Contract of employment - Car allowance
Ian
employment in a fairly senior role and my company sent me a letter
terminating my employment immediately but saying they would pay me for
my month's notice. As part of my T&Cs I get a car allowance but they are
refusing to pay me this for the notice period. I am rather upset at this
as nowhere does it state in my T&Cs that this would not be paid during
any notice period and I would expect to get paid this as part of my
notice. Can anyone provide any information on whether I am being
reasonable in expecting this?
Regards,
Adrian
were saying:
No, you're not. Of course you aren't. Why on earth WOULD you?
You're not being expected to use your car on company business during that
month - so why SHOULD you be paid the allowance intended to compensate
you for that?
Mark Goodge
typed:
I would presume that the car allowance is to cover the costs of
driving on work-related business. If you're on gardening leave during
the month's notice required by the contract (or you've been given pay
in lieu of notice) then it's also fair to presume that you have no
need of the car for work purposes. So their decision not to pay it
during the notice period seems reasonable enough, at least from their
perspective.
However, whether they are actually allowed to choose that option
depends on the precise wording of your employment contract. If the car
allowance is part of the contract itself, then they would normally
have to pay it during the notice period as contractual benefits, as
well as salary, need to continue through the notice period. But if
it's not written into the contract, or if the wording is such that it
can be reasonably interpreted to mean that the allowance is only
payable when actually needed, then they don't have to pay it.
It all depends, therefore, on the precise wording of your employment
contract. If you want to take it further, you'll need to get advice
from someone who can look at the contract and explain what it says. If
you're a member of a union, then speak to your local rep. Otherwise,
the CAB is as good a place as any for free advice. Unless the sum is
significant, it probably isn't worth paying for legal advice until
you're reasonably satisfied that you are owed the money, but if you do
want to take action against the company then hiring a solicitor will
probably be worthwhile.
Mark
--
"There must be a place, under the sun, where hearts of olden
glory grow young"
http://mark.goodge.co.uk - my pointless blog
http://www.good-stuff.co.uk - my less pointless stuff
tim.....
"Adrian" <tooma...@gmail.com> wrote in message
news:6j535mF...@mid.individual.net...
> Ian <I...@invalidaddress.co.uk> gurgled happily, sounding much like they
> were saying:
>
>> I'm hoping someone can help. I was off sick during my first year of
>> employment in a fairly senior role and my company sent me a letter
>> terminating my employment immediately but saying they would pay me for
>> my month's notice. As part of my T&Cs I get a car allowance but they are
>> refusing to pay me this for the notice period. I am rather upset at this
>> as nowhere does it state in my T&Cs that this would not be paid during
>> any notice period and I would expect to get paid this as part of my
>> notice. Can anyone provide any information on whether I am being
>> reasonable in expecting this?
>
> No, you're not. Of course you aren't. Why on earth WOULD you?
Because it is required.
>
> You're not being expected to use your car on company business during that
> month - so why SHOULD you be paid the allowance intended to compensate
> you for that?
When I worked for a company that frequently "let go" immediately staff that
had a car, they had to allow the individual the continued use of the car for
the 'notice period' even though they had business need for it.
I'm sure that if such a thing could be contracted out, they would have done
so
tim
>
Adrian
they were saying:
>> No, you're not. Of course you aren't. Why on earth WOULD you?
> Because it is required.
Who by?
>> You're not being expected to use your car on company business during
>> that month - so why SHOULD you be paid the allowance intended to
>> compensate you for that?
> When I worked for a company that frequently "let go" immediately staff
> that had a car, they had to allow the individual the continued use of
> the car for the 'notice period' even though they had business need for
> it.
Yes, but he hasn't got a company car, he's got an allowance to compensate
him for the business use of his car.
It's not as if they're going to ask him for the keys back - it's his car.
He's not got the hassle of going out and buying/insuring etc a
replacement - it's his car.
Mark Goodge
and typed:
>
>"Adrian" <tooma...@gmail.com> wrote in message
>news:6j535mF...@mid.individual.net...
>>
>> You're not being expected to use your car on company business during that
>> month - so why SHOULD you be paid the allowance intended to compensate
>> you for that?
>
>When I worked for a company that frequently "let go" immediately staff that
>had a car, they had to allow the individual the continued use of the car for
>the 'notice period' even though they had business need for it.
>
>I'm sure that if such a thing could be contracted out, they would have done
>so
It can be contracted out (or, more accurately, the car can be excluded
from the contract to begin with and made a privilege rather than an
entitlement). In some cases, it is. But it's common in many roles
(particularly when employing field salesdroids) for the car to be
advertised as part of the overall remuneration package (eg, "30k +
car") and has to be included in the contract in order to attract the
desired staff.
As always, the devil is in the detail.
Chris R
Adrian opined:
That's an extraordinary response. Many company cars or car allowances are
provided purely as a benefit and have nothing to do with business use. In
genral terms, it is usual for all benefits to be maintained during a notice
period.
Chris R
Chris Lawrence
> Ian <I...@invalidaddress.co.uk> gurgled happily, sounding much like they
> were saying:
>
>> I'm hoping someone can help. I was off sick during my first year of
>> employment in a fairly senior role and my company sent me a letter
>> terminating my employment immediately but saying they would pay me for
>> my month's notice. As part of my T&Cs I get a car allowance but they are
>> refusing to pay me this for the notice period. I am rather upset at this
>> as nowhere does it state in my T&Cs that this would not be paid during
>> any notice period and I would expect to get paid this as part of my
>> notice. Can anyone provide any information on whether I am being
>> reasonable in expecting this?
>
> No, you're not. Of course you aren't. Why on earth WOULD you?
There's no "of course" about it. A car allowance covers all aspects of
owning a personal car for business use. That includes purchasing a
suitable car of suitable age, maintaining it pursuant to the extra use
it sees for business purposes, insuring it to cover business use and so
on. An owner of a car for business use will already have incurred, and
will continue to incur, additional cost as a result of owning and using
the car. It still costing money even if it's temporarily not being
used. The car allowance offsets this cost.
To the OP - if the car allowance is detailed in your contract of
employment, you should write and raise the matter that the car
allowance, which forms part of your salary, has not been paid for the
month and query why. Point out that regardless of the car being unused
for business use, you have still committed costs to its use for business
including including increased insurance cover. As per your contract of
employment you are requesting that month's payment for the vehicle.
Chris
Mark Goodge
typed:
>"tim....." <tims_n...@yahoo.co.uk> gurgled happily, sounding much like
>they were saying:
>
>>> No, you're not. Of course you aren't. Why on earth WOULD you?
>
>> Because it is required.
>
>Who by?
The law. If, that is, it's in the contract of employment.
>>> You're not being expected to use your car on company business during
>>> that month - so why SHOULD you be paid the allowance intended to
>>> compensate you for that?
>
>> When I worked for a company that frequently "let go" immediately staff
>> that had a car, they had to allow the individual the continued use of
>> the car for the 'notice period' even though they had business need for
>> it.
>
>Yes, but he hasn't got a company car, he's got an allowance to compensate
>him for the business use of his car.
>
>It's not as if they're going to ask him for the keys back - it's his car.
>He's not got the hassle of going out and buying/insuring etc a
>replacement - it's his car.
Whether it's an actual car, or an allowance for a car, is entirely
irrelevant. What matters is whether it's in the contract of employment
or not.
If the allowance was part of the agreed contract when the OP took the
job - that is, he took the job knowing that he would be required to
use his own car and that in return he would be paid an allowance for
it - then, in law, that allowance has to be paid during the notice
period whether it is actually needed or not.
On the other hand, if the use of the car, and the allowance, weren't
mentioned at all before he took the job - it was only after he started
work that his employer asked him if he'd be prepared to use his car
for work purposes, in return for being paid a car allowance - then the
allowance can be stopped as soon as the need for a car stops.
BobC
>
> When I worked for a company that frequently "let go" immediately staff that
> had a car, they had to allow the individual the continued use of the car for
> the 'notice period' even though they had business need for it.
>
> I'm sure that if such a thing could be contracted out, they would have done
> so
>
> tim
>
>
My experience with my employer is the opposite.
It's usually salesman who are not expected to work their notice, I
assume because they think they'll just go out selling for their new
employer!
So they'll be out of the door immediately on "gardening leave" and
they leave their car keys behind.
It will, as most have said, be entirely down to the specific T&Cs.
Just because you are no longer using the car for business use is
irrelevant.
Many company cars and allowances have nothing to do with business
need.
I have a company car and can't remember the last time I used it for
business. It's simply a perk.
They did get caught out once though when someone had to go out on a
job and asked for a hire car!!! "Why, you have a company car?". "Yes
but my wife uses that. There's nothing in the T&Cs that says I have to
have it available if I need a car for work".
The T&Cs have now been changed!!!
BobC
Roland Perry
<b9285234-71c2-44b1...@r66g2000hsg.googlegroups.com>, at
09:40:10 on Mon, 15 Sep 2008, BobC <bobc...@gmail.com> remarked:
>I have a company car and can't remember the last time I used it for
>business. It's simply a perk.
>
>They did get caught out once though when someone had to go out on a
>job and asked for a hire car!!! "Why, you have a company car?". "Yes
>but my wife uses that. There's nothing in the T&Cs that says I have to
>have it available if I need a car for work".
One company I worked for had a rule that all cars were "pool cars"
during the period that the employee was on the premises. This was years
before any potential tax loophole - the MD just thought that as he was
paying for the car then he might as well make sure that any (probably
more junior) staff who needed to go out on an errand during the day was
guaranteed a set of wheels. (Before anyone asks, I don't recall how the
petrol money was sorted out).
--
Roland Perry
Derek Geldard
<ne...@holosys.co.uk> wrote:
>> No, you're not. Of course you aren't. Why on earth WOULD you?
>
>There's no "of course" about it. A car allowance covers all aspects of
>owning a personal car for business use. That includes purchasing a
>suitable car of suitable age, maintaining it pursuant to the extra use
>it sees for business purposes, insuring it to cover business use and so
>on. An owner of a car for business use will already have incurred, and
>will continue to incur, additional cost as a result of owning and using
>the car. It still costing money even if it's temporarily not being
>used. The car allowance offsets this cost.
>
>To the OP - if the car allowance is detailed in your contract of
>employment, you should write and raise the matter that the car
>allowance, which forms part of your salary, has not been paid for the
>month and query why. Point out that regardless of the car being unused
>for business use, you have still committed costs to its use for business
>including including increased insurance cover. As per your contract of
>employment you are requesting that month's payment for the vehicle.
>
Agreed, the car was used for business and domestic uses. The fixed
element of the business share of it's cost was compensated by the firm
paying an allowance. That cost continues to accrue even when he's off
sick.
Being off sick he (surmising here) probably didn't have opportunity to
do his normal amount of domestic driving either but all the fixed
costs still have to be paid. Churlish, I would say of the firm to
attempt to wriggle out of their commitment to pay their share.
Derek
the Omrud
My employer has two separate company car scheme contracts. One is for
those who need a car to do their work (e.g. visiting customers). This
can be withdrawn if the employee's business mileage falls below a
threshold (10,000 miles at the moment). The other scheme is where the
car forms part of a "salary package" - the car is a contractual benefit
of employment at certain grades and cannot be withdrawn without a change
to the individual's contract.
The latter scheme has a monthly cash opt-out option - I have known some
senior people who lived close to the office and who never had to travel
away from their home city on business not actually own a car but
continue to take the allowance. That was fine - cars (or allowances)
are offered as part of the salary package for senior staff in our
industry and it would be difficult to attract such people without them.
It would be important to know the nature of the contract under which the
car is supplied.
--
David
Richard Perkin
news:fdvzk.58148$E41....@text.news.virginmedia.com:
Indeed. I'm familiar with the model above, and also with a variation
usd by one of my previous employers:
All staff had a salary + 'flexible benefits' allowance.
This latter was a sum of money (not superannuable - a nice touch,
that) which could be used to 'buy' a range of benefits such as lease
car, private health cover, extra days of leave, or just taken as
cash.
In the latter case it was subject to PAYE. In other cases, the
benefits taken were subject to whatever tax rules applied, and any
balance taxed under PAYE.
Depending on the nature of an employee's job, the cash value of the
'flexible benefits' allowance varied significantly. As a minimum, it
was large enough to buy 5 extra days leave over and above the then
company standard 20 days. If you were in sales, then it was
sufficiently large to include several hundred pounds per month of car
leasing charges, and for senior management it was a very significant
sum indeed...
It was also possible to 'spend' some salary on the 'benefits', for
example to 'buy' a better model of car, or for an employee whose
package did not allow for a leased car to acquire one. [Aside: you
had to be careful with this, as it committed the company to a 3 year
lease, and they wanted the money if you left]
IIRC (it was some years ago now) mine was calculated to include
approx GBP 600 / month for a good car + 10 extra days leave +
assorted other further sums. The total was pretty generous, and was
most certainly contractual.
When I left I kept the car for the notice period (which I didn't
work). The balance was paid in addition to cash in lieu of notice.
The things I had to hand in were phone + laptop + (a very significant
benefit in today's world) the fuel card. None of these was a
contractual entitlement, and the contract said the fuel card could be
withdrawn at any time should the business mileage fall too low. In
practice it was regarded as a perk, and I'm not aware of one being
withdrawn for that reason. Ah, to have it today :(
What I'm getting round to saying is that there are many models of
'car allowance', and the entitlement to receipt depends on what the
contract of employment states.
Kind regards
--
Richard Perkin
To email me, change the <AT> in the address below
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the Omrud
> When I left I kept the car for the notice period (which I didn't
> work). The balance was paid in addition to cash in lieu of notice.
> The things I had to hand in were phone + laptop + (a very significant
> benefit in today's world) the fuel card. None of these was a
> contractual entitlement, and the contract said the fuel card could be
> withdrawn at any time should the business mileage fall too low. In
> practice it was regarded as a perk, and I'm not aware of one being
> withdrawn for that reason. Ah, to have it today :(
I would have to think carefully before leaving my current job (where I
have been, admittedly, for 18 years), what with the car allowance, final
salary pension and yes, fuel card. All of these are contractual based
on my grade and cannot be withdrawn.
Interestingly, because I take the car allowance rather than the car, the
tax cost of the fuel card is lower. Instead of a fixed annual tax
charge which would be levied if I had an actual company car, personal
fuel is treated as salary and simply taxed at 40%.
--
David