Three-tier reliability checks ruled unjustified invasion of worker privacy
A major Canadian utility has had its employee screening policy struck down as unreasonable and a violation of workers' privacy rights.
Chief arbitrator John Stout ruled against Hydro One's Reliability Screening Procedure, which subjected all Power Workers' Union (PWU) members to criminal records checks, driver's abstracts and, for nearly 70% of employees, credit checks, with rescreening required every seven years.
The Ontario utility had argued that as a critical infrastructure organization, it needed screening measures beyond the minimum North American Electric Reliability Corporation (NERC) standard. The union countered that the policy was overly broad, unreasonable, and in breach of both the collective agreement and federal privacy law.
Justifying universal screening
The procedure applied three screening levels to all employees: Level 1 covered 4% of PWU members who had no SAP access; Level 2 covered 27% with non-critical SAP access; and Level 3 covered 69% with critical SAP access, adding credit checks and comprehensive reference checks.
Hydro One stated that since 2018, its screening unit had reviewed many files, of which roughly 85 included evidence of past criminal convictions, and only one person was not hired. It also said the program had blocked 41 candidates at varying levels of risk, including at least five high-risk candidates linked to Chinese and Russian state actors.
In the Jan. 29, 2026 decision, Stout found Hydro One failed to show that existing PWU employees, as opposed to new hires or external actors, posed a workplace problem justifying universal screening. He noted the policy equated SAP access with the critical systems covered by NERC, even though the two systems are separate.
Privacy for existing employees
Stout emphasized the distinction between job applicants and current staff with established track records. Quoting arbitrator Michel Picher in a 2007 Ottawa professional firefighters' case, he wrote: "The extraordinary waiver of privacy which may be justified when a stranger is hired is substantially less compelling as applied to an employee with many months, or indeed many years, of service."
He added that an existing employee "faces a Hobson's choice between giving up their privacy or being disciplined or, worse, losing their livelihood."
Credit reports, he found, contain inherently sensitive financial information, and driver's abstracts for employees who do not drive a Hydro One vehicle were an unjustified intrusion absent reasonable cause. He also found that requiring all employees to submit to a criminal records check, absent a legislative or regulatory requirement or a demonstrable problem, was unreasonable.
