Employers must balance many competing interests in the workplace. Maintaining workplace safety at the expense of the privacy of your employees is a good example. A workplace drugs and alcohol policy may be a source of tension in employment relationships. In certain industries, such as building and construction, health services, transportation and logistics, education, security and government, a workplace drugs and alcohol policy is not unusual and, in some instances, may even be required by legislation, however, it can also be the source of many workplace disputes.
Reasons for workplace drug and alcohol testing
Before implementing a workplace drug and alcohol policy, ask why do you need one? What “mischief” are you trying to manage?
Workplace safety?
Studies show strong links between substance abuse and workplace accidents. Drug and alcohol use contributes to at least 7.5% of all workplace injuries and 4% of workplace fatalities in Australia. There are also some industries where a drug or alcohol impaired employee can have significant safety implications and it is an inherent requirement of the role to operate in a safe manner. This is especially relevant where an employee is operating a motor vehicle, works on a site etc.
Job performance?
Drug and alcohol use can have an impact on an employee’s ability to perform their job. It also contributes to lateness and absenteeism. Loss of overall productivity for the business and the negative effect on co-workers, who must make up the offending worker’s shortfalls, are just some of the other consequences.
Legal Liability?
As an employer, you have primary duties under work health and safety laws to ensure, so far as is reasonably practicable, the health and safety of workers and others at the workplace. Allowing a drug or alcohol impaired employee to report to work increases the risk of them injuring themselves, their co-workers or the public at large.
Reasons against workplace drug and alcohol testing
Having said that, there are some good reasons not to introduce a workplace drug and alcohol testing policy:
Cost
Drug testing may be expensive.
Employee privacy
Although drug and alcohol testing in the workplace is legal in Australia, your employees may object on the grounds it violates their right to privacy and is an invasive procedure.
Implementing a workplace drug and alcohol policy
If you have decided to implement a workplace drug and alcohol policy, you must ensure that you create an appropriate policy and administer it consistently and fairly.
What should the workplace drug and alcohol policy address?
- Do a thorough assessment of the risks and hazards of alcohol and drug use in your industry. This will help you to create an effective policy to address them.
- Consult with employees and/or industry experts in the development of the policy.
- Explain what the purposes of the policy are. For example, to create a safe workplace environment and prevent drug and alcohol related accidents.
- Identify to whom the policy applies. Employees? Contractors? Everyone?
- Provide clear guidelines about what constitutes unacceptable behaviour. Although an employer may not prohibit employee alcohol or drug use in their own time, it may be appropriate to prohibit drug and alcohol consumption at work or at work-related functions, particularly in safety-sensitive roles and prohibit a worker from being affected by any drugs – legal or illegal. This sort of policy might be appropriate in industries where a worker could kill or seriously injury themselves or a third party. [1]
- Specify how the policy will be implemented and what the consequences are for failing a test or refusing to take a test. It may not always be reasonable to terminate an employee. Rehabilitation may be a more appropriate option.
- Educate your staff on the policy and review and update it as necessary.
Unfair Dismissal Claims
Terminating an employee who has tested positive to a drug and alcohol test in the workplace can open a can of worms if they bring an unfair dismissal claim and you have not managed the process properly. However, this is something we can help you with.
An employee dismissed for failing a drug and alcohol test may bring an unfair dismissal claim under section 387 of the Fair Work Act 2009 (Cth), including on the basis that:
- The direction to take a workplace drug or alcohol test was not ‘lawful and reasonable’; and
- The termination of their employment was, in the circumstances, ‘harsh, unjust or unreasonable’.
The direction was lawful and reasonable
Every employee is required to obey lawful and reasonable directions given by their employer. Workplace drug and alcohol testing may be lawful where it is reasonable, proportionate, and supported by a valid workplace policy, employment contract, award, or enterprise agreement.”. However, in defending an unfair dismissal claim an employer must show that a direction or requirement to take such a test was ‘reasonable’ in the circumstances. The employer’s position is strengthened where a clear, accessible and consistently applied workplace drug and alcohol policy exists, and the employee has been made aware of it (as discussed above).
‘Harsh, unjust or unreasonable’
Termination may be considered ‘harsh, unjust or unreasonable’ in circumstances including:
- Dismissals, where procedural fairness did not occur, for example, the policy was not applied on a consistent basis and the employee was not allowed to respond to any reason related to the capacity or conduct of the person[2];
- The evidence or material before the employer did not support the conclusion that the employee had breached the policy, for example, the testing process applied failed on a forensic level; and
- The termination was a disproportionate response to the gravity of the conduct.
As with all employment terminations, employers have a responsibility to ensure that procedural fairness occurs and termination is a reasonable response (These factors reflect the considerations in section 387 of the Fair Work Act 2009 (Cth)).
How we can help
If you need advice about the creation and implementation of a workplace drug and alcohol policy, we can help you create an appropriate document. We can review and draft employment agreements with your employees to ensure they reflect your policy and investigate and defend you against an unfair dismissal claim. Call us on 1300 882 386 or email us.
The information contained in this post is current at the date of editing – 12 May 2026.
[1] Sharp v BCS Infrastructure Support Pty Ltd [2015] FWCFB 1033 [2] Crozier v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport, Print S5897