January 2023

Medicinal Cannabis Use – Employment and Insurance Implications

By Daniel White, Partner and Mark Civitella, Partner

General Commentary

Currently, medicinal cannabis is most strongly indicated as being potentially beneficial for the following medical conditions:

chronic pain
spasticity associated with multiple sclerosis
chemotherapy-induced nausea and vomiting
intractable seizures
neuropathic pain
fibromyalgia
arthritis
sleep disorders
anxiety and depression.

One essential component to safe use is considering a person’s risk of neurocognitive impairment. However, there remains a lack of practical guidance on how clinicians can evaluate this risk in different people.

There are several means of taking cannabis. The most common for medical use are inhalation (e.g. smoking or vaporizing) and oral ingestion (e.g. oils or capsules). Each mode of administration has unique pharmacokinetic and pharmacodynamic properties, leading to different times of onset and duration of action.

Dosing and administration of medicinal cannabis is complicated by not only having multiple methods of administration, but also a wide variety of product types. Cannabis products vary in their composition of the two primary cannabinoids, tetrahydrocannabinol (THC) and cannabidiol (CBD). Typically, cannabis treatment protocols are tailored to the individual person, with the exact dose and administration protocol being dictated by a person’s specific needs and goals of treatment. All of these factors influence the potential for cannabis-related impairment. Every individual has unique considerations. Proper screening and evaluation of a person can help to ensure the safe and responsible use of medicinal cannabis.

Cannabis has the potential to impair multiple domains of neurocognitive function. Evidence to date supports that THC is the primary psychoactive component in cannabis responsible for causing impairment. Determining what THC dose will elicit impairment remains highly person specific, regardless of the method of administration. Given the multiple factors responsible for impairment (such as frequency and time of day of administration), it remains challenging to achieve the intended effects of a THC dose, while also ensuring it is a “safe” dose that will be non-impairing for individuals.

Greater frequency of use of cannabis results in longer periods of potential impairment. Daytime THC use may present a greater safety risk, especially if the person engages in safety-sensitive activities during the day. The pattern of use will depend on patient-specific goals. Assessing the timeframe between use of cannabis and driving or engaging in safety-sensitive positions/workplaces is imperative when assessing risk. For example, if the frequency of use is such that an individual is using inhaled cannabis within 4–6 hours prior to driving or 8–12 hours prior to engaging in safety-sensitive positions/workplaces, then the individual would be considered higher risk.

There is a highly useful framework for assessing medicinal cannabis risk of impairment that can be used by medical practitioners. This criteria is not definitive as to quantifying the exact degree of impairment of a person but is rather viewed as a powerful toolkit to use by both clinicians in combination with employers to better understand and most effectively manage the risk of impairment associated with medically prescribed cannabis.

There is presently no single definitive test that clearly articulates the degree of personal impairment based on levels of THC in a person. The best guidance at present lies in reference to AS/NZ 4308 and AS 4760 – Australian Standard Drug Class Screening Cut-off Levels.

For example:

AS/NZ 4308 (Urine) drug screening cut off level: Cannabis Metabolites (50 ug/l)
AS 4760 (Oral Fluid) drug screening cut off level: Tetrahydrocannabinol THC at 25ng/ml

Answers to FAQ

How does taking medicinal cannabis impact on an employee’s employment? For example, if their employment involves driving a motor vehicle.

It is an offence under section 63(1)(b) of the Road Traffic Act to drive while under the influence of drugs to an extent of being incapable of having proper control of a vehicle. Further section 64AB of the Road Traffic Act states that a person who drives a motor vehicle while impaired by drugs commits an offence. Further, in WA cannabis is a declared ‘illicit drug’ under schedule 1, item 5 of the Misuse of Drugs Act. Drivers found with prescribed illicit drugs in their oral fluid can be charged with the offence of driving with prescribed illicit drug in oral fluid. “Prescribed illicit drugs” include tetrahydrocannabinol (THC): Road Traffic Drug Driving Regulations 2007: Reg 3. This would include medicinal cannabis for which a person has a prescription.

Drivers found to be impaired by prescribed or illicit drugs may be prosecuted for the more serious offence of drug impaired driving or driving under the influence of drugs. These offences apply where police have evidence of suspicious or erratic driving behavior and where that suspicion is confirmed following a driver assessment and/or blood test.

In WA, a person cannot have THC present in their system and drive without being in breach of the Road Traffic Act. It would be regarded as an implied term of any contract of employment, and part of the employee’s duty of fidelity and good faith, that the employee is capable of performing all required duties without breaking the law. This may well be an express term of the contract in any case. In this sense, the use of medicinal cannabis for a person whose duties include driving renders them incapable of properly performing the entirety of the contract of employment. At common law, this strictly speaking would allow the employer to lawfully terminate the contract. However, the statutory protections of anti-discrimination legislation and unfair dismissal must also be considered.

Anti-Discrimination Considerations

Anti-discrimination laws protect workplace participants with a “disability” (Disability Discrimination Act 1992 (Cth) [DDA]) or in WA, an “impairment” (Equal Opportunity Act 1984 (WA) [EOA]). (The two terms have no material difference.) It is unlawful to treat an employee or contractor less favourably because of a disability (direct discrimination), or to impose an unreasonable requirement with which the person cannot comply, compared to another person who does not have the relevant disability (indirect discrimination). However, there is no unlawful discrimination if the effect of the disability means that a person cannot safely perform the “inherent” (essential) requirements of their job, even with “reasonable adjustments”.

The Fair Work Act 2009 (Cth) (FWA) also protects employees from an adverse action in employment because of a “physical or mental disability”. While the FWA “adverse action” scheme is not identical to the federal and state anti-discrimination laws, the practical effect is the same for the purposes of this paper. If an employer’s act of discrimination is lawful under the DDA or the EOA, it will not constitute adverse action under FWA section 351.

In general terms, a person who has been prescribed medication by a general practitioner or a legitimate medical specialist is highly likely to be able to substantiate that they have a “disability” (i.e. a medical condition, temporary or permanent) to which the medication responds. Allowing an employee to take their prescription medication would be a required “reasonable adjustment” – and conversely, prohibiting them from taking their prescription medication would be regarded as indirect discrimination – unless that prescribed medication produces an impairment that prevents the person from safely performing the inherent requirements of the job.

Medicinal cannabis is, in this sense, no different for the purposes of anti-discrimination law from any other prescribed medication (noting that we comment below on the absence of a true ‘impairment’ standard for cannabis use that makes it more complex to assess than alcohol). The question will be whether the use of the medicinal cannabis produces impairment such that the person cannot safely perform the inherent requirements of their job, even with other reasonable adjustments. Note the safety standards to which all staff are subject do not need to change or be lessened for a person because they need to take prescribed medications. It would not be regarded as a “reasonable adjustment” to lessen a general safety standard that an employer has instituted in its policies based on its own operational risk assessment because this would likely mean that the employer is not complying with the parallel statutory obligations of workplace health and safety laws.

Therefore, for a person subject to the employer’s drug and alcohol policies and procedures and its general safety regime, the questions are:

(1) Does the use of the medicinal cannabis produce impairment at work?

(2) If ‘yes’, does the impairment mean that the person cannot safety perform the inherent requirements of their job, even with reasonable adjustments?

See the further comments above on assessing impairment with respect to medicinal cannabis. In the case of a person who operates machinery at work (as opposed to a desk job) it is difficult to see that there are any “reasonable adjustments” to the job that can be made in the case of impairment from medical cannabis. And as set out above, it is an offence to drive with any level of THC in the bloodstream in WA. But ultimately this assessment of impairment and any “reasonable adjustments” need to be made in light of an occupational physician or GP advice, using the questions listed above.

Unfair Dismissal

Some employees may be eligible to bring an unfair dismissal claim:

Employees covered by a modern award or enterprise agreement (regardless of earnings); or
Employees who earn below the high-income threshold of earnings of $162,000 per annum (excluding super).

If an employer dismisses such an employee, it is necessary for a successful defence to demonstrate that there was a “valid reason” for the dismissal, that is, a reason that is sound, defensible or well-founded. A valid reason would include the following:

The employee has driving duties as an essential part of their role but cannot perform those duties without breaking the road traffic legislation because of the presence of THC in their system and there is no alternative role which is available and for which they are qualified and there are no reasonable adjustments to their substantive role that would allow them to perform it without being in breach of the law.
The employee has driving duties as an essential part of their role and cannot safely perform those duties without impairment due to the presence of THC in their system (backed up by medical evidence) and there is no alternative role which is available and for which they are qualified and there are no reasonable adjustments to their substantive role that would allow them to perform it safely.
The employee did not disclose the use of medicinal cannabis in their job interview when directly asked whether they needed to use any drug for medical purposes that would affect their ability to drive or operate machinery lawfully and/or without impairment.

Procedural fairness requirement would still need to be followed during a ‘show cause’ dismissal process in order the defence to unfair dismissal to succeed.

If an employee using cannabis is required to drive or operate plant and machinery and the employer becomes aware of this, is the employer required to look for alternative roles for them within the organization? What if there are no alternative roles?

In WA, it is an offence to drive with THC present in your system, regardless of whether the THC comes from prescribed legal medicinal cannabis or illicit recreational cannabis. If the employer is aware of such an individual taking a cannabis product containing THC, CBD or CBD and THC the employer should immediately instruct the employee to stop work and in line with normal injury management protocols ensure that the individual is referred to an occupational physician for immediate review with the questions listed above for a comprehensive risk assessment as to their ability to complete their inherent job role requirements.

Whilst at the same time (if not completed already), employers should look to review their code of conduct rules, drug and alcohol standards / procedures, injury management procedures (i.e. pre-employment medicals) and recruitment guidelines, therefore immediately ensuring that this is an issue that is clearly identified and addressed prior to future offers of employment being made through the medical recruitment and onboarding process.

If there are no alternative duties for the job role held by the employee, the employer should look to consider retraining individuals to more suitable roles or moving them to other roles. As stated above, for the purposes of employees who are covered by unfair dismissal legislation it is necessary to consider if there is any alternative role which is available and for which they are suitably qualified. Further, for the purposes of anti-discrimination legislation, it is also necessary to consider if there are any reasonable adjustments that can be made to the manner of performing the role which would allow the employee to perform it without being in breach of the law and to do so safely. It is difficult to see what reasonable adjustments would be. However, if an alternative non-driving role were available and suitable, this would avoid the risk of an unfair dismissal claim and largely eliminate the risk of a discrimination-based claim.

If an employer is aware an employee using cannabis and does nothing and the employee is driving a vehicle and they or others are injured, what ramifications are there for the employer under the WHS Act?

As the primary duty under the WHS Act, the employer must ensure so far as is reasonably practicable the health and safety of workers engaged or caused to be engaged and workers whose activities in carrying out work are influenced or directed by the employer while the workers are at work in the business or undertaking. This includes contractors that may work under management and control or direction and influence. This also talks to the employer’s procurement standards with contractor engagement. More specifically, what is the contractor pre-qualification process that ensures contractor endorsement / approval prior to being issued scopes of work from the employer?

More specifically, if the employer knowingly allows / permits individuals to drive vehicles at work whilst under the influence of cannabis (i.e. THC, CBD or CBD and THC) and an event occurs where an employee is exposed to the risk of death or of injury or harm (without having undertaken any medical assessment of the risk), then the employer can be said to be committing a category 2 offence under the WHS Act and liable under the new WHS Act to a maximum penalty of $1.8 million. The worst-case scenario presents as an event where an employee is involved in a fatality level event where the employer knowingly allowed an individual to drive whilst under the influence of cannabis with a maximum body corporate fine of $10 million for Industrial Manslaughter.

To be clear again, it is an offence to drive with THC present in your system, regardless of whether the THC comes from prescribed legal medicinal cannabis or illicit recreational cannabis. Please note, that expert medical assessment of the risk arising from the use of medicinal and prescribed cannabis resulting in a determined low risk classification does not in turn equate to an individual being allowed to drive in Law. It simply means that the employer has taken steps to quantify and assess the risk.

Could the employer be found to be discriminating if they do not support or provide alternative duties to an employee who is being prescribed medicinal cannabis?

See the comments above on disability discrimination. For the purposes of anti-discrimination legislation, it is necessary to consider if there are any reasonable adjustments that can be made to the manner of performing the substantive role which would allow the employee to perform it without being in breach of the law and to do so safely. It is difficult to see what reasonable adjustments would be, but this will depend on the facts specific to each case. If there was an alternative non-driving role available, or the substantive role was retained excluding any duties involving driving or operating machinery, that would largely eliminate the risk of a discrimination-based claim.

Note that the definition of reasonable adjustment under the DDA is any adjustment unless it would impose an unjustifiable hardship. An “unjustifiable hardship” is evaluated according to these criteria:

All the relevant circumstances. (An extremely open-ended criterion.)
The nature of the benefit or detriment likely to accrue to, or be suffered by, any person concerned. (The key detriment to an employee would be the loss of their employment. For the employer it would be dangerous or deficient performance of work by an employee, risk of injury or damage, and breach of the law. For the community, in the case of impairment it would be the risk of injury to the public or to another worker.)
The effects of the disability of any person concerned.
The financial circumstances, and the estimated amount of expenditure required to be made, by the employer. (This could include a financial impost associated with employing another person to do driving duties alongside the employee in question. Larger employers gain less benefit from this consideration than a small business.)
The availability of financial and other assistance to the employer.

If an employee using cannabis has an accident while driving and is injured and charged by Police for having an illicit substance in their system, is there a complete defence to a workers’ compensation claim pursuant to section 22 of the Workers’ Compensation & Injury Management Act 1981 (WCIMA)?

Section 22(a) of the WCIMA is of potential relevance. It disentitles a worker to compensation:

If it is proved that the injury of a worker is attributable to his –

(a) … voluntary consumption of alcoholic liquor or of a drug of addiction, or both, which impairs the proper functioning of his faculties…

… unless the injury has serious and permanent effects or results in death.

Section 22(c) therefore may be relevant, however it will depend on a number of factors including the level of drugs in the worker’s system and the extent of the impairment this caused. In many cases it will be difficult for the employer to establish that the presence of cannabis in the system caused the accident. That is, had it not been for the use of cannabis the accident would not have occurred. It may be, for example, that the accident was simply caused by negligent driving, and there is a lack of evidence of impairment of faculties contributing to the manner of driving, in which case the exclusion would not apply.

Also, subsection (a) must be read in the context of the section in which it is found. The heading of section 22 is “Serious and wilful misconduct by worker, effect of”. Because workers’ compensation legislation is remedial in nature, in cases where the cannabis is medically prescribed to treat a medical condition of the worker, the prescribed dose is not deliberately exceeded and occupational driving is approved as safe by the prescribing doctor, it is likely the element of serious and wilful misconduct will be absent and such defence would fail.

What is the employer’s duty of care at common law to the employee taking medicinal cannabis and to other employees?

At common law, an employer is under a duty to take reasonable care for the health and safety of its employees in all the circumstances of the case so as not to expose them to an unnecessary risk of injury. One of the duties is to provide all employees with a safe working environment so far as is reasonably practicable. The standard of care is determined by the requirement of reasonableness, judged upon all the relevant facts of the case. It requires the employer to assess the potential risk of injury and the harm it may cause against the practicality and cost to the employer of putting safety precautions in place.

Knowledge of the employer is a highly relevant consideration. For example, if an employer knows that an employee requires medicinal cannabis to treat a medical condition, there is a risk of the employer being found negligent if an injury is caused to the employee or a co-worker from the use of machinery while impaired of proper functioning. The risk is heightened if, despite knowing of the use of cannabis, the employer had not sought medical opinion of the kind recommended above to determine the employee’s suitability to perform safety-sensitive activities.

Where a reasonably prudent employer would foresee that acts being done by employees might cause harm to any employee, an employer may be in breach of its duty of care if it did not take suitable precautions when it was in its power to do so. In cases where employees routinely perform work that entails a high level of risk to safety, we cannot exclude the possibility of an employer being in breach of its duty of care, if a work accident is found to have been caused by impairment from drug use, by failing to have an appropriate alcohol and other drug policy and management procedure.

What is WorkCover WA’s position on medicinal cannabis being taken as a treatment for a work injury given it is not on the Pharmaceutical Benefits Scheme (PBS)?

According to the WorkCover WA website, employers and insurers may pay for non-PBS (privately prescribed) medications if, in the medical practitioner’s opinion, the medications are clinically appropriate for the injured worker’s condition and there is no readily available alternative on the PBS.

There is no provision of the WCIMA which expressly limits the kinds of medications that can be prescribed to treat an injury and which must be funded under the claim.

Pursuant to clause 17(1) of Schedule 1:

the expense of such treatment must be “reasonable” to incur;
the treatment must be medically “approved” treatment, ie recommended by a medical practitioner.

Clause 17(1) has been held to import a requirement of reasonableness. When a dispute arises as to whether or not a particular treatment should be funded by an employer or insurer, that is, as the reasonableness of the treatment, the test to be applied by an Arbitrator involves consideration of the following criteria (Napier v BHP Billiton (Worsley Alumina) Pty Ltd [2015] WASCA 230):

Is the relevant medical treatment by a medical practitioner for the purpose of alleviating, remedying, curing or preventing the deterioration of:

the “injury“ of the worker which is compensable under the Act; or
a disability that is wholly or partly caused by or attributable to the compensable “injury“; or
any symptoms or effects wholly or partly caused by or attributable to the compensable “injury“ or a disability within (b).

We cannot therefore exclude the possibility that in some cases an Arbitrator might find that medicinal cannabis is reasonable treatment for an injury. The reasonableness of expenses incurred or likely to be incurred will in each case involve a question or questions of fact which may be unique to that case.

Medicinal cannabis is often prescribed to treat individuals suffering from recurrent seizures. Should a fitness for work assessment be undertaken before employing such person, and if that has not occurred, what should their action be upon becoming aware of these facts?

Ideally decisions like this should be made at pre-employment medical stage (i.e. before the offer of employment is made) or, in the alternative, after an assessment by an occupational physician addressing the questions listed above. See also the answer to question 2.

The occupation physician should be asked for their view on whether any adjustments are required to allow the employee to perform their role, and the specific tasks they are unfit to do, or to do only with stated restrictions. This can legitimately go to assessing whether the employee is fit to perform the inherent requirements of the job with reasonable adjustments.

If an employee using medicinal cannabis is injured in a traffic accident while travelling to work and tests positive to cannabis, would a typical Journey Cover policy contain any applicable exclusion?

All Journey Cover type policies have different wordings as they are not prescribed by statute. It will therefore depend on the precise wording of the relevant exclusion clause.

As an example, a typical exclusion clause might read:

We will not pay benefits with respect to any loss, damage, liability, Event or Bodily Injury which directly or indirectly is substantially caused by a Covered Person being under the influence of intoxicating liquor, including having a blood alcohol content over the relevant prescribed legal limit whilst driving, or being under the influence of any other drug unless it was prescribed by a Doctor or otherwise does not require a prescription of a Doctor in the place in which the Bodily Injury occurs.

In this case, medically prescribed cannabis would not trigger the exclusion.

Leaving that part of the exclusion to one side, there is also the issue of establishing that the accident was “substantially caused” by being “under the influence” of the cannabis, which is a matter for expert opinion and may be difficult to prove. For example, would it be possible to show that a failure to check one’s ‘blind spot’ before changing lanes, which causes a collision, was substantially caused by use of cannabis? Evidence of erratic driving would likely be required, and this is more likely to occur with other types of illicit drugs.

Should all employers request that their employees declare what medications they are taking so that they are aware of each individual’s situation and can take appropriate action? Can random drug testing be used to monitor for cannabis use?

Yes, this is best practice. A determinative decision by the employer should be made on this prior to the person working in the field. Ideally this is completed at pre-employment medical stage (i.e. before an offer of employment is made) or in the alternative post an occupational physician’s review as to the risk profile. Privacy considerations should always be maintained in relation to individuals when making such decisions.

Further, the individual also has a positive duty under section 28 of the WHS Act to take reasonable care for his / her own health and ensure that his / her actions or omissions do not adversely affect the health and safety of other persons. As such, there may be a positive obligation upon the individual to disclose such information where the medication in question has potential safety implications.

From a discrimination law standpoint, it will be important that the request for disclosure of prescription medications is framed in communications to prospective employees and staff – and actually is treated as – a circumstance for which any reasonable adjustments will be properly considered. It should very clearly not be framed as an automatically disqualifying circumstance for employment or any employment benefits. It will also be important, once in possession of the information about prescription medication, that:

this is held confidentially and securely as “sensitive” information under the Privacy Act 1988 (Cth);
out-of-date information is deleted regularly and not relied upon;
any decisions about the employment at all (e.g. promotions, training opportunities, disciplinary actions etc) do not take into account the underlying medical condition or prescriptions unless it is a material consideration going to fitness, safety and/or performance, backed up by clear medical information such as doctor’s reports or an occupational physician’s report;
no detrimental actions to an employee are taken because of an underlying medical condition or use of prescription medication without the support of medical evidence and having considered the anti-discrimination and unfair dismissal risk factors discussed above.

Random drug testing should be viewed as only one aspect of a properly constructed alcohol and other drug policy and management procedure which would address this.

For further information, please do not hesitate to contact us.