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Let's talk: Cannabis and Employment Law

Updated: Jun 26



June 2020 Edit: Thank you to @MakeitLegal for making me aware that the term "marijuana" is a derogatory term which has racist connotations. I have since made a number of changes throughout this document to review the change of term.

2020 brings significant planned and proposed changes for New Zealand; the legalisation of medicinal cannabis, and the referendum which proposes legalisation of recreational cannabis.


With such ground-breaking changes, why aren’t professionals from all disciplines talking about it? Why aren’t we hearing about the potential implications of cannabis and how they relate to New Zealand laws?


In this blog post, let’s talk about the elephant in the room; cannabis (in an employment law context).


CBD and THC: What’s the difference?


The two most common compounds of cannabis are cannabidiol (CBD) and tetrahydrocannabinol (THC). The two compounds are very different, and care should be taken when differentiating the two. THC is the main psychoactive compound of cannabis and gives users a sensation of being high. In comparison, CBD is a nonpsychoactive compound, and is most notably known for its medicinal qualities. In particular, CBD is used to help conditions, such as:

  • Seizures

  • Inflammation

  • Pain

  • Psychosis or mental disorders

  • Inflammatory bowel disease

  • Nausea

  • Migraines

  • Depression

  • Anxiety


Contrary to popular belief, however, THC is also used for medicinal purposes. In fact, THC is commonly used for people experiencing:

  • Pain

  • Muscle Spasticity

  • Glaucoma

  • Insomnia

  • Low appetite

  • Nausea

  • Anxiety


It is important to note that neither compound is fatal.


Medicinal Cannabis Legislative Changes


Pursuant to the Misuse of Drugs (Medicinal Cannabis) Amendment Act 2018, medicinal cannabis products will be available by prescription without specialist approval. The Act comes into force on 1 April 2020 and will allow doctors to prescribe a range of medical cannabis products without specialist approval. The Act considers two forms of medicinal cannabis products: CBD products, and other medicinal cannabis products.


A CBD product will be a prescription-only medicine and can be prescribed by any medical practitioner. To be defined as a CBD product, the product must be predominately CBD. The formula is somewhat confusing; in brief, the THC content must be no more than 2% of the total amount of CBD and THC combined. For example, if the product is 49% CBD, then there must be no more than 1% THC. In contrast, it is estimated that the average cannabis strain today contains 12% THC.


A medical cannabis product which contains more THC or other related psychoactive substances than a CBD product will require additional requirements for prescriptions. Such products will be required to meet the Ministry of Health quality standard, and doctors will be limited to prescribing only one-months supply at a time.


The changes also provide a statutory defense for possessing and using cannabis for people requiring palliation (a type of care that makes you feel better, but can’t cure you). The statutory defence was always intended to be a temporary measure while the government established a medicinal cannabis scheme.


Referendum to Legalise Recreational Cannabis


The Cannabis Referendum is being held on Saturday 19 September 2020 and proposes to legalise recreational cannabis, and includes the following provisions:

  • A minimum purchase age of 20 years old

  • A ban on marketing and advertising cannabis products

  • A requirement to include harm minimisation messaging on cannabis products

  • Confining use to private homes and licensed premises

  • Limiting the sale of recreational cannabis to physical stores

  • Control over the potency of recreational cannabis being sold

  • Licencing regime for recreational cannabis

  • Cannabis Regulatory Authority to licence and authorise supply


Cannabis at Work


One common misconception is that if cannabis became legal (either recreationally or medicinally), that rates of use would increase; and it therefore would become more problematic in the workplace. However, if we consider international trends, it does not appear that legalisation significantly impacts regular cannabis use. For example, in the USA cannabis use increased by 2% after legalisation. However, in comparison, over the same time period, cannabis use rates in New Zealand increased by 3%. In fact, there are studies to suggest that youth cannabis use actually decreases after legalisation (see the Drug Foundation summary here).


This is important; if those using cannabis frequently or heavily is unlikely to increase, why would workplace issues? Let’s face it; alcohol is legal and most of us aren’t turning up to work drunk. So why would it be any different with cannabis?


It’s therefore unlikely that New Zealand workplaces would notice a significant change if cannabis were to be legalised. However, the devil’s advocate in me was not satisfied with this response. Afterall, as an advocate, I’ve been taught to question everything. So, the remainder of this article is dedicated to analysing the existing employment-related laws and questioning whether they are satisfactory to protect employers even if cannabis use increased.


Cannabis and the Health and Safety at Work Act 2015


When considering cannabis and the workplace, we must first consider the obligations imposed under the Health and Safety at Work Act 2015 (“HSWA”). The HSWA imposes a duty to:

  • Eliminate risks to health and safety, so far as is reasonably practicable; and

  • If it is not reasonably practicable to eliminate risks to health and safety, to minimise those risks so far as is reasonably practicable.


If an employee is intoxicated at work, this may impact the health and safety of other employees. This is especially so in safety-sensitive industries, such as building, construction, and the like. To minimise these risks, many employers will have comprehensive drug and alcohol policies, which allows for drug and alcohol testing in the following situations:

  • After an accident or incident (near miss) caused by the employee

  • Where there is “reasonable cause” to believe the employee is impaired

  • Random testing

  • When monitoring an employee who has previously tested positive for drugs or alcohol


Current drug testing relies on urine samples, which can only detect when a drug is in a person’s system. It does not prove that someone is impaired. Because cannabinoids are stored in the body’s fat, they can show up on drug tests for several days or weeks after use; meaning that a drug test will only prove that an employee has taken drugs, not that they are currently impaired.


This is significant, because it means that workplace drug testing may not improve workplace safety. This will not change after any cannabis law reform. The only way to reduce the risks of impairment in the workplace is through quality management, education on the signs of intoxication, a culture of reporting health and safety risks, and a system that encourages people to speak up. It is important to remember; impairment does not only stem from alcohol and drug use. A person may be impaired following tiredness, stress, dealing with grief or a breakup, or as a result of prescription medicines.


There is also the option of implementing saliva testing, which would provide a more definitive means of determining whether an employee was intoxicated (and therefore impaired). It is also easier, more accessible and less intrusive. However, New Zealand would need to assign a measurement of intoxication, similar to the criminal drink driving limit, and I am not sure how realistic this would be; the science around saliva testing is new and inexact. Perhaps Hon Julie Anne Genter’s Bill would address this issue.


It therefore appears that even if cannabis use increased, the HSWA provides adequate protections for workplaces. However, it is my view that, irrespective of the proposed cannabis changes, employers should thoroughly consider the application of the HSWA in their workplace, and implement other practices which may reduce the risk of impairment in the workplace.


Urine drug testing alone is not enough.


Cannabis and the Employment Relations Act 2000


The next question then becomes; if an employee fails a drug test, are there adequate protections to ensure they are treated fairly and reasonably? In this situation, the Employment Relations Act 2000 imposes a test that considers “whether the employer’s actions, and how the employer acted, were what a fair and reasonable employer could have done in all the circumstances at the time the dismissal or action occurred.”


Firstly, we must consider that a failed drug test does not necessarily mean that an employee was intoxicated at work. This means that there are two avenues to consider:

  • Whether the employee has breached the relevant policy by producing a positive test; and

  • Whether, on the balance of probabilities, the employee was intoxicated at work.


If an employer can show, on the balance of probabilities, that an employee was intoxicated at work then this would likely amount to serious misconduct, and an employer would likely be able to consider dismissal. However, an employer will not be able to solely rely on a failed urine drug test, and will be required to show other evidence that the employee was intoxicated.


If an employee has returned a positive drug test, but shows no signs of being intoxicated, it’s unlikely that a dismissal will be justified. As was stated by the Employment Relations Authority in Palmer v Bluescope New Zealand Steel Ltd: “An employer cannot dismiss every person who has an alcohol or drug problem”. Rather, the employer must consider all the circumstances to determine an appropriate outcome. Some circumstances to consider may include the whether the workplace is safety-sensitive, the employee’s role, the employee’s prior working history, whether the employee is using medicinal cannabis, and the employee’s willingness to undergo a rehabilitation programme.


In short, so long as there is an adequate policy in place, an employer may be able to issue an employee with a warning simply for breaching the relevant drug and alcohol policy. However, this is based on the premise that cannabis is illegal. What if New Zealand legalised cannabis; would it be “fair and reasonable” for an employer discipline an employee for having taken medicinal or recreational cannabis? Afterall, it would be unheard of for an employee to be disciplined for having a few beers on a Tuesday night while watching the cricket.


These policies have traditionally been justified on the basis that the health and safety concerns of a business outweigh the rights to privacy of the employees. But an employee has no right to enjoy cannabis; it is currently illegal. And, as the international community begins to legalise cannabis, we are starting to understand more about the drug. In fact, as an estimation, a cannabis induced high can usually last from 30 minutes to six hours (depending on the strain of cannabis, method of consumption, the person’s metabolism, and their surroundings). So, I wonder; how is this any different to alcohol? Why should we treat it any differently?


We shouldn’t. If cannabis were legalised, an employer should not be entitled to discipline an employee for enjoying a legal substance in their free time. It simply doesn’t make sense to treat the two legal substances differently. But that’s not to say that an employer should be required to compromise on health and safety. Instead, I come back to the proposal of saliva drug testing. Currently, employers have an onerous burden of proving “on the balance of probabilities” whether an employee was intoxicated. However, if New Zealand invested into saliva drug testing, it could become a reliable means of proving impairment.


It therefore appears that even if cannabis use increased, the test of justification contained within the Employment Relations Act 2000 would provide sufficient protections for both employees and employers. In fact, the only potential implication would be that less employees would receive written warnings for returning a positive drug test, due to cannabis' legal status. I’m not sure that this is a bad thing.


Cannabis and the Human Rights Act 1993


The Human Rights Act 1993 (“HRA”) prohibits an employer from discriminating against an employee with a disability. The HRA has adopted a broad definitionof a “disability”, but for the purposes of this article, a person is considered to have a disability where:

  • They have a psychiatric illness, an intellectual or psychological disability or impairment; or

  • They rely on a guide dog, a wheelchair, or other remedial means.


In the context of cannabis use employers need to consider whether:

  • The employee relies on medicinal cannabis for remedial means; and

  • Whether the employee could be defined as having a substance use disorder, as defined by DSM-V, and therefore a “psychiatric illness.”


There is an exception to the rule, however. Section 29 of the HRA states that an employer may provide differential treatment to an employee who is disabled where:

  • The person could only perform the duties of the position satisfactorily with the aid of special services or facilities, and it is not reasonable to expect the employer to provide those services or facilities; or

  • Where there is a risk of harm to that person or others, and it is not reasonable to take that risk.


In considering all of these factors, an employer will need to take great care when an employee has returned a positive drug test result. If the employee relies on CBD for remedial means, they will likely produce a positive THC result, despite the low THC content. However, as discussed, the employee is unlikely to be impaired, as CBD is a nonpsychoactive compound. This means that if an employer chose to discipline that employee, they risk discriminating against that employee on the basis of disability.


On the other hand, an employer should not be quick to dismiss if an employee has returned a positive drug test result and that employee is showing signs of impairment. If an employee has a substance use disorder, they would be able to perform their duties satisfactorily following a period of rehabilitation, and in most cases, it would be reasonable to provide the employee with an opportunity of paid or unpaid leave to rehabilitate (whether that be independently at home, or with the assistance of a rehabilitation facility).


Therefore, even if cannabis use increased, there would be no impact to the Human Rights Act 1993. The abovementioned provisions are already in force, and would not require amendments following the proposed and planned cannabis law changes. It is my view that, irrespective of the planned and proposed changes, employers should familiarise themselves with their obligations under the Human Rights Act 1993, and always offer a period rehabilitation following the first instance of a failed drug test.


Moving forward


In conclusion, the reality is New Zealand workplaces will not be significantly impacted by the planned and proposed changes to cannabis laws. However, what we can see is that irrespective of the planned and proposed changes, there is a need for New Zealand to “step up” and to improve its workplace drug testing practices to ensure that employers are meeting their requirements under the HSWA, that they are treating employees fairly and reasonably pursuant to the Employment Relations Act 2000, and that they are not discriminating against employees on the basis of disability.


In considering the referendum, all I can say is educate yourselves. I don't care whether you're for or against the proposed changes; all I care about is that you're making an informed decision. What matters is that you are understanding all sides of the argument. In saying this, I recommend the paper written by the Helen Clark Foundation.


Let’s keep the conversation going. Do you agree with my views? Do you have something to add? Something to rebut? Let’s start some constructive conversations about the matter; whether you’re for or against it. People deserve to be fully informed before making a decision.





Ashleigh Fechney LLM(hons), BA


027 555 999 5 Ashleigh.the.Advocate@gmail.com www.ashleightheadvocate.co.nz

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