03 Mar 2016

Zero tolerance drug policy sets strong ground rules on gas rig

by Amy Granger

Dismissal of an employee who tests positive for drugs may, at least in the context of safety-critical work, be lawful and reasonable.

The Fair Work Commission has made clear that immediate dismissal for drug use at work can be justified in a high-risk work environment with a zero tolerance drug policy in place.


Ensign Australia Pty Ltd, the operator of Santos Moomba Gas Fields, summarily terminated an employee after he returned a positive test result for drugs upon presenting for work on 30 August 2015. The employee, Mr Hafer, had been employed by Ensign for three years as a Derrickhand, performing drilling services at the gas fields. He contested his dismissal on the basis that it was harsh, unjust and unreasonable (Hafer v Ensign Australia Pty Ltd [2016] FWC 990).

The dismissal – not harsh, unjust or unreasonable

The Policy

Ensign’s "Fitness for Work – Drug and Alcohol Policy" adopted a zero tolerance approach to drugs and alcohol in the workplace and made clear in no uncertain terms that a contravention of the policy could result in termination of employment. Additionally, workers had to submit to random and “for cause” drug and alcohol testing due to the high risk nature of the workplace.

Safety considerations paramount

The Commission determined that Ensign was within its rights to terminate Mr Hafer’s employment on the basis of the positive drug test, particularly because Mr Hafer was required to perform work in a high-risk environment (a drilling rig), which, if uncontrolled, potentially exposed him to serious injury or death. A key consideration of the Commission was that the conduct also posed risks to other workers – as their safety on site was dependent upon all crew members following policies and procedures, remaining vigilant and focused on their duties, and being fit for work.

Procedural deficiencies outweighed

Ensign admitted that it had failed to properly notify Mr Hafer of the reason for the termination of his employment, and should have met with him to provide him with an opportunity to respond to the proposal to terminate his employment, prior to making a final determination. However, despite this failure to provide procedural fairness as required by the Fair Work Act 2009 (Cth), the Commission found that had Mr Hafer been provided with an opportunity to respond, the outcome would not have changed.

Given that the determination of an unfair dismissal claim requires the Commission to consider a number of factors in totality, the Commission concluded that due to the serious nature of the safety considerations set out above, the lack of procedural fairness did not render Mr Hafer’s dismissal unfair.

Does your policy allow appropriate disciplinary responses?

This case demonstrates the Commission’s willingness to find that employer policies which provide for disciplinary action including dismissal where an employee tests positive for drugs may, at least in the context of safety-critical work, be lawful and reasonable. Employers should ensure that:

  • policies provide a clear, zero tolerance approach to drugs and alcohol in the workplace, and specify the consequences of a breach;
  • regular training is provided to employees on their obligations (and consequences of breach) under the policy; and
  • if seeking to terminate an employee’s employment for breach of the policy upon return of a positive drug test, ensure that procedural fairness is considered in any termination process.


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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.