A recent FWC case has shed light on the dangers of inadequate policies and procedures relating to drug and alcohol use. How can HR craft a drug and alcohol policy that stands up to scrutiny?

A Sydney train driver dismissed for failing a drug test has been reinstated by the Fair Work Commission (FWC), after it found his employer had not demostrated procedural fairness in the application of its drug and alcohol policy.

This case is a valuable lesson to employers on the importance of clear, compliant and reasonable procedures around drug and alcohol consumption. 

“[Drug and alcohol policy] is a really interesting and vexed space,” says Amy Zhang, Team Leader and Executive Counsel at Harmers Workplace Lawyers. “It’s also not an area where the employer can take a one-size-fits-all approach, and that’s very clear from the complications [in cases like this].”

The case in question

The employee in this case, who had been working at the organisation for over 26 years, failed a random drug test after returning from a week-long period of leave in June 2022. 

After testing officers detected traces of illicit substances at a concentration higher than the testing cut-off, the train driver confessed that he had accepted an offer from a friend to try a class-A illicit drug four days prior to returning from leave. 

Following the positive result, he was suspended from work pending further investigation. Shortly afterwards, he was notified of the organisation’s preliminary decision that he should be dismissed and was given a chance to respond. 

The driver stressed in his response to the charges that this was a one-off occurence and an “error in judgement for which [he was] deeply apologetic”.

He also engaged a pharmacology specialist to testify the characteristics of the drug in question, namely that the substance has a very short half-life and its effects tend to last no longer than 90 minutes. Therefore, if he had consumed the substance four days prior to attending work, “there would be no intoxication or impairment” on the day he returned.

Despite this, after holding a short meeting with the employee to complete its investigation, the employer opted to proceed with dismissal. The driver later sought reinstatement by filing an unfair dismissal claim with the FWC. 

The Commission took into account a number of factors in determining whether the dismissal was fair, including the worker’s 26 years of unblemished service, his remorse and his cooperation with the disciplinary process. It also scrutinised the employer’s drug and alcohol policy and how well it was communicated to staff. 

In its ruling, the FWC noted that, per the organisation’s policy, the employer had an obligation to establish that there was a risk that the driver was impaired at work, which it had failed to do. It said the company had made little effort to “explain to its workforce what [the policy] means by ‘drug-free’ in a way that is comprehensible to the average rail worker”.

“One thing that really comes out of these cases is the need for clarity and very clear, simple language about what exactly are the standards and the requirements that are being asked of employees,” says Zhang.

“In the policy itself, language that is understandable to the layperson is very important, [rather than] using technical language or scientific formulas or numbers. [For example], if it’s a 0.2 limit, what does that mean practically?”

The FWC’s ruling also stated that the organisation’s disciplinary process “had the appearance of affording him procedural fairness” but that, in fact, “the employer’s mind was closed in the disciplinary process to [the employee] continuing in his employment”, and it had failed to consider any options other than dismissal. 

As a result, the FWC concluded that his dismissal had been harsh, unjust and unreasonable. Accordingly, it ordered the employer to reinstate the worker to his former position and compensate him for the remuneration lost due to his dismissal. Notably, it reduced the compensation amount by 20 per cent in recognition of the fact that the employee had failed the drug test.

“Employers really need to be quite careful in terms of terminating employees, and they really need to take into account their response and all of the surrounding circumstances,” says Zhang. 

“[A breach of the policy] may give a valid reason for dismissal. But you would also have to look at all those other factors that the Commission looks at, [such as] procedural fairness and the harshness of terminating someone, particularly if they have a long history of good service to the company and they have no history of disciplinary or conduct issues.”

“In the policy itself, language that is understandable to the layperson is very important, [rather than] using technical language or scientific formulas or numbers.” – Amy Zhang, Team Leader and Executive Counsel, Harmers Workplace Lawyers.

Crafting an airtight drug and alcohol policy

Zhang stresses that an effective drug and alcohol policy will look different for every organisation. For instance, it may not always be considered ‘reasonable’ for an employer to administer regular drug tests.

“It will come down to whether it’s reasonably necessary in the circumstances, having regard to potential consequences and the health and safety of various stakeholders,” she says. “There may also be limitations in enterprise agreements, so [employers] should have a look at that as well.

“In high-risk settings, it will be more reasonable. As this case shows, if you’re a train driver or in an [organisation] like police or airlines, there are regulatory requirements that already allow for testing.”

If an employer wishes to impose limitations on specific levels of drugs or alcohol in the blood to be measured via testing, it’s essential to include the specific limitations and details of the testing procedure in the policy, she says. 

“[The policy] also needs to be clear about if there’s a difference between alcohol versus drugs, as well as different types of drugs and different levels of intoxication and impairments. If there are any exceptions that the employer considers relevant or necessary, that should be included as well.

“For example, they may allow for exceptions to limiting specific levels of alcohol [when it’s] in relation to work events, social settings and meetings with clients. Another thing to consider is, if there are employees who take very strong medication that might bring up false positives, there should be some sort of exception or clause around what happens in those circumstances.”

She recommends that HR consult WorkSafe’s guidance on managing substance abuse in the workplace when developing their policy to ensure its requirements are legal and reasonable. 

It’s equally important for a drug and alcohol policy to outline the potential consequences of a breach, she adds.

“[That means] being very clear about the fact that one of the consequences is potential dismissal, but also including other types of disciplinary action that an employer might be considering, such as warnings, fines or counselling.”

There is no specific legal obligation on employers to provide counselling as a potential response to a breach of their drug and alcohol policies. However, if an employer suspects that an employee is engaging in harmful substance abuse, Zhang notes that they may have obligations under work health and safety policies and laws to provide information or assistance.

As this case demonstrates, ensuring employees are aware of the policy and its details is critically important.

“There might be consultation requirements in an award or enterprise agreement, as well as work health and safety legislation, which requires consultation and advice about the existence of these policies and the obligations in them.

“Given the seriousness and significance of these policies, it would be helpful for employers to not only notify employees of the existence of the policy, but also to have as a requirement that they read it and sign it to confirm that they’ve read and understood the policy.”

Looking ahead, Zhang warns that potential changes to privacy laws on the horizon may well impact how employers develop and enforce their drug and alcohol policies.

“It’s not clear when this will happen. But one of the reforms to the privacy legislation is going to be about changes to what’s considered ‘employee records’. When that happens, employers will have additional privacy obligations, which may impact on the collection and testing of biometric data.

“[This will] potentially make it a lot more complex in terms of extra obligations and extra hurdles that employers will need to consider and overcome. So [HR] should just watch this space around when these reforms come in, and what they’ll look like.”

Need help crafting policies that set clear behavioural expectations? AHRI’s short course will help you understand how to structure, write and implement effective policies and procedures.