An employer's guide to grey fleet legal responsibilities

Transcription

1 An Expense On Demand guide An employer's guide to grey fleet legal responsibilities Effectively managing the Duty of Care owed by organisations operating grey fleets

2 Introduction The grey fleet is a well-established approach to providing for the road transport needs of businesses. The use of employee owned vehicles for which owner/drivers claim a mileage allowance as a business expense to cover fuel and a proportion of running costs improves not only financial efficiency, but business efficiency as well. Offloading vehicle leasing, taxation and running costs simplifies administration and reduces overheads. However, under certain circumstances if a driver or vehicle is not road legal while undertaking company business, then the law may recognise that the employer has failed in its Duty of Care. The business might be liable for damages of injured parties, or in the case of death, a charge of corporate manslaughter could be levelled, leading to imprisonment of individuals and/or significant fines. In this paper we discuss how the use of a suitable expense management system helps businesses operating grey fleets to observe their obligations under the Duty of Care and prevents financial penalty and reputational damage that may result from civil action or criminal prosecution. A catch-22 It s not the same for everyone driving their own car for business purposes. A well remunerated sales person, or senior executive receiving a car allowance, has little reason to avoid the statutory legal obligations that apply to drivers and vehicles. But the same may not hold for a lower paid person caught in a Catch-22: need the car for work, but can t afford to run the car. The rising cost of living combined with stagnant or even reduced earnings means motoring costs are becoming increasingly unaffordable, tempting more drivers to avoid burdensome costs like insurance and road tax. To a certain extent, electronic cross referencing by the Department of Transport and DVLA makes the MOT, insurance and road tax status of each vehicle interdependent - you cannot easily obtain one without the others. However, if a vehicle s owner chooses to avoid all three and continues to drive, the offences may go undetected indefinitely, unless the vehicle comes to the attention of the authorities. One sure-fire way to bring vehicle roadworthiness, tax and driver insurance under scrutiny is involvement in a road traffic accident. Drivers that fail to observe their legal responsibilities are treated seriously by the courts. Commensurately, in cases where injury or death results, the implications are far more serious. Maintaining documentation and locking in the audit trail The need to ensure the Duty of Care for grey fleet passengers is exactly the same as that for vehicles that are owned or leased by companies. This creates the need to manage grey fleets in exactly the same way. There are two aspects of this: Maintaining documentation and locking in an audit trail that supports the Duty of Care.

3 Maintaining documentation In order to easily determine if drivers and vehicles are road legal, accurate data records and instant retrieval and reporting are essential. This is especially true in bigger organisations where large numbers of driver and vehicle records need to be maintained. Many organisations approach this with a manual system or using digital tools such as spreadsheets. However, this is highly inefficient. Typical problems that may arise include omission of essential information, late submission of information and lost original documentation. Vehicle records Essential vehicle record data needs to include: Make Model Fuel type Engine size Emissions Ownership Driver records Essential driver record data needs to include: Drivers licence Insurance certificate MOT certificate Registration document Road tax Providing the audit trail Organising vehicle and driver data records within industry standard computer databases offers the ability to lock in the audit trail and provide verifiable reports. Developed and maintained in accordance with best practice for IT conformance and security standards, database driven systems are a preferred solution for meeting a wide range of regulatory requirements including those for financial and legal purposes. A manual approach is unable to lock in the audit trail or to provide the conformance and security standards of industry standard computer databases. The use of a manual process offers a when, not if approach to failing the Duty of Care that comes from operating a grey fleet. The natural opportunity to manage the grey fleet effectively By definition, the grey fleet requires drivers to reclaim business mileage as an employee expense through the company s expenses claims process. It follows that a company s expense management system offers a natural opportunity for managing the Duty of Care of every grey fleet. Taking care with Expense On Demand Expense On Demand is an expense management system with comprehensive features for verifying mileage expense claims. The system exploits the opportunity to button down Duty of Care obligations by ensuring that complete and satisfactory records of all drivers and vehicles are obtained before allowing mileage claims to be submitted for payment. Expense On Demand requires an online form to be completed by all drivers and for every vehicle. This is submitted to a system administrator, typically a finance manager with

4 experience and knowledge of the requirements for road legal drivers and vehicles. Once satisfied that driver credentials and vehicle documentation are in order, the system administrator activates the vehicle on the system, enabling the driver to submit mileage claims. Expense On Demand provides excellent features to help ongoing management of the grey fleet and ensure the company fulfils its obligations under the Duty of Care. reminders can be set up within the system to alert each driver of anniversaries such as MOT, insurance or tax renewals and system administrators can verify details by viewing scans of original documents uploaded by owner/drivers. Based on a built-in report library and a custom report building tool, Expense On Demand offers a comprehensive reporting capability. As we move towards 2020 and beyond, a key date in the Climate Change Bill, businesses are likely to face taxation based on carbon emissions. Accurate reporting of CO2 will be an essential statistic for every business. With vehicle emissions and mileage expense claims data held in the same system, organisations equipped with Expense On Demand are able to report on grey fleet CO2 emissions with a few mouse clicks. Summary For businesses operating grey fleets, Expense On Demand offers a not to be missed opportunity to manage the risk associated with Duty of Care. The Duty of Care owed by employers to employees driving in the course of their working activities is a legal requirement of the Health & Safety at Work Act Employers and employees may be prosecuted for road traffic accidents that occur during work related journeys when drivers are using employee owned vehicles. If an employee is involved in a road traffic accident while driving a grey fleet vehicle on company business, then the question of insurance becomes inescapable. In such a scenario, insurance policies are invalidated when they do not cover business use or the driver is not licensed for the vehicle. In the case of injury or death and with no valid insurance, if the employee is responsible for causing the accident, then claimants such as other injured employees or third-parties may pursue the employer through the civil courts by making a case that the company failed in its duty to manage the driver. It may be highly preferential for claimants and their legal advisers to pursue the company rather than the driver in civil actions because of the potential to obtain significantly larger compensation payouts. In worst case scenarios, the Corporate Manslaughter and Corporate Homicide Act may come in to play. If it can be proved that management committed a gross breach of the Duty of Care resulting in death, penalties include unlimited fines and publicity orders. Expense On Demand helps manage the grey fleet and ensures that businesses have a robust set of policies and procedures in place. It locks in the audit trail and defends against charges of failing in the Duty of Care when operating a grey fleet. It demonstrates that the business takes its Duty of Care obligations seriously and took reasonable steps to prevent employees undertaking company business in vehicles for which they are neither licensed to drive or appropriately insured.

5 About Expense On Demand This guide was written by Expense On Demand. Expense On Demand is a hosted software solution for managing and tracking employee expenses and time sheets. Using a web browser, employees complete electronic forms that then follow an automated process for online approval and payment. Using online expense management can enforce your expense policy at the point of entry ensuring employees cannot submit out of policy expense claims. Hundreds of thousands of people use Expense On Demand in over 70 countries around the world. It saves organisations time and money, eliminating errors associated with manual entry and enforcing local expense policies, tax rules and corporate governance procedures. Get in touch: E: sales@expenseondemand.com W: ExpenseOnDemand.com Further reading Driving at work - managing work-related road safety published by the Department for Transport and the Health & Safety Executive, E&OE. Expense On Demand accepts no liability for the information contained in this document. Legislation and regulatory policy is subject to change. In all cases you should seek professional legal advice or refer to the Department of Transport, the Health & Safety Executive or other relevant authority if you are in any doubt about your Duty of Care responsibilities or position.