1. INTRODUCTION: GENERAL PRINCIPLES
1.1 The introduction of drug testing programmes into the workplace has given rise to heated debate both in New Zealand and overseas. Experience shows that if the implementation process is not carefully handled this may lead to workplace unrest and give rise to litigation. The debate centres around the extent which an employer can legitimately intrude into the lives of its employees by requiring its employees to undertake drug or alcohol tests.

1.2 Drug testing programmes give rise to a conflict of rights and obligations. On the one hand, there is the right of employees to privacy and to not be subjected to medical tests without consent. On the other hand, there is the obligation upon all employers to take all practical steps to provide a safe and healthy work environment. Where the balance is to be struck between these competing rights and obligations will ultimately be a question for the courts, to be decided on the facts of particular cases.

1.3 However, in order to minimise the risk that an employer's drug and alcohol testing programme may end up being on the wrong side of the law, there are sensible precautions that should be taken aimed at minimising objection to a testing programme while at the same time ensuring that the employer's objective (that employees are fit to work) is obtained. These precautions include:

(a) using testing only where there is an identifiable problem in existence. It is far easier to justify testing (both from an economic and legal perspective) where there is clear evidence of an existing problem;

(b) so far as possible, minimising the extent to which employees may feel humiliated by having to provide samples for testing by providing appropriate screening and respecting privacy, without compromising the integrity of the test;

(c) employees should give their informed consent to the testing process before being tested;

(d) employees should be informed of the company's policy on drug testing including the purpose for having a drug testing policy and the consequences that may follow from a failure to provide a test;

(e) strict controls need to be in place to preserve the confidentiality of the test results and the integrity of the testing process.

2. RELEVANT LEGISLATION
The Privacy Act 1993 
2.1 Drug and alcohol testing involves the collection and use of personal information and is therefore covered by the information privacy principles ("IPPs") in section 6 of the Privacy Act 1993. An initial hurdle for employers is IPP1 which requires that information be collected only if it is for a "lawful" purpose and if "necessary" for that purpose. To show that drug testing is "necessary", the employer should be able to point to evidence that establishes that there is a safety problem arising from drug and alcohol use in the workplace.

2.2 IPPs 3 - 10 apply largely to the implementation of a drug testing programme, rather than the legal basis for testing itself. In summary, the employer will be required to use test samples and results only for the purpose for which they were collected (ie testing for alcohol/drug levels) and must ensure the employee is aware of the purpose of, recipients of, right of access to, and right to correct information collected. The employee should also be made aware of the consequences of refusing to undergo the testing. The testing (collection of samples) is not to be carried out in an unlawful manner, or in a way which is unfair in the circumstances, or which intrudes unreasonably on personal privacy. The collection and analysis should be done in a scientifically reliable manner, should be securely stored and not be kept longer than necessary. The procedure adapted for undertaking the tests should minimise humiliation and respect privacy so far as reasonably possible.

Human Rights Act 1993 
2.3 Section 22 of the Act provides that it is unlawful to refuse work or terminate employment by reason of any of the prohibited grounds, including disability. While it could be argued that "disability" could include impairment brought about by the consumption of drugs or alcohol, that argument is unlikely to find favour with the Courts.

2.4 Employers should not select employees for testing on the grounds of race or sex or any of the other unlawful grounds for discrimination in the Human Rights Act.

New Zealand Bill of Rights Act 1990 
2.5 Drug testing may breach the right to be free from unreasonable search and seizure (section 21), not to be arbitrarily arrested or detained (section 23), and the right to refuse to undergo medical treatment (section 11), if conducted without the consent of the employee concerned.

2.6 However, section 3 of the NZBORA restricts the application of the Act to acts done by the legislative executive or judicial branches of the Government of New Zealand, or by any body in the performance of any public function. As a result most employers will not be directly effected by the provisions of the NZBORA.

2.7 The Act's relevance is that it will be influential when determining where as a matter of public policy, the balance should be struck between an individual's right to privacy and an employer's obligation to provide a safe working environment.

2.8 In Harrison & Ors v Tuckers Wool Processors Limited [1998] 3 ERNZ 418 Goddard CJ referred to sections 9 (right not to be subjected to torture or cruel treatment) and 10 (right not to be subjected to medical or scientific experimentation) of the NZBORA in holding that a drug and alcohol testing clause should be struck out of a CEC because the clause was harsh and oppressive. On appeal, the Court of Appeal in Tucker Wool Processors Limited v Harrison [1999] 1 ERNZ 894 acknowledged the relevance of the NZBORA to assessing harsh and oppressiveness:

Among the matters which might be relevant to the inquiry under s 57(1)(b) are the particular rights or interests of the party affected by the power or rule (such as intrusive drug testing), the relevance of the terms of the employment in issue (such as health tests for airline pilots), societal values (as with the use of the Bill of Rights by the Chief Judge in the present case), and the circumstances of the contracts; including its overall balance.

2.9 Rights under the NZBORA may be "subject to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society" (section 5). An employer should be able to justify drug or alcohol testing on grounds of public safety and compliance with HASEA. Agreement in a collective or individual employment agreement, or the giving of informed consent for the test is the best defence to any claim that protected rights were infringed.

Crimes Act 1961 - Assault 
2.10 It is not possible to forcibly require an employee to provide a sample for testing. Any attempt to do so could amount to an assault and a trespass to the person at common law.

The Health and Safety in Employment Act 1992 and the Accident Insurance Act 1998 
2.11 The overall shift in recent years in health and safety management to impose accountability on the employer at the workplace means that it is in an employer's economic interest to avoid hiring employees with pre-existing susceptibilities that make them more likely to be subject to further injury. HASEA and the Accident Insurance Act offer considerable incentives to employers to determine an applicant's medical history.

2.12 Employers are obliged under s 6 of HASEA to take "all practicable steps" to ensure the safety of employees while at work. OSH has come out in support of drug and alcohol testing in two recent position papers. In November 1998, it endorsed a paper supporting random testing in certain circumstances (attached) and in January 2001, it issued a paper on the impairment caused by marijuana use in the workplace and appropriate biological testing. This paper may be accessed at the OSH website at http://www.osh.dol.govt.nz/order/catalogue/index.html under "Drafts".

2.13 In the case of Pooley v New Zealand Society for the Intellectually Handicapped (unreported, AET 1123/94, BW Stephenson, 7 June 1995) the Employment Tribunal accepted that an employer was justified in dismissing an employee who was suffering from epilepsy when the employee was unable to provide medical reports showing that she was fit to drive, and driving was an essential condition of her employment. The Tribunal expressly referred to the obligations imposed upon employers under the Health and Safety in Employment Act 1992 as forming the basis for justifying the actions the employer had taken. It was accepted that that Act impinges on the security of employment that an employee would otherwise enjoy. By analogy, it can be argued that where an employer has reasonable grounds to believe that an employee may not be fit for work due to impairment from drugs or alcohol, an employer may be justified in taking disciplinary action (which could amount to dismissal). This will particularly apply where either a drugs test is administered and the employee fails to pass, or the employee refuses to undertake such a test.

2.14 In the case of Nelson v Macmahon Contractors (NZ) Limited [2000] ERNZ 528 an employee was suspended without pay for refusing to provide a urine sample for drug testing. The employee sought interim reinstatement pending the hearing of his grievance. In the injunction hearing the Employment Court found that there was an arguable case that the drug testing provisions in the employment agreement were harsh and oppressive, however the balance of convenience favoured the employer. The Court stated:

The balance of convenience falls between the private rights of one individual and the health and safety of a large workforce working in a potentially dangerous occupation. I am also mindful that if [the employee] is reinstated and the defendant is injuncted from testing him for drug use, then those employees who in accordance with their contracts employment do submit and test positive would have reason to be aggrieved. These outcomes are more serious and the momentary embarrassment of [the employee] which I repeat, he may be eventually compensated if his case is successful.

2.15 This case did not proceed to a substantive hearing as the employee discontinued his action.

3. A MATTER OF TIMING
3.1 Workplace drug testing can take place at a number of stages, with various implications:

(a) Prior to employment as a pre-employment screening process;
(b) Post-accident;
(c) where there is reasonable suspicion of drug/alcohol abuse;
(d) on a random or periodic basis;
(e) as a follow up procedure after a positive test.

3.2 Of these different types of tests, random testing is the most problematic.

4. PRE-EMPLOYMENT SCREENING
4.1 Pre-employment screening is not carried out within the context of an existing employment relationship. As such, the employer's and employee's common law duties do not come into play. There has been judicial comment that pre-employment screening is a less problematic area for employers than during employment (Goddard CJ in Harrison v Tuckers Wood Processors [1998] 3 ERNZ 418 at 472).

4.2 It is usually not practicable for economic reasons to screen all applicants for a particular job. One option is to offer employment to the successful applicant but to make such an offer conditional upon the applicant satisfactorily passing a drug test. In Philson v Air New Zealand (unreported, AEC 35/96 Colgan J, 3 July 1996) Air New Zealand had offered employment to Mr David Philson as a part time employee in its warehouse, subject to his passing a drug test. Mr Philson commenced employment and a couple of days later was informed by the company's doctor that he had failed the drug test. Mr Philson submitted a personal grievance claim alleging that he had been unjustifiably dismissed and he filed proceedings in the Employment Court for an order that he be reinstated to his position pending the hearing in the Employment Tribunal of his personal grievance claim. The Employment Court held that Mr Philson was an employee as he had received an offer of employment and had accepted it. The issue was whether Air New Zealand was entitled to terminate that employment on the basis that a condition of Mr Philson's employment was not satisfied. In the result, the Court held that it would not reinstate Mr Philson to his position pending the personal grievance hearing as it was satisfied that his position was a "safety sensitive" one and that Mr Philson did not have a strong arguable care for establishing that he was unjustifiably dismissed.

4.3 The lesson to be learned from this particular decision is that with respect to pre-employment testing, the test should have been completed prior to an offer of employment being made so that there could be no argument that an existing employment relationship existed. A clean drug test result should be a condition precedent to a job offer being made rather than a condition of a job offer which has been made and accepted.

5. REASONABLE SUSPICION TESTING
5.1 The test that should be applied before requesting a test is whether the manager has an honest belief/suspicion based on reasonable grounds, after a proper inquiry, that the employee may be under the influence of drugs or alcohol. In NZ Professional Firefighters Union v NZ Fire Service Commission [1989] 2 NZILR 128 it was sufficient for the employer to act on evidence of other employees that the particular employee had consumed alcohol, as in the normal course of events these employees would have the average person's ability to assess whether another person was influenced by alcohol. In another case, the opinion of a traffic officer as to the employee's fitness to drive was not sufficient basis for the employer's dismissal of the employee for being intoxicated during work hours: Canterbury & Westland Drivers etc IUOW v Eyre County Council [1988] NZILR 1241.

5.2 The manager's concern should be put to the employee who should be given the opportunity to explain why his or her actions, appearance and conduct may have resulted from innocent causes rather than through over use of drugs or alcohol. If the manager's concerns remain after the employee has been given the opportunity to explain, then the employer may request that the employee undergo a drug test.

6. RANDOM TESTING
6.1 Before introducing a random testing regime there should be evidence of a drug/alcohol problem in the workplace, and the employees to be subjected to the test should be working in what are "safety sensitive" roles. In other words the employees should be undertaking duties which, if not properly performed due to an employee's impairment, could expose the employee, or others, to a risk of harm.

6.2 The introduction of random testing exposes an employer to a far greater risk of challenge from employees than would be the case if an employer limits its drug testing programme to pre-employment screening and/or reasonable suspicion drug testing. The risk of legal challenge is much higher in the case of random testing as there is a significant body of opinion within the community which disapproves of random drug testing on the grounds that it is an unwarranted intrusion into an employee's privacy. In Harrison & Ors v Tuckers Wool Processors Limited [1998] 3 ERNZ 418 Goddard CJ examined the following clause:

In keeping with The Company's commitment, and subject to prior consultation on the appropriate procedures the employee consents to undergo drug and alcohol testing procedures on a fair and reasonable basis, as and when required, including prior to seasonal re-engagement; following work-related accident or incident; or on a random selection.

6.3 Goddard CJ made the following comments on the clause:
Of course, employees who come to work under the influence of alcohol or drugs may be a danger to themselves and to others, but the remedy for that situation is not to be found in a contractual provision requiring employees to submit in advance to such invasive and intrusive procedures, a provision that could be abused if applied to someone who is not drunk or drugged. Moreover, it is questionable whether employers are the appropriate authorities or organisations for conducting such tests. There is nothing in the contract to suggest how they will be conducted. In other environments where alcohol and drug testing is authorised there are ordinarily regimes or protocols to ensure the integrity of the process and the fairness of its application. It is a severe assault to the dignity and integrity of the individuality of employees for their employers to impose such strictures upon them. I venture to suggest that few employees would willingly agree to such a provision as reasonable. I am aware that other employers have attempted to insert provisions along these lines in their employment contracts. No doubt some have been agreed to in return for incentives seen as adequate. They would need to be generous to overcome the natural reaction of employees to find such initiatives to be unacceptably disrespectful when dealing with human beings. Arguably, the employment contract is no place for such a provision, nor is the employer an apt person to decide who should and who should not be subjected to testing, whether random or otherwise, or to conduct such tests. If an employer thinks, on reasonable grounds, that an employee has come to work drunk or under the influence of drugs, the employer is perfectly at liberty to send the employee home.

The whole topic of the testing of employees for alcohol and drugs is more fitting to be the subject of legislation than of an employment contract. But even if it is to be dealt with in an employment contract in a workplace situation appropriate for such regulation, the contract would need to be fair to the employee and to contain safeguards and checks and balances to ensure that the results were reliable and were not obtained by means of serious indignity to the employee. It is difficult to see how a provision for compulsory random testing could ever be other than harsh and oppressive. What I have said relates to the use of such procedures during employment and does not apply to the common requirement imposed as a condition of employing a person that that person should pass satisfactorily medical or psychological examinations or tests for the presence of drugs in the body: see, for example, Philson v Air NZ Ltd unreported, Colgan J, 3 July 1996, AEC35/96.

6.4 On appeal in Tucker Wool Processors Limited v Harrison [1999] 1 ERNZ 894 the Court of Appeal stated:

The drug and alcohol testing powers present different issues, but again aspects of them can be tested by reference to extrinsic material. As the Chief Judge indicates, the provisions in the statute book stating the circumstances in which compulsory medical and drug testing is available, the purposes, the procedures, and other safeguards provide guidance. So too may legislation, jurisprudence, and reform proposals in other jurisdictions, eg the review by A Shaw, "Drug Testing in the Work Place and the Bill of Rights" in Drug Testing ? The Sporting Experience: the Employment Possibility, Legal Research Foundation, 1995. And possibly comparative contracting practice. This empirical material would not of course necessarily be decisive, but it would provide assistance for any determination to be made by the specialist Court.

6.5 Some employers maintain that, a drug testing policy limited to pre-employment screening and reasonable suspicion testing on an individual basis may not fully achieve the objective sought, which is to ensure that all employees at the facility are fit for work. This may be due to a number of reasons including the fact that other employees on site may be reluctant to make a report to management when they see behaviour which suggests a fellow employee may be impaired through drug or alcohol use. Employees' unwillingness to "dob in their mates" limits the effectiveness of a reasonable suspicion testing regime.

6.6 The Privacy Commissioner, in a media statement dated 22 November 1994, described a random drug testing programme as a "solution looking for a problem" and noted that a positive drugs test can establish only that the person has at some time in the past used one of the drugs being tested for and not that the employee was necessarily impaired while on the worksite. Given the Privacy Commissioner's express views, if a complaint is made of breach of the privacy principles as a result of the introduction of a random drug testing programme, such a complaint may well be upheld by the Privacy Commissioner.

6.7 IPP4 would apply if the employer tried to administer a drug test without the employee's informed consent. However, provided the employee consents to the test, there seems to be no scope for the employee to subsequently successfully allege that the employer has collected the personal information by unfair means. Thus, it seems that the law does not prevent an employer from introducing a random drug testing programme which involves requesting an employee to undergo a drugs test. The key issue is what action, if any, can an employer take if the employee refuses to undergo a random drug test when he or she is requested to do so. I now turn to consider that issue.

7. WHAT HAPPENS WHEN AN EMPLOYEE REFUSES TO TAKE A DRUG OR ALCOHOL TEST?
No provision for testing in employment agreement 
7.1 As mentioned above, an employer cannot physically force an employee to take a drug or alcohol test. The sanction for refusal will depend upon the terms of the employee's employment agreement. If the employee has not agreed as a term of his or her employment to undergo a drug test, it seems an employee has a right to refuse to take a drugs test and the employer cannot discipline the employee for such a refusal. Employees may not wilfully fail to comply with a lawful and reasonable instruction from their employer. The Arbitration Court in Wellington Clerical Workers IUW v College Group Limited [1984] ACJ 315 defined a "lawful and reasonable order" as being an order which:

(a) was not illegal in the sense of requiring the employee to perform any act contrary to law;
(b) was within the scope of the employee's contractual obligations; and
(c) was one which does not demand the performance of an impossible or dangerous task.

7.2 In the College Group case, an employer's dismissal of an employee who refused to follow a direction to transfer from a "credit reporting" section to a "file checking" section (a position of lower status) was held to be unjustified. The direction given was not "within the scope of the servant's contractual obligations". In New Zealand Food Processing v Unilabour New Zealand Limited [1990] 1 NZILR 35, Chief Judge Goddard held that there could be no intentional or deliberate act of disobedience justifying dismissal where the employee had a:

...bona fide belief in a right to reject the commands or directions as unreasonable or unlawful or as otherwise not binding on the worker.
7.3 Where the employee has not agreed to undergo a drugs test as a term of his or her employment, the employee can refuse to take a test on the basis that he is not bound to comply with the employer's request. It seems that a refusal in these circumstances would not be wilful disobedience justifying disciplinary action.

Provision for testing in employment agreement 
7.4 Where the employee has agreed as a term of his or her employment agreement to undergo a drug test then, a failure to undergo a test, when requested by an employer to do so, could be the subject of disciplinary action. The employee could not be disciplined for being "impaired" simply on the basis of the refusal to undergo the test. The disciplinary action would be for wilful disobedience. Whether such disobedience would justify dismissal, or only a written warning, would depend on all of the circumstances, including whether the employee had received a prior unequivocal warning that dismissal was a possible consequence of disobedience.

7.5 In conclusion, to have an enforceable random drug testing programme, an employer should ensure that appropriate wording is included in the relevant employment agreements. Such wording should refer to the consequences of a failure to comply with the request for a test. It is probably not sufficient to simply insert into the employment agreement a clause expressly stating that the employee will comply with all company policies from time to time.

7.6 A practical hurdle for employers implementing a drug or alcohol programme will be winning the co-operation of unions, particularly where an effective random testing programme is proposed. This can best be achieved by emphasising the common objective of ensuring a safe work environment, emphasising that drug testing is not being introduced as a way of justifying employees being dismissed, and consulting on how a drug or alcohol policy can be used as a means of identifying onsite problems so that problems can be addressed in a constructive way through employee assistance programmes aimed at rehabilitating employees who are identified as being at risk. Once these risk employees are identified, employers could offer to commit to the funding of an EAP programme for the employee in exchange for a commitment by the employee to participate in the programme and to undertake a drug test at the end of the programme and at other specified intervals which will objectively establish that the employee is no longer drug dependent.

7.7 Safeguards will need to be agreed with the unions to ensure that the test results are stored and kept under strict conditions of confidentiality so that employees who agree to undertake a drug test and an EAP programme are in no way prejudiced through the disclosure of such information to others, for example, future prospective employees.

8. RETURN OF A POSITIVE TEST
8.1 A positive test result does not automatically mean that a drug has impaired that employee's performance while at work. However, a positive test is part of the factual background that an employer can take into account to determine whether, on balance, there are reasonable grounds for believing that the employee is guilty of misconduct.

Article from the Employers Toolkit 2002 Seminar 

This is a general summary only and should not be taken as a substitute for specific advice.

For further details contact the author: Philip Skelton, Partner,
Russell McVeagh, Auckland

Web site: Russell McVeagh