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What is the grey fleet?

The grey fleet consists of vehicles that do not belong to and are not leased by the company, but they are used for business travel. It consists of:

  • Vehicles privately owned by staff
  • Vehicles on novated leases (where the company leases it on your behalf and pays for it on pre-tax salary deductions)
  • Vehicles privately rented or borrowed.

Drive in any city or large town anytime between 9am and 5pm and you’ll see many cars with no sign writing that are driven by people doing some kind of business. Some of these will be company cars, but many will be grey fleet cars.

Many companies allow a staff member to take an allowance for a car rather than use a company car. However, if the vehicles are being used for work purposes, they still fall under the Health and Safety at Work Act 2015 guidelines that a vehicle is a place of work, therefore the PCBU (person conducting a business or undertaking) has a responsibility for the vehicle. They must ensure that drivers of grey fleet vehicles are qualified to drive them and that the vehicles themselves are roadworthy and legally allowed to be on the road.

There’s a grey area with grey fleet vehicles, too. Let’s say that your employee drives to the airport in their own car to take a flight for business, or they go to a one-day seminar and take their car, they are no longer commuting to and from work, and it could be argued they are using the vehicle for work. Don’t get caught out in these scenarios.

Disadvantages of operating grey fleet vehicles

  • Vehicle fleet management becomes more difficult with the grey fleet unless a particular vehicle is used very frequently, because it could be impractical for a company to keep a track of the vehicle.
  • The employees might fall outside of the insurance policy that the company holds for driving while at work; the driver’s own insurance policy might not include driving for work, only to and from work.
  • The company many need to offer employees in the grey fleet the same benefits and features as an employee with a company vehicle.
  • It’s hard for the business to know whether servicing and tyre maintenance has been completed.
  • The vehicle’s suitability for the job it’s being used for is also an issue.
  • The average age of a car in New Zealand is around 15 years, which means many won’t have electronic stability control, ABS and other safety features.
  • Do grey fleet vehicles that are older and perhaps untidy convey the best image for your company?

Employers’ obligations for the grey fleet

Employers must ensure that any vehicle used for work purposes is:

  • Insured to be used for work purposes
  • Roadworthy
  • Has a current WoF/registration
  • Is not loaded in excess of its capabilities (e.g. not towing a trailer that’s too heavy for its rating)

It’s advisable to manage grey fleet vehicles within a fleet management system.

Employers have the same responsibilities to grey fleet drivers as their drivers in company vehicles. They must ensure that employees driving vehicles for work:

  • are capable of driving at the time, e.g. not fatigued, not suffering some physical impairment or illness that prevents them from driving
  • are complying with the company’s drug/alcohol policy (zero tolerance is usually best)
  • have the right licence class for the vehicle they’re driving and are complying with any restrictions, e.g. wearing glasses – you can check licence validity using Driver Check or TORO from NZTA.
  • are complying with work-time hours and filling in their logbooks correctly (try this logbook course if your drivers are getting fines and demerit points)
  • have the right safety gear (e.g. high-visibility gear if they are driving to a work site
  • have enough time to complete their journey
  • have the right training to operate the vehicle (this includes training in the road rules and advanced driving in order to reduce accident risk).

An employer might also want to know whether an employee has a history of drink-driving or accidents.

How big is the grey fleet?

New Zealand doesn’t have accurate figures about how many vehicles are in the grey fleet, but it’s estimated to be around 40% of all vehicles in the UK.

If you are running vehicles in a grey fleet, it’s important that you talk to your insurance company, and that you put your drivers through training, e.g. Fleet Driver Skills.

Note: this article does not constitute legal advice. You should definitely talk to your lawyer and/or health and safety consultant establish a course of action.

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Darren has written over 3000 articles about driving and vehicles, plus almost 500 vehicle reviews and numerous driving courses. Connect with him on LinkedIn by clicking the name above

Posted in Advice, Fleet