According to a 2019 report conducted by the NSW Government, work-related road crashes are responsible for almost 30% of workplace fatalities. It’s not just a matter of safety either! Between the vehicle damage repairs, hospital bills and injury-related downtime, the cost of a company car-related accident can put a huge dent in your bottom line.
To avoid this dilemma, companies should take it upon themselves to issue a comprehensive policy that outlines an employee’s personal use of a company vehicle. Unfortunately, it’s not always easy to plan out a policy – thankfully, we’ve prepared this handy guide!
In this article, we explore everything you need to know more about creating a company vehicle policy. We’ll also give you some handy tips and tricks to help keep your drivers as safe as possible.
What is an ‘employee use of company vehicle policy’?
An ‘employee use of company vehicle policy’, also known as an ‘employee use of company vehicle agreement’, is a document detailing the rules and regulations an employee must follow to use a company vehicle. The document should cover the employer’s responsibilities, including vehicle maintenance, upkeep and insurance.
Why do you need one for your business?
Owning and operating a vehicle comes with a lot of risks for your business, your employees, and other people on the road. Having a clear set of guidelines can help lessen the cost of repairs and maintenance, and more importantly, lower the risk of accidents, injury, and fatalities.
How to create an employee use of company vehicle policy
Here are seven things every company vehicle policy should include:
Define company responsibilities
This is where you state the make and model of the vehicle your employee(s) will drive, as well as the kinds of fuel, toll expenses, repairs, routine maintenance, general upkeep, registration, and insurance that the company will be covering. This section will help delineate between the employer and employees’ responsibilities.
What else should the company cover? Before handing a vehicle over to employees, companies should ensure that the vehicle is safe and roadworthy. Employers should also present each employee with a copy of the employee use of company vehicle policy.
Define who may drive the vehicle
Here, indicate which of your employees are eligible to drive company cars. For example, fleet drivers, sales managers and managers who need to attend business conferences out of town all need access to the company’s vehicles. However staff like receptionists and creatives, will likely not need to use a car to do their work.
This is also the section where you lay down the rules on whether employees’ partners, spouses, children, or other family members are allowed to use the company vehicle. Lastly, this is where you indicate whether suspended employees must surrender the company vehicle immediately, or if there is a grace period for returns.
Set the employee requirements and responsibilities
In this section, you must lay down the requirements each employee must meet to use a company car. Here are a few requirements to consider:
- Must have a valid Class C driver’s license.
- Must have a good driving record.
- Must know the rules of the road.
- Must be able to follow safety and traffic rules, including those on seatbelt usage, mobile phone use and driving while fatigued or intoxicated.
- Must be able to keep a record of expenses for fuel, toll, and emergency repairs, as well as a report on distances covered.
- Must report damages, accidents, and other concerns immediately.
Define the limitations of use
This is the part where you discuss what the vehicle can and cannot be used for. Whether your company allows employees to take home company vehicles and drive them for personal use is up to you – but you must indicate this in the policy for the sake of clarity. Some company vehicles use guidelines outline activities that are strictly prohibited with company cars, including but not limited to; courier services unrelated to the business, driving lessons, racing, driving for hire or rideshare services, and transporting friends and family.
Set guidelines for accidents, stolen vehicles, penalties and fines
Every employer must set clear protocols in case of the incidents. Indicate a point person (usually the employee’s immediate supervisor) to call once an accident or incident has happened and establish who must cover for damages and fines.
Set guidelines for breach of policy
Aside from those mentioned above, indicate what kinds of actions or inaction will merit a “breach of company policy”. In this section, you must outline what kind of disciplinary actions will be taken against any employee that violates the company policies. It’s important to set this section because it gives you something to refer to when employees try to contest disciplinary actions.
Discuss guidelines for returning the vehicle
This is where you talk about the circumstances in which employees must turn over the vehicles to the company. This section also outlines the procedure for turning over the vehicle, including the recipient of the vehicle and the reports that must be filed before the turnover is deemed completed.
When should an employee be required to return a company vehicle? Here are some instances to consider:
- When an employee resigns or is terminated from the company.
- When an employee loses their driver’s license or is suspended from driving for a set amount of time.
- When an employee takes leave.
- When the vehicle has been involved in an accident that causes the car to be unfit for driving.
- When an employee is injured or deemed unfit to operate a vehicle.
- When an employee refuses to follow the policies or wilfully ignores them.
- When an employee shows negligence over vehicle upkeep and maintenance.
In this section, the employer must also establish what actions shall be taken should an employee refuse to surrender the vehicle.
Company vehicle use tips for business owners
Here are five things every employer should keep in mind when lending out company vehicles:
1. Always screen your drivers
Never lend company cars to employees that haven’t been properly screened. Always do a thorough background check on potential drivers and don’t forget to look at their accident history, their fine history, and whether they’ve been involved in any drink driving cases.
2. Conduct regular maintenance
Regular maintenance has two positive effects for you as an employer: first, it increases the longevity of your vehicles by making sure everything is well taken care of, and second, it ensures the safety of your drivers.
3. Host driver safety training seminars
Make sure your drivers know the rules of the road. While it is the driver’s responsibility to stay in-the-know on driving rules and regulations, it won’t hurt to conduct safety training seminars to ensure that your drivers are always reminded of the driving dos and don’ts. Most companies conduct mandatory training seminars for new drivers once they get the job or access to vehicles, plus a yearly review course to refresh everyone’s memory.
4. Avoid contacting employees when they’re driving
This one is fairly straightforward. To keep employees from getting into mobile phone-related road accidents, avoid calling or texting them when you know that they’re driving. This allows your employees to always do their jobs safely.
5. Track your vehicles
A good way to keep track of employee vehicle use is to install a GPS tracking system in every vehicle. This will give you a clear picture of how your employees are using company property, it also helps you double-check if they’re being honest in their reports. Finally, tracking vehicles with GPS helps you track down the car in case it gets stolen.
Toyota Fleet Managements ForceField Telematics® is a mobile technology that tracks both vehicle and driver behaviour. With ForceField Telematics, companies can locate vehicles, track movements, and identify “at risk” drivers, among a hefty list of other efficiency-enhancing features.
Important Note: You should consider including a clause in the agreement that you’ll be tracking the vehicle. In some States, it’s required by law to notify employees that you’ll be tracking them via GPS and to display a notice on the vehicle to show that it is under surveillance. You should seek your own independent legal advice in this regard.
Connected vehicles with ForceField Telematics
Toyota Fleet Management’s ForceField Telematics product is a solution based approach to solving your connected vehicle and mobility needs. Managed by the Connected Mobility Team, ForceField Telematics is a proven solution designed to improve your drivers’ safety, increase productivity and reduce costs.
Driver safety
ForceField gives you real-time visibility to your assets, allowing you to connect with your drivers in the event of an accident. You’ll also have access to driver-behaviour dashboards, enabling you to have the right conversations with your at-risk drivers.
Productivity
Through ForceField, you’ll gain access to detailed utilisation data of your assets. This will enable you to identify underutilised assets and swap them around with vehicles that are used more often.
Cost savings
With an improvement in driver behaviour comes a reduction of up to 15% of vehicle consumables such as brakes, tyres and suspensions. ForceField Telematics is an ATO approved electronic logbook for FBT purposes. Utilisation data captured can also be used to support Fuel Tax Credit claims (where entitled).
Toyota Fleet Managements Connected Mobility Team will provide their specialist guidance and guide you every step of the way, from policy review and updates to driver communication and training. Contact us here today to see how we can assist you and your business.
Safety first with Toyota Fleet Management
At Toyota Fleet Management, driver safety is top priority. One of our primary goals is ensuring that every partner takes care of their drivers too. With years of experience in fleet management, we can provide fleet advisory services to help you set the right policies to protect your company and your employees from work-related road crashes. Talk to our fleet management specialist today.
The information provided by Toyota Fleet Management, a division of Toyota Finance Australia Limited ABN 48 002 435 181, AFSL and Australian Credit Licence 392536, is of a general nature and for your information only. Nothing in this article constitutes or should be considered to constitute legal, taxation or financial advice. Before making a decision about any product or service described, we recommend that you seek independent professional advice such as from your accountant, taxation or financial adviser or lawyer, who can advise you about your personal circumstances and what would be suitable for you. ForceField Telematics® is a registered trademark of Toyota Fleet Management.