How can companies mitigate risk when employees use their own cars for work-related purposes?
Small businesses are seeing a significant number of driving offences being committed by their own staff.
In the six months to the end of 2009, a third (31%) of employees using a vehicle for work committed an offence whilst driving on the road, according to research undertaken by Enterprise Rent-A-Car. Over half (51%) of the driving offences committed were due to speeding whilst a quarter (24%) were due to drink or drug driving. Inappropriate insurance was the cause of one in ten (10%) offences and a failure to pay fixed penalty notices affected one in six (16%).
Currently, more than one in three workers (35%) use their own car for business purposes. But an employer retains responsibility for an employee’s safety even when he or she is in their own car, as it is a designated workplace. Unfortunately, these vehicles are essentially ‘off-radar’ as far as being fit for purpose goes.
Rob Ingram director of business rental at Enterprise Rent-A-Car, said: “Although employers cannot directly control their employee’s driving habits, they can ensure that the car they drive for work is regularly serviced and safe to drive. Whether a driver is in a company car or a private vehicle, responsibility remains with the employer.”
“Using privately owned vehicles for work purposes is often part of the problem. Not only do these vehicles tend to be older and less well maintained than leased or rented vehicles but they require a great deal of time and effort to manage properly.
Ingram emphasised the importance of ensuring that all drivers have business insurance and recommends checking employees’ driving licences at least once every twelve months.
Driving down risk
A comprehensive risk management programme should be robust and fully auditable. There is a common misconception that this need not include employees who drive their own cars on business, but the duty of care remains the same. In an attempt to reduce this risk, some employers are moving back to providing a company car.
However, there is no reason that effective driver safety polices cannot apply to grey fleet drivers.
The responsibilities of senior management in relation to employees using company or privately-owned cars cannot be overestimated. At present, under existing health and safety legislation, employers have a basic duty of care to ensure the wellbeing of staff and that other people are not placed at risk by work-related driving activities.
In addition, the Corporate Manslaughter Bill, which became law in 2007, is set to penalise the directors of organisations where health and safety practices have broken down and led to gross negligence.
HR managers are also subject to greater scrutiny following road accidents, as changes to the Road Death Investigation Manual (RDIM) announced in 2006, include instructions to involve the HSE where failures in safety management have been identified.
Your statutory employer responsibilities derive from:
- Health & Safety at Work Act 1974
- Management of Health & Safety at Work Regulations 1992, updated 1999
- Provision & Use of Work Equipment Regulations 1998 (PUWER)
- Working Time Regulation
- Road Traffic Act 198
- Health & Safety Guidance 65 (HSG 65)
- HSE Guidelines – Driving at Work – Managing Work Related Road Safety
- ACPO Road Death Investigation Manual
- The Corporate Manslaughter and Corporate Homicide Acts 2007
A web-based duty of care system will provide ability to update, review and manage information which will withstand legal scrutiny and will feed business mobility data back to managers.
The basic building blocks of fleet risk management are:
- The driver – is he or she qualified and entitled to drive?
- The vehicle – is it fit for purpose?
- The journey – is it appropriate and properly planned?
Check driving licences on recruitment and periodically thereafter; including those of partners and spouses.
Emphasise that staff will be dismissed for failing to declare a driving conviction.
Research carried out by fleet software provider CFC Solutions shows that 15% of drivers have between 3-5 points on their licence, 4% have 6-8 points and 1% has 9 or more points.
“Drivers who have any points at all need to be regularly checked. They are a high-risk group on your fleet and should be monitored regularly and carefully,” says Neville Briggs, managing director at CFC.
Steve Johnson, who heads up the AA’s DriveTech fleet assessment arm says that merely looking at a licence gives no indication of whether it is legal or not.
“People duplicate licences all the time. They could be showing you one but be banned on another. The only way to check a licence properly is via submission to the DVLA once a year; twice if it is someone with a poor driving record.”
Compliance can be a problem, but ensure that formal policies are in place, and read by all drivers.” Drivers need to know what their parameters are,” says Johnson, “How many hours they can drive without a break, mobile phone use and so on. An employer cannot be found grossly negligent in the case of an incident if the driver involved was in breach of a policy that he or she has signed.”
Improve management and provide training
Communicate the importance of managing road risk to department managers. Foster a culture in which employees would consider holding a telephone or videoconference instead of travelling to a meeting.
Does company culture enable staff to approach management about diary pressures if they feel they don’t have time to get safely between appointments? Can drivers make an overnight stay, rather than having to complete a long road journey at the end of the working day? Are employees encouraged to report all work-related road incidents without fear that punitive action will be taken against them?
Ensure that maintenance schedules are in place and that vehicles are regularly checked by a competent person to ensure they are safe. Most importantly, ensure that privately owned vehicles are not used for work unless they are insured for business use (a recent survey revealed that as many as a third of all business drivers were not insured for this use) and, where the vehicle is over three years old, they have a valid MOT certificate.
Provide training for high-risk drivers: those with high annual mileage, a poor accident record, or young drivers. The ICFM runs a range of courses.
Make drivers aware of the dangers of fatigue, especially when driving mid-afternoon- when most fatigue-related incidents occur.
Offer vouchers for regular sight tests and keep a record of them.
Make a business case for adopting best practice. Getting senior management on board on CSR issues can be difficult, but safer driving leads to higher residual fleet values and reduced fuel costs.
Leasing company Arval’s third party claim costs have fallen by 40% and the company has seen a reduction of 50% in speeding offences since it adopted a road safety training scheme for its staff. The company has now rolled out the “Drive4Life” programme to its customers.
Diarmuid Fahy, fleet risk manager for ING says: “There is a perception that risk management is a cost but a well-implemented scheme can help save money – in reducing staff absence, repairs to vehicles and insurance premiums.”
Is it worth outsourcing fleet risk management?
Most of the leasing companies offer duty of care packages. But many facilitate risk management rather than get actively involved in the process. Steve Johnson heads up AA Drive Tech, which is the AA’s fleet assessment arm warns that many suppliers are inexpert in this area and it may pay to outsource risk management to a specialist.
“You won’t identify a problem with your duty of care operation until it’s too late,” he adds. “A fully comprehensive duty of care package will provide you with a snapshot that pulls together all the facts that the police will ask for in the event of an accident: Is the car taxed? When was the last time the driver had an eye test? Were you aware that he was driving to Aberdeen?”
“Once you have agreed the parameters of a duty of care package with a supplier, you will still need to keep them up to date with your fleet mobility, if a driver is transferred to other offices for example,” adds Johnson. “In every case, ultimate responsibility for duty of care rests with the employer, and not with whoever has been engaged to carry out the risk management process.”
One of the main issues with outsourcing risk management is compliance – especially if you have a large grey fleet.
“There are normally a very small minority of individuals who decline to participate for one reason or another, and as an outside agency, there is not a lot we can do to enforce the policy,” says Fahy.” In these circumstances we depend on a strong fleet manager who is prepared to enforce the more assertive aspects of the policy (up to withdrawal of car benefit) to make sure it is applied consistently across the whole organisation.”