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25 August 2016

Lessons from recent cases involving breach of drug and alcohol policies

There have been a number of recent cases considering employers’ obligations when dealing with suspected or known drug and alcohol use by employees.

There have been a number of recent cases considering employers’ obligations when dealing with suspected or known drug and alcohol use by employees. These decisions are helpful in guiding employers through critical issues associated with employee misconduct and termination of employment.

Chisholm v Coates Hire Operations Pty Limited [2016] FWC 3653 – breach of zero tolerance drug and alcohol policy while driving company vehicle outside of work hours

The Fair Work Commission (FWC) held that whether or not criminal charges are laid is irrelevant to the dismissal of an employee for a breach of the employer’s drug and alcohol policy.


The employee was employed by Coates as an assistant branch manager. In 2015 the employee’s company vehicle was involved in a single vehicle accident outside of work hours. The employee claimed that he was not in control of the vehicle at the time of the accident. However, evidence demonstrated that:

  • the employee had been drinking with his girlfriend at a golf club;
  • the employee had placed a meat tray and takeaway food in the company vehicle suggesting that he intended to drive the vehicle home; and
  • a man meeting the description of the employee was seen and heard at a service station shortly after the accident, asking his mother to collect him.

Coates’ policies required a zero blood alcohol concentration while driving a company vehicle and provided that an employee would be dismissed if that policy was breached. Coates suspended the employee on full pay the day after the accident, pending a police report into the matter given the unusual circumstances of the accident and the discrepancies in the evidence provided by the employee.

Due to the delay in obtaining a police report, by agreement Coates interviewed the employee approximately two weeks after the incident and issued him with a show cause letter three days later. After considering the employee’s response, Coates terminated the employee for engaging in serious misconduct in:

  • demonstrating a reckless lack of care for Coates’ property;
  • breaching its policies; and
  • creating a risk to himself and third parties by his breach of the drug and alcohol policy.

Coates also raised concerns at the unfair dismissal hearing that the evidence presented to the FWC demonstrated a level of dishonesty that irreparably harmed the employment relationship. While Coates terminated the employee for serious misconduct, it did pay him in wages in lieu of notice. The employee lodged an application with the FWC alleging that his dismissal was unfair. He claimed that as his keys were lost or stolen he could not be held responsible for the careless driving that led to the damage to the company vehicle.


The FWC found that the dismissal was fair because:

  • the circumstances gave rise to a reasonable and definite inference that the employee was driving the company vehicle and that the employee, who admitted that he had been drinking on the night of the accident, breached Coates’ policies, which constituted a valid reason for his dismissal; and
  • the employee was notified of the reason for his dismissal by Coates and given an opportunity to respond.

The FWC confirmed that where an employee has allegedly engaged in criminal conduct that also breaches the employer’s policies, a failure of the police to press charges for lack of evidence will not provide relief for the employee from termination of their employment. If there is sufficient evidence to support a reasonable conclusion that an employee has engaged in serious misconduct, that will be sufficient proof for an employer to make a termination decision as long as the employer conducts the process in a procedurally fair manner.

Haslett v SuperSealing Pty Ltd [2016] FWC 1622 – an employer does not need to wait indefinitely for an employee to remedy drug addictions before the employer can make a decision to terminate employment


Mr Haslett was employed as a crack sealer. His work required him to drive medium and heavy class vehicles and work on public roads repairing the road pavement. He was dismissed from his employment with SuperSealing as a result of his illicit drug use.

SuperSealing had a drug and alcohol policy that required employees not to be under the influence of alcohol or drugs during working hours. The policy also stated that ‘the Company views alcoholism and drug use as treatable illnesses’ and that ‘in appropriate situations, where an employee’s performance and well-being has been adversely affected by alcohol or drug use, the Company may assist the employee via referral to treatment programs’.

The employee failed two drug tests conducted at the employer’s request. After failing the first, the employee received a warning indicating that his breach of the employer’s drug and alcohol policy was considered serious misconduct and that his employment was at risk. The employee was stood down without pay until he could provide a clear drug test. The employee failed his second drug test and failed to attend six other drug tests arranged by the employer.

The employee was warned 20 days before his dismissal that he would not be allowed to attend work until he provided a clear drug test. Following the employee’s further non-attendance at a drug test arranged by the employer, he received a letter of termination. The letter indicated that the reason for his termination was that for approximately seven weeks the employee had failed to provide a negative drug test and to show that he was fit for work. As such, he had breached his employment conditions and that breach was considered to be serious misconduct.

The employee lodged an application with the FWC alleging unfair dismissal. He was critical of the employer’s failure to offer him further assistance as contemplated in its policy.


The FWC found that the dismissal was not unfair for the following reasons:

  • The employee’s failure to attend the drug test, having already failed two, was a valid reason for his dismissal. The employer was entitled to conclude from his non-attendance that his drug use continued, amounting to serious misconduct.
  • Although the employee was not directly given an opportunity to respond to the reason for his dismissal, the earlier warning put him on notice that an inability to show that he was no longer affected by drugs would lead to his dismissal. Further, discussions between the parties prior to his dismissal contemplated the possible termination of his employment and gave him adequate opportunity to raise any matters the employer should consider.

The FWC also found that the employer had discharged its obligations under its drug policy by having numerous conversations with the employee about the need to obtain assistance and that the employee was mutually responsible for his own rehabilitation.

The FWC considered that, given Mr Haslett was required to use heavy machinery in his work and that he would not be able to perform his work safely while affected by drugs, the employer had demonstrated substantial patience.

Peters v PJ & P Eldred [2016] FWC 1375 – need for reasonable grounds for termination based on accurate and reasonable assessment of an employee’s conduct


Mr Peters was employed as a school bus driver by Elderado, a small business. He was dismissed on the basis that on three evenings over a period of two years he allegedly consumed alcohol in quantities that meant he may not have had a zero blood alcohol concentration when he drove the bus the next morning. On the final occasion, the employee would have contravened Elderado’s formal written drug and alcohol policy if he did not have a 0.00 blood alcohol reading. After each incident he was warned that his behaviour was inappropriate but he was not warned that it might result in his dismissal. Elderado did not have a drug and alcohol policy in place at the time of the first two incidents.

The allegations in the first instance were based on third hand information that the employee had been seen in a hotel with others, with a beer in front of him. The employee told his employer that he hadn’t been drinking but that he had stopped to pick up dinner and was speaking with friends while he was waiting. Three of the employees’ children were waiting for him in the school bus while he was purchasing the dinner.

The second incident occurred at a community Christmas Carol event. Mr Eldred (who was also drinking and drove a school bus the following morning) saw the employee drinking beer and reminded him that he had to drive the bus in the morning and warned that ‘everybody’ was watching him. The employee told the FWC that he had four stubbies over a period of approximately five hours and went home at about 9pm. The employee understood the conversation with the employer as a warning not to drink too much on an evening before a school bus run. The employer did not tell the employee that his job was at risk. Elderado then introduced a drug and alcohol policy after the second incident.

The third incident occurred when the employee attended a pool and darts competition night at a local hotel. The employer received a phone call from a third party who told him that the employee had been drinking in the hotel until at least midnight. The employer raised the matter with the employee who responded that he didn’t think he drank ‘that much’ and that he didn’t think he would be over the limit. The employer made a diary note that he told the employee that he had to be 0.00 and that it was the third time he had talked to him about drink driving. However, the employee’s family gave evidence that he only had enough money on him for four beers and that he did not drink spirits as had been alleged. The employer did not seek to have the employee’s blood alcohol level tested at any time.

The employer terminated the employee’s employment five months after the third incident, citing the three drinking incidents and concerns about the cleanliness of the school bus. The employer gave evidence that he had failed to act for five months because of workloads and the time it took to consult with relevant authorities and the employer organisation.


The FWC found that the dismissal contravened the Small Business Fair Dismissal Code and was also unfair because of the following reasons:

  • Although the employer raised its concerns with the employee and gave him an opportunity to respond, it did not warn him that his job was at risk because of his conduct.
  • The employee was not given a reasonable opportunity to improve because that opportunity must have been given in the context of his employment being at risk.
  • The employer only informed the employee why he was being dismissed after the decision was made. Consequently, the employee did not have a meaningful opportunity to respond or influence the decision.
  • The five month delay between the incident and the termination was totally unreasonable and indicated that the employer did not have strong concerns that the safety of passengers was at risk.
  • The reason for the dismissal was not a valid reason based on the employee’s conduct or capacity because the employer had no reasonable basis to conclude that the employee was not fit to drive the bus on the three occasions.

The FWC confirmed the need to act promptly on allegations of misconduct to preserve the employer’s right to terminate for a serious breach and to the need to ensure allegations relied on as the reason for termination are able to be substantiated.

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This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please let us know.

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