In a landmark decision today the Employment Court in Auckland has decided that Air New Zealand may drug test some of its employees in specific circumstances.
In its judgment the court found that the Health and Safety in Employment Act and general law imposed "absolute duties on employers to take all practicable steps to eliminate hazards to employees and others".
Because of this the court said it was reasonable that employers should be able to take measures including drug testing in "safety sensitive areas".
The court also found that testing should be available where there was reasonable cause to suspect that an employee's behaviour was an actual or potential source of harm and was a result of the effects of drugs or alcohol.
However the court found that Air New Zealand's policy was not valid where it proposed random testing of employees outside safety sensitive areas.
Six unions challenged Air New Zealand's plan to test its staff for drugs and alcohol in the Employment Court in October.
The airline already conducts pre-employment testing but its proposal to extend the tests to all 10,000 staff was challenged by the six unions representing workers, including aircraft engineers and cabin crew, although not pilots.
The New Zealand Council of Trade Unions (CTU) said today the court's decision highlighted the need for urgent government action to spell out legal rights and responsibilities around drug testing in the workplace.
"In its landmark judgement, the court has drawn attention to the need for the law to make clear the rights and responsibilities in this difficult area," CTU president Ross Wilson said.
"It would also be desirable for the CTU and Business NZ to work with the Government to develop a code of best practice for employers and unions."
The court emphasised that its decision only applied to the Air New Zealand situation.
"However it is clear from the judgement that some drug and alcohol testing regimes already being carried out in workplaces are unlawful," Mr Wilson said.