By Mike Toten Freelance Writer

An employer lost a recent case because the Fair Work Commission (FWC) reasoned that because the employer did not establish that an employee who failed a drug test was actually “impaired” at the time, his dismissal was unfair. It ordered the employee to be reinstated. On appeal, a Full Bench of the FWC found that reasoning to be incorrect, but still found the dismissal to be unfair, taking all circumstances of the case into account. The Full Bench emphasised that cases such as these will need to be decided on their individual circumstances, and that failing a drug or alcohol test can still be a valid reason for dismissal.

Facts of this case

The employee was found to have traces of cocaine in his system. He claimed to have consumed it four days earlier while on holiday, and claimed that he did not realise traces could still be present after that time. Sydney Trains dismissed him, but the FWC ordered his reinstatement, concluding that there was no risk of his condition at the time creating an “impairment”, and the employer needed to establish that there was a risk before dismissing him. It also took into account his unblemished 26 years of employment, which included passing about 40 previous tests. 

Sydney Trains appealed against the decision and a Full Bench agreed to hear the appeal on the basis of a need to clarify whether failure of a drug test on its own could justify dismissing an employee.

The Full Bench noted that previous decisions appeared to establish that a positive drug test result could provide a valid reason for dismissal. However, it added that a broader evaluation of circumstances was necessary to establish whether dismissal would be unfair. In this case, the FWC had incorrectly ruled that Sydney Trains had to prove that the employee was “impaired” by the traces of cocaine in his system, however, it had not relied on that conclusion alone to determine that the employee was unfairly dismissed. Instead, it was just one of several factors the FWC took into account. The relevant drug test defined “drug-free” as merely passing the test, it made no reference to whether or not an employee was impaired at the time. Proving the latter would have to involve physical and/or cognitive testing.

Not an “across the board” finding

The Full Bench further commented that it would be generally appropriate for the FWC to conduct an analysis to determine what level of “impairment” to performing his/her job (if any) an employee who tested positive for alcohol or drugs would have had. However, other relevant factors to consider would include any reputational or legal risk to the employer.

In this case, there was supporting medical and scientific evidence that the employee was not “impaired”. 

Decision

The Full Bench dismissed the appeal and upheld the employee’s reinstatement. 

What this means for employers

While not necessarily a “typical” outcome, this decision indicates that if an employee returns a positive result to an alcohol/drug test, it is not guaranteed that dismissal will be justified – even if an employer’s policy clearly states that it will. Employers are advised to have some supporting evidence that a positive test result demonstrates that there is a clear risk if the employee is allowed to perform work. 

That said, the decision also warned that the FWC needs to rely on “clear and cogent evidence” before concluding that an employee was “impaired” from working.

Read the judgment

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