Philip Moller v Cardinal Logistics Limited [2026] NZERA 318

This Employment Relations Authority (ERA) determination is a useful drug and alcohol testing case, especially for employers operating safety-sensitive workplaces. Philip Moller, a professional Class 5 driver, was dismissed by Cardinal Logistics Limited after refusing to take a drug and alcohol test. Cardinal said it had received a serious complaint that he had allegedly been driving a company truck erratically and may have been under the influence of drugs or alcohol. Mr Moller's position is that he does not use drugs at all, and the determination contains no finding that he was under the influence of drugs or alcohol. If Cardinal genuinely believed its allegation, the obvious first step was to manage the immediate safety risk. Instead, Cardinal let him keep driving until the end of his shift, waited about two hours before confronting him, and then tried to rely on the same alleged safety concern as the basis for a compulsory drug test. The ERA described that feature of the case as "extraordinary". Cardinal then failed to take reasonable steps to verify the allegation before requiring the test, including checking whether Mr Moller had actually been driving in the alleged area. The dismissal and suspension were found to be unjustified. The full determination is embedded at the end of this page.

Background

Cardinal Logistics Limited is a nationwide logistics business dealing with FMCG customers and employing approximately 500 employees. Mr Moller worked for Cardinal as a professional Class 5 Driver. He had signed an individual employment agreement in July 2014. That agreement required him to comply with Cardinal's policies and procedures, including its drug and alcohol policy.

The employment agreement included a drug testing clause. It recognised Cardinal's interest in maintaining a safe and healthy workplace, described safety-sensitive roles and environments, and permitted random testing for safety-sensitive roles. It also permitted reasonable cause testing where Cardinal had reasonable grounds to suspect that an employee was under the influence of drugs or alcohol, or where there had been an incident involving a potential compromise of health and safety standards.

The agreement also contained a suspension clause. It allowed Cardinal, where it wished to investigate alleged misconduct, to suspend the employee on pay after discussing the proposed suspension with the employee and considering the employee's views. Cardinal's drug and alcohol policy separately said that refusing written consent to a test, or failing to undertake a test without reasonable grounds acceptable to Cardinal, could be serious misconduct. The policy also said Cardinal was entitled to suspend an employee with or without pay in relation to that conduct.

The complaint on 29 May 2025

On 29 May 2025, Cardinal says to have received a text message from a former employee. The former employee said he had seen Mr Moller driving a Cardinal truck erratically and was concerned for public safety. He also said he believed Mr Moller might be under the influence of drugs or alcohol.

That allegation, if true, was plainly serious. A suspected impaired truck driver is not a minor HR issue. It is an immediate safety issue. That is why Cardinal's later conduct was so damaging to its case: it did not immediately stop Mr Moller from driving, did not immediately check the truck's location records, and did not immediately verify whether the allegation even fitted his actual delivery run.

The complaint was passed to Giyanesh Nand, Cardinal's Operations and Transport Manager. Mr Nand said he was told the alleged erratic driving had occurred in the Sylvia Park Pak'nSave area of Auckland. He then spoke with Cardinal's Head of People and Culture, who advised him not to tell Mr Moller about the allegation before he returned to the depot.

Mr Nand called Mr Moller and told him he needed to speak with him when he returned to the Wiri depot. Mr Moller said he was only told that Cardinal had a "query" and was not told about drug testing, impairment, or any allegation that he was under the influence of drugs or alcohol. Mr Moller had completed his shifts for the day, driven to the Mangere depot, clocked out, and then travelled to Wiri intending to speak to Mr Nand, collect his car, and begin approved leave.

Cardinal let the supposed safety risk keep driving

This is one of the most important parts of the determination. Cardinal's own story was that it had received a report about erratic truck driving and possible drug or alcohol impairment. But it did not pull Mr Moller from the road when it received that information. It did not immediately direct him to stop driving. It did not immediately verify the alleged location against schedules or GPS / EROAD data. It waited until he had completed his shift.

The ERA noted that Mr Nand was notified of the complaint at about 2.40 pm and did not meet Mr Moller until after 4.50 pm. That gave Cardinal about two hours to check whether the allegation was even consistent with where Mr Moller had been driving. The ERA also noted that Cardinal's trucks had GPS / EROAD tracking, and that Mr Nand, as Operations and Transport Manager, could reasonably be expected to have access to truck movement schedules.

The contradiction is obvious. If Cardinal genuinely believed that a professional Class 5 driver may have been impaired and driving erratically, allowing him to keep driving for about two more hours was extremely difficult to reconcile with that supposed safety concern. The ERA itself described it as "extraordinary" that Cardinal allowed the driver to continue driving until the end of his shift.

That point was not a technicality. It went directly to whether Cardinal really had genuine and reasonable grounds at the time it required the test. An employer cannot credibly say "this was an immediate safety concern" while also letting the alleged safety risk continue on the road and failing to check the basic facts.

The request for a drug and alcohol test

At the Wiri depot, Mr Nand took Mr Moller to an interview room and told him Cardinal had received a complaint from a member of the public who believed he was under the influence of drugs. Mr Nand required him to take a drug test. Mr Moller refused.

Mr Moller's position was that he does not use drugs at all. He also gave several reasons for refusing the test. He had already clocked out and finished work for the day. He was about to commence approved leave. He had not been given specific details about the allegation. He also said that, in his experience, testing was usually done before the start of the working day.

Mr Moller was also upset because he believed Mr Nand had misled him by saying there was only a "query". He asked for further details about the allegation, but those details were not provided. Cardinal's People and Culture representative then tried to persuade him to take the test and explained the consequences of refusal, including suspension and possible dismissal for serious misconduct. Mr Moller understood those consequences but still refused.

The suspension and disciplinary process

After Mr Moller continued to refuse the test, Cardinal suspended him with immediate effect. Cardinal confirmed the suspension by letter dated 30 May 2025. The letter said he was suspended from work without pay from 29 May 2025 pending disciplinary action. It also said that refusing to participate in drug and alcohol testing was deemed serious misconduct and would result in immediate unpaid suspension and disciplinary action.

Cardinal then arranged a disciplinary meeting for 11 June 2025. Mr Moller did not attend. A second meeting was arranged for 12 June 2025. Cardinal warned that if Mr Moller did not attend, the meeting would proceed without him and an outcome would be made based on the information available. Mr Moller again did not attend.

On 12 June 2025, Cardinal sent a preliminary outcome letter. It alleged that Mr Moller had refused to participate in required drug and alcohol testing, and had failed to follow reasonable instructions. Cardinal said serious misconduct had been established and proposed termination. Mr Moller did not provide feedback. On 13 June 2025, Cardinal confirmed its final decision to dismiss him with immediate effect.

The key legal issue: did Cardinal have genuine and reasonable grounds?

Cardinal's case depended on whether it had genuine and reasonable grounds for requiring Mr Moller to take a drug and alcohol test. The ERA accepted that the reported complaint was serious. A complaint that a Class 5 driver had been driving erratically and may have been under the influence of drugs or alcohol obviously raised public safety and workplace safety concerns. Cardinal was required to act.

However, acting on a complaint is not the same as assuming the complaint is sufficiently verified to justify a test. The ERA focused on the fact that the complaint identified Sylvia Park as the location of the alleged erratic driving. Cardinal had not checked whether Mr Moller had actually been driving in that area. Mr Nand accepted that he took no steps to investigate the Sylvia Park location before meeting Mr Moller.

That mattered because Mr Moller said his delivery locations that day had all been on Auckland's North Shore. As Operations and Transport Manager, Mr Nand could reasonably be expected to have access to truck movement schedules. The Authority also noted that Cardinal's trucks had GPS / EROAD tracking, which would have made checking the truck location easier. Mr Nand was notified of the complaint at about 2.40 pm and met Mr Moller after 4.50 pm, giving Cardinal about two hours to verify the allegation.

The central issue was identified early: what was the reasonable-cause basis?

Before the disciplinary process advanced, Mr Moller's representative, Lawrence Anderson, challenged Cardinal on the central issue: what genuine and reasonable grounds did it have for requiring Mr Moller to undergo a drug and alcohol test? That was the critical question under Cardinal's own policy and ultimately became central to the Authority's determination.

Cardinal maintained that it suspected Mr Moller was under the influence, but it did not provide the underlying particulars when pressed for the basis of that suspicion. The later evidence showed why that mattered. The allegation concerned driving near Sylvia Park, while Mr Moller said his work that day had been on the North Shore, and Cardinal had access to schedules and GPS / EROAD information capable of checking that issue.

The case therefore turned on the distinction between receiving a serious allegation and having a sufficiently verified basis to exercise a compulsory testing power. Cardinal was entitled to take a safety complaint seriously, but it still had to act reasonably, check readily available information, and provide Mr Moller with enough detail to respond.

Why the lack of detail mattered

The problem was not that Cardinal ignored the complaint. The problem was that Cardinal treated the complaint as enough without checking basic details that were apparently available to it. Cardinal also did not give Mr Moller enough information to answer the allegation at the point the test was required.

The ERA expressly noted that if Mr Nand had told Mr Moller that the allegation related to Sylvia Park, Mr Moller could have said that his delivery locations that day were on the North Shore. Cardinal could then have checked that answer against its schedules and GPS records. That did not happen.

The result was fatal to Cardinal's substantive justification. Cardinal's drug and alcohol policy allowed reasonable cause testing where there was genuine and reasonable cause. The ERA found Cardinal had failed to establish that basis. Because Cardinal did not have genuine and reasonable grounds to require the test, Mr Moller's refusal was not unreasonable in the circumstances.

The process was not enough to save the dismissal

The ERA accepted that Cardinal gave Mr Moller opportunities to reconsider and participate. Ms P had tried to persuade him to take the test and explained the consequences. Cardinal invited him to disciplinary meetings. It rescheduled the first meeting when he did not attend. It also gave him an opportunity to respond to the proposed termination.

However, those later process steps could not cure the earlier problem. Cardinal had required the test without verifying the complaint and without giving Mr Moller the key details when he asked for them. The ERA determined that Cardinal had not acted as a fair and reasonable employer and that Mr Moller was unjustifiably dismissed.

Unjustified suspension

The suspension finding followed the same logic. Cardinal suspended Mr Moller because it treated his refusal to take the test as serious misconduct. But the ERA had already found his refusal was not unjustifiable in the circumstances because Cardinal had not established genuine and reasonable grounds for requiring the test.

The ERA therefore found that Mr Moller was unjustifiably suspended. Cardinal was ordered to reimburse him for monies lost as a result of the suspension. No separate compensation award was made for the suspension, because the ERA treated the suspension as part of the overall events leading to the unjustified dismissal compensation award.

Remedies

Mr Moller was dismissed on 13 June 2025. He said he immediately started looking for alternative employment but did not secure new employment until 13 September 2025. The ERA ordered Cardinal to pay lost remuneration for a period of 13 weeks, less any amount Mr Moller earned in that period. If the parties could not calculate the amount, leave was granted to return to the Authority.

For hurt, humiliation, loss of dignity and injury to feelings, the ERA assessed compensation at $17,000. Mr Moller said the dismissal caused financial loss and distress. He felt humiliated by the allegation that he had been under the influence of drugs and/or alcohol, and said this affected his confidence and his reputation as a driver. He also said the loss of income caused debt and meant his annual leave period was spent trying to find work rather than seeing his son.

The ERA accepted that the termination caused distress and financial difficulty. However, it then considered contribution under s 124 of the Employment Relations Act 2000.

Contribution: 30 percent reduction

Although Mr Moller succeeded on both the dismissal and suspension claims, the ERA reduced the compensation award by 30 percent for contribution. The Authority considered that Mr Moller was a long-serving employee who knew Cardinal's drug and alcohol policies and knew Cardinal took a strict approach to drugs and alcohol. He knew refusal to take a test could be treated as serious misconduct.

The ERA also relied on his later refusal to participate in the disciplinary process. Mr Moller did not attend either disciplinary meeting and did not provide feedback when invited to do so. The Authority considered that this was not reasonable, given the good faith requirement to be active and constructive in maintaining a productive employment relationship. The ERA said that, had he engaged, it was possible his dismissal may not have eventuated.

The $17,000 compensation award was therefore reduced by 30 percent. The resulting compensation payable for hurt and humiliation was $11,900. Cardinal was also ordered to reimburse the filing fee of $71.56 and to pay all ordered sums within 28 days of the determination.

Why this case matters

This case is not a green light for employees to refuse drug and alcohol tests. In safety-sensitive workplaces, drug and alcohol policies can be enforceable, and refusal to test can be serious misconduct. The important point is that reasonable cause testing requires genuine and reasonable grounds. Where the alleged grounds are based on a complaint, the employer should check what can reasonably be checked before requiring the test.

Cardinal had a serious complaint, but it also had a serious verification problem and a serious credibility problem. The alleged erratic driving was said to have occurred near Sylvia Park. Cardinal apparently had truck schedules and GPS tracking available. It also had about two hours before confronting Mr Moller. Instead of stopping the alleged risk and checking the obvious records, Cardinal let him keep driving and then tried to treat his refusal to test as serious misconduct. The ERA considered that a fair and reasonable employer would have used the available information before escalating to a drug and alcohol test and disciplinary dismissal.

The case also shows how an employee can win the main claim but still lose a significant part of compensation through contribution. The ERA accepted that Cardinal's test request was not justified, but it still criticised Mr Moller's refusal to engage in the disciplinary process. That refusal led to a 30 percent reduction in compensation.

Practical takeaways

• Do not let the alleged safety risk keep driving: if an employer says a driver may be impaired, it should immediately manage that risk.
• Reasonable cause testing needs a proper basis: an employer should not treat an unverified complaint as automatically enough.
• Check what can be checked: truck schedules, GPS / EROAD data, job allocation records and location information may be critical.
• Give the employee enough detail: if the employee asks for the allegation details, withholding the key location or facts may undermine procedural fairness.
• Safety concerns are serious: the ERA accepted Cardinal had to act on a complaint about erratic truck driving and possible impairment.
• But urgency does not remove fairness: Cardinal still had about two hours to verify the complaint before meeting Mr Moller.
• Suspension can fall with the underlying allegation: if the test request was not justified, suspension based on refusal may also be unjustified.
• Employees should still engage: refusing to participate in disciplinary meetings can reduce remedies even where the employer was wrong.
• Contribution can be substantial: here, compensation was reduced by 30 percent.
• Keep evidence: in drug and alcohol testing cases, contemporaneous GPS, schedules, communications and testing records can decide the case.

Read the full ERA determination (embedded)

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Source: Employment Relations Authority determination, [2026] NZERA 318. This article currently uses an AndersonLaw-hosted PDF copy pending any later ERA database link.