Grey fleets

Sydney freeway traffic
Sydney Traffic at Night

What's a 'grey fleet' and what are the risks?

Despite what you may be thinking, a grey fleet isn't a car park full of grey cars. The term grey fleet refers to privately owned vehicles that are used for business travel. This includes those used through novated leases, or where the company reimburses the employee for work- related vehicle expenses, or where the employee uses their car and claims work-related costs against their income tax.

Not many employers realise that the law makes no distinction between an employee driving a private vehicle for work purposes and tool of trade vehicle drivers. A vehicle is treated as a 'place of work' when driven for work purposes, regardless of who owns it under various Australian Workplace Health & Safety-related Acts.

Employers duty of care

Simply put, The Work Health and Safety Act 2011 places a duty on organisations to ensure that vehicles used for work, whether supplied by the company or privately owned are safe.

Take the hypothetical example of a small charity that relies on volunteers to deliver food parcels.

One of its volunteers uses their own car that hasn't had a decent service in a while, and the organisation has no record of the vehicle or its safety status. The volunteer is killed in a road accident on the way to a work appointment. The charity is potentially liable and suffers significant reputational damage by not providing a safe workplace for volunteers.

In another example, a bricklaying company allows an apprentice to take his privately owned ute to a small job on the weekend. He picks up a friend on the way to work and both are badly injured in an accident. The company didn't know the ute wasn't roadworthy and is potentially liable for both injuries.

A legal perspective on grey fleets

Nicole Fauvrelle, partner at Sparke Helmore Lawyers, and one of Australia's leading experts on work health and safety law, says some companies might believe they aren't responsible for their employees safety if they have a vehicle licence and are reimbursed for work-related car costs. "They mistakenly think the maintenance of a worker's car has nothing to do with them, even though it is used for work purposes," she says.

Fauvrelle says the law is clear on the use of privately owned vehicles at work. "The vehicle is considered a piece of plant in the workplace and as such it falls within the business' duty of care to provide a safe workplace. From a legal perspective, there is no difference between a company-owned car and a privately owned vehicle used for work purposes, when it comes to health and safety laws."

Fauvrelle adds: "Employers should treat grey fleets like any other key business risk. Organisations should have systems that capture [risk assessment] information to demonstrate they have taken reasonable steps to understand and reduce, so far as reasonably practicable, vehicle-related safety risks."

Employers have asked Fauvrelle if requiring staff to report information on their private vehicle, or the status of their licence (including demerit points) could be a breach of privacy. "Employers are entitled to ask questions and receive answers from staff about matters that are reasonably connected to the work tasks they are required to perform, that might place their health and safety at risk in the workplace," she says.

"It would be discriminatory for an organisation to fire a worker because their car does not meet safety requirements, or focus on a particular group of employees, such as younger male workers. But companies are well within their rights to insist that workers do not use vehicles that are unsafe, or place limitations on private vehicle usage, such as who can be in the car, for work purposes."

A complex issue to manage

Let's think about an organisation that has a small fleet of company-supplied cars. They don't always know how many employees use their own car for work because sometimes people don't claim vehicle expenses or fill in travel logbooks. Also, salespeople usually prefer to use their own cars for appointments in the afternoon to save time.

This can create a problem because the business doesn't have any safety data on those cars, or know when they were last serviced. Plus, there's also an issue when it comes to private car insurance policies that don't cover business usage, and potential WorkCover implications if the business doesn't take steps to reduce safety risks to their staff using private vehicles for work.

Organisations need clear policies for grey fleets and should place the same rules used for their company-supplied fleet for their grey fleet. It's important to develop, communicate and maintain grey fleet policies and require staff to provide vehicle information.

Next steps: reducing grey fleet risks

Assess the extent of grey fleet risks – Some organisations hire fleet management consultants to survey employees on the use of private vehicles in the workplace. Find out how many employees drive vehicles for work and the split between company-supplied and private cars.

Take a risk-management approach  If a grey fleet risk is evident, treat the issue as part of the organisation's broader risk-management processes. Ensure the fleet manager has sufficient resources to assess the risk and develop strategies to moderate it.

Review vehicle usage policies – Develop up-to-date vehicle usage policies that cover grey fleet issues.

Know what happens next if drivers or vehicles fail safety requirements – For example, the company might require a driver to use a pool vehicle if their private vehicle doesn't meet the required safety standards.

Take a similar approach to grey fleet safety as that applied to company-supplied vehicles – The law does not differentiate between privately owned and company-supplied vehicles used for work. Treat them the same when minimising safety risks. The organisation will benefit and so will staff.

This article is a brief summary of key issues with grey fleets and not intended to provide legal advice. Organisations should seek independent legal advice if they are concerned about grey fleet risks and their duties around the law.

Keep employees safe with low risk driver training