Unfair dismissal and drug testing in the workplace

This is extract from an unfair dismissal case decision in the Fair Work Commission which contains an excellent exposition of the legal principles which are involved in such a case in the context of drug testing in the workplace.


“Consideration: principles from Toms, Sharp and Hilder


Harbour City Ferries v Toms

  • In the case of Harbour City Ferries v Toms [2014] FWCFB 6249 Mr Toms was dismissed from his position as a Master after testing positive to a Mr Toms was called in to work at short notice to replace another Master who was on sick leave. Mr Toms was tested after his ferry collided with a pylon at a wharf. The employer’s policy required him to be “drug free” which was defined to mean “any level of drug less than the cut-off levels for each class of drug stipulated by [the Australian Standard].” Mr Toms said that he smoked one marijuana cigarette to assist him with shoulder pain in the evening before the day he received the phone call to work. At the time Mr Toms was on holiday relief, meaning he replaced other Masters who were on planned leave. Harbour City argued that Mr Toms’ misconduct was a serious breach of its Code of Conduct which provided “zero tolerance” for drugs and alcohol.


  • Deputy President Lawrence at first instance accepted that there was no evidence of impairment (see Toms v Harbour City Ferries Pty Ltd [2014] FWC 2327 at [62]), found that Mr Toms’ breach of the employer’s policy was a valid reason for the termination of employment (at [61]) but, notwithstanding that valid reason, the dismissal of Mr Toms was harsh, unjust or unreasonable because of a range of mitigating factors.


  • The Full Bench on appeal was not persuaded that urine testing in accordance the Australian Standard is a guide as to the actual presence of marijuana in an employee’s system or any impairment arising as a consequence (at [8]). The Full Bench identified Mr Toms’

misconduct to be his attending work in breach of the employer’s policy (at [9]) and found no error in the original conclusion that there was a valid reason for dismissal.


  • However the Full Bench found that “there is a wider context and a higher level of seriousness involved in the misconduct of Mr Toms which was not taken into account by Deputy President Lawrence” (at [20]). The Full Bench quashed the original decision and dismissed Mr Toms’ application, finding at [27]-[28]:


“[27] The lack of any impairment arising from drug use, the absence of a link between drug use and the accident and the absence of substantial damage to the [ferry] are not factors relevant to the ground of misconduct identified as non-compliance with the Policy. The fact is that Harbour City required its policy complied with without discussion or variation. As an employer charged with public safety it does not want to have a discussion following an accident as to whether or not the level of drug use of one of its captains was a factor. It does not want to listen to the uninformed in the broadcasting or other communications industry talk about drug tests establishing impairment. It does not need to have a discussion with any relevant insurer, litigant or passenger’s legal representative about those issues. What it wants is obedience to the policy. Harbour City never wants to have to have the discussion.


[28] The mitigating factors referred to and relied on by Deputy President Lawrence are not mitigating factors that address the core issue, which was the serious misconduct which led to the dismissal of Mr Toms. The core issue, the valid reason for termination of Mr Tom’s employment was his deliberate disobedience, as a senior employee, of a significant policy. The Deputy President does not address Mr Tom’s failure to comply with the Policy. The only mitigating factor relevant to this issue was the use of marijuana as pain relief. Consequent upon that explanation is the decision to accept a shift while aware of the likelihood of being in breach of the Policy.”


Sharp v BCS Infrastructure

  • The Full Bench decision in Sharp v BCS Infrastructure [2015] FWCFB 1033 was an appeal from the decision of Vice President Catanzariti in Sharp v BCS Infrastructure Support [2014] FWC 7310. Mr Sharp performed safety sensitive aviation activities at Sydney Airport and was subject to random drug and alcohol Mr Sharp was tested one Monday morning after, he said, smoking a single joint the Saturday night before. Mr Sharp tested positive for cannabinoids and was dismissed.


  • At first instance the Vice President found that there was a valid reason for dismissal, being that Mr Sharp attended for work and failed a drug The Vice President did not regard the fact that Mr Sharp had smoked cannabis two days before commencing work to be a reason for dismissal. Rather, the Vice President’s finding focused on the at-work conduct by Mr Sharp. The Vice President also found that the absence of any evidence of impairment was not relevant to the question of valid reason for dismissal. At first instance Mr Sharp’s conduct was found to be serious misconduct and his dismissal was not harsh or unfair.


  • On appeal the Full Bench also regarded the failed drug test to be at-work conduct. The Full Bench said that the critical consideration was the fact that there was no direct scientific test for impairment due to Because of this limitation in establishing impairment, a policy

that provides for disciplinary action including dismissal where an employee tests positive for cannabis simpliciter may, at least in the context of safety critical work, be adjudged to be lawful and reasonable (at [24]). The Full Bench found no appealable error by the Vice President in relation to harshness, but observed at [38] by reference to Toms:


“… Although the outcome is not necessarily the one we would have arrived at had we considered the matter ourselves, nonetheless it was not outside the range of outcomes within which a proper exercise of the discretion might be expected to reside, particularly having regard to other unfair dismissal remedy decisions concerning drug and alcohol testing [Footnote: See e.g. Harbour City Ferries Pty Ltd v Toms [2014] FWCFB 6249; McCarthy v Woolstar Pty Ltd [2014] FWC 1186]


Sydney Trains v Gary Hilder

  • Mr Hilder was employed by Sydney Trains and its predecessor from 2012 to 2019. Mr Hilder failed a random drug test, testing positive for cannabis Mr Hilder was tested at 7:00am on a Friday morning at his workplace. Mr Hilder said that the day before the test he had some drinks with an old friend he had not seen for years. He said his friend offered him a single marijuana cigarette and he believed it would not be a problem. Sydney Trains dismissed Mr Hilder for breaching its D&A Policy.


  • At first instance (see [2019] FWC 8412) Deputy President Sams found that Mr Hilder’s conduct was a one-off incident, but a serious error of judgment, was not reckless, deliberate or intentional and did not lead to him being incapable or incoherent when at work. The Deputy President concluded that it was not serious misconduct and that there was no valid reason for dismissal. The Deputy President also concluded that the dismissal was harsh as well as unreasonable, or “at the very least” harsh, and therefore unfair.


  • The Deputy President was critical of many aspects of Sydney Trains’ treatment of Mr Hilder, including:
  • “[Sydney Trains] cannot have a strict ‘zero tolerance’ approach at the same time as [professing] to take into account personal and mitigating circumstances or an employees’ show cause response. Both cannot apply in parallel” (at [110]);
  • “As Sydney Trains has a ‘zero tolerance’ approach to drugs and alcohol, it would not matter one jot what personal or mitigating circumstances were considered, or whether the employee responded or The outcome would still be the same. The problem here is that no one would expressly acknowledge the obvious. It is little wonder that employees are left confused and bewildered, as I am sure Mr Hilder was” (at [111]);
  • “Perhaps more significantly, to adopt a ‘one size fits all’ dismissal policy, where harshness factors are ignored, or worse still, are said to be taken into account, when in truth they are not, is a very risky proposition for an employer to defend as a legitimate basis for dismissal. Inadvertently, it will mean that the statutory definition of an unfair dismissal at s 385 being, inter alia, one which is ‘harsh, unjust or unreasonable’” (at [115]); and
  • “If Sydney Trains believes it is appropriate to have a Drugs and Alcohol Policy which makes clear that any detected level of alcohol or illicit drugs will (not may) result in dismissal, then that is a matter for Sydney Trains’ management. What it cannot do is have two policies inconsistent with each other and in circumstances where employees are not even told the less draconian policy will never be This must be so because

the evidence was that: (a) Sydney Trains had not communicated to its employees the true effect of its ‘zero tolerance’ policy since 2017, (b) Sydney Trains had not advised employees that anyone who is found to return a positive test for drugs or alcohol, will be dismissed, and (c) employees had been unaware that personal and mitigating circumstances would not be considered, if any trace of illicit drug use was detected in their systems” (at [117]);


  • On appeal the Full Bench found that the Deputy President erred in taking into account a range of mitigating factors when considering whether there was a valid reason for At [29] the Full Bench said:


“…As the Deputy President recognised, there was no dispute as to the occurrence of the conduct which was the reason for Sydney Trains’ dismissal of Mr Hilder. Nor was it in dispute that this conduct constituted a breach of the Policy. Mr Hilder conceded that he was aware of the Policy and its significance. The only question to be resolved therefore was whether the breach of the Policy was a matter of sufficient gravity to constitute a sound, defensible, well-founded and therefore valid reason for dismissal. This required an assessment of the importance of the Policy in the context of Sydney Trains’ operations and Mr Hilder’s work duties.”


  • In this context the Full Bench found that the Deputy President erred in taking into account the evidence that Mr Hilder was not “incapable or incoherent when at work” (at [31]) and observed at [32] that the lack of impairment was a potentially relevant factor under 387(h):


“That is not to say that evidence in this case concerning the lack of any impairment was not relevant at all. In accordance with the principles earlier stated, it was potentially relevant under s 387(h) in the context of a consideration of the seriousness of Mr Hilder’s conduct and the proportionality of dismissal as a disciplinary response. However it was not relevant to the actual reason for dismissal.”


[emphasis added].


  • The Full Bench found at [35] that Mr Hilder’s conduct in breach of the D&A Policy was a valid reason for dismissal:

“We consider that it is reasonably obvious that Mr Hilder’s contravention of the Policy constituted a valid reason for dismissal. Not every established breach of a requirement of workplace policy will constitute a valid reason for dismissal. If the policy requirement pertains to a matter which is trivial in nature or inessential to the fundamental requirements of the employee’s employment, an established breach of the policy on a single occasion is unlikely to constitute a valid reason for dismissal. But that is plainly not the situation here. Sydney Trains’ operations are safety-critical. The Policy here is designed to ensure that employees do not perform safety-critical functions with drugs or alcohol in their system. Mr Hilder’s duties required him to perform safety-related functions. Compliance with the Policy was therefore a fundamental element of his employment. As to the general importance of compliance with safety policies in the context of Sydney Trains’ operations, we could not put it better than the Deputy President did himself in Singh v Sydney Trains [2019] FWC 182 when he said:


“[325] That an employee’s conduct, which has the potential to cause an imminent risk to the safety of other employees, constitutes a valid reason for dismissal, is plainly an important consideration in cases such as this. The very identification in s 387(a) of such conduct serves to demonstrate how serious the legislature views the ‘safety and welfare’ of others…


. . .


[327] In my view, the conduct in question need not necessarily be wilful, deliberate or reckless to constitute a valid reason for dismissal. Conduct which is negligent, accidental, inadvertent or careless, particularly in the rail industry, can have disastrous, life-threatening consequences. Adherence to safe working policies and practices, particularly where persons are specifically trained to be aware of ever present dangers, is a cardinal principle for any workplace, but even more so in the rail industry where the risk to the safety of employees and the public is obviously so much more acute. It involves fast moving trains and potentially dangerous infrastructure. Employees are commonly working in high risk track environments as a daily feature of the working environment. Such conduct need not be repeated behaviour, but may involve a single instance of conduct which threatens the safety of employees or others…”.


  • Ultimately the appeal was dismissed because the Full Bench found no appealable error in the Deputy President’s alternative finding that the dismissal was harsh. In reaching this conclusion the Full Bench reinforced the Deputy President’s concerns regarding the inconsistency said to exist between Sydney Trains’ “zero tolerance” approach and its professed policy of taking mitigating factors into account when considering the taking of disciplinary action, and also Sydney Trains’ failure to clearly communicate “in terms intelligible to the average Sydney Trains employee” the uncompromising way in which Sydney Trains administered its policy:


“[38] … We have earlier set out the matters identified by the Deputy President in the decision which caused him to conclude that Mr Hilder’s dismissal was harsh. Only two matters have any intersection with the matters which the Deputy President took into account under s 387(a): the inconsistency said to exist between Sydney Trains’ “zero tolerance” approach and its professed policy of taking mitigating factors into account when considering the taking of disciplinary action. We consider that the Deputy President was entitled to have regard to these matters under s 387(h). As to the first matter, we agree that there is a clear inconsistency between the “zero tolerance” approach, which was clearly characterised by Sydney Trains’ witness Mr Christopher Walsh as one whereby any breach of the Policy would result in the termination of employment, and the consideration of mitigating factors in decision-making concerning disciplinary action. The inference is available that the mitigating factors in Mr Hilder’s case were not truly taken into account when Sydney Trains decided to dismiss him. As to the second matter, there was no challenge in the appeal to the Deputy President’s finding of fact that employees had not been informed of the true nature of the “zero tolerance” approach after its adoption in 2017.


[39] We would add that we do not cavil per se with a decision by an employer to recalibrate its response to breaches of drug and alcohol policies and impose a zero- tolerance approach. However, if such a course of action is undertaken, it is desirable that the employer clearly communicates the terms of the new policy to employees, ensures they are trained in it, and gives adequate warning regarding the date upon which the new policy will be implemented and relied upon. Clarity of communication is also highly desirable as to the actual terms of an employer’s drug and alcohol policy. We note in this respect that the Policy here, which we have earlier summarised, simply cross-refers to the Standard in respect of the cut-off levels for drug use without either incorporating the relevant parts of the Standard or summarising their effect in terms intelligible to the average Sydney Trains employee.”


Consideration: testing standards and readings

  • The Australian Standard sets protocols and standards for urine testing. Amongst other things the Australian Standards set minimum “cut off” limits for detection of certain As Dr Lewis said:


“The Standard is not an impairment measuring document, as stipulated in AS/NZS 4308: 2008 Clause 1.1 SCOPE, Notes 2. The Standard is a document designed to measure the competence of a laboratory, such that compliance with that Standard should ensure a correct result, viz, the presence or absence of a drug/metabolite being indicative of either recent or not recent ingestion.”


  • Professor Weatherby’s and Dr Lewis’ evidence was that the cut off limits are set to avoid measurement errors and to provide confidence in testing outcomes. In other words, the cut off limits are set in the Australian Standards by reference to margins of error in the accuracy of the results recorded.


  • Benzoylecgonine is a case in point. The testing cut-off limit in the Australian Standard is 150ug/L, which is a cut-off level determined by the technology and methodology used in the testing process. As Professor Weatherby said, a normal positive reading might be 7000ug/L, which is 46 times larger than the cut-off. This relativity suggests that the testing process can reliably detect minute concentration levels.


  • For drug testing, and particularly tests for cocaine metabolites, there is no utility in comparing a particular positive reading to the cut-off level. Where one might think a blood alcohol level of 0.10 is significant because it is twice the legal driving limit of 0.05, the same kind of comparison for testing cut-off limits is not helpful.


  • The fact that Mr Goodsell’s result was almost double the testing limit sounds terrible for Mr Goodsell, but it just means that his concentration was very low compared to an even lower cut-off limit.


Consideration: connection to risk of impairment

  • For Mr Goodsell therefore, all that the test revealed was that he had consumed cocaine at some point in the previous days. None of the experts who gave evidence suggested that Mr Goodsell’s positive test meant any more than this.




  • Such information might be all that is needed when, for example, testing athletes for banned substances. For the purposes of workplace testing relating to cocaine, further consideration is required because cocaine is only active in the body for a short period of time and its inactive metabolites are present in the body for considerably longer.


  • The taking of drugs by an employee away from work is only relevant to the employment if it has a connection to the performance of As was observed in Rose v Telstra Rose, Print Q9292 [1998] AIRC 1592:


“… employers do not have an unfettered right to sit in judgment on the out of work behaviour of their employees. An employee is entitled to a private life. The circumstances in which an employee may be validly terminated because of their conduct outside work are limited…”


  • The D&A Policy and the information provided to employees try to grapple with the vexed potential overlap between out of hours conduct (be it legal or illegal out of hours conduct) and workplace safety. The D&A Policy properly focuses on conduct and attendance at the workplace but nonetheless recognises that out of hours conduct can affect the state in which an employee attends for work.


  • In workplaces the fundamental link between consumption of alcohol or drugs out-of- hours and the employer’s testing regime is the risk that the employee might be impaired when they attend for The conduct that breaches these kinds of policies is the attendance at work and testing positive to certain substances. In a safety critical environment the testing regime authorised by the policy is a fair and reasonable measure to address this risk.


  • As can be seen from Toms, Sharp and Hilder, policies that rely on testing may be lawful and reasonable when the employer is not otherwise able to assess whether employees are impaired by drugs or alcohol when they attend the workplace. Testing for use rather than impairment is a blunt instrument however, as the authorities say, may nonetheless be fair and reasonable if there is not an effective way to test for impairment.


  • Mr Bugeja said under cross-examination that the fact that Mr Goodsell consumed cocaine while on leave (separate to the fact that Mr Goodsell failed a drug test) was one of the reasons he recommended that Mr Goodsell be Mr Bugeja’s evidence was the closest Sydney Trains came to leading evidence from a decision-maker. Sydney Trains was careful not to submit that Mr Goodsell’s consumption of cocaine was a reason for dismissal and properly so. Mr Bugeja’s evidence does raise a question as to whether he properly understood Sydney Trains’ D&A Policy, the out-of-hours conduct about which Sydney Trains is entitled to take disciplinary action, and the out-of-hours conduct that is irrelevant to employment. Mr Bugeja’s strike-rate on disciplinary matters involving drugs or alcohol, where every disciplinary matter that he has overseen concluded with the employee finishing employment, reinforces this concern.


  • Sydney Trains does not allege that Mr Goodsell was impaired in any way when he attended for work on Saturday 4 June This concession was necessary because there is no evidence of any actual impairment.




  • I accept, as I must, the Full Bench approaches in Toms, Sharp and Hilder to be The dilemma in relation to cocaine is that the connection between the testing regime and the risk of impairment is significantly weaker. The experts agree that the time after consumption during which an employee might be impaired by cocaine is quite short. However, the testing process under the Australian Standard, particularly the low cut-off level for cocaine metabolites under the standard, can detect use several days later.


Consideration: risk of impairment

  • My concern is best illustrated by a hypothetical comparison: if a test was available that could detect alcohol consumption up to 5 days after the effects of the alcohol had worn off, quite obviously employers could only use the results of such a test with extreme caution.


  • Frankly, in Mr Goodsell’s case Sydney Trains does not appear to have exercised any caution and instead blindly accepted the positive test result to be proof of a risk that Mr Goodsell attended work under an impairment.


  • Dr Casolin’s expertise is summarised in paragraphs [32][34] Dr Casolin was the Chief Health Officer at the time Sydney Trains’ D&A Policy was first introduced but he said he was not consulted about the policy at the time, which is extraordinary given his expertise. The policy was reviewed in 2022 and Dr Casolin was not consulted in this review either, which is even more extraordinary after the Hilder proceedings.


  • A Senior Investigator sought Dr Casolin’s advice by email about Mr Goodsell’s test result, asking whether “the test result (264ug/L Benzoylecgonine) is consistent with [Mr Goodsell’s] claim that he ingested the cocaine almost 4 days earlier”. Dr Casolin’s whole advice to the investigator was “Good morning Mark the history provided is plausible and consistent with the result.” Dr Casolin was also asked about the testing procedure and screening cut-off levels and he advised on these Dr Casolin cannot be criticised about his advice: he was asked two very narrow questions and he answered those questions.


  • Dr Casolin was not told that Mr Goodsell had been absent from work for 8 days prior to testing, and Dr Casolin was not asked any questions by the Senior Investigator about the benzoylecgonine concentration detected nor whether there was any material risk that Mr Goodsell could have attended work in an impaired state.


  • In the hearing Sydney Trains did not accept that there was no risk that Mr Goodsell was impaired when he attended work on the day he was tested. Conversely Sydney Trains did not establish that there was any risk that Mr Goodsell was impaired and/or that there was any link between Mr Goodsell’s positive test result and the risk that he attended work in an impaired


  • To be clear, by the reasoning in Toms, Sharp and Hilder Sydney Trains does not have to prove that Mr Goodsell was in fact impaired when he attended work. Those decisions recognise the inherent difficulty for employers in testing for or otherwise proving impairment. However the employer must establish that there was a risk that Mr Goodsell was impaired at




  • In Mr Goodsell’s case he was absent from the workplace for the 8 consecutive days immediately prior to testing. The benzoylecgonine concentration was described by Professor Weatherby as “low” and Professor Weatherby thought that when Mr Goodsell was tested he was near the end of the process of eliminating the benzoylecgonine from his system, which necessarily means that the cocaine had been consumed in the days before testing while Mr Goodsell was on leave.


  • In Mr Goodsell’s particular circumstances there is no proper basis upon which I could find that there was a risk that Mr Goodsell attended work on 4 June 2022 under any impairment arising from his consumption of cocaine during approved leave.


  • Central to this conclusion is the relatively low concentration of benzoylecgonine detected, and Professor Weatherby’s assessment that if cocaine had been consumed only 12 hours before testing then the dosage would have been so low that Mr Goodsell probably would not have realised that he had done so. Even if the cocaine had been consumed 12 hours before the test, and even if that consumption had caused some noticeable impairment 10-12 hours before testing, the very small effects caused by such a low dosage would have long passed before Mr Goodsell attended work and was tested.


Consideration: Section 387

  • Section 387 of the Fair Work Act 2009 (Cth) (FW Act) requires me to take into account the following matters in determining whether Mr Goodsell’s dismissal was harsh, unjust or unreasonable to the extent that they are relevant to the factual circumstances before me:


  • whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and


  • whether the person was notified of that reason; and


  • whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and


  • any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
  • if the dismissal related to unsatisfactory performance by the person – whether the person had been warned about that unsatisfactory performance before the dismissal; and


  • the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and


  • the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and


  • any other matters that the FWC considers




  • I accept Mr Goodsell’s version of events in relation to how he came to test positive for benzoylecgonine on Saturday 4 May 2022, including that:
  • during a period of leave and several days before he was due to return to work, he consumed some cocaine;
  • on the day he returned to work he did not feel any kind of impairment, nor did anyone else identify that Mr Goodsell was suffering from any kind of impairment when he attended for work on 4 May 2022;
  • Mr Goodsell was genuinely remorseful about his actions;
  • there is nothing to indicate any likelihood that Mr Goodsell will fail another drug test;
  • there is no greater risk that that Mr Goodsell might attend for work under the influence of drugs or alcohol than any other employee; and
  • Mr Goodsell fully co-operated with Sydney Trains’


Was there a valid reason for the dismissal related to the Applicant’s capacity or conduct (s.387(a))?

  • Mr Goodsell properly acknowledged that he breached Sydney Trains’ D&A Policy by testing positive to benzoylecgonine in a drug test at work. It is clear from the earlier decisions in Toms, Sharp and Hilder, that this breach of policy was a valid reason for dismissal.


  • Sydney Trains’ operation is safety-critical and Sydney Trains is entitled to place significant demands on its employees regarding matters of safety. In this context, Sydney Trains’ policies can impose on conduct outside of the workplace if that conduct compromises safety in the workplace – the most obvious example being the consumption of drugs or alcohol outside of work that causes an employee to attend work impaired.


Was the Applicant notified of the valid reason (s.387(b))?

  • Section 387(b) requires me to take into account whether the employee “was notified of that reason.” Sections 387(b) and (c) direct the Commission’s inquiry to matters of procedural fairness. In general terms a person should not exercise legal power over another, to that person’s disadvantage and for a reason personal to him or her, without first affording the affected person an opportunity to present a case.


  • In context, the inquiry to be made under 387(b) is whether the employee was “notified” of that reason before the employer made the decision to terminate.
  • It is accepted by both parties that Mr Goodsell was notified of the reason for his dismissal in plain and clear terms.


Was the Applicant given an opportunity to respond to any valid reason related to their capacity or conduct (s.387(c))?

  • The opportunity to respond to which s.387(c) refers is an opportunity to respond to the reason for which the employee may be about to be dismissed.


  • Sydney Trains undertook a disciplinary process that had the appearance of affording him procedural fairness and an opportunity to respond to the reasons for dismissal.


  • Mr Goodsell accepted that he had been given an opportunity to respond to the allegations against him. However Mr Goodsell also submitted that Sydney Trains had closed its mind to




Mr Goodsell’s continued employment, which was said to be indicative of a process that was in substance, procedurally unfair. Mr Goodsell submitted that there is nothing he could have said to change Sydney Trains’ mind and that it was intolerably clear from Mr Bugeja’s evidence that Sydney Trains took a zero tolerance approach to Mr Goodsell’s breach of the D&A Policy.


  • This submission is quite understandable, particularly when Mr Goodsell’s case is compared to Mr Hilder’s case. Of what can be seen of Sydney Trains’ employment practices from the outside, there does not appear to have been any proper consideration of Mr Goodsell’s particular circumstances.


  • However 387(c) is primarily concerned with the opportunity given to the employee to respond, rather than the adequacy, fairness or reasonableness of the employer’s consideration of that response. How the employer considers or acts upon the employee’s response is more relevant to matters examined under s.387(h) and perhaps s.387(a).


  • I am satisfied that Mr Goodsell was in fact given the opportunity to respond to the reason for dismissal.


Did the Respondent unreasonably refuse to allow the Applicant to have a support person present to assist at discussions relating to the dismissal (s.387(d))?

  • This factor is not a relevant consideration in this


Was the Applicant warned about unsatisfactory performance before the dismissal (s.387(e))?

  • As the dismissal did not relate to unsatisfactory performance, strictly speaking this factor is not relevant to the present circumstances.


To what degree would the size of the Respondent’s enterprise be likely to impact on the procedures followed in effecting the dismissal (s.387(f))?

  • Neither party submitted that the size of Sydney Trains’ enterprise was likely to impact on the procedures followed in effecting the dismissal and I find that the size of Sydney Trains’ enterprise had no such impact.


To what degree would the absence of dedicated human resource management specialists or expertise in the Respondent’s enterprise be likely to impact on the procedures followed in effecting the dismissal (s.387(g))?

  • Sydney Trains’ enterprise does not lack dedicated human resource management


What other matters are relevant (s.387(h))?

  • There are a number of other matters that I consider to be relevant (per 387(h):
  • Mr Goodsell’s lengthy and unblemished employment history;
  • Mr Goodsell’s cooperation with Sydney Trains’ investigation, his remorse and that he unconditionally accepted responsibility for his actions;
  • the absence of any risk that Mr Goodsell was impaired when he attended work in the circumstances;
  • the employer’s mind was closed in the disciplinary process to Mr Goodsell continuing in his employment;




  • the information available to employees about the D&A Policy; and
  • Sydney Trains’ failure to consider options other than


Employment history, cooperation and remorse

  • Mr Goodsell was employed by Sydney Trains and its predecessors for 26 He was highly regarded, particularly on matters of safety, and had undertaken more than 40 random drug and alcohol tests without ever testing positive. As he said in his response in the disciplinary process, he was “deeply remorseful of this one-off incident … devastated [by his] poor choice of behaviour [that was] completely out of character.”


  • Nobody from Sydney Trains asked to meet with Mr Goodsell to eyeball him and test the genuineness of his remorse and regret. In fact no one from Sydney Trains involved in the discipline process has ever met Mr Goodsell nor, it seems, made any internal inquiries about his character, truthfulness or the actual likelihood that he might attend work impaired by drugs or alcohol in the future.


  • Mr Goodsell cooperated with Sydney Trains’ investigation and discipline process. He queried some aspects of the testing procedure, as was his right, respectfully.


  • These aspects of Mr Goodsell’s case all support the conclusion that his dismissal was harsh and unreasonable.


No risk of impairment

  • The reasoning in Toms, Sharp and Hilder is compelling: If there is a risk that a worker might attend the workplace impaired by drugs, and there is a difficulty identifying and proving that impairment, then testing for usage rather than impairment is likely to be fair and If a worker fails a test, and the possibility or risk that the worker was impaired when they took the test cannot be eliminated, it is prima facie fair and reasonable that the employer takes strong action including dismissal.


  • As I have considered in more detail above, I am not satisfied that there was any risk that Mr Goodsell attended work on 4 June 2022 impaired by cocaine: see paragraphs [100][109] above regarding the connection between testing and risk of impairment, and also paragraphs [110]]-[118] regarding the actual risk of impairment in Mr Goodsell’s circumstances.


  • Assuming that Mr Goodsell was impaired for a period of time after consuming the cocaine, that relatively short period of impairment was some time in the previous 2 to 5 days. Mr Goodsell was on leave for all of those days and so the period of impairment could only have been while Mr Goodsell was away from the workplace on leave. As Mr Saunders properly conceded, the circumstances would be theoretically different if Mr Goodsell had worked during the four days before the test because then there would be a possibility that he worked with an intoxicant in his system.


  • The concentration of benzoylecgonine was very low, albeit measured against an even lower cut-off limit under the Australian Standards. Sydney Trains’ Chief Health Officer said that the benzoylecgonine concentration measured in the test was consistent with Mr Goodsell’s account that he had consumed the cocaine almost 4 days prior. Dr Casolin and Dr Lewis said the positive test result was also consistent with the cocaine having been consumed less than




four days prior but, as Professor Weatherby said, even if it had been consumed 12 hours prior to testing, the concentration level at test time means that the impairment at the time of consumption would have been so low that Mr Goodsell would probably not have even noticed.


  • The absence of a risk of impairment supports the conclusion that his dismissal was harsh, unjust and unreasonable.


Sydney Trains’ collective mind was closed

  • Mr Goodsell submitted that Sydney Trains’ mind was closed to the possibility of his employment continuing, that Mr Bugeja took a zero-tolerance approach to drugs, that there was therefore nothing that Mr Goodsell could have said that would have changed Sydney Trains’ mind, and that therefore Sydney Trains’ superficially thorough disciplinary process was in substance unfair.


  • Sydney Trains adopted what seems to be its regular practice of shielding the decision maker from scrutiny by leading no direct evidence at all from that As stated above, Mr Bugeja’s evidence is the closest Sydney Trains comes to evidence from the decision maker. At least when he gave his evidence Mr Bugeja was honest enough to say his default position is that anyone who tests positive for drugs is likely to be terminated (see [53] above). For completeness I note that Mr Bugeja said that “in the absence of any compelling evidence to persuade me otherwise, my view is that their employment should be terminated, irrespective of their length of service”, but none of the evidence in this case gave hope to the possibility that Mr Bugeja would or could be persuaded otherwise.


  • In Hilder’s case Deputy President Sams (see [90] above) and the Full Bench (see [94] above) identified many concerns and failings in Sydney Trains’ application of the D&A Policy in disciplinary matters. Most notably the Full Bench said:


“… we agree that there is a clear inconsistency between the “zero tolerance” approach, which was clearly characterised by Sydney Trains’ witness Mr Christopher Walsh as one whereby any breach of the Policy would result in the termination of employment, and the consideration of mitigating factors in decision-making concerning disciplinary action. The inference is available that the mitigating factors in Mr Hilder’s case were not truly taken into account when Sydney Trains decided to dismiss him.”


  • The failings identified in Hilder by and large related to Sydney Trains’ lack of proper consideration of the individual employee’s circumstances. Recognising that the breach of the D&A Policy was a valid reason for dismissal, what made Mr Hilder’s dismissal unfair were the other mitigating factors that applied to him that were either ignored or disregarded by Sydney


  • Most of the same mitigating factors in Mr Hilder’s case apply to Mr Goodsell: a long employment history without blemish, the absence of any evidence of impairment at the time of testing, the apparent zero tolerance/one size fits all dismissal policy, remorse, the lack of a clear information provided to employees about the policy, and so on.




  • Sydney Trains’ decision to terminate Mr Goodsell’s employment came after a 2- or 3- step process. Firstly an investigator was appointed to investigate the allegation, then a Discipline Review Panel invited and received a response from Mr Goodsell, and then the decision maker received various papers from the Panel and made a decision.


  • All of the information that was provided to the decision maker was in evidence in the


  • The investigator collected information about the failed drug test. There was some correspondence between the investigator, Mr Goodsell and Dr Casolin regarding some of the finer points of the test result. The Investigation Report does no more than record the details of the testing process, the test results and Mr Goodsell’s The closest the report comes to any “analysis” is the following paragraph:


“The investigation takes Mr Goodsell’s claim that the test result did not show he was “impaired or acting under the influence” as reference to the possibility that he was not under the influence of drugs, specifically cocaine, at the time of testing. Irrespective of Mr Goodsell’s thoughts or beliefs around his level of impairment, the Sydney Trains Drug and Alcohol Policy sets out that all employees are required to be drug and alcohol free while at work. Being drug and alcohol free means having a reading less than the cut off level stipulated in the Australian/New Zealand Standard 4308.”


  • The Discipline Review Panel received the Investigation Report, formed a preliminary view in its 16-minute meeting that dismissal was the appropriate outcome, invited and received a response from Mr Goodsell and then at a shorter second meeting, prepared a recommendation for the decision-maker. The recommendation from the Panel was in the form of an email that was two pages long when Most of the email/recommendation described the procedure applied to Mr Goodsell. The email/recommendation attached Mr Goodsell’s response but did not otherwise refer to it, or refer to any matter that could be described as a mitigating factor. The pertinent parts of the email/recommendation, omitting the procedural matters, are as follows:



  • On 4 June 2022, Mr Reece Goodsell, Work Group Leader Traction participated in a random drug test and returned a positive result for Cocaine Metabolites (benzoylecgonine -264 – cut off 150 ug/L), which was not consistent with any declared medications.
  • On 6 June 2022, the results were received by PSC and the

Actions Taken

  • In light of the serious nature of the allegations, PSC determined that it would be appropriate for [Mr Goodsell] to be suspended with pay pending a disciplinary






  • As per Sydney Trains HR Delegations 14(g), PSC are now seeking your endorsement as to the final disciplinary outcome being dismissal or any other disciplinary outcome as considered appropriate by the Delegate.

Supporting documents attached

  • Investigation Report
  • Preliminary Outcome Letter
  • Show Cause Response
  • Draft Final Outcome Letter”
  • Despite every member of Mr Goodsell’s disciplinary review panel other than Mr Bugeja being either a lawyer or a “People and Culture” specialist, no information or recommendation provided to the decision maker suggests that Sydney Trains has learnt anything from the Hilder litigation or paid any attention to the Commission’s findings about the unfairness and inadequacies of Sydney Trains’ approach to the D&A Policy. If any of the panel members recognised that there were mitigating factors in Mr Goodsell’s favour, they stayed quiet about it and chose not to include any such acknowledgement in their email/recommendation to the decision maker.


  • In his evidence in the proceedings Mr Bugeja described his reasoning for recommending that Mr Goodsell be dismissed. He referred to four particular matters that a reasonable person would regard as points in Mr Goodsell’s favour. However Mr Bugeja found a way to see each point as a positive reason to dismiss Mr Goodsell. Mr Bugeja’s view was:
  • Mr Goodsell’s unblemished 26 years of service counted against him because his length of service meant that he had spent a significant amount of time working on the track, being inducted to the relevant sites and so on;
  • Mr Goodsell’s belief that he was not impaired when he attended for work counted against him because he was not in a position to judge whether or not he was impaired. Mr Bugeja also held the view, erroneously, that when Mr Goodsell attended for work “an illicit drug was present in his sample above the cut off limits for that drug”;
  • because Mr Goodsell failed a random test he “tested positive … by chance” and therefore Mr Bugeja “had no way of being sure that he would not fail to comply with our policies on drugs in the future”; and
  • even though dismissal would cause Mr Goodsell financial hardship “in choosing to take cocaine, whether as a one off or otherwise, [Mr Goodsell] took a gamble and put his job in jeopardy.”
  • Mr Goodsell’s allegation that Sydney Trains’ mind was closed to the possibility of him continuing in his employment is very difficult to prove. And in context, whether or not the decision-maker, Mr Burge, in fact considered mitigating factors will not ultimately determine the outcome of the case. It is possible that Mr Burge had a more informed understanding of fairness in employment matters than those on the panel that advised him, but Sydney Trains chose to lead no evidence from him.




  • I am satisfied that Sydney Trains’ approach to Mr Goodsell’s breach of the D&A Policy was procedurally unfair. Even though Mr Goodsell was given the opportunity to provide a response to the breach, there is no evidence at all to suggests that anyone involved in the process fairly considered the Applicant’s response or was open to the possibility that Mr Goodsell could remain in employment.


  • The process adopted by Sydney Trains supports the conclusion that his dismissal was unjust and unreasonable.


  • The criticism of Sydney Trains’ administration of its own policy in the Hilder litigation has essentially been ignored. Sydney Trains’ conduct in Hilder that was criticised by the Commission was repeated.


Information provided to employees

  • On a similar note, Deputy President Sams and the Full Bench in Hilder emphasised the need for Sydney Trains to explain to its workforce what it means by drug free in a way that is comprehensible to the average rail worker. Sydney Trains was critical of Mr Goodsell’s decision to attend for work without sure knowledge that he was ‘drug-free’.


  • In the circumstances, Sydney Trains’ criticism was unreasonable. The information Sydney Trains made available to its workforce is not clear on how the Australian Standards apply, or that in reality the random testing program tests for use rather than impairment, and so


  • As referred to earlier, the information obtained from the testing regime under the Australian Standard, being evidence of use of a drug at some time prior to testing, might be sufficient for screening athletes in a sport that bans all use of certain drugs. If Sydney Trains applies its D&A Policy in the same way as a sports administrator and brings sanction upon anyone who consumes certain drugs at any time (inside or outside of work), the material supplied to employees should unambiguously state Sydney Trains’ expectations.


  • The lack of clarity in the information Sydney Trains makes available to its employees supports the conclusion that Mr Goodsell’s dismissal was harsh and unreasonable.


Other options/Rehabilitation

  • Sydney Trains is entitled to have a “zero tolerance” for breaches of the Code of But zero-tolerance does not mean that every transgression of the Code must result in dismissal of employment.


  • Dr Casolin said that rehabilitation is generally offered to individuals who self-declare that they have a problem with drugs and Recognising that the priority for the employer is to have a drug-free workplace, Sydney Trains does work more cooperatively with employees who recognise their own limitations and seek help.


  • Certain procedures are put in place when an employee makes such a Those procedures recognise and reflect the heightened risk for that worker that they might attend the workplace impaired by drugs or alcohol.




  • Even if one was to accept that after Mr Goodsell failed a random test the employer’s assessment of the risk that Mr Goodsell might attend work impaired by drugs is heightened, it was reasonably open for Sydney Trains to put measures in place that recognise and reflect this risk. I note in this regard that Mr Goodsell indicated during the disciplinary process that he was prepared to “partake in recommended courses or further assistance relevant to my incident” and also in any targeting testing regime.


  • Sydney Trains’ failure to consider and implement alterative arrangements for Mr Goodsell support the conclusion that his dismissal was harsh and unreasonable.


Is the Commission satisfied that the dismissal of the Applicant was harsh, unjust or unreasonable?

  • I have made findings in relation to each matter specified in section 387 as relevant. I must consider and give due weight to each as a fundamental element in making an overall determination as to whether the termination was harsh, unjust or unreasonable and therefore an unfair dismissal.


  • Overall I find that the dismissal of Mr Goodsell was harsh, unjust and unreasonable, and therefore unfair.


  • There was a valid reason for dismissal however when the mitigating factors referred to above are taken into account, I am comfortably satisfied that the dismissal was unfair.


Remedy – reinstatement

  • Being satisfied that Mr Goodsell made an application for an order granting a remedy under s.394, was a person protected from unfair dismissal and was unfairly dismissed within the meaning of 385 of the FW Act, I may order Mr Goodsell’s reinstatement, or the payment of compensation to Mr Goodsell, subject to the FW Act.


  • The Commission must perform its functions and exercise its power in a manner that is fair and just and promotes harmonious and co-operative workplace relations (per s.577 of the FW Act) and must take into account the objects of the FW Act, and equity, good conscience and the merits of the matter. The power to order reinstatement is “a very drastic one” (per Slonim v Fellows (1984) 154 CLR 505 at 515, [1984] HCA 51, cited in Blackadder v Ramsey

Butchering Services Pty Ltd (2005) 221 CLR 539 at 548, [2005] HCA 22 at [28]). As the High Court observed in Blackadder, such an order is an intrusion into the personal relationship of employer and employee, and an intrusion that is “deliberate and envisioned by the Act” (at [28]).


  • As the Full Court in Perkins v Grace Worldwide Australia Pty Ltd (1997) 72 IR 186 at 190, [1997] IRCA 15 observed, the employment relationship is capable of withstanding some friction and doubts:


“Each case must be decided on its own merits. There may be cases where any ripple on the surface of the employment relationship will destroy its viability. For example the life of the employer, or some other person or persons, might depend on the reliability of the terminated employee, and the employer has a reasonable doubt about that reliability. There may be a case where there is a question about the discretion of an employee who




is required to handle highly confidential information. But those are relatively uncommon situations. In most cases, the employment relationship is capable of withstanding some friction and doubts. Trust and confidence are concepts of degree. It is rare for any human being to have total trust in another. What is important in the employment relationship is that there be sufficient trust to make the relationship viable and productive. Whether that standard is reached in any particular case must depend upon the circumstances of the particular case. And in assessing that question, it is appropriate to consider the rationality of any attitude taken by a party.”


  • Mr Bugeja’s concerns about the possibility of Mr Goodsell returning to employment, described in paragraph [55] above are not persuasive. His suggestion that Mr Goodsell should not be reinstated because “despite adequate training and awareness, Mr Goodsell does not understand or value the safety aspects of his role or the role of any Rail Safety Worker especially one that also holds an electrical authorisation” is without foundation. Mr Bugeja’s reluctance to ‘take the chance’ that ‘he will not do it again’ is similarly For the same reasons that Mr Goodsell should not have been dismissed, I am satisfied that Mr Goodsell’s reinstated employment is capable of withstanding some friction and “doubts.”


  • Taking all these matters into account I find that it would be appropriate to order that Mr Goodsell be reinstated to his former position pursuant to s.391 of the FW Act.


  • Further, it is appropriate to make an order that maintains the continuity of Mr Goodsell’s employment (per s.391(2)(a)) and to make an order that Sydney Trains pay to Mr Goodsell an amount for the remuneration lost by Mr Goodsell because of the dismissal (per s.391(3)).


  • In making an order under s.391(3) I am required by s.391(4) to consider:
  • the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for reinstatement; and
  • the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual


  • An order to restore lost pay pursuant to s.391(3) is a discretionary one and the Commission may take into account all of the circumstances of the case, including the conduct of the employee that led to the dismissal (see Humphries v Buslink Vivo Pty Ltd [2015] FWC 6278 citing Kenley v JB Hi Fi, Print S7235 at [36]).


  • In an order for lost wages is reduced because of the employee’s conduct, the reduction ought to be proportionate to the conduct. In Kenley v JB Hi Fi, Print S7235 at [37]-[38], the Full Bench of the AIRC regarded the reduction in backpay as imposing a “financial penalty” on the employee, likening the backpay that was withheld at first instance to a period of suspension without pay.


  • Any pay in lieu of notice of termination must be considered in the calculation of lost earnings (per Nyrstar Hobart Pty Ltd v Cannan [2015] FWCFB 888 at [105] and [110]).





  • Recent examples of reductions in back pay because of the employee’s conduct include:
  • Hilder v Sydney Trains [2019] FWC 8412 – a 50% reduction in lost earnings where the dismissal was because of a breach of the D&A Policy (at [142]);
  • Dyson v Centennial Myuna Pty Ltd [2020] FWC 5486 – six months backpay was reduced by three months because it was considered appropriate that the employee bear a substantial degree of responsibility for the financial consequences of his dismissal;
  • Johnson v Chelgrave Contracting Australia Pty Ltd [2020] FWC 5784 – backpay was reduced by 15% because the employee had not done everything he could have done in order to avoid a safety breach;
  • Morcos v Serco Australia Pty Ltd [2019] FWC 7675 – no backpay was ordered because the employee had “had made a mistake by attending work after having consumed alcohol”; and
  • Wakefield v Sunraysia Institute of TAFE [2019] FWC 4979 – backpay was reduced by 25% to take into account the employee’s misconduct in sending the email to his former employer, and to “reinforce to the Applicant the importance of not repeating this behaviour in the future” (at [123]).


  • I have decided to reduce the amount Sydney Trains is required to pay as compensation by 20% in recognition that Mr Goodsell failed a drug test.


  • As such I will make an order in due course requiring Sydney Trains to pay an amount compensating Mr Goodsell for lost pay as a result of the dismissal, calculated as follows:
  • the amount Mr Goodsell would have received as ordinary time earnings but for the dismissal;
  • MINUS any amount paid by Sydney Trains in lieu of notice;
  • MINUS any amounts received by Mr Goodsell as income from employment or other work since his dismissal;
  • MINUS a further 20% of the amount calculated after the above


  • I will make an order1 that Mr Goodsell be reinstated to the position in which he was employed immediately before his dismissal (per 391(1)) by no later than 22 December 2023, an order that maintains Mr Goodsell’s continuity of employment (per s.391(2)(a)) and also the following directions for the filing of material by the parties in order to facilitate the making of an order to restore lost pay (per s.391(3)):


  • Parties must confer on the calculation of the lost pay as per paragraph [185] above;
  • If the amount payable is agreed between the Parties by 13 December 2023, Mr Goodsell must advise the Commission by no later than 4:00pm on that day;
  • If the amount payable is not agreed between the Parties by 13 December 2023, each party must file and serve submissions and any supporting evidence by no later than 20 December 2023 in relation to (1) the amount each party submits to be the correct amount the Commission should order; (2) the amount of remuneration earned by Mr Goodsell from employment or other work during the period between the dismissal and the making of the Order for reinstatement; and (3) the amount of any remuneration reasonably likely to be earned by Mr Goodsell during the period between the making of the Order for reinstatement and the actual reinstatement.”



Goodsell v Sydney Trains (2023) FWC 3209 delivered 4 December 2023 per Easton DP