While the issue of random drug testing in the workplace is not new, recently we've seen two cases of companies dismissing employees based on drug test results that were procedurally flawed and therefore invalid. Coca-Cola Amatil (NZ) Limited v Hooper and Patchett v Contour Roofing are timely reminders to employers of the importance of having a well-drafted alcohol and drug policy, and of adhering to procedural standards when carrying out testing. Random testing is permitted, but may only be carried out where it is expressly provided for in a company's alcohol and drug policy. Employees may not be tested without "reasonable cause".

Drug testing in the workplace is increasing

Recent figures from the New Zealand Drug Detection Agency show that drug screening in the workplace has almost doubled in the last 12 months in New Zealand. Employers are more aware than ever of the dangers of drugs and alcohol in the workplace. And with good reason: amphetamine-type substances were detected in almost 15 percent of all positive tests in 2011 (a significant increase since 2010).

Tips for employers

Employers would be well advised to ensure that:

  • alcohol and drug policies set out clearly the employer's position on alcohol and drug use in the workplace: when testing may be carried out, and possible consequences for employees of breaching policy;
  • "safety sensitive areas" are clearly identified in an alcohol and drug policy;
  • alcohol and drug policies are properly promulgated in the workplace in consultation with employees (and unions if appropriate); and
  • any alcohol or drug testing is carried out in accordance with company policy.

Health and Safety

The Health and Safety in Employment Act 1992 requires employers to take all practicable steps to provide and maintain a safe working environment. This involves identifying hazards in the workplace and taking steps to eliminate, isolate or minimise them. An effective alcohol and drug testing programme not only reduces the rate of positive drug tests, but also reduces personal injuries and human error accidents.

An employer is entitled to rely on its occupational health and safety obligations when implementing a comprehensive drug testing policy. However, drug testing must be carried out in accordance with company policy and should not infringe unnecessarily on the rights of employees. The process inevitably involves the weighing up of two competing interests: the employee's rights to privacy and freedom from intrusion, and the employer's obligation to ensure the safety of employees in dangerous working environments.

There must be a proximate connection between health and safety requirements and a company's drug policy. An employer's right to carry out random or suspicionless drug testing depends on the inherent risk of the employee's position. Random testing can only be imposed on employees who are employed in "safety sensitive areas". Generally, safety sensitive areas are those that involve the use of dangerous machinery or operate within environments in which serious or fatal accidents could occur as a result of a lapse in concentration, poor judgement or impairment. It is up to an employer to define which employees fall within this category (in consultation with employees) and to insert the relevant drug testing provisions into its alcohol and drug policy.

Contour Roofing v Patchett

Last month the Employment Relations Authority awarded $15,000 compensation to an employee who was unjustifiably dismissed from Contour Roofing Nelson following random drug testing. Mr Patchett was randomly drug tested and suspended without opportunity to comment.

The Authority found that there was no reasonable cause to test Mr Patchett at or near the time that he was tested. The testing was not an action that a fair and reasonable employer would have taken (applying the old section 103A test).

Coca-Cola Amatil (NZ) Limited v Hooper

In this Employment Court decision last month, Coca-Cola Amatil was found to have carried out a "random drug test by stealth". Keith Hooper was awarded lost wages and $4,000 compensation after being unjustifiably dismissed following a random drug test. The employer's case failed on a number of procedural elements.

Prudent employers will carry out drug testing in accordance with company policy. A drug testing process that is procedurally flawed cannot be validated retrospectively by a positive result.

Coca-Cola Amatil's alcohol and drug policy provided that an employee could be drug or alcohol tested in one of three situations; after an accident, if an employee's behaviour indicated impairment, or if the employee was using drugs during work hours. Mr Hooper was drug tested at work in February 2010 in what appeared to be a response to whistleblower allegations that other employees had been using drugs in the workplace. Mr Hooper was not named in the whistleblower reports, but had been investigated seven months before in relation to an earlier double hearsay claim from a fellow employee. The Employment Court held that there was insufficient nexus to justify Mr Hooper's drug test.