INTRODUCTION

Grey fleet is a term used to identify those vehicles that are employee-owned vehicles and used on company business. The management of grey fleet travel plays an important part in supporting three key policy areas of Occupational Health and Safety (OH&S).

Managing the duty of care to employees driving for work is a legal requirement, and this includes employees driving their own vehicles for work. The OH&S legislation clearly states that ‘It shall be the duty of every employer to ensure, so far as is reasonably practicable, the health, safety and welfare at work of all employees.’

The reality is that if the organisation provides a vehicle, in any way shape or form, or owns the task that is being undertaken then the organisation owns the duty of care responsibility.

This issue was further reinforced by the High Court of Australia in the appeal of the case of ‘Kirk v the industrial relations court of NSW’ where the court, in its judgement, declared that this duty of care resided with the organisation alone and could not be delegated or outsourced.

This means that in incidents involving work-related journeys, even when the driver is using their own vehicle organisations will need to provide evidence that they have taken ‘reasonably practicable’ steps to manage their duty of care.

It is down to the individual organisation to assess the risks in each case and to make a judgement on what is ‘reasonably practicable’, or what actions it is reasonable to take to manage the risks in the specific circumstances.

Policies on driving for work must include driving privately owned vehicles for work. Vehicles and drivers must comply with Road Traffic Law be in a safe and roadworthy condition and fit for purpose when used for business purposes.

PROCEDURE

Employees who travel occasionally on company business and do not require, or are not eligible for a company supplied vehicle can, with proper approval, use their personal vehicle for company business.

Employees will be compensated for the use of the vehicle on a reimbursement basis in line with the Australian Taxation Office guidelines.

To qualify for the kilometre rate, the person authorised to approve the employee’s travel expense must specifically approve the use of a vehicle to ensure that it is fit for purpose. Such approval shall be granted only upon evidence that the employee carries insurance in a sufficient amount.

No payment for use of personally owned vehicles is permitted for (a) home to office travels (b) any activity except official business.

Employees must understand that the cents per kilometre reimbursement is meant to reimburse employees for all fixed and running expenses connected with their vehicle; e.g. fuel, oil, maintenance, insurance and garaging.

It is incumbent upon company employees using a personal vehicle on company business to have the vehicle properly serviced and maintained as per the vehicle manufacturer’s recommended service and repair schedules. Additionally the employee must maintain an adequate level of insurance, including business use, for the activities undertaken on the company’s behalf.

It is the responsibility of the supervisor/authorising person to sight proof of servicing/repair and appropriate insurance and to ensure that this is kept on file for each employee authorised to use a personally owned vehicle on official business.

In the event of an incident while on company business, employees should make the necessary report to their insurance company, as well as advising the company.

Employees are not authorised to use a substitute vehicle or driver for company business unless authorised by the company. Such vehicle substitutions will only take place where the employee owned vehicle is unavailable due to breakdown or maintenance/servicing requirements.

Without exception, substitute vehicles may only be a vehicle sourced from a short term lease/hire company such as the major car hire organisations. Such organisations will only be used with the express authorisation of the company. Any vehicle hired will be of the same or a superior specification and carry adequate insurance cover. If there is uncertainty as to what level that should be, then the employee must immediately contact the company.

Employees agreeing to use their own vehicle in the course of company business will be compensated as per the Australian Taxation Office Income Tax Assessment Act 1997 division 28 – car expenses; Subdivision 28 – C The ‘cents per kilometre’ method as outlined below.

Engine capacity rates as at 2015

Reimbursement rates for tax years are advised by the ATO. The above are for 2015 and it is important that at the start of each financial year a check is made to establish what the applicable current rate is.

Also important to note is that the Australian Taxation Office Income Tax Assessment Act 1997 division 28 – car expenses the maximum work related kilometres able to be claimed is 5,000.