Many resource industry players use urine testing to ensure their staff are not affected by drugs or alcohol on the job.

Unions are threatening, in light of the Endeavour Energy case, to take legal action to stop them using urine testing.

Employers could find themselves having to defend their use of urine testing in any relating unfair dismissal cases or fending off union challenges.

Endeavour Energy, a New South Wales government-owned electricity network company, lost its third FWC case over its drug and alcohol testing methods.

It had been trying to get permission to use urine testing because it was a more accurate and reliable means.

In March 2012 the FWC determined oral testing alone was to be used by Endeavour Energy for drug testing purposes and that testing had to be carried out using a device accredited under the relevant Australian standard.

In July 2013 the National Association of Testing Authorities announced it would not proceed with accreditation of any onsite, oral swab testing device under the Australian standard.

Endeavour was left in the position where it had to use oral swab testing with accredited testing devices but there were no accredited onsite oral swab testing devices to be had.

It went back to the FWC to again try to use onsite urine testing because testing equipment for that is accredited under Australian standards.

Instead the FWC varied its original decision reinforcing the use of oral swab testing by removing the need for the relevant testing devices to be accredited under the Australian standard.

The Electrical Trades Union said the latest FWC decision confirmed two previous court rulings, including one by the full bench of Fair Work Australia, that found the use of urine testing was "unjust and unreasonable" because it could detect drug use from days earlier, rather than more recent use that could lead to impairment at work.

The ETU and other unions see the Endeavour Case as delivering a precedent that urine testing is unlawful.

The Australian Metal Workers Union has reportedly already threatened to challenge the use of urine testing in the resources industry.

Australian Mines and Metals Association policy executive director Scott Barklamb said the decision made things tough for employers that wanted to properly manage drug and alcohol impairment in the workplace.

"One of the most concerning implications of this case is that employers who have effectively used one type of drug and alcohol testing method for years might find themselves in the very uncertain position of defending this procedure in an unfair dismissal case or if the method is challenged by a union representative," he said.

"The case also begins to set a dangerous line of thought that very serious obligations to keep people safe and healthy at work are now outside the direct control of management and should instead be an industrial relations issue that requires negotiation and agreement with unions."

Barklamb said the FWC's approach to matters involving drug and alcohol testing methods had been "all over the place".

"Despite the extreme importance of ensuring nobody onsite is at risk due to drug or alcohol impairment, mining and energy employers still have no clear and consistent precedent to follow from the FWC.

"Since 2011 there have been three important cases before the FWC in relation to an employer's right to use whichever testing method it deems best manages drug and alcohol impairment.

"In 2011 HWE Mining was told it could determine its own methods of keeping its workplaces safe and free of drug and alcohol impairment. Their preferred method was urine testing.

"In 2012 Endeavour Energy was ordered to use saliva testing as the FWC deemed urine-based testing to be ‘unjust and unreasonable'. Its further appeals on various grounds were rejected.

"In 2013 the FWC supported the actions of an employer who dismissed an employee who refused to take an onsite drug test."

Barklamb said AMMA wanted a separate expert bench to be established to independently hear appeals of contentious FWC submissions.

For its part, Endeavour Energy wanted the ability to use urine testing because it could be accredited, was more reliable and more accurate, as found in the HWE case.

"We have a moral and legal obligation to provide safe places of work and we're committed to advocating what we consider to be in the best interest of the safety of our workers and the community," Endeavour Energy CEO Vince Graham said.

"Mine workers and electricity workers both work in potentially dangerous conditions and yet different drug testing methods have been ordered by the FWC.

"Endeavour simply sought to give its workers the same level of protection given to the mine workers."

With this FWC decision though, the protections given to resources workers may soon be gone.