By: Amanda Douglas
Published: 29/08/2016
A recent decision of the Employment Relations Authority has highlighted the importance of procedural fairness when disciplining staff for a failed drug test.
 
Background
 
In McLeod v Envirowaste Services Limited [2016] NZERA Christchurch 103, Mr McLeod was employed by Envirowaste as a truck driver.  After Easter weekend, McLeod was selected to undertake a random drug test.  The result of that test was non-negative and the sample was sent to the laboratory for a confirmatory test.  McLeod was initially suspended on full pay while awaiting the final test results.
 
The confirmatory test returned a positive result for THC (cannabis) and, as a result, Envirowaste asked McLeod to attend a disciplinary meeting.
 
McLeod's explanation was that he had been to a party that weekend and had been very intoxicated.  He said his memory was vague but he did recall that people were smoking cannabis at the party.  He said, as far as he could remember, he did not smoke any drugs and queried whether the cannabis in his system could have been from second hand smoke.  Following the disciplinary meeting, Envirowaste changed McLeod’s paid suspension to suspension without pay.
 
A further meeting was held in which Envirowaste advised McLeod that his actions were considered to be serious misconduct justifying termination.  Envirowaste was not prepared to exercise its discretion under the drugs and alcohol policy to offer rehabilitation.
 
The decision
 
The Authority made it clear, from the outset, that drug testing policies or contractual provisions will be interpreted and applied strictly.  
 
As the testing itself was not carried out in the manner prescribed in the policy, there was a procedural error by Envirowaste, which affected its ability to rely on that test result.  The Authority found that the employer's failure to follow the policy meant that the credibility and integrity of the test was questionable and, without an admission by McLeod that he attended work under the influence of drugs, there was no basis for a finding of serious misconduct.

It also found that throughout the disciplinary process, Envirowaste had blurred two allegations; that McLeod attended work under the influence of drugs, and that he failed a drug test.  Envirowaste's decision to dismiss McLeod was, in fact, based on the conclusion that he had been under the influence of drugs at work as well as a view that Mr McLeod was not telling the truth; a conclusion that was never put to Mr McLeod in a way he could respond to.
 
The Authority found that Envirowaste did not investigate any of the matters that Mr McLeod raised as an explanation for the positive drug test result.  It was found that Envirowaste could have spoken to McLeod's wife, who was present at the party, and could have made inquiries as to the likelihood of McLeod being under the influence of drugs when he attended work.
 
The Authority decided that Envirowaste had predetermined the outcome.
 
The Authority also found that Envirowaste had not exercised its discretion to offer rehabilitation appropriately in the circumstances and, once again, it had not followed its own policy on this.
 
The Authority found that Envirowaste's failure to apply the policy strictly meant the subsequent decision to dismiss was unjustified.  It was also found that Envirowaste acted in an unjustified manner by suspending Mr McLeod without pay which caused disadvantage to him.
 
The Authority exercised its discretion to award beyond three months' salary and ordered Envirowaste to pay 34 weeks' wages ($20,762.60) along with $11,000.00 compensation for hurt and humiliation.
 
What this means for employers
 
Where an employer has a drugs and alcohol policy in place, it is important it is not overly onerous or ambiguous, and that any internal procedures are correctly and accurately followed by the employer.  This requires both a carefully drafted policy, and detailed adherence to that policy when carrying out drug testing.
 
It may not be enough for an employer to simply rely on a failed drug test as a finding of serious misconduct.  An employer may be required to investigate further, particularly where an employee may raise other explanations, or where the employer makes allegations that go beyond the failure of a drug test (such as being under the influence at work, or dishonesty).  Policies need to be carefully drafted to enable dismissal based on a failed test.
 
Adherence to the policy is essential to demonstrate the integrity of the test and to then prove that an employee did take drugs.
 
If rehabilitation is referred to in the policy, even where the decision to offer rehabilitation is at the employer's discretion, it will open up such a decision to scrutiny by the Authority.  Employers should carefully consider how rehabilitation should apply in their organisation and how it is recorded in their drug and alcohol policy.
 
Care needs to be taken around suspension, and an employee may have a disadvantage claim if suspension is not paid, particularly if that is not set out in the policy.
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