By Catherine Ngo Content writer, presenter and podcaster

Enforcing drug and alcohol policies often raises the question of whether conduct outside working hours can be a valid reason for dismissal. The relevance of an employee's drug use outside of work lies solely in its potential impact on their job performance, particularly when it poses a risk of impairment during work hours.

The big question is: should a positive drug test result automatically lead to termination of employment?

A recent case where the Fair Work Commission's (FWC) full bench has upheld the reinstatement of a Sydney Trains employee who tested positive for traces of cocaine. 

This ruling was made despite the bench's finding that a senior member of the commission had wrongly concluded that employers must prove that workers who fail drug and alcohol tests pose a risk of impairment before they can be dismissed.

The case involved an employee who was dismissed after traces of cocaine were detected in a random urine test. A thorough investigation led to the employee's dismissal for violating the employer's drug and alcohol policy, which mandated a "drug-free" workplace. This policy provided clear standards of conduct for employees, leaving no room for uncertainty regarding the consequences of engaging in illicit substance use.

Within a safety-critical environment, the FWC has ruled that attending work while testing positive for certain substances constitutes a breach of company policies. In such circumstances, the testing administration authorised by the policy is considered a fair and reasonable measure to address the risk.

Testing for impairment is limited

Policies that rely on testing may be deemed lawful and reasonable when the employer lacks alternative means to assess whether employees are impaired by drugs or alcohol at work. While testing for use rather than impairment may not be the most precise method, it is still considered fair and reasonable if there is no practical way to test for impairment.

Therefore, employers who dismiss an employee for breaching company policy by returning a positive drug and alcohol test are not obligated to determine whether the employee was at risk of being impaired. The fact that an employee attends work and returns a positive test for a prohibited substance may constitute a valid reason for dismissal under the Fair Work Act's unfair dismissal laws.

Despite potential legal and reputational risks for employers associated with breaches of drug and alcohol policies, the Fair Work Commission (FWC) ruled that the dismissal of an employee in this case was unfair.

The employee had a pristine 26-year employment record and was not at risk of impairment on the day he failed a random drug and alcohol test. These factors contributed to the FWC's finding that the dismissal was unfair. Notably, the employee was reinstated.

While this decision establishes that a positive drug and alcohol test can constitute a valid reason for dismissal, it also emphasises that a valid reason for dismissal may not always prevent the dismissal from being found unfair. This applies particularly to cases involving long-serving employees with an unblemished employment history.

With the end-of-year festivities on the horizon, reviewing and reassessing company policies concerning substance abuse is crucial. Additionally, remind employees of behavioural expectations during these events, as violations may lead to disciplinary actions.

Employers must conduct comprehensive workplace investigations in the event of policy violations to maintain a safe and compliant work environment. This proactive approach ensures appropriate measures are taken to address misconduct and uphold organisational standards.

Read the decision

Sydney Trains v Reece Goodsell [2024] FWCFB 401 (21 October 2024)