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More than 70 sawmill workers are claiming $2500 each after they were drug-tested when cannabis plants were found growing at work.
In a ruling released today, the Employment Relations Authority has found Carter Holt Harvey knowingly failed to follow its own policy when testing about 190 staff in March last year.
Seventy-six union members have taken a case to the authority seeking $2500 each in compensation and a $20,000 penalty for the breach of good faith.
Tests were undertaken after two cannabis plants were found on the grounds outside sawmill buildings on their Eves Valley site, near Nelson.
Site manager Darryn Adams said all employees should be subjected to a "reasonable cause" drug test because the site was only accessible by staff and not easily accessed by the public.
The testing, by the New Zealand Drug Testing Agency, involved a tester standing behind men employees as they urinated into a cup. Women staff were allowed to give their sample in private, the ruling said.
Half way through the testing, the Engineering, Printing and Manufacturing Union was contacted, which told Mr Adams it believed the testing was in breach of CHH's drug and alcohol policy.
However, the testing continued and staff were told that while they could refuse to provide a sample, disciplinary action could follow, the ruling said.
One employee was found to have a "non-negative test", but there was no suggestion in front of the authority that he had planted the marijuana plants.
CHH told the authority it was justified in testing the employees because it was reasonable to assume that whoever planted the marijuana worked at the sawmill.
The company conceded the testing was not in strict accordance with its Policy and Operating Procedures but said it was motivated by a strong desire to protect its employees and so the testing was justified.
But one worker, Aaron Sim, told the authority he felt he had to prove his innocence to the company after 10 years service.
"It made people feel that everybody was being accused of being drug users and that we were not trusted and had to prove our innocence.
"Guilty until proven innocent is the way a lot of people have described it, and that is how I felt."
Authority member Christine Hickey said CHH's approach was "wrongheaded", but Mr Adams acted with honesty and openness.
"However, he did have an ulterior purpose or motivation, which was one not allowed for in the employment agreement.
"CHH intended to find whoever had planted the plants and to send a strong message to its staff that it would not tolerate drugs or drug use on site."
The company knew it was acting against its own policy, but continued on nonetheless, she said.
The breach was deliberate, but not so serious it warranted a fine for breaching good faith.
She ordered the company and employees to sit down in mediation to work out a compensation payment, or return to the authority if they could not agree.
- By Rebecca Quilliam of APNZ