You are on page 1of 17

how to manage...

fleet risk
september 2006

Sponsored by For information about Centaur’s products. how to manage fleet risk ! contents " 5 Leader column 7 Sponsor’s comment 8 Why worry about fleet risk? 11 Legal issues 14 Health and safety policy 17 Assessing risk 20 Reducing risk 23 Driver checks 26 Driver training Sponsored by The How to Manage guides are published by Employee Benefits. Employee Benefits is published by Centaur Media plc. Employee Benefits accepts no responsibility for loss or damage to material submitted for publication. the UK’s premier independent business publisher. Subscribe: 020 7292 3719 or online at http://sales. Britain’s leading magazine for benefits decision No part may be reproduced in any form without written permission of the publisher.centaur. Copyright Centaur Media plc. employee benefits how to manage/fleet risk 2006 3 . visit www.centaur. All rights ISSN 1743-081X.

combined with other incoming legislation and changes to the police Road Death Investigation the responsibilities of senior management in relation to employees using company or privately-owned cars for business purposes is on the increase. is set to penalise organisations where health and safety processes have broken down and led to “gross negligence manslaughter”.co. due to become law in 2007. Employee Benefits magazine Editor Amanda Wilkinson Senior reporter Vicki Taylor Art director Caitlin Smail Production editor Roger Carter Production manager Simon Hadley Contributor Curtis Hutchinson Display sales executive Catherine Bell Publisher Debi O’Donovan Telephone: 020 7970 4000 Fax: 020 7943 8094 Email: employee–benefits@centaur. However. organisations have a basic duty of care to ensure the wellbeing of staff as is reasonably practicable and that other people are not put at risk by work-related driving activities. how to manage fleet risk ! " editorial In these uncertain times. Although fleet management is a long way removed from international terrorism it too has risks associated with it that cannot be ignored. At www. In fact. under existing health and safety legislation. This. Amanda Wilkinson Editor. risk management is moving up the corporate agenda to find a place at boardroom level. will undoubtedly serve to tighten up the management of employee benefits how to manage/fleet risk 2006 5 . the Corporate Manslaughter Bill.

While a few enlightened businesses see the measurable benefits of adopting a risk management culture in their organisations. its employees and other road users. are making British boardrooms take even greater notice of fleet management issues. Organisations need to understand that poor health and safety procedures are no longer acceptable. It will also place further pressure on HR managers. ING Car Lease employee benefits how to manage/fleet risk 2006 7 . fleet risk manager. auditable and cover all the elements to protect the employer. a large number still see it as a waste of time and money. industry comment Why fleet risk has been bumped up the boardroom agenda RISK MANAGEMENT is now one of the biggest workplace issues facing human resources. who may now come under far greater levels of scrutiny following road accidents. Amendments to the Road Death Investigation Manual (RDIM) announced in July make sober reading for HR managers. such as the closer working relationship between the police and the Health & Safety Executive (HSE) with regard to road traffic accidents. The most significant feature contained within the annex to the RDIM is the instruction to involve the HSE following a road incident where failures in safety management have been identified. Diarmuid Fahy. And recent developments. be robust. HR managers should investigate introducing a comprehensive risk management programme. These programmes should be tailored to the organisation’s specific needs. fleet managers and company directors to ensure they have the appropriate systems and processes in place. Reducing risk is all about caring for workers and any financial bonus should be considered as an additional benefit. The closer relationship between the police and HSE can only increase the need for organisations to review their risk policies.

For example.hse. evaluate and assess potential risks. the lack care published by the Fatalities Department for Transport and the HSE The level of potential risk for managers (available from who are not familiar with the relevant www. with these practical guidance on how to manage accounting for more than 20 fatalities a scheme. regardless of whether schemes. It also helps employers to and 250 serious injuries every week. cash allowances or use their own employee-owned vehicles used for vehicles for work-related business. of interest at boardroom level. Employers need to think in terms of A stumbling block for many establishing clear audit trails that cover organisations in relation to managing the safety at work of their employees work-related road safety is the lack of and formalise their corporate duty of awareness or. Driving at work: Managing work- related road safety. organisations are subject to to ensure that employees have specific duty of care obligations in adequate insurance cover and are relation to all employees who drive driving vehicles that are regularly during work time. the benefits of up to a third of all road traffic managing a successful work-related accidents involve someone who is road safety programme and offers working at the time. Failure to ensure serviced and maintained. Why worry about risk? Drive the message home Being oblivious to at-work driving risk is no defence in the eyes of the law and doesn’t make good business sense either ! IGNORANCE is far from bliss when it While this is reasonably comes to managing a company car straightforward for company-run car scheme. systems and procedures also employees are provided with company need to be put in place to cover cars. there is a duty In fact. 8 employee benefits how to manage/fleet risk 2006 . According The guide outlines an employer’s to the Health & Safety Executive (HSE). ! rules and regulations is high. business. that their policies and practices are An essential starting point to compliant can result in prosecution. assessing duty of care responsibilities and ignorance of the law is an and procedures in relation to staff inadequate defence for fleet managers using cars on business is the guide. in some cases. and the organisation itself. legal

for cars used on business example. Profit through organisation. has analysed this worrying managed outfits.” he says. directors are aware Cars driven correctly can also result in savings in fuel costs and employees of the status of the who have polished their skills through attending a driver training course. have been put there for a specific This study polled 100 directors and purpose and it is the role of the board fleet executives in medium and large to ensure those rules are followed and firms and found that 79% had not to have an audit trail that shows they ! compiled a car fleet risk management are followed with diligence. could not only reduce the number of driving on business. Furthermore. accidents but also lead to lower insurance costs and result in less down time for “Few boards of staff members and their vehicles. for example. within their The promotion of better health and safety driving practices could even spill organisations and do over into an employee’s private driving which. The legal requirements safety: a boardroom plan for action. could reduce their risk of not have formal being injured in an accident outside of working hours. there are the importance of numerous personnel and commercial benefits of proactively managing a increasing safety successful work-related road safety programme. in many " organisations are “out of touch” Benefits of managing road safety and unaware of As well as ensuring that organisations are fully compliant with the law. are likely to feel less stressed when driving on business.” strategy. Professor Peter Cooke. Centre for Automotive Industries “Such a situation cannot be allowed Management at Nottingham Trent to continue – not only in the best University. from the of business mobility. 73% failed to identify company car operations as a ! For a copy of Profit strategic risk. board level reports as to the ongoing status employee benefits how to manage/fleet risk 2006 9 . levels for employees Managing driver safety. in turn. through safety: a boardroom plan for action contact Kwik-Fit No board level reporting Fleet on 01727 840206 Professor Cooke said the responses or info@kwik- highlighted that boardroom managers but in any trend in a survey.

expected to reach the 1999 emphasise that employers have statute books in 2007. Legal issues Move to curb practices that contravene the law ! Failure to comply with the laws relating to fleet management could result in legal action against employers and hefty fines THERE are two main pieces of to just cover the physical place of legislation governing work-related road work. employers should else involved with company cars should remember that the rules also apply to be aware of. Management of Health and Safety at Risk assessments ! Work Regulations 1999. and the In addition. Under these affect employers. ensure the wellbeing of all staff as is Employers can rest assured though reasonably practicable. employers have to carry out an The existing Health and assessment of the risks to the health Safety at Work Act 1974 lays and safety of their employees while at down the basic duty of care rules. the responsibility to manage health both of which are set to and safety effectively. the Management of Corporate Manslaughter Health and Safety at Work Regulations Bill. However. whether it is an office. unless staff are widely interpreted by many employers travelling to an unfamiliar place. These are the Health and employees using company or privately- Safety at Work Act 1974 and owned cars for business purposes. employers should also The rules also stipulate that it is the keep a close eye on the forthcoming responsibility of employers to ensure Road Safety Bill. shop or safety that fleet managers and anyone factory. " employee benefits how to manage/fleet risk 2006 10 . likely to other people are not put at risk by become law by the end of work-related driving activities. this year. work and to other people who may be These state that employers must affected by their work activities. However. that the law doesn’t apply to journeys In the past. rules. these rules have been to and from work. (£94).britishsafetycouncil. Also included will be the new ALD Automotive. drivers caught using management are identified. Visit information on existing and www. the government’s commitment to Recent changes to the police Road reduce the number of people killed Death Investigation Manual further and seriously injured on roads by 40% highlight the way fleet risk is moving up by the end of the decade.” “gross negligence manslaughter”. Visit Law and practice special report website has information on the www. able to offer a broad range of is also available to buy online advice on best practices in called Driving at work 2007: • The Driving Standards Agency health and safety. the offence of causing death by careless fleet management arm driving. Group.dsa. state that the Health & Safety mobile phones while driving are likely Executive should be involved in road to be targets facing tough penalties. " Further information • The Health & Safety Executive www. Persistent the agenda. contains a range of up-to-date legislation. It will target rule-setting senior managers Stiffer penalties within organisations.hse. accidents where failures in safety For example. Mel have three penalty points on their Dawson. Visit to find out more.workplacelaw.Failing to satisfy the person while driving on A guide for more • The Workplace Law website ! holds information on the latest information. announced in speeders and drivers using hand-held July. which will have a penalty of up of Société Générale to five years imprisonment. . The changes. a director of licence. rather than middle The incoming Road Safety Bill is part of managers who follow them. says: “Under The Corporate Manslaughter Bill is existing legislation employers also set to have far reaching implications have a responsibility and duty of for employers if members of staff are care for the safety of their staff while killed or cause the death of another driving on business. For more details visit Road Safety for more • The British Safety Council is upcoming legislation.! Failure to adhere to the mobile phones while driving will see rules could result in heavy fines increase from £30 to £60 and fines or legal action. www. This legal system that organisations take legislation is designed to penalise work-related road safety seriously organisations for management failures could result in them being fined or that have led to the breakdown in the prosecuted for breaches of health and health and safety process leading to safety legislation.

which tight risk management policies but specifically includes work-related road when you read them they are full of safety (Management of Health and holes that employees who have been Safety at Work Regulations 1999). speeding and using a hand-held mobile while driving. Paul Holmes. Health & safety policy Pay more than lip service ! It is vital to have a health and safety policy. phone use while on the move and the warns that the policy must also be maximum acceptable daily mileage. with staff to discuss car policies and “Too many firms believe that risk driving behaviour rather than simply management is a tick-box exercise in bombarding them with complex compliance rather than a living and documents that they are unlikely to breathing set of guidelines that drivers have the time or inclination to read. for example.” Holmes adds. and the Bombarding staff Corporate Manslaughter Bill both It is important then to include ! head for the statute books. This would be a good up-to-date road safety policy in place. head of risk organisation’s position on mobile management solutions at the AA. that argue no-one had ever mentioned to includes tougher penalties for them. used and read by staff if it is to offer Holmes argues that employers any protection to employers in the should also hold regular meetings event of a breach. your However. place to formalise. but to stand up as a legal defence it must also be read and understood by staff BY LAW. all organisations employing more than five people should have a can go to bosses with questions about. involved in an incident could easily And as the Road Safety Bill. it is now specifics in your policy that spell out even more important for organisations what might seem obvious to to make sure they have a clear and employees. 12 employee benefits how to manage/fleet risk 2006 . “Many firms claim to have water- written health and safety policy.

Organisations in Scotland should also consider covering smoking. easily digestible. accessible to staff and regularly updated to make it as relevant as possible. but already done so.” he advises. the fleet management Finally. while those with having a useable policy covering existing policies should review their work-related driving can have current measures to check whether additional benefits. Make sure it also spells out key aspects of the Highway Code – especially the adherence to speed limits. The Health & Safety Executive’s Workplace Transport Safety Document HS (G) 136 can help employers with formulating a policy. explains: “The first step for most organisations is to produce a formal health and safety policy document that sets out. The document is the ideal place to formalise your company’s position on key issues.” versa. including the use of mobile phones while driving and maximum daily driving times and mileages. which is now banned in public places. including working environments. too. premiums as accident claims tumble. says: remember that they need to be fully “The benefits of a co-ordinated and aware of their obligations and not properly managed work-related road simply pay lip service to them. a director of ALD both the employer and its employees. but safety programme are not only legal communicating it is completely but there is a moral aspect and a clear different and there is no substitute to financial aspect that translate into just talking to staff and also getting lower operating costs. So the message to employers with Making sure all bases are covered staff driving on business is to ! from a legal standpoint can obviously implement a policy if they haven’t help protect the organisation. they offer adequate protection to Mel Dawson. Visit www. reduced staff written feedback that proves they absences due to injury or work-related understand where their responsibilities ill health and reduced insurance start and the company’s end and vice.hse. the employer’s commitment to safety at work and the rules they expect their staff to follow and the managing director should then sign it. employee benefits how to manage/fleet risk 2006 13 . director of the fleet consultancy Colin Tourick and " Formalising a health and safety policy An organisation’s formal health and safety policy must be thorough. Automotive. Colin to view a copy. ! “Having a policy is one thing. at a high level.” This top-level endorsement from the outset is important as it will give credibility and authority to the document and highlight the management’s thinking to employees. organisations should arm of Société Générale Group.

employers to ensure that equipment used by employees is both safe and Claims history used safely. Assessing risk Driving down onerous risk ! ! The government has relished high profile prosecutions of its at-work driving regulations. a senior director or manager should take responsibility for the assessment and involve those responsible for human resources. including driving. employers are required to carry out risk assessments of the workplace and any workplace activities. the same should be done totally integrated with the as with any other workplace risk. fleet management and the organisation’s other legal compliances to make it assessments. That organisation’s culture. says risk assessments require The aim is to minimise the risk of board level direction and management. identify any particular risks they have ! Richard Schooling. It is also means that the activity should be beneficial to involve employees who looked at and any risks should be drive at work. Alphabet.” could pinpoint particular accident Depending on the size and structure trends and highlight where problems " employee benefits how to manage/fleet risk 2006 14 . since they will be able to recorded and reduced where possible. the commercial encountered or any concerns they director of fleet management company might have. so assess risk carefully ! " ! UNDER the Management of Health and Safety at Work 1999 Regulations. The government makes no A useful starting point for a risk secret of its appetite for a high profile assessment is to carry out a review of prosecution for failing to comply with the fleet’s recent claims history as this [its] at-work road safety requirements. In order to conduct these of the business. someone being injured or killed “Duty of care [responsibilities] require through driving at work.

each hazard identified will cause harm and what can be • Record your findings • Decide who might done to reduce the risk posed. it might be useful to have Consider hazards relating to help them plan their workload. although passengers. While this developments or changes in groups should be relayed to is easy for company-owned company car provision. Technologies like video Groups potentially at high risk conferencing could also be • Review your assessment should also be identified. introducing Fleet management. staff could be five employees must record the ! In an accident it will be the encouraged to use public findings of their risk driver who is most often transport as an alternative. Working Organisations running company car out what is being covered by these schemes should also consider involving third-party services will form an their vehicle provider in the risk invaluable part of an organisation’s assessment as most will offer risk risk assessment. To help protect Regularly review and update as high mileage and drivers from vehicle faults the risk assessment to keep it inexperienced drivers. and any steps taken.can be addressed. records to help identify trends. reviewing diary pressures. Organisations with more than be harmed For example. such considered. The regular maintenance schedules in line with legislative potential risk exposure of these should also be place. evidence that company-funded the driver. pedestrians are also at risk. " Carrying out a risk assessment There are five steps that should form the basis of any risk assessment. assessment. Measures such as management services. Each should be carried out specifically in relation to driving at work: • Identify hazards their line managers who can cars. leasing or satellite navigation devices for high contract hire companies should also mileage drivers. could help reduce risk exposure. Gather the views of • Evaluate and reduce serviced and that these and those who drive at work and the risk privately-owned vehicles have research accident claims Evaluate how likely it is that up-to-date MOT certificates. especially for long journeys or also be notified of the findings other road users and visits to major cities. Employees must harmed. . the vehicle and the cars are being regularly journey. and driver training have procedures in place to make sure programmes could are options that routine servicing work is carried out. tyres and windscreens are regularly checked and driver licence and claims Provider involvement records are kept up to date.

it can be difficult to see road worthiness. Reducing risk Learn to drive user admin ! Rigorous document keeping and checking is a must for bosses when their staff drive privately-owned vehicles for work EMPLOYERS who provide vehicles for staff as part of a traditional company car fleet are in the best position when it the firm’s responsibility and the business thinks it can successfully wash their hands of the issue. the radar. cash allowances or permitting warns: “These cars are completely off employees to use private cars. car ! privately-owned vehicles for work. decade. However. If the cars are owned by the Grey areas arise where cars are organisation. The driver often believes it’s “Probably the biggest single problem is 16 employee benefits how to manage/fleet risk 2006 . what vehicle they want. When the rules governing personal The same systems should be in taxation on company cars were operation if cars are provided under a changed at the beginning of the contract hire or leasing agreement. this has led to functions are outsourced to a specialist the creation of unstructured schemes fleet management company. access to staff insurance records. robust systems should be bought through a cash allowance in place to check factors such as the scheme or where employees are driving status of employee driving licences. points out the Paul Holmes. regardless of Jeremy Hay. [but] comes to complying with current and neither is right. which will where employees can choose exactly report regularly to the employer. The employer will also where the employer and staff know how the car is insured and have responsibilities begin and end. cash for cars gained in where most of the day-to-day popularity among employers and management and risk assessment employees. chief executive of its suitability for work and its road Essential Risk Consultants and Realtime worthiness and safety record. In servicing schedules and general vehicle these cases. Risk Assessment. head of risk problems facing organisations offering management solutions at the AA.” pending duty of care laws.

where the employer has work purposes. sales and marketing director of Work Act 1974. are which stipulate that the vehicles have lumbar liable for the health and safety of the support and a high safety rating in the European driver and other road users arising New Car Assessment Programme crash tests. to of employees are not covered for a dealer-based leasing package. [that] between 14%-30% company to supply and administer the vehicles. It would make sense then for However. This is taxed at source and is usually paid on a monthly basis with employees’ salary. These allowances can be used to fund a myriad of different finance packages ranging from a structured employee car ownership plan (Ecop). brought in the services of a fleet funding for example. you.” vehicle ownership at the end of a set period.” regardless of how you acquire vehicles. He adds that many employers are now “If an employee uses their own car offering short choice lists for cash-in-lieu drivers.500 privately-owned also have the employees back into company-provided cars. for work. which last year made a strategic bought with a cash allowance or are corporate decision to end its Ecop and move 3. while pushing their mainstream drivers employee car ownership [plan]. protection of the Health and Safety at Andy Leach. their duty of care responsibilities. Both types of [driving at work] under the terms of schemes can be structured to give the employee their insurance policy. as an employer. director of the fleet business but now they are seen as designated consultancy Colin Tourick and workplaces and employers have greater Associates.where employees use their own car for " The cash versus car debate ! Cash-in-lieu of a company car gives employees the opportunity to fund their own cars using company-provided money. a car fleet management company. explains: “Your health and awareness of their duty of care responsibilities safety policy must cover car use and the need to be compliant. You cannot absolve Leach thinks some companies are using cash- your organisation of its health and in-lieu schemes as a recruitment tool for middle safety responsibilities by moving your managers who are not expected to drive long fleet cars to a cash-for-car or distances. The highest Organisations also need to remember profile company to do this so far is the high street that staff using cars that have been bank Barclays. employee benefits how to manage/fleet risk 2006 17 . from that use. the use of private and cash-in-lieu cars used for Colin Tourick. some organisations are beginning to employers to regularly check the status review their cash allowance provisions in light of of their employees’ own insurance.” back into company cars. must also be a risk-management policy says: “Organisations didn’t use to worry about in place that covers them. Our research shows. This means that there CFC Solutions.

but the candidate you are looking for?” should be viewed as an integral part of He also thinks that steps to control an employer’s HR operation. measures should also be Graham Hine. These can start as early as the recruitment process by checking the Fit for the road driving licences of any candidates who When it comes to existing members of would be expected to drive at work. If results are. monitoring when eyesight ! argument that licence checks should be tests are carried out and what the part of the recruitment process. that the workplace. employee’s activity at work. licence that they have gathered in the Regular licence checks on existing previous two years then are they really staff are not a legal requirement. as well as monitoring the someone has nine points on their time employees spend driving. staff. drivers have been caught speeding “Organisations can spend weeks and those who are in danger of losing inducting new employees in all sorts of or having their licences suspended. Yet. speed cameras line vast " employee benefits how to manage/fleet risk 2006 18 . says: “There is a strong example. Driver checks ! Check for black marks ! Driving licence checks and monitoring eyesight tests can help protect staff and meet employers’ duty of care responsibilities ONCE organisations accept that cars used on business are an extension of to a £25. for Fleet Operators. They are at-work driving risk should be part of the only reliable way to monitor which the induction programme on joining.000 car with barely a second thought.” Hine adds. ways but then just hand them the keys These days. This might include. in the wrong hands. there are various checks car is more likely to result in injury or and balances that can help reduce the death than any other part of that new risk to the employer and its employees. the Midlands region regularly taken to ensure they are fit chairman for the Association of Car for the road.

The steps numbers of roads. and organisations organisations can take include: should be alert to any employees approaching or exceeding 12 points. regular reviews of spouse and partner licences to ensure the people • Consider making drivers pay for the excess on potentially driving them are any insurance claim. Put a monitoring system in place to more than eight points it would be record when tests were carried out and what worth reviewing their licences every the results were. • Implementing a formalised system for when disqualification becomes regularly checking the status of driving mandatory and could obviously affect licences of your employees. and vehicle licensing checks. an individual’s ability to do their work. employers should also consider safety policy annually. Employers looking for a more high- • Encourage line managers to monitor the tech way to monitor licences and store number of appointments staff make and the other important paperwork relating to mileages and times involved. focus on more responsible and safer driving. • Regularly check insurance documents for cars used on business and MOT certificates of cars Monitoring driver papers that are more than three years old. functions for online driver employees choices include side airbags. journey logs and management reporting. care policy. For higher risk staff with glasses. outlines for a duty of Assessment Programme crash tests." Driver check list There are a number of practical ways employers can help to ensure their drivers are fit for the road and raise general standards of safety. director of the fleet consultancy Colin Tourick and Associates. These can include. employee benefits how to manage/sickness absence 2006 19 . Where possible at-work driving might also want to encourage the use of video or telephone consider using one of the specialist conferencing instead. including those who do not wear them on file. The best way to monitor driving licences to is view and photocopy • Make sure drivers undergo regular eyesight them every six months and retain tests. software packages available on the market. three months. says ! !! Colin Tourick. insurance Employers could also consider only selecting management. For employer-provided ! • Get drivers to read and sign the health and cars. This could help them competent and legal. for • Ensure that with any employer-provided cars example. web-based driver risk models with high ratings in the Euro New Car assessments.

then they can also have a including reduced fuel and maintenance positive impact on staff morale.” 20 employee benefits how to manage/fleet risk 2006 . 75% of employees around their vehicles and by creating a have never been offered any form of sense of accountability. organisations are turning towards driver skills Safety at a premium ! DRIVER training programmes can most effective programmes include improve the skills levels of new and follow-ups to make sure drivers have existing employees driving on business.” he says. despite the proven benefits pedestrians. and are perceived by employees as a “As [an employer] you will see results benefit. while the [in-car] psychometric-based online risk reduction in annual accident training allow[s] them to gain a assessment to build on the costs of around £126. you could be viewed as a one-off quick fix. lower collision rates and insurance However. lack of care at junctions. most importantly. costs. services co-ordinator. Driver training To cut insurance costs.000 over better understanding of results it has already experienced the last five years. a consultant with Driver safety. driver training should not costs but.” " Case study: Océ (UK) Document management and The company has offered in. cyclists and However. says: “The digital printing firm Océ . says:“The six major costs and provide clear evidence that hazards seen in collisions are drinking your company is taking its duty of care [and driving]. overtaking. only a small minority recognise these through better of organisations actually provide it. As well as helping to improve staff Bill Pirie. Training will help drivers to of driver training. over and above accident prevention. speeding. Pirie adds that training can have Driver training firms often point out wide ranging benefits for the company that if schemes are introduced properly. responsibilities seriously. According to research by the Institute of through adopting safety margins Advanced Motorists. themselves [and] how they through in-car driver training. not slipped back into old habits. driver risk assessment or training. as the be saving lives. As online risk assessments will help putting more than 500 company a result. is car driver training since 1999. Colin Jones. they can also reduce insurance Training Matters. Océ (UK) fleet approach driving. anticipation and concentration. it has seen its accident identify our drivers’ attitudes to car drivers through a rate fall from 69% to 39% and a driving risk.