What should a company car risk management strategy cover?

The threat of the Corporate Manslaughter Act makes some employers nervous about offering company car schemes, but these fears can easily be mitigated with a robust risk management strategy.

If you read nothing else, read this…

  • Employers have a duty of care towards staff drivers. 
  • It is difficult for organisations to know when employees are driving for business. 
  • Checks, such as ensuring staff have a valid driving licence, are simple to make. 
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Under the Corporate Manslaughter and Corporate Homicide Act of 2007, an employer could be found guilty of corporate manslaughter if shortcomings in the duty of care for their car scheme results in a person’s death. This is why organisations must have a robust risk management strategy in place, but this may be easier said than done.

One of the biggest challenges is knowing when employees are driving. Caroline Sandall, fleet manager at Barclays and deputy chairman of the Association of Car Fleet Operators, says: “We’ve got 50,000 employees and I never know when they’re going to drive. I only know when they have driven because I can see when they’ve claimed for miles. We can do all sorts of things when they join the organisation, we have a formal safe driving programme, but there is no easy way of controlling staff after that.”

Sandall, who was one of eight guests at the Employee Benefits Fleet roundtable debate hosted in July, says it is difficult to make employees realise when they are driving in a business capacity. “There has been a huge sea-change internally in terms of getting staff to understand that when they are driving to another branch to cover someone’s holiday or sick leave, they’re driving a business mile,” she says.

“That control point is a massive challenge, but increasing employees’ awareness of what is a business mile is key.”

Lack of legal guidance puts onus on employers

But perhaps the biggest challenge is that there is a lack of legal guidance for employers. Alastair Kendrick, director at MHA MacIntyre Hudson, says: “It is a very grey area as there have been no prosecutions.”

The Health and Safety Executive states that employers have duties under health and safety law for on-the-road work activities. The Health and Safety at Work etc Act 1974 states that employers must ensure, as far as is reasonably practicable, the health and safety of all employees while at work. “But what does that reasonable definition mean?” says Sandall. “We have to work that out for ourselves, and that’s really difficult.”

But David Hosking, chief executive of Tusker, says this is no excuse for employers not undertaking basic safety checks, such as whether employees have a valid driving licence, as part of a comprehensive risk management strategy. “An employer has a duty of care to make sure that anybody driving for business is properly insured, is driving a roadworthy vehicle and has a licence and an entitlement to drive that vehicle,” he says.

Kendrick says employers must include their car scheme provider within their risk strategies, and should not assume that they have their own internal risk frameworks in place. “The thing that really concerns me is leasing companies’ lack of adequate control on whether vehicles are being serviced when they should be serviced,” he says.

“It’s a myth for employers to think that they are safer putting employees in company cars because they’re all being serviced by the leasing providers, because some of the large ones we’ve dealt with haven’t got any system in place.”

But Chris Chandler, senior consultant at Lex Autolease, says: “There is a responsibility on the driver; they are in charge of the vehicle.”


What the law says

Corporate Manslaughter and Corporate Homicide Act 2007: The act, which came into force on 6 April 2008, clarifies the criminal liabilities of employers, including large organisations, where serious failures in the management of health and safety result in a fatality. Organisations can be found guilty of corporate manslaughter as a result of serious management failures resulting in a gross breach of a duty of care.

The Health and Safety at Work etc Act 1974: also referred to as HASAW or HSW, is the primary piece of legislation covering occupational health and safety in Great Britain.

The Management of Health and Safety at Work Regulations 1999: These require a risk assessment to be carried out to identify the nature and levels of risk associated with a work activity. Appropriate precautions need to be taken to eliminate or control these risks. A response proportionate to the risk is required.