Legal Definitions - essence test

The essence test is a legal principle used in labor law. It is a test that determines whether an arbitrator's interpretation of a collective-bargaining agreement is valid or not. The test requires that the arbitrator's interpretation must be upheld if it is derived in any rational way from the agreement, viewed in light of the agreement's language, its context, and any other evidence of the parties' intention.

For example, if a collective-bargaining agreement between a union and an employer states that employees are entitled to a certain amount of vacation time each year, an arbitrator's interpretation of that agreement must be based on the language of the agreement, the context in which it was written, and any other evidence of the parties' intention. If the arbitrator's interpretation is rational and based on these factors, it must be upheld.

Another example could be a dispute over the interpretation of a clause in a collective-bargaining agreement that deals with overtime pay. If the arbitrator's interpretation of the clause is based on the language of the agreement, the context in which it was written, and any other evidence of the parties' intention, and is rational, it must be upheld.

These examples illustrate how the essence test is used to determine the validity of an arbitrator's interpretation of a collective-bargaining agreement. The test ensures that the interpretation is based on the agreement itself and the parties' intentions, rather than on personal biases or opinions.