First For Business
DREAM TEAM
NOVEMBER 2016
www.ffb-online.co.uk
FROM CARELESS TO CAR-LESS HOW TO DEAL WITH RECKLESS DRIVERS WHO KEEP WRECKING THEIR COMPANY CARS . . . ROB MOORE RECOVERY EXPERT AND PARTNER AT TAYLOR & EMMETT Where an employee is provided with a company car, it is important to have rules governing the employee's use of the vehicle. I note from your query that the company car is part of these employees’ contract of employment. This means that it is a contractual benefit and that you should take extra care before taking it away from them, as what you are seeking to do will effectively change their terms of employment. The general position is that unless the change is expressly allowed by the employment contract, an existing employment contract can only be varied with the agreement of both parties. My first recommendation would be for you to take a closer look at their employment contract, to see if any term allows you to remove the employees from the company car scheme. You may find a clause giving you the power to vary this specific benefit. This type of clause is called a flexibility clause and the good news is that it is not subject to an obligation of reasonableness. Provided that your employees are not going to be significantly worse off by you removing the car from them, you will be able to rely on this type of clause even if it makes changes that are detrimental to their interests. I would however be careful that you do not preclude any employee from getting to work. You may also find that the employment contract lists the employees’ responsibilities in connection with the use of the car and highlights their obligation to drive with due care and
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DEAR DREAM TEAM, I am the MD of a business with 60 staff, and around half of them have company cars. Unfortunately a handful of these employees have proved to be reckless drivers, and their scrapes over the last decade are really hitting our insurance premiums. A car is part of their contract, but do I have grounds for removing them from the company car scheme?
diligence. You may then be able to argue a breach of contract on their part. If you do not see any of the above clauses in these employees’ contracts, several other options would be available to you. Firstly, you could seek their express consent to being removed from the company car scheme. You will need to consult with them to explain the reason for the change, you must record the variation to the terms of their contract in writing. Obtaining their consent may prove to be difficult as removing the right to a company car may undoubtedly place them in a less advantageous financial position. Be aware that dismissing the employees who refuse the change may expose your business to unfair dismissal claims. Alternatively, you could attempt to impose the change and leave it to the employees to decide how to respond. This may result in claims for constructive dismissal.
Rob Moore
Finally, you could choose to terminate the employees’ employment and offering re-employment on new terms which does not involve the contractual benefit on company car. I would highlight that this is a very drastic choice, and should you opt for this option, you should be mindful of the notice period employees are entitled to under the term of their contract. Termination of employment short of the notice period would potentially expose your business to wrongful dismissal claims and I would stress the importance of seeking legal advice before such decision is made. However, being a lawyer means that I am risk averse by nature. I would favour an option which does not involve exposing your business to any claim. I would therefore recommend for you to explicitly set out the rules governing the employees’ use of the car by adding a company car policy to your staff handbook. This would need to detail the employee's responsibilities for the car, the rules and procedures regarding the use of the car and payment of expenses. This option would allow you to treat reckless driving as a misconduct and to invite the employees in questions to a disciplinary hearing. I hope the above is of some help and wish you the best of luck.
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