Ticking “bomb”

PRIVATE cars driven by company employees while doing their work pose a hidden threat to the occupational health and safety (OH&S) exposure of management and directors because managers are not aware that their OH&S liabilities apply to all vehicles used on behalf of a company regardless of ownership.

So-called “grey fleet” vehicles are those under novated leases, cash allowance vehicles and people who prefer to drive their own private cars for work and claim back the cost against their income tax.

There are no definitive numbers for grey fleet vehicles in Australia but, in the United Kingdom, where the grey fleet issue has been under increasing scrutiny for about five years, nearly five million people use their private car while at work.

The depth of grey fleet use often surprises managements.

One UK company with 10,000 employees reported that it had just 50 company vehicles. Yet proper investigation revealed that it had 2500 employees driving their own cars at work and it had no idea if the drivers were fit to drive, were licenced, or how many demerit points they had and whether the cars were insured or roadworthy.

Another company found it had a driver whose furnished driving licence, on close examination, was in fact a guarantee card for a Polish washing machine and that he had never sat a driving test.

In Australia, in spite of OH&S rules that carry onerous monetary penalties and where directors can be jailed if their policies are found wanting, traditional emphasis of fleet management has been on managing vehicles.

This poses a challenge for companies which remain unaware of the exposure to which they are being subjected by workers in private cars who think what they do in their own car is their own business.

But the issue of grey fleets has the potential to add a very different focus to fleet management responsibilities.

The new paradigm will include an emphasis on managing the activities of drivers in vehicles other than those owned by the company or organisation.

This will involve systems that will monitor the fitness of these drivers to be on the road at work, their driving records, insurance coverage and the suitability and roadworthiness of their vehicles with all the implications these areas might have on OH&S liability of their employers.

For example, in NSW nearly 100,000 people are just one more fine away from loss of licence.

Yet most employers would have no idea if their employees’ driving records were so tainted. Recently a truck driver with 13 demerit points faced court over the death of four people in the one family. Such a tragedy might have severe implications under OH&S liability for an employer.

Australian data shows that the road is a dangerous workplace. More than 60 per cent of workplace deaths in the past 10 years involved a vehicle. The number so far this year is 50 per cent.

Driving for work also increases the exposure to risk.

Data from NTC Australia shows that workers drive double the kilometres of private users and that there are 50 per cent more driving incidents at work than in private activities.

The data shows that workplace vehicle accidents cost $10 billion a year and that for every dollar of insurance paid out on claims there are additional uninsured losses that range between $8 and $53.

The issue is getting increased airing in Australia at an ongoing roadshow by a UK company, TR Fleet, which operates online grey fleet driver monitoring systems for companies and presently has about 200,000 UK drivers under scrutiny.

The managing director of TR Fleet, Julie Summerell, told GoAuto that grey fleet management in Britain had become a mainstream feature of fleet operations and that it was “interesting to be in a country like Australia that does not identify grey fleet as an issue”.

Ms Summerill said: “Many companies think their OH&S responsibilities stop at tool-of-trade vehicles but it goes further than that. There is already legislation that requires an employer to make sure that the cars and their drivers are fit for purpose and safe.

“The difference between us and the leasing companies is where we view the asset. Our approach is that the asset is the employee.”

She said that the traditional leasing company sees their job is to protect the vehicle and protect its value and maximise returns over the term of the lease but concerns about the drivers tend only to be in terms of the drivers’ role in preserving the asset.

“So they are focused on funding the vehicle, keeping it on the road and keeping it safe but they do not have any mechanism for monitoring the driver community that are using their cars.

“So the piece of the puzzle missing is that we manage the drivers independently of what vehicles they drive on behalf of the company and no matter who owns the vehicles,” she said.

“It is not just about those few tool-of-trade cars, it is about managing all those who drive as part of their jobs and ensuring they are capable.”

The executive director of TR Fleet Australia, Jeremy Sneddon, said that grey fleet size is increasing locally.

“As fleet managers have been looking to take cost out of their operations they are putting more and more of their drivers into grey fleet vehicles.

“We predict that the total size of the grey fleet will grow as this trend continues.

“But, as that happens, they need to know more about that private vehicle. Is it roadworthy (in NSW: when was it last inspected), has it been modified and is it insured for business use.

“Then, in addition to your drivers of trucks, vans, buses and company cars, management needs to know who else is in their driver community.”

Mr Sneddon said that none of the major fleet leasing companies were collating records on all their drivers in terms of validity of licences, demerit points, eyesight testing and acknowledgement of company driving policies.

“We are really wanting to know, do they have a valid licence, can they see, can they drive and what level of exposure they have on demerit points.” He said some UK companies will not hire drivers with six or more points and others will take drivers off the road once they reach 10 points and wait until the total reduces.

Ms Summerill said the payback for management was both a peace of mind in that they have demonstrated compliance and that they are on top of the OH&S issues for their employees. There was also lower vehicle insurance costs, reduced injury downtime and lower Workcover premiums.

She said the TR Fleet roadshow had been well received by big insurers in Australia which can see driver monitoring as a way of driving down at-fault claims and driving down insurance premiums.

She said that in the UK they identified 25 van drivers who were having an average of three accidents per driver per year. They were put through a safe driving qualification that in the UK goes into their employment CV and they became the safest drivers in the company with no incidents in the following year.

The employer was then able to secure a 23 per cent insurance reduction, she said.