Employees have a duty to comply with their employer’s lawful and reasonable directions made under certain workplace policies. However, if an employer fails to apply their policies fairly, then the direction may be found not to be reasonable or lawful and any subsequent disciplinary action for non-compliance with that direction may be found to be unfair.
In the recent decision of Tamativ MQT Pty Ltd [2025] FWC 2607, the Fair Work Commission (FWC) found that the decision to dismiss an employee for refusing to undergo drug and alcohol testing was unfair given the employer’s confusing application of its own policy.
On 10 April 2025, the employee and two colleagues who were employed by MQT Pty Ltd (the Employer) attended a four-hour lunch at a licensed premises. When they returned to work, the Employer requested one of the employees do an alcohol breath test, which he refused and instead resigned from his employment.
The employee was then asked to have a “quick chat”, during which she admitted that she had consumed one alcoholic drink at the lunch and agreed to undertake an alcohol breath test.
However, she then began to question the basis for the request, stating that she felt ambushed, unfairly targeted and that she was “guilty by association” because her colleague had refused.
The Employer justified that the test was required “for fairness” – since the employee was at the same lunch as the first employee – and the Employer felt it had a duty of care. The Employer also relied on its Drug and Alcohol Policy (the Policy), stating it “could undertake testing at any time on its sites” and if she refused she would be suspended and may face disciplinary action.
The employee refused to under go testing and the Employer subsequently suspended her.
The third attendee of the lunch also resigned later that day.
The employee attended a meeting on 14 April 2025 to discuss her refusal to undergo drug and alcohol testing. She again questioned why she had been required to undertake a “random” drug and alcohol test. The Employer denied that it was a random test and provided two different reasons as to why the test was required:
Ultimately, the Employer summarily dismissed the employee for serious misconduct for refusing a lawful and reasonable direction to undergo drug and alcohol testing.
In the employee’s unfair dismissal claim she acknowledged that she had refused to undertake the test, but argued that the direction to undergo testing was unclear and unreasonable and so her dismissal was unfair.
The FWC ultimately agreed with the employee and found that the dismissal was unfair, providing that:
1. The direction to undergo testing was not a lawful and reasonable direction.
The FWC assessed the evidence of the “reasons” provided by the Employer on 10 April 2025 and found that the Employer had contradicted itself and failed to make clear to the employee whether the test was “random”, “post-incident and for cause”, or “on suspicion”.
The FWC also noted that although the Employer eventually concluded on 14 April 2025 that the test was required “on suspicion”, the FWC was not satisfied that the employee’s actions would give rise to the requisite suspicion to require testing under the Policy. On that basis, the FWC concluded that it was not reasonable nor lawful to direct the employee to undergo a drug and alcohol test.
2. The refusal to undergo testing was justified.
The FWC found that the employee was entitled to make enquiries given there was no clear basis for the direction to undergo testing.
Therefore, on the basis that the Employer could not provide a sufficient reason and the employee did not understand why she was required to undertake testing, the FWC concluded that the employee’s refusal was justified.
3. The Policy did not specify a sanction for refusing a test.
The FWC noted that given the Policy did not state whether disciplinary action could be taken for refusing a test, the Employer had relied on its broader disciplinary policies which included sanctions for failing to follow a lawful and reasonable direction.
As the FWC found that the direction was not lawful and reasonable, any disciplinary action imposed was unreasonable.
The FWC also faulted the Employer’s application of its broader disciplinary policies which required the Employer to conduct a thorough investigation into such allegations, finding that an investigation did not occur. Further, it noted that that disciplinary actions may have also included warnings, counselling or demotion – which the Employer did not consider.
The FWC found that was no valid reason for dismissal, and the employee was not given an opportunity to respond to the reason. The FWC also did not consider that summary dismissal of the employee was warranted.
The FWC held that the employee’s dismissal was unfair and awarded the employee $63,500 in compensation.
In preparation for the upcoming end-of-year party season, employers should ensure that their drug and alcohol policies are up to date and clearly outline the procedures and consequences for not complying with the policy.
As seen in this decision, a failure to apply workplace policies consistently can open employers up to legal risk and result in orders to pay compensation.
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