The cost of a drug and alcohol testing program is visible, budgeted and predictable. The cost of not testing is invisible until it surfaces as an inflated workers compensation premium, an indefensible claim, a notifiable incident without documentation or a regulatory investigation where the employer cannot demonstrate active risk management. In 2023-24, Australian workers lodged 146,700 serious workers compensation claims involving at least one week of working time lost. For employers in high-risk industries, every one of those claims flows through to premium calculations via experience rating. The presence or absence of a drug and alcohol program affects how those claims land, how defensible the employer's position is and how the premium moves in the years that follow.
These connections are rarely visible on a balance sheet. They compound across multiple channels: insurance, legal, productivity and reputation. Understanding where the exposure sits is the first step toward managing it.
Why Drug and Alcohol Impairment Is a Risk You Are Expected to Manage
Under section 19 of the Model WHS Act, a person conducting a business or undertaking must manage risks to health and safety so far as is reasonably practicable. Safe Work Australia identifies drugs and alcohol as a workplace hazard requiring active management. Impairment is not an unforeseeable risk in high-risk industries. It is an identified hazard with well-established control measures available, including testing, policy, training and support pathways.
Officers hold a personal duty under section 27 to exercise due diligence. This includes verifying that the organisation has appropriate resources and processes to manage identified risks. An employer who identifies impairment as a hazard but does not implement testing needs to demonstrate what alternative controls are in place and why testing was not reasonably practicable.
Victoria operates under the Occupational Health and Safety Act 2004, which diverges from the Model WHS Act in structure and terminology. In Western Australia, the WHS Act 2020 and WHS (Mines) Regulations 2022 apply; the legacy Mines Safety and Inspection Act 1994 was superseded from 31 March 2022 and is no longer current. Organisations operating across jurisdictions should verify their obligations with the relevant state or territory regulator. Understanding why programs built on policy documents alone produce weaker compliance and cultural outcomes is critical to closing the gap between a written position and an operational one.
When an Impairment-Related Incident Triggers WHS Reporting Obligations
Employers must notify their WHS regulator immediately after becoming aware of a notifiable incident at the workplace. Under section 35 of the Model WHS Act, notifiable incidents fall into three categories: the death of a person, a serious injury or illness, and a dangerous incident that exposes a person to an immediate risk to health or safety.
Impairment-related events can trigger any of these categories. A vehicle collision involving an impaired operator that results in hospitalisation is a serious injury. A near-miss involving an impaired forklift driver in a warehouse may constitute a dangerous incident. When the regulator investigates, the employer's drug and alcohol controls form part of the evidentiary record.
In December 2025, Safe Work Australia published amendments to the Model WHS Act expanding notification requirements. These include notifiable extended absences of 15 or more consecutive days, notifiable suicides and a new duty to notify other persons conducting a business or undertaking of "relevant occurrences." These amendments apply only once adopted under local WHS laws, and employers should check with their state or territory regulator before adjusting reporting practices.
An employer who can demonstrate active testing, documented risk management and consistent policy application at the time of a notifiable incident is in a materially stronger position than one who cannot.
How Testing Programs Affect Workers Compensation Premiums and Claims
Workers compensation in Australia is administered at the state and territory level. Schemes differ (icare in NSW, WorkSafe Victoria, WorkCover Queensland, ReturnToWorkSA in South Australia, WorkCover WA and equivalents in other jurisdictions), but the premium calculation principles are consistent. Premiums are based on industry classification, payroll and claims experience. Experience rating adjusts an employer's premium based on its own claims history relative to the industry average. Higher claims frequency and severity drive higher premiums over subsequent policy periods.
A drug and alcohol testing program reduces impairment-related incident risk, which over time reduces claims frequency and severity, which flows through to lower experience-rated premiums. The absence of a program means impairment-related incidents are more likely to occur and more likely to result in claims that compound the premium.
The claim outcome angle matters equally. In several jurisdictions, workers compensation legislation treats a worker who is under the influence at the time of injury as guilty of "serious and wilful misconduct." In NSW, section 14 of the Workers Compensation Act 1987 provides that a personal injury is taken to be attributable to serious and wilful misconduct if the worker was under the influence, unless the substance did not contribute to the injury. Similar provisions apply in the ACT. However, an employer's ability to invoke these provisions depends entirely on having evidence of impairment at the time of the incident. Without a testing program in place, that evidence does not exist.
What "Reasonably Practicable" Means for Drug and Alcohol Testing
Drug and alcohol testing is a widely available, well-established and relatively low-cost control measure for impairment risk. Australian Standards govern the equipment and procedures: AS 3547:2019 for breathalysers, AS/NZS 4760:2019 for oral fluid testing and AS/NZS 4308:2008 for urine testing. An employer in a high-risk industry who does not implement testing when it is available and proportionate to the risk will find it difficult to argue that its risk management meets the "reasonably practicable" standard. The direct and indirect financial costs of an impairment-related incident in the workplace reinforce why the investment in testing infrastructure is proportionate to the risk it manages.
How Testing Records Support Your Position in Proceedings
Testing data functions as evidence across multiple legal and regulatory contexts. In a WHS investigation, testing records demonstrate that the employer identified impairment as a hazard, implemented a control measure and actively applied it. In a coronial inquiry following a workplace death, testing data can establish whether impairment was a contributing factor and whether the employer had reasonable controls in place. In a Fair Work Commission proceeding following a dismissal related to a positive test, documented records support the procedural fairness of the employer's actions.
The evidentiary value of testing data depends on how it is collected and stored. The Soberlive FRX wall-mounted breathalyser generates AS 3547:2019 certified results with facial recognition identity verification, automated time-stamping and real-time data sync to the Andalink cloud platform. The Andalink platform stores records in a centralised, searchable database with exception alerting, CSV export and access controls. Andatech's ISO 27001:2022 certification provides assurance that testing data is managed under internationally recognised information security standards. For mobile and field operations where wall-mounted installation is not feasible, the Prodigy S portable breathalyser provides AS 3547:2019 certified testing with 10,000-record internal memory. Oral fluid drug testing using the DrugSense DSO8 Plus V3 and OraScan Saliva Drug Test Cassette V5 complements breath alcohol testing as part of a comprehensive program. Andatech's NATA-accredited Melbourne calibration centre supports calibration currency, a critical component of evidentiary defensibility.
Indirect Costs That Accumulate Without a Testing Program
The hidden costs of not testing compound across channels that are difficult to isolate on a balance sheet: inflated workers compensation premiums driven by avoidable claims, legal costs from regulatory investigations or Fair Work proceedings where the employer cannot demonstrate due diligence, productivity losses from impairment-related incidents and workforce disruption, reputational damage as an employer and as a contractor, and personal liability exposure for officers who have not exercised due diligence under section 27. How routine testing supports accountability, legal protection and long-term workforce performance provides a broader view of the operational returns a testing program delivers.
Actions Employers Should Take Now
- Conduct a risk assessment that identifies impairment as a workplace hazard
- Review or develop a drug and alcohol policy that meets WHS requirements and includes defined testing circumstances
- Implement a testing program using Australian Standards certified equipment
- Establish a data management system that produces auditable, exportable compliance records
- Brief officers on their personal due diligence obligations under section 27 of the Model WHS Act
- Train supervisors on testing administration, incident reporting and chain-of-custody procedures
- Review workers compensation claims history to identify impairment-related trends
- Schedule annual review of the testing program and policy
Talk to Andatech about building a defensible testing program
Andatech works with employers across Australia to design drug and alcohol testing programs that satisfy WHS due diligence requirements and support workers compensation risk management. Contact the team to discuss configuring the Soberlive FRX wall-mounted breathalyser, OraScan 3000 Analyser and Andalink data management platform for your operations.
Disclaimer: This article provides general guidance only and does not constitute legal or financial advice. Employers should seek professional counsel for advice specific to their circumstances.
