Can You Dismiss an Employee for Being Drunk at Work in Australia?

Finding out an employee is drunk at work is one of those moments every employer dreads.

On the one hand, you may be worried about safety, customers, mistakes, property damage, and your legal obligations as an employer. On the other hand, you don’t want to rush into a termination and end up dealing with an unfair dismissal claim (or a broader workplace dispute) because you acted too quickly or didn’t follow a fair process.

So, can you dismiss an employee for being drunk at work in Australia? Sometimes, yes. But whether it’s lawful (and whether it’s “summary dismissal” or dismissal with notice) depends on the facts, your workplace policies, the applicable industrial instrument (like a modern award or enterprise agreement), and the steps you take after the incident.

This guide breaks down the practical considerations for small business employers, including when termination might be justified, what to do immediately after the incident, and how to reduce your legal risk.

Can You Dismiss an Employee for Being Drunk at Work in Australia?

Yes, in many cases you can dismiss an employee for being drunk at work.

Being intoxicated at work can amount to misconduct, and in serious cases it can be serious misconduct (which may justify immediate dismissal without notice). However, not every “drunk at work” situation automatically allows you to terminate on the spot.

In practice, whether you can lawfully dismiss an employee will depend on factors like:

• Safety risk: Were they operating machinery, driving, working at heights, handling cash, or in another safety-sensitive role?
• Workplace policies: Do you have a clear alcohol and drugs policy, and did the employee know about it?
• Evidence: Can you show they were intoxicated (not just “acting oddly”)?
• Impact on work: Was their performance compromised, did they behave aggressively, or did they breach customer trust?
• History: Is this a first incident, or is there a pattern (including prior warnings)?
• Role expectations: Is there a strict “fit for work” requirement (common in construction, transport, security, healthcare, etc.)?

Even where there is a valid reason to dismiss, employers still need to follow a procedurally fair process, particularly if the employee has access to unfair dismissal protections.

When Does Being Drunk at Work Count as “Serious Misconduct”?

“Serious misconduct” is the category of conduct that may justify summary dismissal (dismissal without notice).

Alcohol intoxication can fall into this category where it causes (or creates a real risk of) serious harm, serious safety issues, or a major breakdown of trust and confidence. In many workplaces, this is assessed by reference to the seriousness of the conduct and whether it exposes the business (or others) to significant WHS or other risks.

Common Examples Where Summary Dismissal May Be Defensible

While every case turns on its facts, some scenarios are more likely to justify immediate termination, such as where the employee:

• turns up intoxicated and is working in a high-risk environment (forklifts, driving, tools, electrical work, heights, hazardous substances)
• is aggressive, threatening, harassing, or violent while intoxicated
• refuses a lawful and reasonable direction (for example, refusing to leave the workplace when directed)
• puts customers, colleagues, or the public at risk
• causes significant property damage or serious financial loss
• seriously damages the business’s reputation (for example, intoxication at a client site while representing the business)

In these situations, you may be thinking: “This is obvious. They’ve breached safety. We have to act.” That instinct is understandable.

But even if the end result is termination, your process still matters. A rushed decision without proper evidence and a chance for the employee to respond can create unnecessary risk.

When It Might Not Be Serious Misconduct

There are also cases where intoxication may be misconduct, but not serious misconduct. For example:

• the employee appears mildly affected and is immediately removed from duties
• the employee’s role is not safety-sensitive and there was no harm or serious risk
• there is uncertainty about whether intoxication actually occurred (for example, medical issues, fatigue, or prescribed medication)
• the employee admits to drinking but says it was an isolated error in judgment

In those circumstances, you might still have a valid reason for disciplinary action, but it may be more appropriate to investigate and consider options such as a warning, a final warning, suspension (with or without pay depending on your contract, policy, and any applicable award or enterprise agreement), or termination with notice.

What Should You Do Immediately If an Employee Is Drunk at Work?

When intoxication is suspected, your first priority should be safety and control. The second priority is protecting your business by creating a clear record of what happened.

Step 1: Remove Them From Duties (Safety First)

If there’s any risk, direct the employee to stop work immediately.

If they’re operating equipment, driving, or supervising others, it’s important to act quickly and calmly. If possible, have a second manager present as a witness.

Depending on the situation, you may direct them to leave the workplace and, if appropriate, stand them down while you look into the incident. Arrange safe transport home (for example, a taxi), and avoid letting the employee drive.

Step 2: Document What You Observed

Write down the facts while they’re fresh. Focus on objective observations, for example:

• smell of alcohol
• slurred speech
• unsteady walking
• confusion, poor coordination, inappropriate behaviour
• admissions made by the employee
• any safety incident or near miss

If other staff observed the conduct, ask them to provide a short written statement (again, focusing on facts and observations, not opinions).

Step 3: Follow Your Policy (If You Have One)

If you have a drug and alcohol policy, follow it. This might include directions about reporting, investigation steps, and disciplinary consequences, and (if your policy provides for it) testing procedures.

If you don’t have a clear policy, this incident is a strong sign your business may benefit from updating your workplace documentation, including an Workplace Policy that covers fitness for work, safety, and conduct standards.

Step 4: Consider Whether Testing Is Appropriate

Alcohol testing can be legally sensitive. Whether you can lawfully require an employee to take a breath test (or other test) often depends on:

• the nature of the role (higher-risk roles usually justify stricter measures)
• whether there is an existing workplace policy (and sometimes an applicable award or enterprise agreement) that clearly allows testing
• whether the direction to test is lawful and reasonable in the circumstances

Testing isn’t always necessary to take action, but it can help strengthen your evidence if implemented correctly. If you’re unsure, it’s worth getting advice before escalating.

How To Dismiss an Employee for Being Drunk at Work (Without Creating Unnecessary Risk)

Even if you believe dismissal is warranted, the safest approach is usually to treat the incident as a workplace investigation first.

A fair process can be the difference between a clean termination and months of time dealing with a claim.

1. Put the Allegations in Writing

Explain what is alleged and why it is an issue (for example, breach of safety rules, breach of code of conduct, reputational risk, or breach of policy).

If the allegations are serious, you may also outline that termination is being considered, depending on the outcome.

2. Give the Employee a Chance To Respond

Invite them to a meeting and give them a reasonable opportunity to explain their side. There may be relevant context, such as:

• a medical condition or medication
• personal issues (not an excuse, but potentially relevant to your approach)
• disputes about what occurred
• an admission and willingness to comply moving forward

Consider allowing a support person, particularly if the situation is serious.

3. Consider Any Alternatives and Consistency

Before deciding, consider whether dismissal is proportionate and consistent with how similar matters have been handled in your business.

Consistency matters because if you’ve previously given warnings for similar behaviour and suddenly move to summary dismissal, it may be harder to defend.

4. Decide on the Outcome and Communicate It Clearly

If dismissal is the outcome, confirm it in writing.

You should clearly explain:

• the reason for dismissal (facts and findings)
• whether it is summary dismissal or dismissal with notice/payment in lieu
• the termination date
• final pay details (including accrued leave entitlements)
• return of company property and access (keys, devices, logins)

If you decide to dismiss with notice (or pay in lieu), it’s worth understanding the rules around payment in lieu of notice, because getting final pay wrong can cause a separate compliance issue.

5. Make Sure Your Employment Paperwork Supports You

Your strongest protection is usually having clear contractual and policy foundations before a problem occurs.

For example, a well-drafted Employment Contract can set expectations about conduct, compliance with policies, and grounds for termination.

Where appropriate for your workplace, your documentation should also address:

• fitness for work requirements
• reporting safety issues
• employee obligations to follow lawful and reasonable directions
• disciplinary processes

Key Legal Risks Employers Should Watch Out For

Handling intoxication at work isn’t just about deciding whether to terminate. It’s also about managing your legal exposure from multiple angles.

Unfair Dismissal Risk

If the employee is eligible to make an unfair dismissal claim (for example, they have served the minimum employment period and your business meets the relevant thresholds), the Fair Work Commission generally looks at two big themes:

• Was there a valid reason? (for example, misconduct or serious misconduct)
• Was the process fair? (notification, opportunity to respond, and proportionate decision-making)

Intoxication can be a valid reason, but employers often run into problems when:

• they don’t have evidence (or rely on hearsay)
• they don’t give the employee a chance to respond
• they act inconsistently with past practice or policy
• they skip investigation steps because they’re frustrated or under pressure

Work Health and Safety (WHS) Obligations

Separately, you have duties to provide a safe workplace. Allowing an intoxicated employee to continue working can expose your business to WHS risks, especially if something goes wrong.

This is one reason why “removing from duties first, investigating second” is often the safest immediate approach.

Discrimination and Medical Issues

Sometimes intoxication is connected to a health issue (including alcohol dependency). That doesn’t mean you must ignore misconduct, but it can complicate how you respond.

For example, you may need to consider whether there are reasonable steps you can take (depending on the circumstances) while still maintaining safety and performance standards.

If you suspect there may be an underlying medical condition, it may be appropriate to consider whether you can request medical information in a lawful way. The rules can be nuanced, so it helps to understand when employers can request medical clearance.

Underpaying or Mishandling Final Pay

Even where termination is justified, employers sometimes create a second dispute by mishandling final pay.

This might include issues around notice, outstanding wages, or leave balances. If you’re working through termination logistics, it can be helpful to have a clear approach to calculating final pay.

How To Prevent “Drunk at Work” Issues (Policies, Training, And Contracts)

Most small businesses don’t want to spend time dealing with disciplinary issues. The good news is that a bit of upfront planning can significantly reduce the likelihood of alcohol-related incidents (and make it easier to take action if they do occur).

Have a Clear Drug and Alcohol / Fitness for Work Policy

Your policy should explain (in plain English):

• what “fit for work” means in your workplace
• when alcohol is prohibited (including attending work under the influence)
• whether alcohol can ever be consumed at work events and under what limits
• how testing works (if applicable)
• what happens if someone breaches the policy (investigation and disciplinary outcomes)

It’s also important that employees actually receive the policy and that you can prove they were made aware of it (for example, onboarding checklists and signed acknowledgements).

Train Your Managers on What to Do

In a small business, the “first responder” is often a manager or supervisor, not HR.

Make sure your managers understand:

• how to respond calmly
• how to document observations
• how to manage immediate safety risks
• what to say (and what not to say) to avoid escalating conflict

Use the Right Employment Agreement for the Role

A tailored employment agreement is often your first line of protection because it sets expectations and makes it easier to enforce standards.

Depending on the engagement type, you may need different documentation, including a Casual Employment Contract (which can address roster expectations, conduct standards, and termination rules in a way that matches casual employment).

Set Expectations About Workplace Conduct Early

It’s much easier to address misconduct when the rules are clear from day one.

That includes expectations about:

• presenting to work unimpaired
• professional behaviour around customers and clients
• following safety directions
• reporting hazards and incidents

When standards are consistently applied, disciplinary action (including dismissal where necessary) is less likely to come as a surprise to the employee and more likely to be defensible.

Key Takeaways

• You generally can dismiss an employee for being drunk at work in Australia, but whether it’s lawful depends on the circumstances, your evidence, and your process.
• Intoxication may amount to serious misconduct where it creates serious safety risks, involves aggressive behaviour, or causes a major loss of trust and confidence.
• Your immediate priority should be safety: remove the employee from duties, document what happened, and follow your workplace policies.
• A fair process matters even when dismissal seems obvious, including putting allegations in writing and giving the employee a chance to respond.
• Strong contracts and workplace policies reduce the risk of disputes and make it easier to respond confidently when misconduct happens.

If you’d like help handling a drunk at work incident or putting the right workplace documents in place, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.