Employment Law - An Employer's Right to Know: Drug and Alcohol Testing

posted by Chen Palmer
, on Jun 09

By Jim Castiglione (Partner) and Sarah Wilson (Associate), Chen Palmer Public and Employment Law Specialists

The issue of whether drug and alcohol tests unnecessarily intrude on employees’ privacy is ongoing, and the debate on whether to test and how has been shifted by legal and scientific developments in recent years.

The starting point for employers is their duties under the Health and Safety in Employment Act 1992 (“HSEA”), which requires them to take “all practicable steps” to protect the safety of their employees at work.  As a response to these stringent duties, employers are increasingly adopting drug and alcohol policies for their staff.

Employees on the other hand (and unions on their behalf), have contested for years that the reach of an employer can only extend so far, and should not be overly restrictive of an employee’s private life. 

Employers’ and employees’ clashing interests have led to arguments about the most appropriate way to protect employee privacy while providing employers with sufficient opportunities to ensure workplace safety is maintained.

There are two commonly used methods for testing: urine testing and saliva testing from mouth swabs.  Recent caselaw suggests that employers tend to prefer urine tests because of their comparative accuracy, while employees prefer swab tests on the basis that they are less intrusive.

Urine tests involve stringent restrictions on the sample collection process (in accordance with Australian and New Zealand Standard 4308:2008); the employer must be certain that the sample has not been tampered with but must equally protect employee privacy during the sample collection process as much as possible. We note that no New Zealand Standard for mouth swab tests exists, but there is an Australian Standard in this area (4760:2006).   

The initial position – support for urine testing

In NZAEPMU v Air New Zealand (2004) 2 NZELR 157, six different plaintiffs (all unions) made a claim against Air New Zealand that its attempts to introduce a drug and alcohol testing process (which included urine testing) were unlawful and intrusive of employee privacy. The unions’ claim was ultimately unsuccessful, and Air New Zealand was allowed to go ahead with its proposals for urine testing, although some restrictions were made on which employees could be subjected to tests and in what circumstances.

The arguments for the intrusiveness of urine testing were aptly described in [49] of the judgment:

There is a degree of humiliation in providing a urine sample on demand and… the specimen provided by the donor has to be inspected by the collector to establish the correct temperature, colour, and volume… there may be less than full or adequate comprehension of the discomfort, if not indignity, that the process might cause.

The unions’ privacy arguments were based on two key grounds:

  • First, the testing regime involved the collection of personal information within the definition of the Privacy Act 1993, and that because Air New Zealand could not guarantee the confidentiality of the information, there were breaches of privacy principles 1 and 4 (which require that personal information must be collected for a necessary and lawful purpose, and that it must not be collected in an unfair or unreasonably intrusive manner). The Employment Court said that there may possibly be breaches of the privacy principles, but that it was not for the court to decide, because action would need to be taken by the Privacy Commissioner and the Human Rights Review Tribunal.
  • Secondly, the testing constituted a tortious breach of privacy, but this too was rejected. This case preceded the Court of Appeal decision in Hosking v Runting [2005] 1 NZLR 1 (CA), and at the time the boundaries of any possible privacy tort were uncertain. Further, the privacy jurisprudence at the time focused on public disclosure of private facts, and the collecting of information would not have been actionable without disclosure of that information, such as by the publication of test results.  

Use of urine tests upheld – Maritime Union v TLNZ Ltd Employment Court ARC34/07, 21 December 2007

Three years later, the Maritime Union brought a case against a stevedoring company, TLNZ Ltd, arguing that the scientific developments in the intervening period since the Air New Zealand case meant that saliva testing had become sufficiently accurate so that it should be a requirement for employers to use that testing method instead of urine testing. 

Detailed scientific evidence was put forward for both sides. The union argued that urine tests were overly intrusive because they could pick up drug use long after its effects had worn off, and therefore they could not detect risks to workplace safety. On the other hand, the employer argued that mouth swabs were insufficiently accurate, and that in particular they were unable to properly detect the presence of benzodiazepines, commonly found in anti-anxiety medications, among others.

The Employment Court upheld the employers’ proposed policy for the use of urine testing, agreeing that mouth swabs were insufficiently accurate.

Developments in accuracy of testing methods


In the recent Australian decision of Endeavour Energy v CEPU [2012] FWAFB 4998, an employer was required under its drug testing policy to use mouth swabs instead of urine testing.

In the first instance judgment (affirmed on appeal), the accuracy of urine tests was questioned. While it was acknowledged that urine tests were more likely to pick up whether an employee has “at some stage” taken substances, it was noted that this method does not necessarily focus on the goal of the testing regime, which is workplace safety, and may create false positive results. When comparing the costs and benefits of each form of testing, the Board concluded that the use of urine testing would be unjust and unreasonable.

New Zealand

If a similar case came up in New Zealand, an employer may be required to use mouth swabs to drug test their employees instead of urine tests based on dicta in the recent Employment Court decision of Hayllar v The Goodtime Food Company [2012] NZEmpC 153.  Judge Ford made the following comments at paragraphs 67-68:

The comparison between the two levels of drug testing was not an issue in the case before me but the conclusions in Endeavour Energy perhaps demonstrate the scientific advances made in testing procedures… [Endeavour Energy] would in my view have equal application in this country.

Privacy implications for developments in technology

Under the Privacy Act, there is a real possibility that a policy requiring urine testing could be held to be in breach of the Act by the Privacy Commissioner, based on arguments that:

  • it is unreasonably intrusive (in breach of principle 4); or
  • it is not collected for a lawful purpose, because it collects information beyond the scope of the employer’s requirements to protect workplace safety (in breach of principle 1). The classic example of this is where it detects information about past drug use that had no impact on an employee’s ability to work.  

This could ultimately result in damages being awarded by the Human Rights Review Tribunal, but also importantly, it could negatively impact an employer’s reputation.

Importantly, a new cause of action has also emerged which could expand employers’ liability on the basis that an intrusive drug testing policy could be a breach of the redefined tort of privacy. In C v Holland [2012] NZHC 2155, Whata J recently held that a tort of privacy existed for unreasonable intrusions into an individual’s seclusion or solitude.

This development in case law is crucial. An employee complaint about the collection of drug test results could be determined by a court to be an actionable intrusion into seclusion, and could result in damages for an employer (which of course, could lead to other employees making further claims). While there was no recognised tort of privacy when the Air New Zealand case was argued, this new limb of privacy could strengthen an employee or union claim.


It may only be a matter of time before this issue is relitigated, and Hayllar indicates that employers have a battle on their hands if they wish to retain urine tests for drugs in the workplace.

Employers looking to test their employees for the use of drugs or alcohol need to do so with caution, and reliance on ad hoc policies can be risky. There is no ‘one size fits all’ policy for drug and alcohol testing, and policies will need to be updated in line with developments in the science of testing. If less intrusive testing methods become available, it makes the use of more intrusive methods unreasonable and possibly actionable as a breach of privacy.

Source: Chen Palmer