08 Nov 2012

Fair Work Australia: urine testing an unreasonable intrusion in employee privacy

by Joe Catanzariti

Competing considerations must be balanced: the need to ensure a safe workplace against the need to protect employees from undue interference by employers in their personal lives.

Testing for drugs is a sensitive workplace relations issue. On the one hand, employers are interested in meeting their obligation to provide a safe work environment by screening out employees who are impaired by drug use. On the other hand, employees are concerned with any unjustified intrusions into their private lives. The fine issues which can arise where an employer seeks to introduce a particular testing method were considered in Endeavour Energy v CEPU [2012] FWAFB 4998.

The new drug and alcohol testing policy

In this case, the employer proposed to introduce a new drug and alcohol testing policy. The policy was objected to by the respondent Unions upon several grounds, particularly, upon the basis that urine testing was not an appropriate method of drug-testing. Following the dispute settlement procedure in the Endeavour Energy Enterprise Agreement 2010, the parties agreed to refer their dispute to Fair Work Australia ("FWA") for arbitration.

The first instance decision: "Unjust and unreasonable method"

At first instance, SDP Hamberger made several findings. These included findings as to the accepted level of blood-alcohol concentration in employees, the suitability of pre-employment and pre-placement testing, and the process for random testing. These findings were not challenged on appeal. The employer however challenged SDP Hamberger's finding that its introduction of urine testing would be "unjust and unreasonable" in view of the availability of saliva testing.

The unions and the employer were in agreement that random drug and alcohol testing, in itself, was a suitable matter for employer directions. However, disagreement lay in the method of testing, ie. was urine testing appropriate. The relevant principle was stated as follows in Australian Federated Union of Locomotive Engineers v State Rail Authority of New South Wales (1984) 295 CAR 188, that the Tribunal "not seek to interfere with the right of the employer to manage his own business unless he is seeking from the employees something which is unjust or unreasonable".

SDP Hamberger found that urine testing was an unjust and unreasonable method because:

  • oral testing was available;
  • oral testing is able to identify whether there has been recent consumption of drugs whereas urine testing is not so capable; and
  • whereas oral testing only shows a positive result where there is recent consumption, urine testing can yield a positive result even where consumption occurred several days ago. Thus, there is a risk with urine testing that employees will be made to account for drugs taken outside of an employment context.

SDP Hamberger had regard to the rationale of drug testing being, to eliminate the risk of employees coming to work intoxicated by drugs and posing a risk to the health and safety of others, "[b]eyond that the employer has no right to dictate what drugs or alcohol its employees take in their own time. Indeed, it would be unjust and unreasonable to do so".

The employer's arguments on appeal

On appeal, the employer relied upon several legal and factual arguments to show that the primary decision was erroneous.

From a legal perspective, it was argued that the decision at first instance failed to give adequate regard to the employer's obligations under the Work, Health and Safety Act 2011 (NSW) ("the WHS Act") and was inconsistent with the decision of Lawler VP in CFMEU v HWE Mining Pty Limited [2011] FWA 8288.

From a factual perspective, the employer alleged that SDP Hamberger had given undue regard to the evidence of a non-expert, especially, because the evidence was in conflict with evidence given by toxicology experts.

Urine vs saliva testing

The Full Bench recognised that its power to overturn the decision at first instance was governed by the principles recognised in House v The King (1936) 55 CLR 499 that the appellant identify an appealable error on the part of the decision-maker. The Full Bench determined that SDP Hamberger's decision was not infected with error.

In particular, the Full Bench found that it was proper for SDP Hamberger to focus on the respective capacities of urine and saliva testing to detect cannabis in particular, because the evidence disclosed that cannabis was the most widely used drug in Australian workplaces. Furthermore, it was appropriate for SDP Hamberger to take the approach of comparing the effectiveness of urine and saliva testing in detecting recent drug use. This was because the policy expressed its purpose to be the maintenance of a safe workplace and recent drug use would provide the best reflection of whether an individual was impaired from drug use.

Relying on a non-expert

As to the employer's contention that SDP Hamberger put undue reliance upon the evidence of a non-expert, the Appeal Bench rejected this contention. Under sections 590 and 591 of the Fair Work Act, Fair Work Australia has a discretion as to the admission of evidence. The non-expert evidence was important to the issues in the case because the person who gave it, though not a qualified toxicologist, had expertise in relation to alcohol and drug use in the workplace.

The employer's obligations under the WHS Act

As to the employer's contention that the first instance decision failed to accord adequate significance to the employer's obligations under the WHS Act, the Full Bench rejected this argument having regard to:

  • the primary obligation under the WHS Act – to "ensure, so far as is reasonably practicable, the health and safety of workers" – was expressed in general terms, such that there is no explicit obligation to adopt a particular method;
  • there was no reason to believe that oral testing would not meet the employer's primary obligation; and
  • although SDP Hamberger did not expressly refer to the WHS Act it was implicitly taken into consideration.

Therefore, the primary decision was in harmony with the WHS Act.

In this regard, the Full Bench's decision accords with Shell Refining (Australia) Pty Ltd v CFMEU [2009] AIRCFB 428 where it was stated in relation to the then occupational health and safety framework, "[I]t cannot be expected that any employer which does not have a system of random urine-based testing is potentially in breach of the law".

Should the decision in HWE Mining have been followed?

The employer argued that SDP Hamberger should have provided reasons for not following the decision in HWE Mining.

In that case, the employer proposed a change in its drug testing regime, namely, that saliva testing be introduced to operate in conjunction with pre-existing urine testing. In addition, the case was heard in mid-2010 before significant improvements were made in the reliability of saliva testing.

These two factors were held to distinguish the case from the immediate circumstances. Ultimately, the Full Bench held that SDP Hamberger was "required to determine the matter which had been referred to him for arbitration on the basis of the evidence and material before him".


This case illustrates the meaning of the concept "unjust and unreasonable" in the context of proposed drug testing. The phrase requires a balancing of competing considerations: the need to ensure a safe workplace against the need to protect employees from undue interference by employers in their personal lives. Moreover, "unjust and unreasonable" requires a comparison between the merits of any proposed method of drug use against alternative methods.

This article was written when Joe was a partner at Clayton Utz and does not necessarily reflect his views as Vice-President of the Fair Work Commission.

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