Executive Summary: Key Legal and Evidentiary Issues

• SaskEnergy Incorporated appealed two Court of King's Bench decisions arising from a labour arbitration over mandatory employee drug and alcohol testing.
   
• Two affidavits summarizing witness testimony were ruled inadmissible because no hearing transcript existed and the summaries were selective and unreliable.
   
• An arbitrator had found that requiring five employees to undergo testing after two gas line strikes was not a reasonable line of inquiry under company policy.
   
• Reasonableness review under Vavilov required the appellate court to determine whether the arbitrator's decision reflected a rational chain of analysis.
   
• Company counsel argued the arbitrator mischaracterized its position and failed to grapple with evidence of safety violations, though the court disagreed.
   
• Both appeals were dismissed, with costs awarded to the union.
   

Facts of the case

Following two unrelated workplace incidents, five members of Unifor Local 649 employed by SaskEnergy Incorporated grieved management's decision to require them to undergo drug and alcohol testing. In the first incident, on July 17, 2019, a SaskEnergy crew excavating a trench near Moose Jaw struck a natural gas pipeline. Doug Lansdell was the crew lead, and the other workers involved were Tyler Thauberger, Ryan Manz, and Tyler Malinowski. The line had been mismarked, and although Mr. Manz could not locate the gas line where the markers indicated, trenching continued and Mr. Malinowski struck the line with the trenching machine. All four employees were sent for testing and tested negative. In the second incident, on March 4, 2020, a crew installing gas service on White Bear First Nation struck a buried line that had unexpectedly deviated from its expected path. Dan Pelly was the crew lead, and Cortney Mead, operating the backhoe, was sent for testing after the strike; he also tested negative. Neither incident resulted in discipline for any employee.

The employees grieved on the basis that SaskEnergy had not complied with its Drug and Alcohol Policy governing post-incident testing. An arbitrator agreed, finding that SaskEnergy required the testing as a deterrent rather than because there was any reasonable basis to suspect impairment. The arbitrator ordered SaskEnergy to pay compensation of $1,500 each to Mr. Lansdell, Mr. Manz, Mr. Malinowski, and Mr. Thauberger, and $2,000 to Mr. Mead.

SaskEnergy applied for judicial review of the arbitrator's award. In support of that application, it sought to file affidavits from two employees, Bree Kozakewich and Kate Brown, summarizing their recollections of witness testimony at the arbitration hearing, since no transcript of the hearing existed. The reviewing judge ruled these affidavits inadmissible in a separate decision (the Affidavit Decision) and, in a further decision (the Review Decision), found the arbitrator's award reasonable and dismissed the application for judicial review. SaskEnergy appealed both decisions to the Court of Appeal for Saskatchewan.

Policy and legislative provisions at issue

The relevant provision of SaskEnergy's Drug and Alcohol Policy required testing for employees in safety-sensitive positions following a significant work-related incident "where requiring a test is a reasonable line of enquiry for the investigation," or, at management's discretion, following any other incident "where there are reasonable grounds to believe" that substance use may have contributed. SaskEnergy argued that the employees' departure from safety protocols made testing a reasonable line of inquiry, while the union maintained these Policy prerequisites had not been met.

On the evidentiary question, the appeal engaged Rules 3-57(2)(d) and 3-58 of The King's Bench Rules, which govern the record an administrative decision-maker must produce on judicial review, and the exceptions permitting a record to be supplemented, as recognized in Hartwig v Commission of Inquiry into matters relating to the death of Neil Stonechild, 2007 SKCA 74, and Saskatchewan (Workers' Compensation Board) v Gjerde, 2016 SKCA 30. Section 259(1) of The Occupational Health and Safety Regulations, 1996 was also relevant to the arbitrator's finding that crew members could reasonably rely on line-locate markers.

Reasoning and analysis

Writing for the Court, Justice Kilback first addressed the admissibility of the Kozakewich and Brown affidavits. Although Hartwig recognized that parties to a judicial review may bring forward evidence that was before the original decision-maker, the Court held this principle did not assist SaskEnergy, because the affidavits were not a transcript of testimony but a partisan employee's selective recollection of certain evidence, prefaced by argument. Applying the Gjerde framework, the Court agreed with the reviewing judge that the affidavits could not be admitted to elucidate the record: they presented only evidence favourable to SaskEnergy's position, and there was no assurance of the accuracy of a recollection recorded roughly seven and a half months after the hearing. The Court also rejected SaskEnergy's suggestion that competing affidavits and cross-examination could resolve any unreliability, agreeing with the reviewing judge that this would leave the court "hopelessly lost" in the face of conflicting accounts of what witnesses said.

Turning to the merits, the Court applied the reasonableness standard from Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65, asking whether the arbitrator's decision reflected an internally coherent and rational chain of analysis justified by the facts and governing law. The Court found the arbitrator had correctly understood and rejected SaskEnergy's central argument — that the employees' departure from safety procedures made testing a reasonable line of inquiry — rather than mischaracterizing it. It further found the arbitrator had properly considered the crew leads' role in reporting incidents to management, had not misapprehended the evidence concerning the investigation of the 2020 incident, and had not required SaskEnergy to prove actual grounds to suspect impairment as a precondition for testing. Finally, the Court concluded the reviewing judge had not improperly buttressed the arbitrator's reasoning, but had simply responded to SaskEnergy's argument that the arbitrator failed to appreciate the seriousness of the incidents.

Ruling and overall outcome

The Court of Appeal for Saskatchewan dismissed SaskEnergy's appeal from both the Affidavit Decision and the Review Decision, finding no error in the reviewing judge's exclusion of the Kozakewich and Brown affidavits or in his conclusion that the arbitrator's award was reasonable. Unifor Local 649, the respondent union, was successful on the appeal, and the Court ordered costs in its favour calculated in accordance with Rule 54(1) of The Court of Appeal Rules — the specific quantum of those costs is not stated in the decision. The underlying arbitration award, which compensated four grievors $1,500 each and one grievor $2,000, was not disturbed.