The Full Bench of the Fair Work Commission (FWC) has upheld a decision that highlights the boundaries between drug use detection and actual impairment. The decision, stemming from Sydney Trains v Goodsell (2024), reinforces that a positive drug test alone can justify dismissal under the Fair Work Act 2009 (Cth), even if no evidence of impairment exists. However, it also underscored the need for employers to ensure clarity in their policies if they aim to enforce a “zero tolerance” stance effectively and fairly.

The Case Overview

The case involved a long-serving Sydney Trains employee, a work group leader who was dismissed in September 2022 after a random drug test detected cocaine metabolites in his system. He asserted that he had tried cocaine for the first time four days earlier while on leave and was unaware it would remain detectable upon his return to work. Despite having breached the company’s drug and alcohol policy, which required employees to be "drug free" at work, Deputy President Michael Easton initially found the dismissal harsh and reinstated the employee, citing mitigating factors like his clean 26-year record and lack of impairment at work.

Sydney Trains appealed, arguing that the Deputy President misinterpreted the law by requiring the employer to prove there was a risk of impairment to justify dismissal. The Full Bench, however, upheld the original decision, establishing several key points that reshape employer responsibilities regarding drug and alcohol policies.

Testing for Use vs. Impairment: A Valid Reason for Dismissal

The central question was whether an employer must prove an employee was at risk of impairment from drug use to validate a dismissal. The FWC clarified that under the Fair Work Act, an employer does not need to establish impairment risk; a positive drug test indicating a breach of policy may constitute a valid reason for dismissal, particularly in safety-critical industries. This position aligns with previous cases such as Toms, Sharp, and Hilder, where the FWC ruled that a breach of a lawful and reasonable drug and alcohol policy is a valid reason for dismissal, regardless of impairment evidence.

In Goodsell, the Full Bench reiterated that “testing for use” is acceptable and enforceable, particularly where impairment tests are scientifically impractical or unavailable. While testing solely for use may be blunt, it is still considered fair and reasonable if no effective impairment test exists. Therefore, an employer’s obligation to maintain a safe work environment outweighs the employee’s right to engage in private conduct, such as drug use, that could impact workplace safety.

The Full Bench emphasized that their decision should not be construed as endorsing an analysis of impairment risk in every unfair dismissal case related to a drug and alcohol policy breach. “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 identified by the Full Bench in Toms 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.”

The “Intelligible” Policy Standard

The Full Bench also highlighted the importance of making drug and alcohol policies “intelligible” to employees. It found that Sydney Trains’ policy, while clear on alcohol limits, lacked sufficient detail regarding prohibited drugs and testing standards. The FWC outlined minimum requirements for a drug and alcohol policy to be effectively communicated, including:

1. Detailed Information on Prohibited Drugs and Cutoff Levels: Employees should understand which substances are prohibited, the cutoff levels, and how these standards relate to drug presence rather than impairment.
2. Explanation of Metabolite Detection: The policy should explain that tests detect inactive metabolites and that their presence, even without impairment, constitutes a policy breach.
3. Information on Detection Periods: Employees should be informed about how long certain substances may remain detectable, even after the effects have worn off, so they can make informed decisions about drug use outside work.
4. Zero-Tolerance Clarification: A zero-tolerance approach should explicitly state that any positive result above the cutoff level assumes an unacceptable risk, irrespective of whether the employee shows visible impairment at work.

The FWC observed that by not including these details, Sydney Trains risked a lack of clarity among its workforce, increasing the likelihood of employees inadvertently breaching the policy. In Goodsell, the employee’s unfamiliarity with testing procedures and detection periods contributed to the FWC’s finding of harshness, emphasizing that a well-understood policy can reduce such misunderstandings.

Balancing Safety and Fairness: When a Valid Reason May Still Be Unfair

The Full Bench emphasized that while a positive drug test provides a valid reason for dismissal, it may not necessarily lead to a fair dismissal outcome. Factors such as the employee’s work history, remorse, and understanding of the policy can all weigh in favor of mitigation. In Goodsell, the FWC acknowledged that while the dismissal had a valid basis, the employee’s 26-year unblemished record, his one-time conduct, and a lack of clear communication from the employer warranted reinstatement.

The ruling underscores that employers, particularly those adopting a zero-tolerance approach, should balance their policies with practical measures. Offering education and resources, such as access to information on drug detection and the potential for metabolites to linger, can reduce misunderstandings. Furthermore, considering individual circumstances—such as a history of compliance and willingness to undergo additional testing or rehabilitation—can support a fair application of the policy.

Key Takeaways for Employers

The Goodsell case reaffirms that employers can enforce drug and alcohol policies based on use rather than impairment alone, especially in safety-critical environments. However, to support fair and enforceable dismissals, employers should:

1. Develop Clear, Accessible Policies: Policies should detail prohibited substances, cutoff limits, metabolite detection, and the implications of a zero-tolerance approach.
2. Provide Regular Training: Ensure employees understand the policy and are aware of how long substances may remain detectable to avoid unintentional breaches.
3. Balance Enforcement with Fairness: Consider mitigating factors in each case, especially when an employee has a strong performance history and displays a willingness to comply with testing protocols.

In Goodsell, the FWC set a precedent by emphasizing that a valid dismissal reason does not automatically translate to a fair one. Employers should strive to ensure their drug and alcohol policies are not only enforceable but also clearly understood by employees to avoid inadvertent breaches and unfair dismissal claims.

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

Fair Work Act 2009 

s.604—Appeal of decision

Sydney Trains v Reece Goodsell (C2023/8091)

VICE PRESIDENT ASBURY DEPUTY PRESIDENT BEAUMONT DEPUTY PRESIDENT ROBERTS

BRISBANE, 21 OCTOBER 2024

Appeal against decision [2023] FWC 3209 of Deputy President Easton at Sydney on 4 December 2023 in matter number U2022/9973  – Breach of drug and alcohol policy valid reason for dismissal – significance of drug and alcohol policies as method of managing risk of impairment at the workplace – Relevance to unfairness of dismissal of impairment or risk of impairment of employee who tests positive for prohibited substance – Where impairment or risk of impairment at work is not reason for dismissal mitigating factors to be considered as other relevant matters under s. 387(h) – Erroneous finding that employer must show risk of impairment to establish that dismissal was not unfair – Error did not vitiate other findings – Appeal dismissed.

Savvy has drafted Drug & Alcohol policies for organisations in a variety of sectors including the manufacturing and construction industries. For assistance with your Drug & Alcohol policy for your organisation, contact Savvy HR today.

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