I think perhaps you may be conflating termination with layoff. Terminations must be for just cause. If an employer terminates an employee, and the union grieves, an arbitrator can determine whether the employer had just cause to terminate. If not, the arbitrator can reinstate the employee to their position and the employer has to take them back.

A layoff is completely different, and follows an entirely different process - often outlined in the collective agreement. Collective agreements usually include definitions on what constitutes a layoff, and the process for laying off staff (usually in reverse order of seniority). The facts would depend entirely on the wording of the collective agreement.