Enforcement of drug and alcohol policies in the workplace tests the boundary of when out-of-hours conduct can be a valid reason for dismissal. The taking of drugs by an employee away from work is only relevant to the employment if it has a connection to the performance of work. That connection is the risk the employee’s functioning at work will be impaired.

Does that mean a positive drug test will not provide a valid reason for dismissal unless there is evidence of employee impairment?

A Full Bench of the Fair Work Commission (FWC) in Sydney Trains v Goodsell (2024) recently reviewed the authorities on this issue and concluded the answer was “no”.

The decision concerned the dismissal of an employee when traces of cocaine were detected by a random urine test. Following an investigation, the employee of 26 years was dismissed for breaching the employer’s drug and alcohol policy. The policy, which required employees to be “drug free”, created a clear standard of conduct for employees considering rolling the dice with illicit and other substances.

The FWC ruled the conduct breaching these kinds of policies is the attendance at work and testing positive to certain substances. In a safety-critical environment, the testing regime authorised by the policy is a fair and reasonable measure to address this risk. Policies that rely on testing may be lawful and reasonable when the employer is not otherwise able to assess whether employees are impaired by drugs or alcohol when they attend the workplace. Testing for use rather than impairment may be a blunt instrument but is nonetheless fair and reasonable if there is not an effective way to test for impairment.

Therefore, employers that dismiss an employee for breaching company policy by returning a positive drug and alcohol test are not required to determine whether the employee was at risk of being impaired. The fact that an employee attends for work and returns a positive test for a prohibited substance may of itself constitute a valid reason for dismissal for the purposes of the Fair Work Act 2009 (Cth) unfair dismissal laws.

Despite this, the FWC ruled the dismissal in this case was unfair. While there were possible legal and reputational risks for employers associated with breaches of drug and alcohol policies, the employee’s pristine 26-year employment record and the fact that he was not at risk of being impaired on the day he failed the random drug and alcohol test made the dismissal unfair. The employee was reinstated.

This decision – while establishing that a positive test result provides a valid reason for dismissal – highlights that a valid reason for dismissal may not prevent the dismissal from being found to be unfair where a long-serving employee has a good employment history.