David Faithful, a partner at Amery-Parkes Solicitors, is warning that contracts of employment will have to be rewritten to encompass companies' use of in-car data collection systems.
By using telematics systems to monitor vehicle mileage, speed and location, companies have been able to reduce fuel costs, crack down on 'phantom' overtime and improve efficiency through better route planning.
But the systems require companies to store data on a computer and consequently the information is governed by the Data Protection Act 1998.
This means the driver's consent must be obtained in cases where 'sensitive data' - such as speeding — may be used, otherwise the employer could face an industrial tribunal if it dismissed a driver who lost his or her driving licence because of evidence provided to the police by the employer.
Faithful says that where an employer has used telematics systems to obtain and then disclose private information, the employee could view his contract as repudiated and claim constructive dismissal.
He said: 'Contracts of employment I have seen do not address the complex issues raised by telematics schemes. It is the contract of employment that governs the relationship between the employer and the employee.
'Any alteration in that relationship would inevitably require a consequential alteration to the contract and disciplinary rules.
'Otherwise any attempt by the employer to dismiss a driver using information gathered from a telematics system could well lead to a visit to an industrial tribunal.'