HR tip: Reducing company car standard

HRD & Payroll Solutions continues to bring HR Zone members a range of HR and payroll tips in 2007. A market leader in the provision of HR and Payroll training and nationally recognised professional qualifications, HRD & Payroll Solutions are highly experienced in teaching about common HR and payroll problems. A wide selection of tips, tricks and guidance can be seen below. HR Zone highly recommends that any tips are taken as a starting point for guidance only.

Question:
"As part of a move to reduce operating costs, we intend to lower the standard of the cars that we provide for certain employees. Is this safe?"

HR tip:
That depends upon what is written in the contract of employment or in the conditions about provision of the car. If the contract states that the employee will be provided with a six litre Bentley, that is what you must provide or, if the model is no longer in production, an equivalent vehicle.

If the contract is not specific about the model, but the car is provided for the exclusive use of the employee for both business or private use, the employee would have a right to expect a broadly similar model on replacement and, should you wish to reduce the standard, you should agree this with him or her.

If you have a sound business reason for reducing the standard of vehicle, hopefully you will be able to persuade the employee, but if you fail, your recourse will be to terminate the employee's contract of employment and offer a new contract embodying the lower car standard without any break in service. This may be more trouble than its worth, so good luck with persuasion.

Previous HR and Payroll tips:

January 2008
The disappearing employee
Pre-employment medicals
Monitoring bullying
Controlling absence

2007 tips

2006 tips

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