Employers may roll the dice and decide to undergo the costs of arbitrating a grievance with the expectation that an unfavourable decision can be reversed by a court. This process is called a judicial review or “JR” for short. The reality, however, is that in most cases a judicial review of an arbitrator’s ruling is an uphill battle. During a judicial review of an arbitrator’s decision, courts are not tasked with scrutinizing evidence or relitigating the grievance hearing. Instead, courts apply a narrow standard to assess the arbitrator’s decision-making. This process does not generally provide parties much flexibility to overturn an arbitrator’s decision.
The reasonableness standard
The standard that is used by courts to review a labour arbitrator’s decision is “reasonableness.”[1] This means that the party challenging the arbitral decision has the burden of showing that the decision was unreasonable. The Supreme Court of Canada has defined the reasonableness standard in a judicial review to mean:
The burden is on the party challenging the decision to show that it is unreasonable. Before a decision can be set aside on this basis, the reviewing court must be satisfied that there are sufficiently serious shortcomings in the decision such that it cannot be said to exhibit the requisite degree of justification, intelligibility and transparency. Any alleged flaws or shortcomings must be more than merely superficial or peripheral to the merits of the decision. It would be improper for a reviewing court to overturn an administrative decision simply because its reasoning exhibits a minor misstep. Instead, the court must be satisfied that any shortcomings or flaws relied on by the party challenging the decision are sufficiently central or significant to render the decision unreasonable.[2]
Therefore, during judicial review, a court is not concerned with whether the arbitrator’s decision was necessarily correct. In other words, the court does not consider whether, had it been presented with the same evidence and issues, it would have rendered the same outcome or decision as the arbitrator. Rather, the court’s task is to determine, even if the decision is incorrect, if the arbitrator’s decision-making was “internally coherent and rational” in coming to their decision.[3] Accordingly, a court’s application of the reasonableness standard can result in multiple reasonable outcomes.[4]
An arbitrator’s written reasons are not assessed against a standard of perfection. Arbitrators’ reasons do not have to include all the arguments that were presented during the grievance hearing.[5] However, an arbitrator’s reasons must be responsive to the key issues raised by the parties in the grievance hearing.[6]
The reviewing court assesses the justification offered in the ultimate decision rendered by an arbitrator. Historically, due to arbitral expertise, courts tend to defer to labour arbitrators’ decision-making in matters concerning the interpretation of the parties’ collective agreement.[7] Additionally, courts will also defer to labour arbitrators when dealing with matters related to the appropriate remedies in labour arbitrations.[8] This deference is afforded to arbitrators as they are seen as subject matter experts on labour relations. Accordingly, courts are reluctant to interfere with the decision-making of labour arbitrators or to overturn their decisions.
In cases where a court renders a labour arbitrator’s decision as unreasonable, the grievance is remitted to another arbitrator for determination.
Judicial review: Assessing a labour arbitrator’s decision
In practice, a court will consider numerous factors when determining if a labour arbitrator’s decision is reasonable. The following are some of the most important to the courts’ consideration:
- Whether the arbitrator misinterpreted or failed to consider critical facts or evidence.[9]
- The arbitrator clearly explained the elements relied on in coming to their decision, particularly in cases where the arbitrator has departed from established precedent or practice in the labour jurisprudence.[10]
- The reasons in the decision reflect a possible and acceptable outcome, based on the applicable facts and law and is consistent with other matters decided on similar facts.[11]
- Where the matter relates to a dispute regarding the interpretation of language in a collective agreement, whether the specific interpretation relied on by the arbitrator was available to them based on the parties’ evidence.[12]
More recently, applications for judicial review to dismiss an arbitrator’s decision have been successful where:
- An arbitrator’s decision that held a letter of understanding had no application to the matters in the grievance was found to be unreasonable as it was inconsistent with the “plain wording and logic” of the language in the collective agreement.[13]
- An arbitrator’s decision to uphold a just cause discharge grievance for a group of employees who participated in workplace sexual harassment was found to be unreasonable for multiple reasons, including the arbitrator’s finding that the employer’s investigation was not fair or impartial and no harassment occurred because the victim did not wish to file a formal complaint against the offending grievor(s). Specifically, the arbitrator relied on stereotypes concerning why a victim of sexual harassment or sexual assault may refuse to come forward with a complaint that have previously been rejected by the Supreme Court of Canada. The arbitrator also did not meaningfully address the employer’s statutory obligations under the Occupational Health and Safety Act to investigate incidents of workplace harassment regardless of if the victim was unwilling to participate in the investigation.[14]
- An arbitrator’s decision to uphold a grievance that the employer had breached the collective agreement when it failed to recognize September 19, 2022, as a paid holiday after the Governor General “proclaimed” that day as a national day of mourning to honour the memory of Her late Majesty Queen Elizabeth the Second. The court held this decision was unreasonable because it ignored applicable principles and jurisprudence in failing to consider evidence that the union had never previously demanded a holiday when a proclamation was made and the relevant issue of whether the parties intended that a holiday would be granted every time a “proclamation” was made for symbolic reasons.[15]
Key takeaways
When considering a judicial review of an arbitration decision, employers should carefully read the decision and consider whether the decision is reasonably justified in light of the relevant legal and factual constraints on the arbitrator. An employer must also consider if the decision is responsive to the central issues and arguments, as well as the key arguments and evidence, raised by the parties. A judicial review is not a second kick at the can in terms of litigation. The court will not generally hear evidence from the parties; rather, in deference to the experience of labour arbitrators, the court’s review will focus on the arbitrators decision making process as set out in the decision.
This can be a complex assessment. For more information on this topic or any questions related to the legal implications of this process on your business please contact the authors, Russell Groves or Fatimah Khan or any member of Dentons’ Labour and Employment group.
[1] Service Employees International Union, Local 2 v. Labatt Breweries Ontario Canada, 2024 ONSC 3881 at para. 26.
[2] Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 at para. 100.
[3] Ibid. at para. 85.
[4] London Civic Employees Union Local 107 v. Corporation of the City of London et al, 2024 ONSC 6625 at para. 24.
[5] Ibid. at para. 91.
[6] Ibid. at para. 128.
[7] Ibid. at para. 7.
[8] Service Employees International Union, Local 2 v. Labatt Breweries Ontario Canada, 2024 ONSC 3881 at para. 28.
[9] United Food and Commercial Workers Union, Local 175 v. Copper River Inn and Conference Centre, 2021 ONSC 5058 at paras. 46 and 48.
[10] Ibid. at paras. 22-24.
[11] Canadian Pacific Railway v Teamsters Canada Rail Conference Maintenance of Way Employees Division, 2023 ABKB 454 at para. 79.
[12] Royal Ottawa Health Care Group v. OPSEU, 2025 ONSC 1337 at para. 22.
[13] Unifor Local 2002 v. Air Canada, 2022 ONSC 2319 at paras. 29 and 36.
[14] Metrolinx v. Amalgamated Transit Union, Local 1587, 2024 ONSC 1900 at paras. 60-62.
[15] Ottawa Police Services Bd. v. Ottawa Police Assn., 2023 ONSC 6225 at paras. 35 and 42.
