non-unionized employees are much more vulnerable, many protected only by anti-discrimination legislation and a theory for finding discrimination espoused in the Court of Appeal for Ontario’s Entrop decision that is becoming less and less consistent with the SCC-defined meaning of discrimination. In light of the Supreme Court of Canada’s gymnastics in Irving Oil, is there any doubt that the courts will find a path, however tortured, that leaves non-union employees with the same protection?