Workplace drug and alcohol testing

by The FindLaw Team

Testing of employees for drugs or alcohol is becoming increasingly common in New Zealand workplaces.

The main reason employers decide to test is that, depending on the type of work being performed, impairment by alcohol or drugs gives rise to a very real health and safety hazard.
Employers are required by law to take reasonable steps to protect employees and others from hazards at work – drug or alcohol testing is a reasonable step that can be taken, especially now that testing services are readily available in New Zealand.

However, drug and alcohol testing raises the issue of privacy, and also whether an employee can refuse to take a test and what happens if they do?

This article looks at the health and safety obligations of employers in relation to drug and alcohol testing, policies, privacy and refusal to take a test. At the end of the article is a series of links to New Zealand drug and alcohol testing employment cases, summarised by the FindLaw team.

Health and safety

Impairment by drugs or alcohol presents a hazard that must be identified and controlled. This is especially the case where an employee’s actions (or inactions) could cause harm to themselves or someone else, for example people who drive vehicles, work at height, or operate machinery or dangerous equipment. It also includes jobs where a mistake could have harmful results, such as aircraft engineers making pre-flight checks, mechanics repairing vehicles or dangerous machinery, or doctors operating on a patient.

The Health and Safety in Employment Act 1992 specifically states that the term “hazard” includes a situation where a person’s behaviour may be a source of harm, such as situations resulting from drugs or alcohol.

In order to control the risk of impairment by drugs or alcohol, many employers have a policy that allows them to test employees. Policies commonly allow the employer to test an employee:

  • Before an employee commences a role that is safety sensitive (or is in a safety sensitive area);
  • After an accident or incident (near miss) caused by the employee;
  • Where there is “reasonable cause”, ie where the employee’s behaviour suggests they are impaired;
  • Random testing (case law suggests random testing is only reasonable for safety sensitive roles or areas); and
  •  Monitoring an employee who has previously tested positive for drugs or alcohol.


What makes a drug/alcohol policy “reasonable”?

The Employment Court’s judgement in NZ Amalgamated Engineering Printing and Manufacturing Union Incorporated & Ors v Air New Zealand Limited & Ors (2004) gave some indications of the factors that need to be present in order for any drug and alcohol testing policy to be considered reasonable:

  • Random testing is only likely to be reasonable for employees in roles where there is a risk of serious harm from their impairment as a result of drugs/alcohol;
  • Consultation with employees and unions is likely to be needed before introducing a policy;
  • Issuing comprehensive written company policies should be a normal feature of the work environment;
  • There needs to be scientific validity to the test results and preferably involvement by medical practitioners in interpreting the results;
  • Employee consent must be gained, although refusal to give consent may be treated as a failure to follow lawful and reasonable instructions (refusal must be dealt with on a case by case basis);
  • The policy must endeavour to deal sensitively with personal information;
  • Education and avoidance of use or abuse of such substances should be the primary goal of the policy; and
  • Rehabilitation should be the primary “remedy” for those testing positive.


Drug testing and privacy

Drug testing involves the collection, storage, and use of personal information. The provisions in the Privacy Act 1993 mean employers can collect personal information (including test results) only for a “lawful purpose” connected with their functions or activity and the collection must be “necessary” for that purpose.

Initially, it is necessary to look at the means by which information is collected, and ensure it is not collected by unlawful means. The information gathered must not be unfair or intrude to an unreasonable extent on the affairs of the individual.

Meeting the employer’s duty to provide a safe workplace under the Health and Safety in Employment Act is likely to be a “lawful purpose” for collection of personal information by testing, especially as unsafe behaviour arising from the effects of drugs or alcohol would come under the meaning of “hazard”.

Even so, employers must carefully assess the scope and process of testing. In most cases, random testing would probably be too intrusive. While there may be more scope to introduce pre-employment testing, it needs to be tailored to the specific position being filled. There are crucial limits on how far an employer can go to compel an employee to give a blood or urine sample, and the extent to which employers can introduce testing programmes on existing (rather than new employees).

What happens if the employee refuses to give consent?

Most policies will state what will happen in the event an employee who is asked to take a drug or alcohol test refuses to do so. Usually, refusal without good cause will be treated by the employer as being failure to follow a reasonable and lawful instruction that is considered to be serious misconduct.

The employer must follow a fair and reasonable process when investigating and taking action against an employee who refuses to take a drug test. If it ends up in the Employment Relations Authority (or Court), the test of justification will be applied. This test requires the employer to:

  • Sufficiently investigate before taking any action against the employee (including the sequence of events that led to the employee’s refusal and their reason for refusing);
  • Raise its concerns with the employee before taking any action against the employee;
  • Give the employee a reasonable opportunity to respond to its concerns before taking any action against the employee; and
  • Genuinely considered the employee's explanation (if any) before taking any action against the employee.


What happens if the test is positive?

The degree of intoxication and the position held by the employee are important factors when considering what action the employer will take following a positive drugs test. Many employers choose to allow an employee to keep their job so long as they undertake a rehabilitation programme and meet certain conditions. As the Employment Relations Authority said in Palmer v Bluescope New Zealand Steel Ltd (2006):

“An employer cannot dismiss every person who has an alcohol or drug problem so an employer has to manage the situation in such a way that the rights of the disabled employee and the rights of other employees are weighed fairly and reasonably. This will not always be easy to do and that is another reason why a policy would be of assistance.”

The decision whether to dismiss an employee who has tested positive or allow them to keep their job (subject to warnings and other conditions) will depend on the individual circumstances – there is no one solution that suits all.

Links to case examples



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