Previously printed in the Lexis Nexis Labour Notes Newsletter, and updates since its original publication.
In ATCO Electric Ltd. v. Canadian Energy Workers' Assn. (Concerning Drug and Alcohol Testing Grievance), [2024] A.G.A.A. No. 49 (applications for review dismissed, 2025 ALRB 93), Arbitrator James Casey ordered $12,500 in damages for breach of privacy related to a misdiagnosis of a Substance Use Disorder by an employer health agency. The misdiagnosis had resulted in wage loss and two years of random testing for the employee.
Background
The Grievor was employed by ATCO Electric Ltd. (the "Employer") as an electrical technologist. The Grievor began to experience difficulties at work and disclosed to the Employer that they might be related to his anxiety or his new anxiety medication.
Due to the safety-sensitive nature of the Grievor's position, the Employer required medical information to confirm his fitness to work. The Grievor went through several processes to evaluate his ability to safely attend at work, including:
- An independent medical examination (the "IME") coordinated by the Employer's health agent service (the "Health Agent"). The IME concluded that the Grievor was not psychologically fit to work at that time for a variety of reasons, including "his alcohol use concerns". It recommended that the Grievor complete a "Substance Abuse Expert assessment" (the "SAE Assessment"), conducted by the Health Agent, prior to returning to work.
- The SAE Assessment concluded that the Grievor met the criteria for both Substance Use Disorder – Severe (alcohol) and Substance Use Disorder – Moderate (drug), both in early remission. It recommended, among other things, random substance testing for 24 months after the Grievor returned to work.
The Grievor strenuously objected to the diagnoses of Substance Use Disorder and even offered to undergo a second SAE Assessment. He was, however, compliant with the requirements in the report and was able to return to work.
Grievance
The Canadian Energy Workers' Association (the "Union") filed a grievance alleging multiple privacy breaches. There were two primary issues under consideration at arbitration.
First, the arbitrator considered whether the medical information, including the referral to assessment with the Health Agent, had been obtained in a way which appropriately balanced the Grievor's right to privacy and the Employer's need to maintain a safe workplace.
Second, the arbitrator considered whether the Grievor had been appropriately diagnosed with Substance Use Disorders and, if not, whether the Employer was liable for that misdiagnosis.
Analysis
With respect to the first issue, the arbitrator concluded that there were no privacy breaches in the manner of obtaining medical information.
The second issue was more complicated. It related to whether the Grievor's diagnosis of Substance Use Disorders was appropriate and, if not, whether the Employer was responsible for the damages which flowed out of the inaccurate diagnosis.
The arbitrator concluded that the Health Agent had made an improper diagnosis, upon which the Employer had relied to implement two years of random drug and alcohol testing. Because there was no valid reason for such testing, the Employer's implementation of the testing was an unjustified violation of the Grievor's privacy.
Turning to the liability issue, the arbitrator relied on the general arbitral principle that employers will be liable for the actions of agents they retain. This general principal was specifically supported by the Alberta Personal Information Protection Act, which provides, in part: "[W]here an organization engages the services of a person ... the organization is, with respect to those services, responsible for that person's compliance with this Act."
The arbitrator concluded that the Employer failed to properly reconsider its approach when the Grievor objected to the diagnoses and offered to be reassessed.
In quantifying damages for this breach, the arbitrator considered the following factors: (i) the highly invasive nature of random testing; (ii) the extensive and prolonged test period; (iii) the significant trust relationship between the Grievor and the Employer; and (iv) the serious negative impact on the Grievor. The arbitrator awarded $12,500 to the Grievor for the breach of his privacy rights.
Alberta Labour Relations Board Decision
The Employer and the Union applied to the Alberta Labour Relations Board for review of the decision. The Employer's application challenged the arbitrator's liability finding and decision on damages. The Union's application took issue with the arbitrator's decision not to find further privacy breaches, and sought corresponding increased damages. On July 30, 2025, the Board ultimately dismissed both applications for review, holding that the arbitrator had grappled with the complex array of evidence and myriad of arguments to arrive at transparent, justifiable and intelligible findings and conclusions.
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