Boozy employees? What’s an employer to do?

Managing employees with alcohol and substance problems is fraught with challenges.  The mix of conduct, disability, incapacity and performance issues make this situation a minefield for employers and employment lawyers alike. The US Courts have recently supported the right to have a “you drink, you’re out” approach. Would the same response work in New Zealand? Minter Ellison Rudd Watts employment law specialists Jennifer Mills and Christie Hall shed light on this issue:
 
The US case
The background for the US case is Thomas Ostrowski was employed by Con-Way Freight as a Driver Sales Representative.  He had voluntarily taken leave from his employment to enter a rehabilitation programme for the treatment of alcoholism.  When he returned to work, Con-Way required him to sign a “Return to Work Agreement” prohibiting him from consuming alcohol or drugs at any time, whether while at work or otherwise, during the course of his employment.
 
Ostrowski suffered a non-work-related relapse and voluntarily re-admitted himself to rehab.  In response to this, Con-Way terminated his employment for breaching the Return to Work Agreement. Ostrowski argued that his dismissal was an act of disability discrimination by Con-Way (his addiction being the relevant disability).  However, the US Court of Appeals upheld the dismissal, stating that his violation of the agreement was “a legitimate, non-discriminatory reason for Con-Way to terminate Ostrowski’s employment”.
 
The New Zealand situation
In New Zealand it is common for employers to have agreements or policies in place prohibiting employees from being under the influence of drugs or alcohol at work.  It is accepted that those policies may have an effect on an employee’s personal life, meaning that the employee cannot consume alcohol or drugs within a reasonable period of time prior to commencing work. However, enforcing an agreement requiring abstinence without any connection between the behaviour and the workplace would likely be considered a breach of an employee’s personal privacy and freedom, which would go beyond the bounds of what could be expected from a fair and reasonable employer. 
 
It is open to employers to put such agreements in place to “encourage” recovery, but New Zealand employers are likely to have difficulty in justifying any dismissal resulting from a breach of the agreement unless they can show a causal connection between the employee behaviour and the company.
 
In recent years, the boundaries between work and personal life have become increasingly blurred.  As a result, it is now widely accepted that, wherever and whenever employee conduct occurs, if that conduct impacts on the employer, then the employer may take action to protect the company and its reputation.
 
In addition, regardless of whether there is an agreement in place, a New Zealand employer will generally be able to terminate employment if an employee is abusing drugs and alcohol in a manner that impacts upon their role or on other employees.  The New Zealand Authority and Courts are, however, likely to draw a line in respect of wholly personal conduct on the part of the employee.    
 
Is there anything that a New Zealand employer can do in respect of an employee with an alcohol problem where the only effect on the employer is the employee’s rehab absences?  Depending on the length of time spent in rehab, and the resulting impact on the business, a dismissal on grounds of medical incapacity could be an option.  It is well established that a time may be reached when a fair and reasonable employer could “call halt” on the relationship due to illness or injury related employee absences.  It is likely that the same rationale could be applied to alcohol treatment related absences, but employers need to be aware that the Authority and Courts have set the threshold very high in respect of the length and frequency of absence required to enable an employee to call halt. Continuous absences of less than three months and intermittent absences of less than 60 days in one year are unlikely to meet the relevant threshold.  In addition, even with sufficient absence levels, the impact on the business and the employee’s ongoing prognosis would need to be considered prior to any decision about continuation of employment being made. 
 
Ostrowski raised a medical incapacity related argument in the Con-Way case, alleging that Con-Way had discriminated against him on the basis of his disability (being alcoholism).  The Court did not make an express finding as to whether his alcoholism amounted to a disability.  Rather, it found that the agreement he entered into was not discriminatory because it did not prohibit alcoholics from working at Con-Way, it simply required those employees to refrain from consuming alcohol. It regulated conduct rather than acting against a certain class of individuals. 
 
The New Zealand institutions are likely to take a similarly strict view regarding alcohol related disability arguments.  This was demonstrated by the Employment Court nearly 10 years ago in the well-known EPMU v Air New Zealand drug testing case, where the Court commented in respect of alcoholism and drug dependency that the Human Rights Act “defines the term [disability] quite widely, but contemplates some affliction of a permanent or at least long–term nature, a condition that ordinary people would regard as a handicap...as opposed to a temporary induced state of unfitness or diminution of ability.”  This is also supported by the approach in the United Kingdom, where the Equality Act specifically states that addiction to, or dependency on, drugs or alcohol does not amount to a “disability”.
 
So where does this leave New Zealand employers? 
Although a blanket agreement to refrain from consumption of alcohol or drugs is unlikely to be enforceable in New Zealand, the Authority and Courts have generally been supportive of employers in reacting to instances of alcohol and drug related misconduct.  Employers are generally entitled to set and enforce high standards of behaviour for their employees, particularly given the serious health and safety, bullying and performance issues posed by alcohol.  As an alternative to approaching alcohol addiction problems in a disciplinary sense, employers also have the option to assist employees in recovering from an alcohol or drug problem, through the use of workplace tools, such as EAP, more specific counselling, medical assessment and return to work monitoring.  If such measures are ineffective in resolving workplace related alcohol problems, medical incapacity and performance management processes also remain viable options.