Fleet News

Dangers of staff using own cars for work

Thousands of small organisations remain completely oblivious to their legal occupational road risk management responsibilities in relation to employees who drive their own cars on business trips.

Known as the grey fleet, the raft of legislation that applies to the risk management of employees who drive company cars and vans equally applies to staff who drive their own vehicles for work purposes.

And, while there has been more than a decade of focus by the fleet industry on encouraging companies to adopt comprehensive occupational road risk strategies to limit their exposure in the event of an employee being involved in a crash, there remains a belief that compliance has bypassed many smaller organisations.

Additionally, there are increasing concerns that a widespread corporate focus on cost control and carbon footprint reduction – as well as safety – is being undermined by largely unregulated grey fleet use.

Anecdotal evidence suggests privately-owned cars driven on business are older, larger and less fuel-efficient than fleet vehicles and almost certainly not equipped with the latest safety features, which would be standard equipment on the newest company cars.

Evidence from ACFO (Association of Car Fleet Operators) and other studies, suggests that where employees have given up a company car and now drive their own car on business, emission levels could be around 20g/km of CO2 higher than the vehicle they gave up.

And with few own use vehicle controls in place, employers have found that mileage being travelled is rising and as a result so are mileage reimbursement costs.

The rising mileage means CO2 emission levels associated with vehicle use are also on the increase. And so is the risk of staff being involved in a road crash.

While 40p a mile for the first 10,000 business miles travelled and 25p a mile for subsequent mileage is HM Revenue & Customs’ tax-free mileage reimbursement rate, some employers are paying significantly more.

John Lewis, chief executive of the British Vehicle Rental and Leasing Association, said: “Our own estimates suggest that a realistic rate for the average grey fleet car would be more in the range of 20-30p per mile.”

Yet he claimed that many employers were paying up to 70p a mile – investigations by Fleet News revealed that some local authorities were paying 53ppm and some health trusts as much as 58ppm.

While the initial concerns of allowing employees to drive their own cars on business are focused on risk management, issues around cost management and the environment are increasingly being used to support the argument that alternatives are available and, in many cases, a preferable option when considering safety, environment and cost issues.

Lewis said firms should review their business travel plans and look at options such as tele-conferencing, public transport and vehicle rental and leasing.

And he added: “Employers should prevent staff from using their own vehicles for business unless they can give proof that their car is roadworthy and insured.”

Pro-active managers have spotted the link between cost, safety and the environment and have taken swift action, according to ACFO chairman Julie Jenner. These include:

  • A cap on grey fleet mileage – for example, if an employee travels more than 5,000 business miles a year they must drive a company car, particularly if they have opted for cash allowances.
  • Caps on CO2 emissions and MPG, thereby allowing staff to use their own cars on business but only if they meet the predetermined levels.
  • Introducing an age-related cap to grey fleet vehicles.

Jenner said some organisations had banned grey fleet use or made it clear that own car use was a last resort for a business trip with permission having to be obtained.

Promoting benefits
She added: “These organisations are promoting the cost-effective, safety-focused and environmental benefits of alternatives such as public transport, audio or video conferencing, car hire and, in some cases, have reintroduced pool cars. Additionally, anecdotal evidence suggests that demand for company cars is rising for the first time in many years.”

However, grey fleet use remains a conundrum for many organisations and specifically small business.According to health and safety lawyer David Faithful, a consultant at Lyons Davidson law practice, they remain immune to all the advice and information that is available because they do not consider themselves to be part of the fleet community.

He said: “There must be thousands of small UK companies who operate vehicles on an expenses regime and have not focused on managing the risk posed by these cars.”
Yet Faithful, who is also the legal adviser to road safety group RoadSafe, says smaller organisations are more at risk from prosecution if an employee is involved in a crash than a larger organisation.

Road risk management
He said: “Most larger organisations have at least some occupational road risk management policies and procedures in place so in the event of a road crash can demonstrate to the police that they are managing the health and safety of their staff and other road users. But many smaller organisations do not have such policies and procedures in place and therefore are wide open to prosecution.”

Credence to Faithful’s view is given by the fact that the first prosecution under the 2007 Corporate Manslaughter and Corporate Homicide Act – although not related to a road crash – involves a small west country company, Cotswold Geo-technical Holdings. It is charged with the unlawful killing of a young geologist by gross negligence and director Peter Eaton is also charged with manslaughter under common law. The trial is due to start in February.

If an employee is involved in a road crash while driving on business – irrespective of who owns the vehicles – the police will want answers to a series of questions around the vehicle, the driver and the journey.

Records relating to the maintenance of the vehicle, that it was fit for purpose and correctly insured and has a current MoT if required will all be requested; records relating to the well-being of the driver, including medical and eye sight checks will all be required; work and appointment schedules may also be examined, particularly if, for example, fatigue caused by a long hours culture was suspected as a reason for a crash blame; and details of the journey will also be examined, in relation to whether enough time was allowed.

However, an employee does not have to be involved in a fatal road crash for the long arm of the law to strike either their employer or managers/directors. Various legislation, including the 1974 Health and Safety at Work Act and the Management of Health and Safety at Work Regulations 1999 highlight that, so far as is reasonably practicable, firms must manage the health and safety of all employees while at work and that includes when driving their own vehicles on business.

Need to know: policing the grey fleet

  • Check validity of employees’ driving licences and for those with points check licences as frequently as quarterly
  • Check business insurance cover is in place
  • Check vehicles are serviced and maintained in accordance with manufacturer recommendations
  • Ensure vehicles have an MoT certificate if applicable
  • Ensure own-use vehicle drivers have to report accidents
  • Ensure the vehicle being driven is suitable for the job
  • Implement a vehicle age and CO2 cap
  • Implement a cap on the number of miles to be travelled annually
  • Ensure all drivers undergo a risk assessment and use the results to trigger further training
  • Introduce eye sight checks for all drivers and make notification of medical conditions compulsory
  • Remind drivers of key issues – no mobile phone use while driving, take regular breaks, plan journeys, check tyre tread and pressures etc. – with regular communications to develop a safety culture within the business

Click here to read 'Risks of failing to manage grey fleet'
See more in the Grey Fleet section.

Taken from Small Fleet Review Feb 2010.

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