50 Shades of Grey Fleet

Apologies to E.L. James for referencing his series of erotic novels in this title, but hopefully I’ve captured your attention long enough to discuss an important topic – Grey Fleet.

While not sexy, if you’re in a position of authority within an organisation where employees use their own vehicles for business purposes, it is important you’re aware of the issues.

As vehicle crashes represent the most common form of work related fatality, driving for work purposes is a considerable road safety risk.

grey fleet

What is Grey Fleet?

The term Grey Fleet has only come into the Australian lexicon in the last few years. The term refers to any vehicle used occasionally or regularly by employees for work purposes, including their own vehicles and hire cars.

Who does it apply to?

A driver of a Grey Fleet vehicle is generally an employee of an organisation that is operating a personal vehicle (or other third party vehicle) for work purposes. However, Grey Fleet does not just apply to company employees, it applies to anyone who drives a private vehicle for work purposes. This includes un-paid volunteers, contractors, or anyone billing their time to the company, or being reimbursed by the company.

Why is Grey Fleet important?

Under Common Law and in accordance with the Australian Work Health and Safety Act 2011, organisations have a legal responsibility to provide a safe working environment, and to ensure that the public at large is not put at risk from the organisations transportation activities.

The duty of employers to employees is to ensure that where employees work is safe and without risks (and by definition this includes vehicles and grey fleet vehicles).

An organisation has a responsibility both where it owns the vehicle (whether it is used for business or private activities) and/or where it owns the task. In the case of an employee using their own vehicle for work purposes, the organisation may have outsourced the task but not their task ownership and therefore responsibility.

So, lets consider a few scenarios:

1. Do you know the age of all employee vehicles used for work purposes?
2. Do you know the safety rating of these same vehicles?
3. Do you know when they were last serviced and how well they are maintained?
4. Do you have the details of their current vehicle insurance policy?
5. Do you know their driving behaviour – speeding, mobile phone use etc?
6. Do you know their current license status, details of any demerit points etc?
7. Do you have policy and procedures that cover the use of Grey Fleet vehicles?

Now ask yourself the same question regarding your company vehicles – the same rules apply! I suspect that for some reading this article, the benefits and ease of allowing or encouraging employees to use their own vehicle for work are now in sharper focus.

What are the potential consequences?

As previously mentioned, under Common Law employers must take reasonable care not to cause harm to those persons to whom they owe a duty – commonly known as ‘Duty of Care’. What is reasonably practicable and/or what amounts in law to taking reasonable care will vary depending on the individual circumstances of a case before a court.

The legislative definitions of ‘reasonably practicable’ and ‘reasonable precautions’ can provide a general guide for assessing the risks of harm associated with using grey fleet vehicles.

Penalties may include significant fines and/or imprisonment for individuals and even more significant fines for organisations deemed liable.

Not to mention the catastrophe of a seriously injured or deceased employee in your workplace, resulting from an accident.

COVID-19 Impacts?

It’s clear that COVID-19 has had significant impacts on many aspects of our lives. From a business point of view, there have been numerous implications for fleet assets resulting from travel restrictions, business closures, staff working from home etc.

In many cases, company vehicle utilisation has decreased and at the same time there are increasingly long lead times for new vehicles resulting from major supply chain issues. Accordingly, there are concerns that Grey Fleet use may be on the rise, as some companies opt to downsize their fleet.

A recent survey conducted by the British Vehicle Rental & Leasing Association published some alarming statistics relating to Grey Fleet in the UK:

  • 50% of fleets are made up of Grey Fleet vehicles
  • 18% of businesses did not know how many Grey Fleet vehicles they have
  • 30% of businesses have been impacted by the pandemic regarding Grey Fleet
  • More than 50% of businesses are unaware of when a personal vehicle is being used for business purposes
  • 58% of fleets are managed by non-fleet professionals
  • 34% of respondents were not aware of current Grey Fleet legislation

While unsure of any similar survey being conducted in the Australian market, I suspect there is a reasonably strong argument to suggest that there would be some comparable results.

Control Systems & Risk Mitigation

As a Fleet Management professional, it’s my experience that while it may be necessary to apply the same control and compliance measure to employee owned vehicles as company owned vehicles, it often doesn’t happen.

Many employers are either unaware of their legal responsibilities or unwilling to tackle the obligations.

You can exercise some control over grey fleet in several ways, here are some examples:

  • Consider eliminating use of grey fleet vehicles entirely, operating only company owned vehicles. Supplementing your company fleet with ride share vehicles or Taxis may be cost effective
  • Introduce a vehicle pool to provide employees with access to company vehicles on an ‘as required’ basis
  • Limit the age of any Grey Fleet vehicles for safety and environmental reasons. Perhaps set a minimum 5 star ANCAP safety rating and/or maximum Co2 emissions to prescribe or encourage newer/safer vehicles
  • Offer salary packaging to employees to encourage the purchase of newer/safer vehicles which may have occasional business use
  • Introduce a Pre-Start Checklist for Grey Fleet use
  • Ensure you have a Grey Fleet Policy and relevant procedures

Do you have appropriate control over Grey Fleet and the relevant risks? For more information or assistance, contact us at Fleet Advisory.