How medical cannabis is a legal minefield for Australian employers

With medical cannabis use on the rise across Australia, a partner from a national law firm has warned that its presence in the workplace remains a legal minefield – leaving employers caught between competing duties of compliance, employee rights, and safety.

Australian employers are increasingly on the frontline of a complex workplace challenge: how to manage staff prescribed medicinal cannabis.

With unclear regulations, no reliable tests for impairment, and pressing safety obligations, many businesses are navigating uncharted territory.

As medical cannabis prescriptions surge nationwide, Louise Hogg, partner at Holding Redlich, warned that its workplace use is far from straightforward, given that it is legal to prescribe, but not always safe or appropriate, particularly in safety-critical roles.

“Managing medicinal cannabis in the workplace puts employers in a challenging position; while it may be legally prescribed, that doesn’t make it appropriate in the workplace, especially where it creates a risk to health and safety,” she said.

With employees forced to rely solely on “drug and alcohol policies, risk assessments, and expert evidence” to manage medicinal cannabis in the workplace, Hogg highlighted three key issues that make the current system largely ineffective.

“The biggest challenges for employers at present are three-fold: the inability to test whether an employee is impaired from medicinal cannabis use; the varied medicinal cannabis prescriptions, including whether they contain THC, CBD or a mix of both; and the absence of clear work health and safety guidelines about medicinal cannabis,” she said.

“These challenges will only be resolved through further education and research, including clinical trials around impairment and safe dosing, if any, for medicinal cannabis.”

Regulations lag behind reality

Although medical cannabis has been legal in Australia since 2016, Hogg stressed that the country’s regulatory frameworks “have failed to keep pace with the insatiable demand for medical cannabis”, leaving both employers and employees exposed.

Unlike other prescription medications, Hogg highlighted that current regulatory frameworks are lagging because much of the medicinal cannabis in use is not TGA-registered, meaning its safety, quality, and efficacy have not been formally assessed.

“Firstly, most medicinal cannabis is not approved and registered with the TGA, and so its safety, quality and efficacy have not been TGA tested. This also means that the content of the prescription can vary from what is stated,” she said.

Adding further fuel to the issues Hogg highlighted is the prescribing process itself, with many patients receiving medicinal cannabis prescriptions after brief consultations and little oversight, highlighting a pressing need for stronger safeguards.

“Secondly, most medicinal cannabis is not prescribed to individuals in the context of an ongoing therapeutic relationship. Indeed, many individuals will have a short consultation with a medical practitioner (this could be less than five minutes), after which the person is given a medicinal cannabis prescription,” she said.

“Given that medicinal cannabis containing THC is a Schedule 8 drug, and such drugs should not be prescribed as a first-line treatment for medical conditions, greater prescribing safeguards are needed, including evidence about: the duration of the therapeutic; the medical condition being treated; and other treatments trialled for medical condition.”

While the Medical Board of Australia has introduced new prescribing guidelines, Hogg stressed that they “do not address all of these concerns”.

The work health and safety perspective

The complexities of medicinal cannabis use do not change the fundamental responsibilities under Australia’s WHS laws, with Hogg noting that both employers and employees are legally required to minimise workplace risks.

“Work health and safety laws are clear that employers must take all reasonable steps to ensure people aren’t exposed to hazards and risks, and that includes impairment from drugs or alcohol. Employees have similar obligations,” she said.

“The obligations employers and employees have under WHS laws do not change because the cannabis is prescribed by a health professional.”

As medical cannabis often contains THC, Hogg highlighted a key challenge: drug tests detect only the presence of THC or its metabolites, not the degree of impairment, leaving employers with little clarity.

“Cannabis contains THC, which increases the risk of impairment, and drug tests do not measure impairment – only the presence of the substance or its metabolites,” she said.

“Employers are left in a difficult position because there is no available clinical data on safe dosing or appropriate dosing that might minimise risk in the workplace.”

Until better data and clearer guidance are available, Hogg advised employers to “treat all medical marijuana prescriptions, including CBD-only products, as they would any other prescription drug that might impact a person’s fitness for work, and err on the side of caution”.

Disclosure, boundaries, and the legal grey zone

Even if employees don’t see it as necessary, Hogg warned that they are legally obliged to disclose any prescribed or non-prescribed drugs that could impact their ability to work safely – including medicinal cannabis.

“Employees have an obligation to disclose to their employer if they are using any drug, prescribed or otherwise, that could impact their ability to do their job safely,” she said.

“Once that disclosure is made, employers can then ask for further information – but they must have the employee’s signed consent before contacting a doctor, otherwise the employer will be in breach of the Privacy Act.”

Employers must also tread carefully. Hogg stressed they cannot force an employee to change medications; their role is to work with the employee and their treating practitioner to explore safe alternatives.

“What employers can’t do is tell an employee they must switch to a different medication. Instead, they can explore what alternatives are available, in consultation with the employee and their treating practitioner, so that the employee is able to continue working safely,” she said.

Practical steps for employers

Despite the regulatory and scientific gaps, employers can still take proactive steps to manage the risks associated with prescribed cannabis.

Hogg recommended establishing “rock-solid drug and alcohol policies” that are “clear, easy to understand, and grounded in risk assessments for both the workplace overall and individual roles”.

Depending on the industry, she also suggested that employers might implement a “zero-tolerance approach to any presence of drugs”, or, in lower-risk environments, adopt policies that allow for “some degree of leeway”.

She advised that workplace policies should clearly outline how medical information is collected, stored, and used, and she emphasised that employers should respond constructively if an employee discloses medicinal cannabis use.

“Policies should clearly state how the employer will collect medical information, how it will be stored, and how it will be used,” she said.

“If an employee discloses medicinal cannabis use, the employer can work with the employee and their doctor to explore potential alternatives, because potentially, the doctor doesn’t know that prescribing this drug is going to impact their ability to do their job.

“It’s not about telling someone what to take but exploring whether they are able to take something else and maybe giving them leeway to do that (i.e. transition to a new medication).”