Marine Atlantic has lost its challenge to an arbitration award reinstating a junior engineer who was intoxicated aboard a ferry, after an unpaid suspension of approximately 17 months and with strict conditions on his return.
In Marine Atlantic Inc. v. Canadian Merchant Service Guild, 2026 NSSC 283, decided September 3, 2026, the Supreme Court of Nova Scotia found the arbitrator had reasonably balanced serious safety violations against the employee’s work history, remorse and prospects for rebuilding trust.
The ruling did not excuse drinking aboard a vessel or award full back pay. It upheld the reasonableness of replacing dismissal with a lengthy unpaid suspension, followed by 24 months of periodic random alcohol testing and searches of the employee’s baggage and cabin, beginning with his first shift back.
A serious breach in a safety-sensitive workplace
The employee had worked for Marine Atlantic for 18 years. The company dismissed him in November 2023 following an investigation into his intoxication aboard the Leif Ericson on August 17 of that year.
The arbitrator’s account records that he failed to report for work and was visibly intoxicated and incoherent when personnel entered his cabin. The termination letter also cited his refusal of a breath-alcohol test.
The union did not dispute that he was intoxicated or had violated the company’s drug and alcohol policy. It argued that termination was excessive and that a long suspension with conditions could provide an appropriate penalty.
The policy’s reach was central to the dispute. Vessel employees must remain fit for emergency duties throughout their tour, even during off-shift hours aboard ship. Bringing alcohol aboard and consuming it were prohibited; the rule did not permit a small amount simply because an employee was not on a scheduled shift.
Marine Atlantic stressed the danger to passengers and crew in a harsh marine environment. It said the employee’s conduct was planned, his explanations were dishonest and dismissal was necessary to protect safety and deter similar behaviour.
The disciplinary framework required the arbitrator to decide whether there was just cause for discipline, whether dismissal was excessive in all the circumstances and, if so, what alternative penalty was appropriate. Serious misconduct did not remove the need for that individualized assessment.
The arbitrator did not accept every explanation
The arbitrator found the employee had deliberately brought alcohol aboard intending to drink it. He rejected the explanation that it had been purchased for a later visit elsewhere. He nevertheless distinguished an intention to drink from an intention to become intoxicated, finding the latter had not been established.
That distinction did not make the planned drinking acceptable. The arbitrator expressly treated the conduct as an extremely serious violation warranting a strong disciplinary response.
He also acknowledged the employee’s initial lies when confronted. But he did not accept the employer’s broader position that omissions and inaccuracies throughout the investigation demonstrated continuing deception. Having heard the employee and reviewed the investigation, he found that much of the later account was honest and that more probing interview questions could have elicited additional detail.
The rejected explanation for buying the alcohol remained a serious concern. The arbitrator considered whether it ruled out reinstatement, but ultimately found that the employee had admitted the material misconduct, accepted responsibility and shown genuine remorse. Counselling and willingness to undergo random testing supported the prospect of restoring trust.
Mitigation was not an excuse
The arbitrator considered the employee’s long service and clean disciplinary record, along with heightened personal stress and the particular hardship caused by losing health benefits while dealing with serious health concerns.
Marine Atlantic argued that stress could not justify planned misconduct and that the evidence did not establish the medical connection alleged in the grievance. The court agreed that the arbitrator had not found the employee’s conduct involuntary or his responsibility displaced by a psychological condition.
Instead, stress was treated as part of the context contributing to poor decisions, alongside other factors. It did not negate intent or excuse the policy breach. Nor did the court announce a general rule dispensing with expert evidence whenever illness is invoked in a disciplinary case.
The arbitrator concluded that dismissal was excessive in these particular circumstances. He substituted the lengthy unpaid suspension and return-to-work conditions, emphasizing both the seriousness of the misconduct and the importance of deterrence.
The court reviewed the reasoning, not the penalty afresh
On judicial review, Marine Atlantic argued that the findings about dishonesty and planning could not logically be reconciled with genuine remorse or rehabilitation. It also said the arbitrator had minimized safety and deterrence while giving too much weight to stress and hardship.
Justice Ann Smith rejected those arguments after reading the award as a whole. A reviewing judge must assess whether the decision’s reasoning and outcome are justified, transparent and intelligible—not choose a preferred penalty or reweigh the evidence.
The arbitrator had repeatedly addressed the high-risk workplace and the factors weighing against reinstatement. He did not have to repeat every aggravating and mitigating consideration in a single concluding paragraph. The court could trace why he believed a lengthy suspension and strict conditions could serve deterrence while allowing the employment relationship to be repaired.
The court also distinguished decisions involving repeated misconduct and a failure to acknowledge wrongdoing. Here, the arbitrator had made credibility and remorse findings after hearing the evidence, and his reasons explained how those findings supported reinstatement despite significant concerns.
The judicial-review application was dismissed with costs to the union. No costs amount was fixed in the reasons. The decision leaves the arbitration award intact; it does not establish the employee’s current working status or create a general entitlement to reinstatement after an alcohol-policy breach.
