Australia: Mandatory drug and alcohol testing not precluded by CFMEU Enterprise Agreement

On 7 October 2011, the Full Bench of Fair Work Australia handed down its decision in Wagstaff Piling Pty Ltd; Theiss Pty Ltd v Construction, Forestry, Mining and Energy Union [2011] FWAFB 6892. In its decision, the Full Bench disagreed with findings of the Victorian Industry Disputes Board and Commissioner Blair of Fair Work Australia, and determined that the drug and alcohol policy contained in the relevant enterprise agreement did not prevent the implementation of a mandatory drug and alcohol testing regime, despite the fact that the enterprise agreement made no reference to drug and alcohol testing.

The facts of the case involved numerous workers who were subcontracted by Wagstaff Piling to Theiss, who was the principal contractor for the development of a major highway. Theiss had a comprehensive Fitness for Work Policy (the Fitness Policy), which included requirements for monthly random mandatory drug and alcohol testing of its employees and subcontractors. Upon engagement, Wagstaff agreed to ensure that its workers would abide by all occupational health and safety requirements issued by Theiss. This meant that Wagstaff agreed that its workers would abide by the mandatory random drug and alcohol testing as per the Fitness Policy.

In March of 2011, the CFMEU gave notice that Wagstaff's workers would not cooperate with the testing announced for that month. Theiss and Wagstaff regarded this refusal to cooperate as prohibited industrial action.

In accordance with the dispute resolution clause in the relevant Theiss enterprise agreement (the Agreement), the CFMEU advised the Victorian Building Industry Disputes Panel (the Panel) of the dispute. In its submissions, the CFMEU contended that the action did not constitute prohibited industrial action because the testing procedures were not permitted by the Agreement, which required compliance with the Victorian Building Industry Alcohol and Other Drugs Policy (VBIAOD Policy). As the VBIAOD Policy did not provide for mandatory drug testing, the procedures in the Policy were in conflict with the Agreement and not enforceable. The Panel agreed with the CFMEU's proposition.

Wagstaff appealed the decision of the Panel to Fair Work Australia. At first instance, Commissioner Blair effectively affirmed the Panel's decision, noting that because the Agreement and the VBIAOD Policy were silent on the issue of mandatory testing, the Agreement could not be interpreted in a way which would allow Theiss to apply its own drug and alcohol testing regime inconsistently with the Agreement and the VBIAOD Policy.

On appeal, Senior Deputy President O'Callaghan, Deputy President Ives and Commissioner Gay agreed that the Agreement and the VBIAOD Policy contained no express entitlement to conduct compulsory drug and alcohol testing. However, the Full Bench considered that the VBIAOD Policy or the Agreement did not operate in a way that limited or prohibited a drug and alcohol testing regime to exist as a lawful direction by an employer to its employees or to those on site. The Full Bench's reasoning in this case was that, given that the Agreement was silent on the issue, and the VBIAOD Policy clearly endorsed a cooperative and collective approach in the management of drug and alcohol issues, a testing regime could therefore be implemented as a cooperative and collective approach.

This ruling has been identified as a landmark decision for the construction industry.

The CFMEU is currently seeking legal advice with a view to appeal the Full Bench's decision of the Federal Court. The union maintains that the VBIAOD Policy does not permit random drug and alcohol testing. The union has sent "safety notices" to union organisers informing them that the Full Bench's decision does not mean that mandatory random drug and alcohol testing can be introduced without union consultation, arguing that "all employers have a legal obligation to fully consult with the CFEMU OHS rep [sic] before any changes" are made.

What does this decision mean for employers?

Fair Work Australia acknowledges that a direction to submit to drug and alcohol testing may be lawful and reasonable in the circumstances, particularly in the context of high risk construction projects.

This case supports the proposition that employers may legally direct their employees and subcontractors to undergo mandatory drug and alcohol testing in high risk industries, despite the silence of any relevant enterprise agreement on the issue.

Employers should ensure that all directions issued to employees and subcontractors are lawful and reasonable, within the scope of the employment contract, and not contrary to any applicable enterprise agreement.

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