Employee drug use outside work hours – mitigating health and safety risks

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Wednesday 24 January 2018

Employee drug use outside work hours – mitigating health and safety risks

As we come out of the holiday season, many employees will be returning to the work environment after weeks of free time. As a general rule, what employees get up to in their own time is none of their employer’s business. However, employees must be fit and ready to work competently and safely.

Working safely means employees must not be at work under the influence of drugs or alcohol. This is particularly important in safety sensitive positions. Many responsible employers will attempt to mitigate this risk by implementing drug and alcohol testing and imposing disciplinary sanctions for employees who are impaired while at work.

Most drug testing is currently conducted by way of a urine screening test. This is an invasive process, and doesn’t always indicate actual impairment at the time of testing. Therefore, the courts have put in place certain protections for employees. These guidelines seek to strike a balance between employers’ obligation to provide a safe workplace and the general rule that employees’ time is their own to spend how they choose.

A recent example of an employer tipping the balance too far against an employee is Lloyd v Healthy Business Investments Limited[1].  Healthy Business Investments Limited (“HBIL”) runs a gym and café and employed Mr Lloyd as a chef. He disclosed a history of drug use during what he had been told was a confidential consultation with the onsite nutritionist. This information was passed on to HBIL’s management.

Mr Lloyd was questioned about his drug use and acknowledged that he used marijuana in his spare time. Based on this admission alone HBIL made a decision that Mr Lloyd was in breach of his terms and conditions of employment. HBIL told Mr Lloyd his employment could not continue unless he agreed to attend rehabilitation for drug use. In a meeting held to discuss the decision, HBIL suggested a drug test. The meeting became heated and came to a premature end. Immediately following the meeting, Mr Lloyd resigned from his position.  In response, HBIL dismissed Mr Lloyd for serious misconduct. It relied on his aggressive behaviour during the meeting. HBIL said it did not feel safe having Mr Lloyd work out his notice period.

The Employment Relations Authority upheld Mr Lloyd’s claims for unjustified dismissal and unjustified disadvantage and awarded him $15,000 compensation, lost remuneration, and the value of lost benefits for free gym membership and meals. It also noted that even if he had not been dismissed, Mr Lloyd would have been able to claim he was unjustifiably constructively dismissed.

The Authority held that HBIL “had a right to prevent Mr Lloyd from attending work in an impaired state, not to dictate what he did in his private life”. Further, Mr Lloyd had to show signs of impairment during work hours to justify HBIL taking the approach that it did.

There are a few lessons in this case for employers. HBIL’s process was entirely flawed. It concluded Mr Lloyd had breached his employment agreement without proper processes. No drug test was undertaken, but in any event HBIL would not have had grounds to require Mr Lloyd to submit to a test. His drug use was outside of working hours. There was no evidence to suggest he was impaired while at work.

While drug and alcohol testing, and then offering rehabilitation or imposing disciplinary action, can be effective tools for employers, there are restrictions as to how far they can intervene into employees’ private lives. A suspicion, or even admission, of drug use outside work will not of itself justify intervention. An employer’s right to test for drugs and alcohol, and take formal action following a non-negative result, is founded on health and safety, not just the use of drugs or alcohol.

Reasonable cause testing is a sensible option in many work places. However, “reasonable cause” in this context means reasonable cause to suspect an employee is impaired while at work as a result of drug and alcohol use. Knowing or suspecting someone has used drugs or alcohol outside of work will not of itself justify testing. Reasonable cause requires evidence of possible impairment within the workplace. This may be in the form of physical evidence (e.g. unusual clumsiness, slurred speech, bloodshot eyes), a reduction in performance or seeing an employee using drug paraphernalia in the workplace.

There are some guidelines employers should bear in mind when addressing this issue:

  • If you intend to implement a drug and alcohol testing regime, you will need a written policy. Best practice is to outline the signs of impairment that would justify reasonable cause testing
  • This policy must be followed closely. The managers responsible for implementing drug and alcohol related processes should receive targeted training to ensure the policy is followed.
  • Before conducting a reasonable cause test, you need reliable and credible evidence. Overhearing workplace gossip about an employee using drugs is not grounds for testing. An employer should assess whether the source of the information is credible before acting on it. For example, did the source actually see the employee exhibiting signs of impairment, or is it hearsay or gossip? Is there a possibility of a false or malicious complaint? Where possible, evidence should be corroborated. For example, the policy may require two people to sign off as observing signs of impairment, with one of them being a manager/supervisor.
  • Any test must be carried out as soon as practicable. The information being relied upon should show a risk of impairment at the time of testing. You cannot rely on observations made weeks or days before testing to justify administering a test.


If there is any doubt on how to proceed with a drug and alcohol related issue your first port of call should be to refer to the policy. If you are still unclear as to how to proceed, or require an update of your policy, please feel free to contact us.

[1] Lloyd v Healthy Business Investments Limited [2017] NZERA Christchurch 188


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