How do you manage partners driving perk cars?
08 June 2017
Author: Jack Carfrae
There's plenty written about managing employees by the book, and the whole caboodle of risk, compliance and policy never ceases to be a hot topic.
Little of that extends to non-employees though, which seems logical enough - why worry about people who don't work for the company? There's always a chance that someone outside the business could end up behind the wheel of a mobile asset, though. This is particularly pertinent with perk cars, where it's more or less expected that an employee's spouse will share some of the out-of-hours driving time. That's fine if it's managed correctly, but it does need to be managed.
It seems glaringly obvious, but a pukka fleet policy is the best way to handle external drivers, as it is with employed ones, but it's also the most likely snag.
"A laissez-faire policy is where it goes wrong," says Institute of Car Fleet Management (ICFM) chairman Paul Hollick. "Keys and vehicles just being handed around, particularly with pool vehicles; it's things like this that fleet managers aren't necessarily aware of, and that culture of 'just have the keys, don't worry about it'.
"Those types of corporates will have more issues than somebody with a robust policy set up through the HR community, through their fleet community, vetting driving licences, with a database of employees and spouses that can drive company assets."
That level of diligence is harder to achieve when without a dedicated fleet manager, as Martin Evans, managing director at fleet management software firm Jaama, explains: "Having a fleet manager going through this sort of stuff is happening less and less. A driver joins a company and they just throw them the keys; nobody sits down with them to go through the policy as such, so if there's anywhere that it goes wrong, it's a driver not realising what they need to do in terms of their partner driving; they just kind of assume."
At the very least, the policy should address the bare minimum required to absorb external parties onto a fleet, which involves the rudimentary licence check and a watertight database, as Hollick explains: "You need a complete and robust database of all your employees that have a car, and what other users you have vetted and approved to use that vehicle that aren't company employees. That's the bare minimum."
Best practice is more involved, though, as Shaun Sadlier, head of consulting at leasing company Arval, explains: "Internally, we actually ask drivers to sign a DVLA mandate, so we can check their driving licence on a regular basis.
"The other thing is, how many people do you allow that employee to have as additional drivers? Some companies would limit it to one; we allow two. Then you look at the minimum age, and for most companies, this is in line with what their insurance company allows.
"It must be a full driving licence - no provisionals - so you couldn't be taking your son or daughter out who's learning to drive. And most policies would
ask for a minimum of one year's
Where the lines start to blur is if the details around a driver's age and experience levels are left unaddressed. If the main driver is at a stage in life where insurance age limits are a thing of the past, they're less likely to give it a second thought if they're under the impression that other drivers are fair game. Equally, the exact nature of the relationship between the employee and the person they want to drive the car needs to be squared off.
"The policy needs to address at what age they are eligible and at what stage of relationships they are eligible," adds Hollick. "Should they be boyfriend and girlfriend, or should they be living partners? I think best practice should be that, as a minimum, they need to be partners that are cohabiting, and they both need to have a certain level of experience.
"If you've got an experienced driver with a partner living with them that has recently passed their test, you don't want them to be driving around in your company car, especially perk cars, without suitable strategies deployed. There needs to be particular, robust processes around what 'good' looks like, and you can set policies mitigating risks that non-employees driving company cars can deal with those vehicles. The worst thing ever is a massive crash in a company vehicle when it's not an employee; it's a third-party person."
Points on the licence is another biggie according to everyone BusinessCar spoke to as part of this article, so much so that some firms actually tighten the rules for external drivers in this area.
"Some companies have a fleet policy, or an insurance policy, where if a driver's got more than nine points, they have to notify their insurer," says Evans. "In that case, the same goes for if a partner's got more than nine points. But I've seen guidelines and policies where they're harder with the partners than they are with the main driver. Potentially, if a partner had more than six points, they probably wouldn't be allowed to drive the company car."
"If they're close to a ban, if they've got nine points, their licence needs to be checked every three months," adds Hollick. "I think fleets need to have a policy with non-employee drivers that asks, if they have been previously banned, whether they are still eligible.
"Some people could have been banned and just not notified anybody. They could have just finished up a ban and be going straight into using that vehicle at the weekends. Fleets need that visibility of data and that control in place to be able to deal with these things."
It's difficult to put a figure on the cost of properly managing external drivers - or the savings if you get it right - but if you're justifying steps to top brass, then the potential cost of failing to do it properly is a good sales tactic.
"Let's say an additional driver has lost their licence and gets caught," says Evans. "It's a bad reflection on the company from a PR perspective, and they're probably still holding the baby financially, because if the claim is on our insurance, and the insurance isn't going to pay out because that person hasn't got a licence, it would probably be the company that is liable for those costs.
"Because it's not on company business per se, the police will ask, 'one of your vehicles has been involved in an accident. Can you prove that you've taken proper steps to make sure this person's able to drive?' If they can't, then they could end up with issues around corporate homicide and the manslaughter act if there are any injuries. And if they're running heavy goods and commercial vehicles, they could lose their HGV licences just by not having appropriate policies in place on the company car side, so there is a massive risk.
"There are people that scaremonger about this sort of stuff but the police will take a pragmatic view. I think that employers just need to be comfortable that they can demonstrate that they've got robust policy processes and checks in place - and if they can demonstrate that they will probably be fine. If they can't, it could be a whole world of pain."
Fleet operators should bear in mind that private use is part of the deal with a company car, so accepting that the vehicles will be used out of business hours, and planning for it, goes a long way.
Colin Hutt, category and contracts manager for fleet and insurance at the Construction Industry Training Board (CITB), explains how he does it: "What we realise is that people who opt for a company car primarily have it for business, but they pay tax on the basis that they use it privately as well, which probably does mean that their partner or someone else will share the driving, and that's fine.
"We allow them to nominate someone, usually a family member living with them, and we use a third-party process to check licences. It's £5 or £6 a check and we're happy to pay that. We outsource the checks because if it's an external company, you're paying them to check the licences, and if they miss something, it's their professional negligence. You are essentially taking that risk away from yourself and pinning it with someone else. That sounds like a bit of a cop-out, but they are the experts, and they know what they're looking for."
Association of Car Fleet Operators (ACFO) member Hutt typically limits the number of external drivers an employee is allowed, but will permit others on a temporary basis, providing their licence checks out. His fleet policy stipulates that the company can charge employees the insurance excess if a non-employed driver causes damage, though.
"We reserve the right, where any accident involving that nominated driver is their fault - i.e. there's no third party to claim any recovery - to claim the excess back from the employee for that accident, and also any additional costs involved, like hiring other vehicles.
"That's what we get the driver to sign up to when we allow them to nominate someone, but all we say is that we reserve the right to do that." The company trusts the drivers to provide them with the correct information when they are reporting incidents and claims, so they have to rely on what they are saying, explains Hutt.
"But if they have a partner who's a bit careless, constantly bumping into things and costing us money, that's frustrating. We would pick that up and say 'because they've done this again, we're going to charge you the cost of the repair or the cost of the excess, because it happens too much', and it will hopefully make them think about whether they still want that person to be driving the vehicle.