June 2014 . . . In a decision released late last month the Employment Relations Authority told Carter Holt Harvey that it had to compensate 76 employees who were required to undergo a drugs test after two cannabis plants were found growing in the grounds of a sawmill near Nelson.
Each employee had claimed $2,500, meaning Carter Holt could be up for $190,000, plus legal costs. The parties have been told to try and agree on the exact amount – we suspect the final total will be considerably less than that, but it will be significant.
What went wrong?
Carter Holt’s drug policy allowed for “reasonable cause” testing. The sawmill manager believed that the discovery of the two plants gave the company reasonable cause, and he wanted to send a “strong message” to staff. However the EMPU (and the Employment Relations Authority) disagreed. “Reasonable cause” was defined in the policy and, as Cater Holt more or less conceded, that definition didn’t extend to cover the unwelcome discovery of illegal foliage on site.
The key lesson for employers is that they must strictly follow the terms of their drugs policy, and they must ensure that their testing policy is practical and workable. When testing is challenged the Authority will focus heavily on the policy wording – it is highly unlikely to give employers any latitude simply on the grounds of safety.
Impossible situation?
In this case we think Carter Holt Harvey crossed the line – the testing was plainly outside the terms of its policy, and workers understandably objected to mass testing just so the company could send a strong message.
However, we think the situation highlights a real problem for employers. Because drug testing is invasive, courts have placed strict limits on what employers can and cannot do. In particular, courts have said that employers who conduct drug testing must have comprehensive policies that protect employees rights.
Employers have enthusiastically and responsibly implemented these policies. However, over the last several years there have been a number of cases where employers have been taken to taskfor disciplining or dismissing staff without strictly following the terms of their own policy.
A better way?
Employers are currently caught between a rock and a hard place. On one hand it’s vitally important that businesses ensure their workers are free from impairment caused by drug use. On the other, employers are being asked to pay for and then scrupulously implement detailed and complicated drug policies.
That is difficult enough for large companies like Carter Holt to achieve. We think it’s virtually impossible for small and medium sized employers to get right, 100% of the time (frankly, some of the drug policies we see aren’t that easy to follow).
Currently, a private members bill (still waiting to be drawn from the ballot) aims to give employers far greater scope to test for drugs and take disciplinary action. This would be a controversial change.
Perhaps less controversial is the suggestion that employers and workers would benefit from a clear and well drafted model policy, perhaps issued by the Ministry of Business, Innovation and Employment. Such a model policy wouldn’t necessarily change the balance that currently exists between safety and employee rights. Businesses would still have the (heavy) responsibility of ensuring that any testing and subsequent disciplinary action complied with the law, and with the model policy in particular.
However this approach would at least avoid the need for businesses to pay for a costly policy, and allow them to simply adopt a well drafted and understood process for free.
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