Zero tolerance drug and alcohol policies play a critical role in managing safety risks, particularly in industries where impairment can have serious consequences for workplace safety. However, a recent decision of the Fair Work Commission (“FWC”) serves as a timely reminder that a “zero tolerance” policy does not always mean dismissal should automatically follow every breach.
A valid reason is only the starting point
In this recent unfair dismissal case, an employee was found to have breached his employer’s zero tolerance Drug and Alcohol Policy (the “Policy”) by returning a positive result for THC metabolites. The employer relied on its Policy which stated that there is to be “no detectable level of illegal or synthetic drugs in [a worker’s system] while attending the workplace or performing work” and the Managing Misconduct Standard (the “Standard”) which defined serious misconduct as “breaches a Cardinal Rule including providing a positive reading to drugs or alcohol whilst at work”.
The FWC accepted that returning a positive drug test while at work constituted a valid reason for disciplinary action, as it was defined as serious misconduct under the Standard and breached the employer’s Policy. However, the more salient issue was whether the employer had properly exercised its discretion under its own disciplinary framework, before deciding that termination of the employee’s employment was the appropriate outcome.
The FWC commented that using the language of zero tolerance does not necessarily equate to automatic dismissal, particularly where a policy expressly contemplates a range of disciplinary responses.
Where the employer fell short
While the Standard described the conduct as serious misconduct, it set out a range of disciplinary actions other than dismissal where an employee had engaged in such conduct. This included giving warnings, providing counselling, putting an employee on a performance improvement plan and other corrective actions, with dismissal being only one of several options.
The FWC found that the employer had approached the breach on the basis that dismissal was the default or mandatory outcome rather than genuinely considering whether a different disciplinary outcome was appropriate in the circumstances. Additionally, the FWC identified a number of significant mitigating factors that should have been weighed and were relevant to identifying the appropriate disciplinary action. These factors included that:
the employee had 27 years of service with the employer;
the employee had an otherwise entirely unblemished disciplinary record;
the employee cooperated and was honest during the investigation process;
there was a low level of metabolites detected in the employee’s urine sample;
the steps the employee took to self‑test before attending work demonstrated he wanted to ensure he was fit for work; and
the employee’s willingness to explore alternative measures, including ongoing testing, to retain his employment.
Taken together, these factors weighed heavily in the FWC’s assessment that dismissal was disproportionate.
The failure of the employer to turn its mind to alternatives, and to weigh mitigating factors identified in the Policy itself, ultimately led the FWC to conclude that the dismissal was harsh and therefore unfair. The employee was reinstated with backpay and his continuity of service maintained.
Zero tolerance does not eliminate discretion
The decision highlights a common misunderstanding among employers: that adopting zero tolerance language removes the need to consider proportionality or discretion.
Unless a policy clearly states that termination of employment will automatically follow a breach (and even then), decision‑makers are expected to apply the disciplinary framework as drafted. Ordinarily, that means:
assessing the seriousness of the conduct;
considering the employee’s explanation;
weighing service history and prior conduct; and
evaluating whether dismissal is proportionate.
A zero tolerance policy limits tolerance for certain conduct — it does not automatically remove judgment about the appropriate consequence.
The importance of clear policy drafting
This case is a reminder that clarity in policy drafting is important. Employers should review drug and alcohol policies to ensure they clearly articulate what “zero tolerance” means in practice and how disciplinary decisions are to be made, including the interaction between drug policies and broader misconduct frameworks.
Where policies are ambiguous, decision‑makers may inadvertently adopt an inflexible or mistaken approach that is not supported by the policy wording, exposing employers to legal risk.
Employers who take the time to properly apply their own frameworks, and draft them clearly, will be far better placed to defend disciplinary outcomes if they are later challenged.
