In brief

Drug and alcohol policies have been in the spotlight in 2014.

There have been a number of key developments and trends that are worth noting:

  • There is a growing consensus that urine based testing for drugs is not the Fair Work Commission’s (FWC) preferred method for testing for impairment.
  • However, there has been a small shift towards recognising the reasonableness of policies that allow businesses, in some cases, to test for, and take disciplinary action in respect of, evidence of drug use generally – regardless of whether the use has caused any impairment at work.
  • Increasingly, governments are seeking to regulate in this space. The most notable example of this is the Victorian Construction Code which includes specific requirements for employers working on government-funded construction projects to have and implement drug and alcohol policies.

Anecdotally, many employers have deferred the introduction of testing regimes because of union and privacy concerns. However, the combination of government and regulator interest coupled with the potential consequences of inaction, means that for many employers, doing nothing is no longer an option.

Why implement a policy?

Workers who are impaired by drugs and alcohol have the potential to negatively impact the safety, productivity, harmony and culture of business. These are all motivators for having a drug and alcohol policy.

There are also legal motivators – work health and safety legislation in every jurisdiction places an obligation on businesses to keep their workers safe from harm as far as reasonably practicable. In many work environments (and certainly in operational businesses), impairment caused by drugs and alcohol will create health and safety risks which businesses are required by law to manage. In some industries, for example the rail and transport sectors, there are already specific legislative requirements for drug and alcohol testing.

There may also be commercial pressures to have a drug and alcohol policy. This may be required by a client or in some cases by government policy (for example, the Victorian Code of Practice for the Building and Construction Industry 2014 requires ‘building and construction industry participants’ to have an approach for managing drugs and alcohol in the workplace with a requirement for participants involved in projects over $10 million to have and implement a drug and alcohol policy which provides for random testing).

How to test for impairment

A key issue regarding workplace drug and alcohol policies has been whether the policies should use urine or saliva based testing. In recent years, there has been extensive debate about the science involved in the different testing methods and, in particular, the efficacy of each method in identifying impairment.

Different decisions arising from the FWC,1 along with the decision by the National Association of Testing Authorities (NATA) in mid-2013 to suspend its accreditation in respect of oral fluid testing, has caused some uncertainty.

This year, however, the FWC has consistently expressed the view that urine testing is not its preferred method for detecting impairment at the workplace.

This has been illustrated in the following cases in the FWC:

  • Endeavour Energy (No. 2)2- where Hamberger SDP affirmed his Honour’s earlier decision that the introduction of a urine testing policy was unjust and unreasonable (despite NATA’s suspension of accreditation due to technical issues associated with the Australian Standard for saliva testing).
  • MUA v DP World Brisbane Pty Ltd & Ors3- where Booth DP prevented DP World from using urine testing for confirmatory tests on the basis that urine testing was deemed to be an unjust and unreasonable method for detecting impairment at work. Whilst this decision has since been overturned by a Full Bench, the reasons for doing so did not relate to the efficacy of the different testing methods.4
  • Harbour City Ferries Pty Ltd v Toms5 - where a Full Bench of the FWC, in considering an appeal regarding an unfair dismissal matter, commented that: “We are not persuaded that urine testing… is a guide as to the actual presence of marijuana in an employee’s system or any impairment arising as a consequence. It is a testing system which in this case indicated past use and no present impairment."6

Considered together, these cases suggest that if a policy solely aims to identify and address issues of impairment at the workplace arising from drug use, then it could be open to criticism (within the FWC at least) if it uses urine testing in order to achieve this objective.

What is being tested: impairment or usage?

Despite this emerging consensus at the FWC, there has been a number of decisions arising in the context of unfair dismissal proceedings which indicate that a workplace policy can, in some circumstances at least, legitimately test for drug use generally. This marks a significant move away from merely testing for actual impairment exclusively during the hours of work.

This trend has been highlighted in a number of recent cases.

In Harbour City Ferries the Applicant was employed as Master of a vessel. The Applicant was called in to work at short notice, and lost control of the vessel which resulted in an incident. The Applicant subsequently tested positive to marijuana in a urine test. Despite being successful in his unfair dismissal application at first instance, the Full Bench quashed the decision and dismissed his application. In doing so, the Full Bench made the following comments:

“As an employer charged with public safety it does not want to have a discussion following an accident as to whether or not the level of drug use of one of its captains was a factor. It does not want to listen to the uninformed in the broadcasting or other communications industry talk about drug tests establishing impairment. It does not need to have a discussion with any relevant insurer, litigant or passenger’s legal representative about those issues. What it wants is obedience to the policy. Harbour City never wants to have to have the discussion."7

This was a particularly significant outcome given that there was no evidence that the Applicant’s drug use contributed to the incident in any way, or caused the Applicant to experience any impairment during his hours of work.

Similarly, in Sharp v BCS Infrastructure Support Pty Limited8the Applicant’s unfair dismissal application was dismissed despite there being no evidence of impairment at work. In this matter, the Applicant had been employed in the maintenance and servicing of particular equipment at Sydney Airport. The Applicant was dismissed after producing a positive urine test for marijuana. Catanzariti VP found that by failing the drug test and breaching the relevant policy the Applicant had engaged in serious misconduct, and the dismissal was not harsh, unjust or unreasonable. The Applicant had performed his work in safety sensitive areas of the airport, and the positive test results were said to put the employer’s business at risk of reputational damage.

In Collins v Lyndons Pty Ltd9the FWC again dismissed an unfair dismissal application in circumstances where the Applicant had produced a positive result for marijuana after completing a urine test. The Applicant was employed as a vehicle operator. In this case, whilst there was also no evidence that the Applicant was impaired at work, there was evidence that the Applicant was a regular user of marijuana in his private life.

Each of these cases are examples of the FWC deciding not to interfere with management decisions to dismiss employees who fail urine tests, despite there being no evidence of actual impairment while the employee was at work. In each case, the employee’s breach of the relevant drug and alcohol policy was sufficient to justify the dismissal in the circumstances.

However, it is possible that the FWC might take a different approach:

  • in respect of employees who do not perform ‘safety critical’ roles or
  • where the reputational risk to the business arising from a positive drug test is not as significant.

The extent to which this approach would be taken in other matters remains to be seen.

Looking forward

The importance of businesses having effective policies for managing alcohol and drug related issues at the workplace is not new. It is widely accepted that a drug and alcohol testing regime can provide productivity, cultural and safety benefits for businesses in medium and high risk industries and, for some businesses, may be required by work health and safety legislation.

There can be very significant impediments in particular industries to the introduction of testing policies. However, inaction by employers – especially in industries involving manufacturing, transport and manual handling – is less and less of an option. The current tide of decisions also suggests that the time is now right for businesses to take advantage of the opportunity to introduce or update their drug and alcohol procedures.

In addition to the practical and industrial factors, other issues which employers need to consider involve how and when to test employees. For example, should this be on a random or suspicion basis? Should testing always follow a workplace safety incident? The lawyers in our team are very experienced in these matters. Clients with any queries should contact any of our Herbert Smith Freehills partners whose contact details can be accessed here.