Grey fleets in black and white04 December 2017
Plumfleet Director Mat Prestney and Sparke Helmore Senior Associate Sam Jackson talk us through what you need to know about operating a grey fleet in your organisation and how to be legally compliant.
What exactly is a grey fleet?
MAT: It's when workers use their privately-owned vehicles, including employer-paid allowance and novated lease vehicles, for work purposes. The main issue around grey fleets relates to how the Work Health and Safety (WHS) Act and Occupational Health and Safety (OHS) Act refer to any vehicle used for work purposes as a "place of work", and the associated duty of care and chain of responsibility implications.
What are the other fleet options for businesses?
MAT: Many organisations still use "traditional" methods of enabling staff mobility by providing company vehicles or access to pool cars.
There are, however, emerging trends in some areas encouraging staff to take alternative methods of transport when conducting company business, such as car-sharing schemes, Uber and public transport.
When considering a standard car fleet versus a grey fleet, what are the key benefits of one over the other?
MAT: There is an increasing reliance on the use of grey fleet vehicles in Australian as more organisations move away from providing the traditional "company car". A number of factors are driving this trend, including reduced operating costs, fringe benefits tax minimisation and increased staff utility and flexibility.
Additionally, imminent changes to the way operating leases on motor vehicles are treated under global accounting standards, as well as the impact of the National Disability Insurance Scheme on funding arrangements for many not-for-profit service providers, are two more recent factors that we see contributing to the increased reliance on grey fleet vehicles.
We typically don't recommend one method of running a vehicle fleet, however, for organisations operating a grey fleet, it's essential that employers have the appropriate WHS and OHS controls and measures in place.
How does a business initiate a grey fleet? What is Plumfleet's role?
MAT: We often work with organisations that are either unaware of a grey fleet in their daily operation or the associated WHS and OHS compliance requirements. So the first step for us is usually to undertake an education process with the company's key stakeholders.
Once we have established a better understanding, we work with the client to review their existing fleet and safety-related policies and procedures, before surveying various elements of their driver-community. This allows us to produce a comprehensive gap-analysis report.
Now the client is in a much better position to address staff mobility in a way that is WHS and OHS compliant, and manageable in terms of cost. Clients often seek to implement a system that operationalises key elements of their new policies and procedures, as they relate to grey fleet and driver management. We support that process, too.
What is an organisation's legal responsibility with grey fleets?
SAM: Australian safety legislation requires persons conducting a business or undertaking (including employers) to provide a safe working environment or workplace for workers (including employees and contractors) and any other people whose safety may be affected by the activities of the business or undertaking.
Safety legislation defines "workplace" as a place where work is carried out for the business, and includes any place a worker goes for work, including motor vehicles.
So, if a business requires workers to drive a vehicle for work purposes, whether the vehicle is provided by the business or whether it is their own vehicle (grey fleet), the business has a duty under safety legislation, as the vehicle is a workplace. Businesses also need to consider the risk of exposure if an incident happens and take measures to eliminate or reduce those risks, in a way that is reasonably practicable.
How might an organisation experience issues with its grey fleet?
MAT: An example might be a small business owner who allows a staff member to use their own vehicle for work purposes. The staff member is involved in a traffic incident that damages that vehicle and another car. The staff member's car insurance provider declines the insurance claim due to the fact that the staff member did not have business-use cover on their insurance policy. The staff member and the owner of the damaged third party property both make claims on the employer for costs incurred.
What can organisations do from a practical sense to manage health and safety risk associated with their grey fleets?
MAT: Firstly, know your business and your workforce's driving requirements to monitor and address risk effectively. Consider:
- are they using company-provided vehicles or their own
- the type of driving your employees are doing
- how far they're driving and at what time of day
- if an appropriate type of vehicle being used, and
- who is permitted to be in a work vehicle and who are the authorised passengers?
Have appropriate and robust vehicle policies in place. Consider:
- whether policies cover driving behaviour, vehicle selection and maintenance
- everything your policies should cover, such as fatigue, health conditions that may affect driving, medications that may affect driving, drug and alcohol use, licence requirements and journey planning, and
- using the "the driver is the asset" approach—if your employees feel the policies and procedures are geared towards their safety and wellbeing, this will assist in engagement, compliance and monitoring.
Activate and promote your policies—don't just leave them on the shelf, instead:
- consult with employees and train them on proactively implementing policies
- have processes in place, like driver check-ins (particularly when travelling long distances), and
- monitor implementation and effectiveness through audits or random inspections (and make changes or updates as necessary).
Keep accurate records of licences, insurance and vehicle details. Also record any training undertaken by employees, as well as attestations from the drivers that they have read and understood the policies, and that all information provided is true and correct.
Finally, in the event of safety and driving breaches, engage HR to ensure disciplinary policies are used appropriately and followed consistently.
What is your top tip for businesses looking to implement a grey fleet?
MAT: You and your grey fleet drivers must recognise and commit to your obligations under the WHS and OHS Acts for driving privately owned vehicles for work purposes. In this sense, the harmonisation of related policy, procedure, safe systems of work and ongoing reporting is critical to successfully establish a grey fleet based work-related transport model.
Mat Prestney is the Director at Plumfleet. For more information, visit https://plumfleet.com/