When “zero tolerance” meets a doctor’s prescription: lessons from Brown v Alliance Group Ltd [2026] NZERA 569
Reinstatement, $25,000 in hurt and humiliation, and a hard lesson on drug policies and medicinal cannabis in safety-sensitive roles
The short version
A 38-year Alliance Group butcher, on medicinal cannabis for chronic pain from a serious workplace injury, disclosed his prescription in 2023. Two years later he failed a second random drug test while on a final written warning – and was summarily dismissed. The Employment Relations Authority has now ordered his reinstatement, awarded $25,000 in compensation, and found the dismissal unjustified from top to bottom.
For any employer running a drug and alcohol policy with a “non-negative equals serious misconduct” cut-off, this determination is required reading.
What happened
Paul Brown started at Alliance’s Mataura plant in 1987. In 2016 he was crushed between cattle in a workplace accident that left him with chronic pain and sleep issues. He managed this first with analgesics, then – after discussing side effects with his GP – moved to prescribed medicinal cannabis oil in 2022, and later a cannabis flower product recommended by a specialist clinic.
Brown disclosed his prescription to Alliance’s occupational health nurse in early 2023. Nothing came of it – no monitoring regime, no follow-up, no questions about dosage or timing. He passed a random test shortly after.
In July 2025 he failed a random saliva test. Under Alliance’s policy, any detectable trace – not just levels above a cut-off – counts as a non-negative result and is treated as serious misconduct. Brown was suspended, sent through a drug counselling course designed for recreational users (which even Alliance’s own witnesses later conceded served no purpose in his situation), and issued a final written warning.
In August 2025, HR flagged that Brown – despite being on a final warning – hadn’t been tested in six months. He was tested again on 27 August, returned another non-negative result, and after a brief investigation-turned-disciplinary meeting on 30 January 2026, was summarily dismissed.
Why the Authority found the dismissal unjustified
1. A policy applied as an on/off switch, not a framework for judgment
Alliance’s drug and alcohol policy set a strict standard: any detectable trace of a drug or metabolite after a final warning was serious misconduct, full stop. The Authority found this approach – designed around illicit recreational drug use – simply wasn’t fit for purpose when applied to a long-disclosed, legitimately prescribed medication. Both decision-makers repeatedly told Brown they had “very limited discretion,” effectively outsourcing the substantive judgment call to the policy wording itself.
That’s the crux of the case. Section 103A requires an employer to genuinely engage with an employee’s explanation before deciding to dismiss – not to treat a rigid internal threshold as dispositive of serious misconduct.
2. A dismissal built on almost no investigation
The Authority was blunt: the “investigation” consisted of the test result itself and a 22-minute meeting (with a 7–10 minute break). Nobody:
- reviewed Brown’s personnel file or the history of how his 2023 disclosure had been handled;
- interviewed co-workers about whether he’d ever shown signs of impairment;
- sought independent medical evidence on his dosing regime or its pharmacological properties; or
- asked Brown to substantiate his stated intention to explore alternative pain management with his GP.
The decision-maker, Mr Caughey, hadn’t even read Brown’s personal file before the meeting – something the Authority described as “unfair and unnecessary.”
3. The decision was made too fast, and the mitigating offer was never weighed
Brown offered, mid-meeting, to cease medicinal cannabis entirely and submit to frequent testing. Caughey later conceded under questioning that he simply didn’t factor this into the dismissal decision. Alliance’s own internal “Manager Checklist for ER Matters” required seeking feedback on a proposed outcome before finalising it – that step was skipped. No notes were taken of the deliberation itself.
3A. Rushed, not predetermined – a distinction worth understanding
A closely related but analytically separate issue is predetermination, which engages s 4(1A)(c) of the Act – the good faith obligation to provide access to relevant information and a genuine opportunity to comment before a decision affecting continuation of employment is made. Two facts pushed hard against Alliance on this front:
- Ms Wilson obtained delegated authority to dismiss Brown from Alliance’s in-house counsel in a six-minute phone call before the disciplinary meeting even started.
- After a brief adjournment, Mr Caughey opened the resumed meeting by announcing the outcome directly – “I think if we’re going to have to part ways, terminate your employment, Paul” – and only then did further exchange with Brown’s union representative occur.
Both facts are the classic fingerprints of a predetermined outcome: authority to dismiss secured in advance, and an announcement of the decision that precedes rather than follows the final round of submissions.
Despite this, the Authority pointedly declined to make a predetermination finding. At [54]:
“I would not go as far as to say in obtaining the delegation to dismiss that the decision was predetermined, but it did lead to a decision to dismiss without further reflection.”
This distinction matters for how employers should read the case. The Authority found the process fell short of the s 103A(3) fairness standard – rushed, insufficiently investigated, lacking genuine reflection – without going the further step of finding a breach of the s 4(1A)(c) good faith obligation itself. A formal predetermination finding is a more serious institutional failure than a finding that a process was merely rushed, and it is worth employers understanding that Alliance came close to that finding without quite crossing the line. The practical lesson is the same either way: securing sign-off to dismiss, or announcing an outcome, before the employee’s final round of comment has genuinely been heard and weighed is exactly the kind of sequencing that invites a predetermination argument – succeed or fail.
A good reminder of the importance of preliminary decision letters in these sorts of processes where final written warnings or dismissal is being contemplated.
3B. A higher standard because of who was in the room
The Authority was explicit that Alliance’s resourcing set the bar it would be measured against. At [51]:
“I find that Alliance given its available group resources and recourse to an experienced in-house counsel, should be held to a reasonably high standard.”
This is a recurring theme in unjustified dismissal case law: the s 103A test is objective, but what a “fair and reasonable employer” could have done is assessed in light of the actual resources available to that employer. Alliance wasn’t a small business without HR infrastructure – it had a dedicated Plant HR Manager, a Plant Health and Safety Manager, and access to in-house legal counsel. Against that backdrop, an under-prepared decision-maker who hadn’t read the employee’s personnel file, an HR manager who took no notes because she said she “never” does, and a disciplinary process that skipped the employer’s own documented checklist steps, all landed considerably worse than the same conduct might have from a resource-constrained employer. Bigger, better-resourced employers with dedicated ER and legal functions should expect the Authority to hold them to what those resources are capable of delivering – not to a lowest-common-denominator standard.
4. Disclosed prescription use isn’t the same as undisclosed illicit use – and the case law reflects that
The Authority engaged directly with two contrasting Australian Fair Work Commission authorities on cannabis in safety-sensitive roles:
- Sharp v BCS Infrastructure Support / Gauci v DP World Brisbane – support the proposition that a zero-tolerance drug policy can be lawful and reasonable in safety-critical work, particularly where use wasn’t disclosed.
- Mills v Glamorgan Spring Bay Council – where an employee’s prescribed cannabis use, once disclosed, required the employer to properly explore alternatives and assess actual incapacity rather than default to dismissal.
The Authority found Brown’s situation sat closer to Mills: this was known, long-disclosed use, not concealment, and Alliance had done nothing over more than two years to establish a monitoring framework, seek medical guidance, or explain what would actually be required of Brown to remain safely employed.
5. “We couldn’t rule out self-medication” isn’t enough on its own
Alliance’s key substantive argument was that a non-negative result meant it couldn’t distinguish lawful prescribed use from misuse or overuse – an inherently reasonable safety concern in the abstract. But the Authority found Alliance never actually tested this theory: it didn’t ask Brown for his medical records, didn’t get independent advice on dosing and timing, and didn’t put the “you must have mistimed or overused it” theory to him directly during the process. An unexplored suspicion isn’t the same as an evidentially grounded finding of serious misconduct.
The remedies
- Reinstatement to his former role and seniority, with back-pay, to the payroll from 23 August 2026 — subject to an occupational health assessment addressing his pain management regime and how it can be safely managed at work.
- Lost wages from dismissal to the investigation meeting.
- $25,000 compensation under s 123(1)(c)(i) for hurt and humiliation, with no reduction for contributory conduct – the Authority found it couldn’t fairly characterise legitimate, disclosed medicinal use as contributing to the grievance.
What a proper investigation would have looked like
The Authority didn’t just say the investigation was inadequate in the abstract – at [52] the Member set out, specifically, what a more thorough investigation could have included. It’s a useful checklist in its own right:
1. Interview co-workers about impairment and behaviour. Not to build a case, but to establish whether Brown had ever shown signs of impairment or unusual behaviour at work – direct evidence relevant to the actual safety risk, rather than relying solely on the abstract fact of a positive test.
2. Review the employee’s personnel file and the history of the disclosure. Alliance had known about Brown’s prescription since February 2023. Nobody looked at how that disclosure had been handled – whether any monitoring or support mechanisms had ever been put in place, particularly in the period after his first failed test in July 2025. A decision-maker cannot fairly assess a second failure in isolation from how the employer handled the first one.
3. Seek further medical information from the employee to inform alternative options. Brown was never asked to provide his medical history, or to explain his dosing and timing regime, as part of the process leading to dismissal. That closed off the possibility of exploring alternatives short of dismissal – exactly the kind of contextual factor s 103A(3) requires an employer to genuinely engage with.
4. Obtain independent medical advice on the medication itself. The Authority specifically flagged the need to understand the pharmacological properties of what Brown was taking, and – importantly – whether he was correctly administering his prescribed dosage, “especially given Dr Adam’s cautious evidence around the timing of dosages.” This isn’t a step most operational managers are equipped to take on their own judgment; it calls for genuine occupational health or specialist medical input before drawing conclusions about risk.
Ms Wilson’s own evidence was that the investigation was “very limited” and “concentrated only on the testing documentation.” Alliance argued in submissions that an abbreviated investigation was justified because the core fact – the failed test – wasn’t contested. The Authority rejected that reasoning outright: an undisputed test result is not the same as undisputed serious misconduct, and the very issues Brown raised (his disclosed prescription, his safety record, and the policy’s own gap in addressing legitimate medicinal use) were exactly the kind of issues that warranted further reflection rather than being treated as settled by the policy’s bare wording.
The pattern across all four points is the same: a defensible investigation into a positive drug test involving disclosed prescription medication has to look substantively different from one involving suspected illicit or undisclosed use. It needs to test the employer’s working theory (here, that Brown might have self-medicated or mistimed his dose) against actual evidence – file history, co-worker observation, and independent medical input – rather than treating the test result as self-proving.
Practical takeaways for employers
1. Audit your drug and alcohol policy for a “prescription pathway.” A policy that treats any detectable trace as automatic serious misconduct, with no distinct process for disclosed prescription medication, is a live litigation risk – especially post-Brown. Build in a genuine individualised assessment step before disciplinary consequences attach.
2. Disclosure should trigger action, not a filing exercise. When an employee discloses prescription medicinal cannabis (or any impairing prescription medication), that’s the moment to establish a monitoring and support plan – occupational health input, agreed testing protocols, clarity on dosing/timing expectations – not simply to place the certificate on file and move on.
3. Safety-sensitive doesn’t mean discretion-free. Both New Zealand and Australian authorities recognise legitimate policy interests in safety-critical roles, but the sensitivity of the role is a reason to invest more in individualised risk assessment, not a substitute for it.
4. Decision-makers need the file, not just the test result. A dismissal decision built on a positive test and a short meeting, without reference to service history, prior handling of disclosures, or independent medical input, is vulnerable regardless of how “clear” the policy language appears.
5. Take mitigating offers seriously and document that you did. An offer to cease use, submit to enhanced testing, or explore alternative treatment is exactly the kind of contextual factor s 103A(3) requires an employer to genuinely engage with – and to be seen to have engaged with, in contemporaneous notes.
6. Investigation and disciplinary process should not be conflated or rushed. Labelling a meeting an “investigation meeting” doesn’t make it one if it proceeds straight to a dismissal decision within the same 22 minutes.
7. Watch the sequencing of dismissal authority and outcome announcements. Obtaining sign-off to dismiss before the disciplinary meeting starts, or announcing the outcome before the employee’s final round of comment has been heard, invites a predetermination argument under s 4(1A)(c) – even where, as here, the Authority ultimately characterises the process as rushed rather than predetermined. Get delegation to act on a decision once made, not delegation to dismiss in advance of hearing from the employee. Prepare a preliminary decision letter if you are contemplating a final written warning or dismissal; it becomes a two-step process.
8. Bigger, better-resourced employers will be held to a higher standard. Access to in-house counsel, dedicated HR and health and safety managers, and documented ER procedures raises the bar for what a “fair and reasonable employer” is expected to deliver. Skipping your own documented checklist, or having an experienced HR practitioner attend a dismissal meeting without having reviewed the employee’s file, will be judged against what those resources make possible – not against a lighter, resource-constrained standard.
This article discusses [2026] NZERA 569, a determination of the Employment Relations Authority, and is provided for general information. It is not legal advice. Employers reviewing their drug and alcohol policies in light of this decision should seek specific advice tailored to their circumstances.
Need support? If you would like assistance with any employment matter relating to workplace drug and alcohol, or would like your policy reviewed, please get in touch with our team. Email admin@cmalaw.co.nz or phone 03 211 0153.
Disclaimer: This update provides commentary on employment law, health and safety and immigration topics, it should not be used as a substitute for legal or professional advice for specific situations. Please seek legal advice from your lawyer for any questions specific to your workplace.