The Fleet Management professional is charged with the responsibility of managing an organisation’s entire fleet and this includes its ‘grey fleet’. So are you managing the grey fleet risks?
WORDS LEE SAUERWALD, Uniting Communities
The challenges of managing an organisation’s fleet are many. Ensuring you are operating vehicles fit for your purpose, continually striving for the lowest whole of life costs, servicing and maintaining your fleet for its optimal performance, greening your fleet by minimising carbon emissions while reducing fuel costs, as well as training your drivers to effectively and safely operate your fleet, there’s a lot at stake.
However, have you ever carefully thought about what actually constitutes your fleet? Sure you have. You can look to the car park and see your company-owned fleet. You may even have tracking systems in place so you know where the fleet is at all times. But do you know where your grey fleet is? Do you know what a grey fleet is and whether or not you even have one?! If you are not familiar with the term grey fleet, you are not alone as it’s not a widely understood term in Australia – but it needs to be.
Grey fleet defined
Grey fleet is when employees are authorised to drive their own private cars for business purposes. Whether or not you reimburse employees or volunteers, any business travel in their privately owned vehicles means you are operating a grey fleet. This could include staff or volunteers running errands such as picking up mail using their own cars but not bothering to be reimbursed.
Okay, so why is it called grey fleet? Well, it’s hard to see and is often also referred to as the invisible fleet. But why does grey fleet exist? One of the reasons is that they are generally a convenient way of moving your workforce around without having to purchase or lease more company cars. They can also be a cheaper option by paying a reimbursement or allowance, especially if lower distances are being travelled as opposed to owning or leasing many company cars that sit idle.
Over 30% of vehicles on Australian roads are driven for work purposes and at certain times of the day, two out of three vehicles are making work-related trips. It’s also not uncommon for grey fleet use to be 2-3 times that of a company fleet. If we have a look at an example from the United Kingdom, there are an estimated four million grey fleet cars in the UK – more than three times the number of company cars. One city council in the UK thought that the 10 million miles its company car fleet travelled was a problem, but an audit discovered the council’s grey fleet was doing 30 million miles!
Right … so why then is this a big deal?
Because vehicles continue to be the leading cause of deaths in our workplaces. According to Safe Work Australia over the last 11 years two-thirds (66%) of fatalities involved vehicles. In 2013, 122 of the 191 fatalities (64%) involved a vehicle. Over the past 11 years 40% of worker fatalities were due to a vehicle collision. “Road traffic injury is the leading cause of work-related death, injury and absence from work in Australia” (Monash University) and “traffic injuries are twice likely to result in death or permanent disability than other workplace incidents” (Carrs-Q Queensland University of Technology). Not to mention that work-related road crashes cost the Australian community approximately $1.5 billion dollars every year.
The challenge with grey fleet is that not only do all the usual fleet risks apply but grey fleet carries even more risks than company owned or leased fleets for a number of reasons. Grey fleets are older than company owned or leased fleets as they tend to be second hand vehicles which are by default older than new company fleets. So many grey fleet vehicles lack the latest safety technologies and advancements such as multiple air- bags, electronic stability control, autonomous emergency braking etc. This potentially increases the safety risk to your staff, volunteers, clients and public at large. As grey fleet vehicles are older they are also less fuel efficient so tend to be higher carbon emitters. A ‘grey’ fleet does not equate to a ‘green’ fleet. There are currently 2.5 million used cars sold in Australia every year – this compares to just over 1 million new car sales each year.
Grey fleet is an important, but often neglected, aspect of fleet management – Why?
It’s difficult to control and manage because it’s ‘out of sight, out of mind’. It can also be difficult to capture data about grey fleets, because they can be difficult to track and monitor. So ensuring they are regularly serviced and maintained and most importantly remain roadworthy is problematic, which increases the risk to safety. Given motor vehicle fatalities are the leading cause of death in the workplace and grey fleet carries greater risks than company owned or leased vehicles, this puts grey fleet at the top of any organisational risks to be managed. Unless an organisation doesn’t run a grey fleet at all, which is in itself difficult to ensure.
So now you know what grey fleet is and that you most likely have one, whether you are paying reimbursements or not, can’t you just leave things as is because you haven’t had any instances up until now? Well, you could hope for the best and that your current track record continues, however you may like to consider your legal obligations.
Duty of Care
Are you aware that in accordance with the Australian Work Health and Safety Act 2011, by definition a ‘vehicle’ is a workplace? “A workplace is a place where work is carried out for a business or undertaking and includes any place where a worker goes, or is likely to be, while at work. Place includes: a vehicle”. This applies to all vehicles where work is carried out, whether the company owns the vehicle or not, including staff and volunteers using their private vehicles for your business purposes.
It is also worth noting “the main object of this Act is to provide for a balanced and nationally consistent framework to secure the health and safety of workers and workplaces by “protecting workers and other persons against harm to their health, safety and welfare through the elimination or minimisation of risks arising from work. Importantly, your primary duty of care is “a person conducting a business or undertaking must ensure, so far as is reasonably practicable, the health and safety of workers and other persons are not put at risk from work carried out as part of the conduct of the business or undertaking.”
Remember, all references here to ‘workplace’ includes all vehicles, company owned / leased and grey fleet vehicles. And you have a duty of care not only to your own workers and those acting at your direction but also other persons. For example, anyone else who may be affected by your activities including the general public.
But what is considered ‘reasonably practical’? “In this Act, reasonably practicable, in relation to a duty to ensure health and safety, means that
which is, or was at a particular time, reasonably able to be done in relation to ensuring health and safety, taking into account and weighing up all relevant matters”. And if that’s not enough to sharpen your focus then perhaps the penalties that apply if you are found in breach of the legislation will. In the case of an offence, penalties start at $300,000 or 5 years imprisonment or both for individuals, $600,000 or 5 years imprisonment or both for individuals conducting a business or undertaking and up to $3,000,000 for a body corporate.
Under common law and WH&S legislation 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 organisation’s transportation activities. The duties 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). You have a responsibility if you own the vehicle whether it’s being used for business or private activities and where you ‘own’ the task, such as employees using their own vehicle – grey fleet. You may have outsourced the task but not your responsibility. The consequences of not managing your grey fleet appropriately are many. The obvious legal risks and associated potential fines, as well as the potential damage to the organisation’s reputation – not to mention the catastrophe of a seriously injured or deceased employee in your workplace.
It is vital that organisations ensure they have appropriate checks in place to meet their legal responsibilities as part of their duty of care to their staff. In accordance with this legislation you need to have done everything that a reasonable employer can to provide a safe workplace – including all vehicles used for business purposes.
So then, just what is reasonable? Well for a start, if employees’ cars are used for business travel, the employer has a duty of care to ensure that its grey fleet is fit for its purpose, the vehicle is registered and roadworthy and the employee has a valid driving licence. In addition to driver’s licence checks, grey fleet drivers also need to advise their motor vehicle insurance company that they are using their vehicle for some business use – or otherwise their insurance may be void in the event of a related claim. Grey fleet drivers also need to ensure that their vehicles are regularly serviced and maintained for roadworthiness. John Salanitri, Head of Maurice Blackburn’s WorkCover “suggests that it is incumbent upon the employer to have a regular system of maintenance in place for all their grey fleet and to act reasonably and rectify any problems arising from the routine maintenance.”
Now that you know all of this – what are you supposed to do?
You can exercise some control over your grey fleet in a number of ways.
- You could consider limiting the age of your grey fleet vehicles for safety and environmental reasons.
- Perhaps set a minimum ANCAP safety rating and/or set maximum Co2 emissions to prescribe or encourage newer vehicles.
- You could eliminate your grey fleet entirely and only run company owned vehicles – but this may be an expensive option to carry so many company owned or leased vehicles in your fleet.
- You could offer ‘pooled’ company cars to be utilised first ahead of grey fleet vehicles.
- You can also offer salary packaged cars to employees to be used for business purposes as well as personal.
However, despite implementing all of this you are still likely to have remaining grey fleet, so you need to manage it. And good management always starts with good measurement. Measuring your existing grey fleet is a crucial first step towards effective grey fleet management. You can begin by auditing your grey fleet and then benchmark against others in your industry.
It’s an apparent lack of responsibility that is one of the key reasons why the grey fleet is so often being overlooked. So who should be responsible? You guessed it – the fleet management professional is charged with the responsibility of managing the organisation’s entire fleet and this also includes its Grey Fleet.
So are you managing your Grey Fleet risks?
As grey fleet crosses over numerous functions in an organisation such as procurement, finance, HR and WHS, the establishment of a working group to assist with the development and implementation of a grey fleet policy is recommended. You will all need to work together to assign tasks to fulfil the project.
Experience shows that while the fleet management professional can take the lead they will need to involve other key stakeholders in the organisation to achieve the necessary buy-in for effective grey fleet management.
The good news is that you won’t need to take apart your existing policies and procedures and put them back together again. You can and should treat your grey fleet vehicles like your company cars and implement the same policies. You just need to make specific mention of them in your policy around their definition and any notable differences. For all of your fleet, you can create a culture of safety and sustainability with your policy and procedures.
How to communicate your Grey Fleet Agreement
Importantly, staff need to be made aware of their responsibilities to comply with policy requirements for company and grey fleet vehicles. But all of this can fall over if you don’t follow through with the next step. After you’ve toiled away bringing together a great company and grey fleet policy and procedures, it’s to no avail if no-one is going to take the time to read it. A great way to communicate your grey fleet policy is to produce a company and grey fleet policy declaration which must be signed by the driver to indicate that they have read and understood the policy. This will help to communicate the policy and to gather evidence that drivers have been made aware of their responsibilities.
Setting expectations is important, so staff who are authorised to use their own vehicles for work purposes should have a signed grey fleet agreement in place to confirm the employer’s expectations. It’s an ‘agreement for the use of grey fleet vehicles’ which covers all aspects of grey fleet management to maintain a safe work environment.
It should include;
- driver’s licence conditions
- vehicle registration and insurance requirements
- rules of the road
- driver distraction
- visual inspections
- accident response
- illegal drug use
- infringement notices
- vehicle roadworthiness
- and everything in between
If grey fleet is used outside of the conditions of this agreement, it should become a disciplinary matter which may result in termination of employment.
Effective Fleet management, including your grey fleet, ensures that all vehicles are fit for their intended purpose and they are adequately serviced and maintained for their safety and environmental impact. All Motor Vehicles are to be maintained so as to be in a safe, reliable and roadworthy condition. One of the grey fleet conditions should be that grey fleet drivers agree to: “maintain the vehicle in a roadworthy condition”. But what is the best way to ensure this actually happens in accordance with the signed agreement? What is ‘reasonably practical’ for the employer to ensure this?
Noting that the test from the WHS Act is: after assessing the extent of the risk and the available ways of eliminating or minimising the risk, the cost associated with available ways of eliminating or minimising the risk, including whether the cost is grossly disproportionate to the risk. You may need to consider ways in which inspections of these vehicles are carried out and evidence regularly supplied to the employer for compliance, such as an annual inspection that the vehicle is roadworthy and if this should change between inspections the employee must notify the employer immediately and cease using their private vehicle as a grey fleet vehicle until it is rectified as roadworthy.
All of this may sound great once we have confidence in our policies and procedures and a grey fleet agreement in place, however, there is one
thing that hasn’t been mentioned – driver behaviour. So what else do you need to do? You need to educate your drivers. There are numerous ways that you can do this from practical driving courses through to educational training sessions. Online driver e-learning safety education training which is mandatory for all of drivers, including your grey fleet drivers, in an effort to influence your driver’s attitudes and behaviour and make them all more safety aware.
A final word
Hopefully you are now better informed about what a grey fleet is, whether you have one and importantly how to manage the risks of running a grey fleet. You can tailor your driver, including grey fleet safety policies, messaging, campaigns and training to address the highest risk areas, of which grey fleet is certainly one. The aim is to ensure all your business vehicles including your grey fleet are safe and you increase driver safety awareness in an effort to keep all your employees, your volunteers, your clients and the public safe at all times.