A confirmed positive drug or alcohol test result triggers a chain of decisions that extend well beyond the safety response. Once the worker is stood down, the organisation must navigate a complex intersection of employment law, enterprise agreement provisions, payroll obligations, and leave entitlements. Getting these decisions wrong can expose the employer to unfair dismissal claims, underpayment disputes, or breach of agreement proceedings — even when the underlying positive result is valid and defensible.

This article examines the key payroll and leave implications of stand-down periods following a positive test, with reference to the Fair Work Act 2009 and common enterprise agreement provisions.

Paid vs Unpaid Stand-Down

The question of whether a stand-down following a positive drug test is paid or unpaid is one of the most contentious issues in Australian workplace drug testing. The answer depends on the legal basis for the stand-down and the terms of the applicable industrial instrument.

Fair Work Act Stand-Down Provisions

Section 524 of the Fair Work Act 2009 allows an employer to stand down an employee without pay if the employee cannot usefully be employed because of a stoppage of work for which the employer cannot reasonably be held responsible. However, the Fair Work Commission has generally held that a positive drug test result is not a “stoppage of work” within the meaning of section 524. The employee is available and willing to work; it is the employer’s policy that prevents them from working.

This means that a stand-down under section 524 is unlikely to provide a lawful basis for an unpaid stand-down following a positive test result. An employer who relies on section 524 alone may find itself required to back-pay the employee for the stand-down period.

Enterprise Agreement and Policy Provisions

Many enterprise agreements and workplace policies include specific provisions for stand-down following positive drug or alcohol test results. These provisions may authorise:

• Unpaid stand-down pending confirmation testing
• Unpaid stand-down for a defined period following a confirmed positive result
• Paid stand-down for an initial period (for example, until confirmation results are available), converting to unpaid if the result is confirmed positive
• Direction to use paid leave (annual leave, personal leave, or long service leave) during the stand-down period

The critical point is that the authority for the stand-down and its payment status must be clearly established in the applicable industrial instrument or employment contract before the situation arises. An employer that attempts to impose an unpaid stand-down without a clear contractual or legislative basis is exposed to legal challenge.

Enterprise Agreement Provisions

Enterprise agreements in safety-sensitive industries frequently contain detailed drug and alcohol testing provisions, including stand-down arrangements. Common structures include:

Immediate Unpaid Stand-Down

Some agreements authorise immediate unpaid stand-down from the time a non-negative screening result is returned, continuing until the matter is resolved (confirmation testing, medical review officer assessment, disciplinary outcome). This is the most cost-effective approach for the employer but requires clear agreement language and must be applied consistently.

Paid Stand-Down Pending Confirmation

Other agreements require the employer to continue paying the employee until the screening result is confirmed (or not confirmed) by laboratory testing. The rationale is that a screening result is preliminary and may be a false positive — standing the employee down without pay on the basis of an unconfirmed result is considered unjust.

Under this model, the stand-down typically converts to unpaid if the confirmation result is positive, and the employee is back-paid for the stand-down period if the confirmation result is negative.

Direction to Use Leave

Some agreements allow the employer to direct the employee to use accrued annual leave or personal/carer’s leave during the stand-down period. This ensures the employee receives income while shifting the cost from the employer’s operational budget to the employee’s leave balance. However, directing the use of personal/carer’s leave for this purpose is legally questionable unless the agreement explicitly authorises it, as personal/carer’s leave is intended for illness or caring responsibilities.

Fair Work Act Suspension Provisions

Where the employer decides to suspend (rather than stand down) the employee pending investigation or disciplinary proceedings, the same payment questions arise. The Fair Work Act does not contain a general right to suspend an employee without pay. Authority for unpaid suspension must come from:

• The enterprise agreement
• The employment contract
• A lawful and reasonable workplace policy that has been incorporated into the employment relationship

The Fair Work Commission has emphasised that policies must be communicated to employees and must be reasonable. A policy that authorises unpaid suspension for extended periods without adequate procedural safeguards may be found to be unreasonable.

Leave Entitlements During Stand-Down

During a stand-down or suspension, the employee’s leave entitlements are affected in the following ways:

Annual Leave

Annual leave continues to accrue during a paid stand-down but does not accrue during an unpaid stand-down (unless the enterprise agreement provides otherwise). If the employee is directed to take annual leave during the stand-down, the leave is deducted from their balance and the period counts as service for accrual purposes.

Personal/Carer’s Leave

Personal/carer’s leave continues to accrue during paid periods but not during unpaid periods. Directing an employee to use personal leave during a drug-related stand-down is contentious and should be approached with caution.

Long Service Leave

Long service leave accrual during stand-down depends on the applicable state or territory legislation and the terms of the enterprise agreement. In most jurisdictions, unpaid absences beyond a threshold period do not count as service for long service leave purposes.

Superannuation

Superannuation guarantee contributions are only required on ordinary time earnings actually paid. During an unpaid stand-down, no superannuation is payable. During a paid stand-down or directed leave, superannuation continues as normal.

Return-to-Work Payroll

When an employee is cleared to return to work following a stand-down, the payroll implications include:

• Resumption of ordinary pay — The employee returns to their normal pay rate and roster from the date they are cleared.
• Back-pay adjustments — If the stand-down was unpaid and the confirmation result is negative (the employee was wrongly stood down), back-pay for the full stand-down period is typically required.
• Leave balance adjustments — If the employee was directed to use leave, their balances should be verified and any necessary adjustments made.
• Modified duties — If the employee returns on modified duties (for example, non-safety-critical work during a rehabilitation period), ensure the correct pay rate applies. Some enterprise agreements provide for a different rate during modified duties.

Documentation

Every aspect of the stand-down and its payroll implications must be documented thoroughly:

• The date and time of the stand-down, and the reason
• Whether the stand-down is paid or unpaid, and the legal basis
• Any direction to use leave, including the specific leave type and the basis for the direction
• Communication to the employee (ideally in writing) explaining the stand-down, its pay status, and their rights
• The date and basis of any return-to-work clearance
• Any payroll adjustments made

This documentation is essential if the stand-down or any associated payroll decision is later challenged through a grievance procedure, Fair Work Commission application, or court proceeding.

Practical Recommendations

• Review your enterprise agreement, employment contracts, and drug and alcohol policy to ensure they contain clear, consistent provisions for stand-down payment status.
• If your current instruments are silent or ambiguous on this point, address it as a priority — before the next positive result occurs.
• Train HR and payroll staff on the correct procedures so that stand-down and return-to-work payroll are handled consistently.
• Seek legal advice before imposing an unpaid stand-down if you are unsure of the legal basis.
• Use a testing platform that timestamps the stand-down and clearance events, providing an accurate record for payroll purposes.

Need a platform that tracks stand-down periods, return-to-work clearances, and provides the documentation your HR and payroll teams need? Visit fairtest.com.au to start your free trial and streamline your post-positive-result workflow.