A labour-hire company has been ordered to pay $37,223 compensation to a worker it dismissed for drug policy breaches, after the Fair Work Commission found serious procedural failures in testing methodology that “set employees up for failure.”

The case highlights critical issues around drug and alcohol testing protocols in high-risk industries, particularly regarding chain of custody procedures and conflicting workplace policies.

Background and Employment Arrangements

The worker, an experienced mobile plant operator, was employed by labour-hire company WorkPac Pty Ltd and on-hired to Batchfire Resources Pty Ltd at its Boundary Hill coal mine in Queensland, which produces coal for the Callide power stations.

The worker had disclosed mental health issues and occasionally used medically prescribed cannabis to manage his condition, smoking half a prescribed cannabis joint on the evening of 25 January 2025, before being rostered to work the following day.

The Testing Sequence and Procedural Issues

On the morning of 26 January, the worker followed Batchfire’s fitness for duty policy by conducting a voluntary self-assessment drug test before starting his shift. The test showed a negative result, so he commenced work.

However, two hours into his shift, the worker was called to the mine office for additional testing after the company discovered his accommodation-sharing colleague had tested positive for THC.

What followed was a confusing sequence of contradictory test results:

• An initial test showed positive
• A subsequent test showed negative
• Management opted for a laboratory saliva sample due to the uncertainty

Due to the Australia Day public holiday, the laboratory sample was stored in a mine office refrigerator rather than being processed immediately—a significant break in proper chain of custody procedures.

Further Testing Complications

The following day, the worker again used a voluntary test before his night shift, which showed negative. He was then called for another official test, which he claimed initially showed negative but allegedly turned positive after a delay of more than 30 minutes.

The worker argued that the saliva tests used by Batchfire could only be read accurately within 10 minutes, making results after 30 minutes unreliable.

A final test showed positive, leading to his dismissal after a show cause process.

Fair Work Commission Findings

Fair Work Commissioner Chris Simpson acknowledged that having measurable THC levels constituted a breach of employment terms and provided valid grounds for dismissal.

However, the Commissioner found the worker to be credible and accepted his evidence that he would not have attempted to work if voluntary tests showed positive results.

Procedural Failures Identified

Commissioner Simpson identified multiple “procedural failures in the testing methodology used by Batchfire which worked to the detriment” of the worker, including:

• Chain of Custody Breaches: Tests were not “conducted in conformity with Batchfire’s policy” due to custody failures with samples
• Equipment Calibration Issues: Voluntary tests were “calibrated differently to the higher sensitivity tests subsequently used in the laboratory,” creating a system that “sets an employee up for failure”
• Policy Conflicts: “Confusing divergence” between WorkPac’s policies and Batchfire’s policies created uncertainty for workers
• Inadequate Investigation: WorkPac’s site manager failed to investigate procedural failures and “merely adopted the laboratory results as the reason for termination”

Management Response Inadequate

The Commission noted that even WorkPac’s witness “had some difficulty explaining how the policies of WorkPac and Batchfire were intended to operate in the event of conflict.”

This highlighted the practical problems created when labour-hire arrangements require workers to comply with both their employer’s policies and conflicting client site policies.

Compensation Ruling

While finding the dismissal had valid grounds, Commissioner Simpson determined it was “harsh” given the procedural failures and awarded $37,223 compensation.

Reinstatement was ruled inappropriate in the circumstances, reflecting the ongoing nature of the policy breach and workplace relationship breakdown.

Industry Implications

This decision establishes several important precedents for workplace drug testing:

Chain of Custody Critical: Proper sample handling and storage procedures are essential for testing validity. Holiday periods don’t excuse custody breaches.

Equipment Consistency: Using voluntary tests with different sensitivity levels than official laboratory tests creates unfair “gotcha” scenarios for workers.

Policy Alignment: Labour-hire arrangements must ensure compatible drug and alcohol policies between hire companies and client sites.

Procedural Fairness: Managers must investigate testing irregularities rather than automatically accepting laboratory results.

Worker Communication: Clear guidance is needed when voluntary and mandatory testing systems operate with different standards.

Broader Lessons for Employers

The case demonstrates that while employers have legitimate rights to maintain drug-free workplaces, particularly in high-risk industries like mining, testing regimes must be procedurally sound and consistently applied.

Workers using prescribed medications need clear pathways to manage their obligations, and testing systems should support rather than undermine worker efforts to comply with safety requirements.

The substantial compensation award reflects the Commission’s view that procedural failures in drug testing can constitute harsh treatment even where policy breaches occurred.

Maxwell Parks v WorkPac Pty Ltd [2025] FWC 2316 (8 August 2025)