Can an employee be dismissed for a positive drug test when not (obviously) impaired?

Managing failed drug and alcohol tests by employees can be challenging. Recent Fair Work Commission cases have upheld that an employee can be fairly dismissed due to a positive drug test, even if an employee does not show any signs of obvious impairment. However, it is not a blanket rule, and the surrounding circumstances must be considered.

In the current environment where it is difficult, if not impossible, to test for actual impairment from drugs and alcohol, it is crucial for businesses to be aware of how to manage these situations.

Sydney Trains v Goodsell: The background

In the recent Fair Work Commission (FWC) Full Bench in Sydney Trains v Goodsell ¹(Sydney Trains Decision), an employee was dismissed for a positive test for cocaine metabolite benzoylecgonine after returning from eight days of annual leave.

The employee worked as a Work Group Leader at Sydney Trains, working his way up from a trainee position over a period of 26 years of good service with no disciplinary history.

The employee admitted that four days earlier when he was on annual leave, he had accepted an offer to try some cocaine but believed it would have cleared his system by the time he was due back at work. He seemed unaffected by any substance during the test and emphasised that he felt completely normal and would have stayed home if he felt impaired.

Confirmation testing determined that the employee’s concentration level of benzoylecgonine was 264 ug/L while the Australian Standard’s cut off level for benzoylecgonine is 150 ug/L. The Sydney Trains’ drug and alcohol policy had outlined that, in pursuit of its goal to maintain a drug and alcohol-free workplace, it requires a test result below the Australian Standard cut off. The employee consequently applied to the FWC alleging that he had been unfairly dismissed from his employment with Sydney Trains as he was not actually impaired, and sought reinstatement to his former position. The original decision found the dismissal to be unfair, but Sydney Trains appealed to the FWC Full Bench.

FWC Full Bench decision

As a matter of principle, the FWC Full Bench highlighted that establishing a fair dismissal due to failing a drug test does not depend on establishing that there was a risk of impairment.

Failing a drug test in breach of a policy, regardless of impairment, presents a valid reason for dismissal.

This is because it is a breach of an important safety policy which has the purpose of ensuring that employees do not perform safety-critical functions with drugs or alcohol in their system – regardless of impairment. The Bench recognised the overarching reputation and legal risks for an employer where an employee has a prohibited substance in their system.

However, whether a particular employee was actually impaired at work will still be relevant in determining whether a dismissal is unfair in the list considerations under the Fair Work Act 2009 (Cth) to determine whether a dismissal was harsh, unjust or unreasonable. A valid reason for dismissal is just one of the considerations, and the FWC can consider “any other matters” that may be relevant.

Ultimately, the FWC Full Bench accepted the original decision that the dismissal was unfair, and reinstated the employee, despite there being a valid reason for dismissal. This was due to the mitigating factors weighing in favour of the employee - including that there was expert testimony that the employee would not have been impaired, his long employment (which included 40 clear drug and alcohol tests), the evidence that it was a one-off incident, the financial implications for his family, and that he showed remorse and a willingness to engage in future testing regimes as appropriate.

The importance of policy and communication

The Sydney Trains decision once again showed the importance of a clear policy which is well communicated to employees - with one of the relevant mitigating factors being the employee did not understand, from the policy or any training, that he could still test positive some days after taking the substance (whilst not working and on leave).

This has recently been reiterated in Hancock v Sydney International Container Terminals Pty Limited,² where it was found that whilst the policy was clear, the change to the policy of blood alcohol concentration from .02 to 0 was not communicated clearly enough to employees. Similarly in Witherden v DP World Sydney Limited,³ DP World’s policy did not explain to the employee the significance of the cut-off levels, how the Australian Standards apply, and particularly that the policy is intended to manage risks associated with hangover effects days after use, in addition to actual intoxication.

These recent decisions make it clear that where an employer is seeking to control an employee’s out of work conduct (i.e. not taking drugs and alcohol when off shift because of a potential “hangover”), the implications must be explicitly explained to employees.

Steps for employers: Managing positive drug and alcohol tests

These cases make it clear that having a “zero tolerance” policy on its own will not be sufficient to make a dismissal for a positive drug or alcohol test fair, particularly where it is questionable whether the employee is actually impaired. We recommend the following to manage drug and alcohol in the workplace:

1. Develop a clear drug and alcohol policy and communicate the policy to all employees. The policy should clearly outline prohibited substances, testing procedures, consequences for violations, and the process for dealing with positive test results. Importantly, if the policy applies regardless of impairment, the policy and training must clearly inform employees of the implications of alcohol and drug use whilst off-work. HopgoodGanim Lawyers are well placed in drafting policies and can assist your organisation.
2. If an employee has returned a positive result, provide the employee an opportunity to explain the result and provide any mitigating factors.
3. Thoroughly consider the mitigating factors presented by the employee, particularly the employee’s employment history (length and disciplinary record), role in the organisation, the nature and level of the drug use (including risk of impairment), or any health or personal issues that may have led to the positive result.

Our Workplace and Employment team at HopgoodGanim Lawyers have extensive experience in providing legal expertise in relation to drafting alcohol and drug policies, managing an employee’s failed drug test and across wider employment, industrial relations and workplace health and safety matters.

1. [2024] FWCFB 401
2. [2025] FWC 516
3. [2025] FWC 294