Suncor Energy will appeal an arbitration panel ruling that rejected the oilsand giant's application to randomly test its workers for drug and alcohol use.

"We are disappointed with the decision and will be appealing," said Suncor spokesperson Sneh Seetal in an email. "In our view, and based on the evidence we presented, this is an unreasonable outcome."

Two years ago, the Alberta company announced it was going to submit employees and contractors to random drug testing.

The union representing 3,400 Suncor workers challenged the program.

In a recent ruling, arbitration chair Tom Hodges ruled random drug tests violates the privacy rights of workers.

Roland Lefort, president of Unifor local 707A, said the union will continue to work with Suncor to make sure the workplace is safe.

But Seetal said despite current safety measures, drug and alcohol use remains a concern.

"In the last seven years, there have been three deaths at our site where alcohol and drugs were a factor," Seetal said. "We believe one death is one too many."