Are your employees driving company vehicles?
Making sure employees know the risks and responsibilities of getting behind the wheel of a company car is a must for any business.
By understanding both employer obligations and employee duties, you can stay compliant with the law and help make our roads safer for everyone.
As a trusted leader in road safety education, we’ve put together this helpful resource to simplify the complexities of managing company vehicles.
Here, we break down everything you need to know—when employees can drive company vehicles, their responsibilities, and what employers should do to ensure safety and compliance.
When can employees drive company vehicles?
To keep things clear and avoid any confusion, employers need to lay out the rules in a written employee driving policy.
Typically, employees are allowed to drive company vehicles during working hours when their employer gives the green light for job-related tasks, such as attending meetings or making deliveries.
Driving the company car for personal use is usually off-limits unless it’s clearly outlined in the employee’s contract or staff policy.
Employee responsibilities when driving company vehicles
When driving a company vehicle, there are a few important responsibilities to keep in mind. These duties not only protect the driver and passengers but also safeguard other drivers on the road and the company’s valuable assets.
Make sure you have a valid driver’s licence
First things first—make sure your driver’s licence is up to date and valid for the vehicle you’re driving. This isn’t about following company rules, but Australian law.
If your licence lapses or changes, it’s crucial to inform them right away. Driving without a valid licence can lead to legal consequences for both you and your employer.
Respect the road rules and company driving policy
Following road rules isn’t optional. This means staying within speed limits, observing parking regulations, and steering clear of distractions like mobile phones.
Your employer may also have specific policies—like breaks every 1.5hrs of driving or phones have to be turned off when in the car—that you’ll need to follow.
Breaking these rules could result in serious consequences not only on the road, but at your job as well.
Always drive safely
Safety on the road should be your top priority. Stay alert, use defensive driving techniques, and don’t let distractions take your attention off the road.
The Work Health & Safety Act 2011 Act puts the responsibility on both you and your employer to ensure safety at all times, which includes driving. If you’re on a long drive, make sure to take regular breaks to avoid fatigue—a leading cause of accidents in Australia.
Keep the company vehicle clean
Keeping the company vehicle in good condition is part of your responsibility. Regular maintenance is key to safe driving, so report any mechanical issues right away and make sure the vehicle stays clean and functional.
Scheduled inspections are required under the National Heavy Vehicle Regulator (NHVR) guidelines, ensuring the vehicle is always safe and roadworthy.
Understand the insurance policy
Both you and your employer need to be clear on what the policy covers to avoid any financial surprises.
It’s essential to be familiar with the company’s vehicle insurance policy. Knowing what’s covered—especially in the event of an accident—is crucial.
If you drive outside of the policy’s terms, such as for unauthorised personal use, it could void the insurance.
Employer obligations when employees drive company vehicles
When your employees are driving company vehicles, you have certain responsibilities to fulfil. These employer obligations help ensure safety, legal compliance, and protection for both the business and its team.
Enforce a company driving policy
It’s up to employers to create and enforce a clear employee driving policy. This policy should explain when and how employees can use company vehicles, outline their responsibilities, and provide steps for reporting accidents.
Ensuring the policy complies with the Work Health and Safety Act is critical, and regularly reviewing it helps keep everything up to date.
Review the employee’s driver’s licence
Regularly checking workers’ licences is a must for any employer. It ensures that employees driving company vehicles are legally authorised to do so.
Promote safe driving practices
Employers should go beyond the basics and actively encourage safe driving.
Offering training or refresher courses, such as those provided by Road Sense Australia, helps promote a culture of safety and significantly reduces the risk of accidents.
Cover all vehicle running costs
Employers are responsible for all the running costs associated with company vehicles—everything from fuel and insurance to maintenance and registration. This ensures that employees aren’t left paying for business-related vehicle use.
Depending on the vehicle’s usage, you may also need to account for Fringe Benefits Tax (FBT), especially if the vehicle is used for personal purposes.
Check if you have to pay Fringe Benefits Tax
If a company vehicle is used for personal errands, employers may be liable for FBT. However, there are exemptions available, such as if the vehicle is used primarily for work.
Be sure to check with the Australian Taxation Office (ATO) or a tax professional to determine your exact situation and stay compliant.
What happens if an employee gets into a road accident when driving a company car?
If any employees driving company vehicles are involved in a road accident, the first step is to prioritise everyone’s safety.
Legally, the accident must be reported to both the appropriate authorities and the company’s insurer. Both parties need to follow the company’s accident reporting procedure to manage liability and minimise risk.
If the employee is found to be at fault or has breached company policy, there may be legal or financial consequences for both sides. That’s why understanding your insurance coverage and relevant laws is key to handling these situations effectively.
Help employees driving company vehicles stay safe on the road
When it comes to employees driving company vehicles, staying safe on the road is a shared responsibility. And understanding the key duties of both employees and employers is the first step. By keeping these responsibilities in mind, you can reduce risks, improve safety, and avoid costly liabilities.
Road Sense Australia’s Drive It Home program offers tailored solutions for businesses looking to boost road safety. For more information on how we can support your team, contact our team today.
