Case of interest: Justified dismissal in relation to drug use - Employment Update Week 1, October

Justified dismissal in relation to drug use

Despite an employer having no applicable policy on reasonable cause drug testing, the Employment Relations Authority found the employer’s testing of an employee for cause to be justified because the employee consented to the test.

The employee’s Team Leader, Mr.King, said that in the course of casual conversation the employee told him that he smoked marijuana on most days and had gone to the staff carpark to smoke marijuana on one occasion. Mr.King was concerned and commenced a formal investigation. Mr.King invited the employee to a formal meeting, invited the employee to bring a support person or a representative, and alleged that the employee had been working under the influence of drugs at work and during working hours. During the meeting, Mr.King asked the employee to undertake a drug test and the employee agreed to do so. Following the meeting, the employee returned home and said that he did a home drug test which failed. The employee told Mr.King that there was no point in giving a sample to a third party and told the employer to proceed under the assumption that it was a positive result. Mr.King told the Authority that he then advised the employee during a telephone conversation that it was in his best interests to do the drug test and that if the employee removed his consent to the drug test Mr.King would need to obtain advice from Human Resources to find out how that would affect the process and possible outcomes.

A number of days later the employee underwent a test with The Drug Detection Agency (TDDA) which tested positive for cannabinoids. During the disciplinary investigation process, following the drug test result, the employee advised Mr.King that he smoked marijuana recreationally around two or three times a week and did not smoke at work. As a result of the investigation, Mr.King concluded that the employee had worked under the influence of marijuana because of the two different tests which registered the presence of cannabinoids; the conversation the employee originally held with Mr.King; and the employee’s responses throughout the investigation, including specifically his confirmation that he regularly used marijuana recreationally.

The Authority considered that the employer’s policies on drugs and alcohol in the workplace were well known to employees, and the employee had confirmed in the first disciplinary meeting that he was familiar with them. The employer’s disciplinary policy categorised the use of illegal or other non-prescribed drugs in the workplace as serious misconduct and had an absolute rule that employees must never work under the influence of alcohol or drugs. The Authority accepted the employer’s conclusion that the employee had worked under the influence of marijuana as one that a fair and reasonable employer could have reached in all the circumstances. Although the employee argued that the employer had no contractual right to test employees for drugs for reasonable cause, the Authority found that the employee gave his consent to testing freely at the first disciplinary meeting. Although the employee later expressed a preference not to take an employer organised drug test, this was only after doing one himself (which tested positive for cannabinoids). The Authority did not consider coercion took place through Mr.King’s advice that if the employee withdrew his consent HR would need to be contacted for advice. The view that the employee gave consent willingly and without coercion was supported by the employee’s statement at the second disciplinary meeting that one reason he was happy to go through with the testing was to prove that he took nothing other than marijuana.


See Syed v Vodafone New Zealand Ltd [2019] NZERA 306.

Trial period upheld for redundancy dismissal

The purpose of the trial period being introduced was to allow an employer to determine a prospective employee’s suitability for permanent employment without the risk of legal proceedings for unjustified dismissal in the event that the employment relationship does not work out. The question may then arise as to whether shielding an employer from liability related to dismissing an employee for redundancy meets that legislative purpose. When a redundancy occurs for genuine business reasons, that decision has nothing to do with having trialled the employee’s suitability, but ordinarily, the employer is still required to follow a fair consultation process.

This issue has not been the subject of much judicial analysis, but in a recent decision of the Employment Relations Authority the fact that an employee had been made redundant, rather than dismissed for performance or conduct concerns, did not prevent the employer from relying on the trial period. The employer made the employee redundant, along with two others, due to the business failing to secure sufficient clients and operating at a loss.

Although the employee was made redundant, he was still prevented from pursuing a personal grievance claim of unjustified dismissal due to the trial period. It is worth noting, however, that the employee represented himself in the Authority and did not appear to put forward arguments specifically seeking to set aside the trial period on the basis he had been made redundant. As such there was no analysis of this issue undertaken by the Authority. Rather, the employee sought to set the trial period aside on the basis he had not been informed at the meeting that his employment was being terminated in accordance with the trial period provision in his employment agreement. The Authority found that there is no requirement to explicitly refer to the trial period when giving notice of dismissal.


See Smith v Halcyon Knights New Zealand Ltd [2019] NZERA 266.

Reproduced with permission of Wolters Kluwer NZ


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