Is impairment needed for dismissal in drug testing?

A Full Bench of the Fair Work Commission has upheld the reinstatement of a Sydney Trains employee found to have traces of cocaine in his system, despite ruling that a senior member wrongly concluded that employers need to establish workers who fail drug and alcohol tests are "impaired" before sacking them.

Deputy President Michael Easton in his December decision accepted that Sydney Trains had a valid reason for dismissing the safety work group leader in 2022, but ultimately ordered his reinstatement after considering his unblemished 26-year work record and determining that there was no risk of impairment. The deputy president as part of his reasoning leaned on full bench authorities to hold that "the employer must establish that there was a risk that [the group leader] was impaired at work".

In weighing Sydney Trains' appeal, Vice President Ingrid Asbury and deputy presidents Abbey Beaumont and Tom Roberts first agreed to hear the matter because it raised issues about the approach "to considering impairment or the risk of impairment in cases involving dismissal for non-compliance with drug and alcohol policies", as well as the correct application of legal principles previously expressed by Commission full benches "in determining whether the dismissal of an employee for breach of a drug and alcohol policy is unfair".

On the first question, the bench noted that current full bench decisions "do not establish a decision rule or stand as authority for the principle that in cases involving a dismissal for breach of a drug and alcohol policy, an employer must establish a risk that an employee dismissed for returning a positive drug test in breach of such a policy was impaired at work. To the contrary, those cases all make clear that 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 s387(a) of the Act."

The bench continued that, as made clear by a full Federal Court decision, the notion of a "fair go all round" enshrined in s381(2) of the Fair Work Act "recognises the importance, but not the inviolability, of an employer's right to manage its business, balanced against the protection the Act affords against unfair dismissal. Accordingly, the task of assessing whether a dismissal is unfair and the selection of remedies, involves broad evaluation. A finding as to whether a particular employee dismissed for breaching a drug and alcohol policy was or was not impaired at work, may be relevant to the question of whether a dismissal is unfair but a conclusion that a dismissal is not unfair does not require a finding that there was a risk of impairment."

The bench said that even where an employer had a valid reason under s387(a) for dismissing a worker for breaching a drug and alcohol policy, "it may be reasonably open to the Commission to find that in all the circumstances of a particular case, the dismissal was unfair, when other matters in s387 are considered and weighed, including mitigating factors in s387(h)".

While Deputy President Easton had wrongly determined that Sydney Trains had to establish there was a risk that the group leader was impaired at work, the bench said that "when the decision as a whole is read fairly and the finding in relation to impairment is considered in context, [he] did not apply the erroneous principle to reach his conclusion that [the group leader's] dismissal was unfair".

"Relevantly, it is implicit in [his] finding that there was 'no risk that [the group leader] was impaired at work', that he found on the balance of probabilities [the group leader] was not actually impaired on the day he returned a positive test for a prohibited substance. It is also clear that this finding was not determinative of the deputy president's conclusion on the ultimate issue of whether [the group leader] had been unfairly dismissed. Instead, the deputy president considered risk of impairment as one of several matters that were relevant under s387(h) and weighed all of those matters in his overall assessment, to find that [the group leader's] dismissal was unfair. [He] did not apply the erroneous principle to this task."

As a result, the bench continued, while the principle stated by Deputy President Easton was erroneous, "it did not infect [his] approach to considering the matters in ss387(a) and (h)".

"We uphold appeal ground 1 on the limited basis that the principle stated ... is erroneous, while accepting that it did not infect other findings made by the deputy president and . . . did not vitiate those findings, or the ultimate conclusion that the dismissal of [the group leader] was unfair. We would also add that our decision in this case should not be viewed as an acceptance that in dealing with an unfair dismissal application concerning a breach of a drug and alcohol policy, it will be generally appropriate for the Commission to undertake an analysis and make a finding about the level of impairment, or whether there was a risk that a dismissed employee was impaired.

"As we have stated, the risks associated with employees who have consumed proscribed drugs attending for work with traces of those drugs in their systems, go beyond the risk of an individual employee being impaired at work. There is an overarching risk ... that an employee with a prohibited substance in their system creates a reputational and legal risk for the employer regardless of whether the employee is impaired. In the present case, the general risk at which the policy was directed, was recognised by the finding that [the group leader's] dismissal was for a valid reason."

"In relation to mitigation, there was medical and scientific evidence to support a finding that [the group leader] was not impaired at work. That will not be so in every case and given the serious implications of breaches of drug and alcohol policies, and the responsibilities of employers in providing and maintaining safe workplaces and systems of work, findings about whether an employee was impaired at work should be made by the Commission with caution and based on clear and cogent evidence."