Hello. The company i work for has decided to change the car policy. Employees have been able to opt out of having a company car for at least the last 15 years. People have opted out to save on the tax burden. For me, taking the chance to run my own car reduced my tax burden by £450 per month. On top of that the company paid me £800 car allowance so thats about £500 net after tax. They also pay a mileage allowance for business mileage in line with the inland revenue rates. Now they are removing the opt out forcing us into company cars. For me i will be £1000 per month worse off in my take home pay. There has been no consultation with us or offer of compensation. Just this is the policy and you have 12 months to move into a company provided car. Is there anything i can do.
Province/Country relating to question : Uk
Spoken to hr but they say the company can do what it likes
Hello,The employer cannot unilaterally do this as the opt out has become part of your contract and they cannot bringin new policy to change the terms of your contract without your consent.I suggest you raise a written grievance about this and say that you are opposing the proposed changes.They may then agree to keep the opt out, or they would need to terminate your employment contract and issue you with a new one.Hope this helps
Assuming that due to the time this policy has been in place it has become an implied contractual term, there will be certain options open to the employer in order to withdraw or amend it:1. By receiving the employee’s express approval to the changes (not always necessary if there are collective agreements in place, which have been negotiated by a recognised Trade Union and which is the employee is bound by). 2. By forcefully introducing the changes (called unilateral change of contract).3. By giving the employee notice to terminate their employment and then offer them immediate re-engagement on the new terms.If the employee agrees to the changes then that would usually put an end to the matter.If the changes are introduced forcefully then the following options are open to the employee:1. Accept the changes, start working on the new terms and not take the matter any further.2. Start working on the new terms but making it clear to the employer (preferably in writing) that they are working ‘under protest’. This means that the employee does not agree with the changes but is only working them because they are forced to. In the meantime try and resolve the issue either by informal discussions or by raising a formal grievance. At the same time, the employee can bring in a claim for breach of contract in the civil courts or, if the changes relate to a reduction in pay, a claim for unlawful deduction of wages in an employment tribunal.3. If the changes amount to a fundamental breach of contract (i.e. a change that affects at least one of the key contractual terms, such as pay, place of work, etc.) the employee may wish to consider taking the final step of resigning and claiming constructive dismissal. The resignation must be done without undue delay so as not to give the impression that the changes had been accepted. The claim must be submitted in an employment tribunal within 3 months of resigning and is subject to the employee having at least 1 year’s continuous service.Finally, if the employment is terminated and the employer offers re-engagement on the new terms that could potentially amount to unfair dismissal. However, the employer can justify the dismissal if they had a sound business reason for dismissing an employee who refuses to accept the variation in terms. If no such reason exists, the employee can make a claim for unfair dismissal in an employment tribunal. The same time limit of 3 months to claim and the need to have 1 year’s continuous would apply.Sometimes employment contracts may try to give the employer a general right to make changes to any term of the employee’s contract. As such clauses purport to give the employer carte blanche to change any term of the employment relationship, so as to evade the general rule that changes must be mutually agreed, courts will rarely enforce such clauses. Nothing but the clearest language will be sufficient to create such a right. Any attempt to rely on such clauses will still be subject to the requirement of the employer to act reasonably and in the spirit of the mutual trust and confidence relationship it enjoys with its employees.Please press Accept for the advice given so far. I can then continue providing further advice and guidance as required and answer any specific questions you may have. Thank you
(Edited by Moderator) Maria-Moderator40981.7734626157
Ben Jones... So I do recall HR saying that they could terminate and re-employ but the issue here is the impact to take home pay. The opt out policy was designed to be cost neutral for the company so the business reason is not commercial in my mind. Perhaps they have an idea that its easier to administer but I'm unsure about that position. For higher grade staff there is an option to keep their own car but then the company would not pay the employee a mileage allowance. That sort of suggests it can't be for administration purposes. So I am faced with a reduction in my net take home pay of £1000 per month if I am forced into a company car. Surely they have to make up that pay impact?
Thinking ahead ... If they offer for me to keep the opt out option like the execs can under what they are proposing I would have to fund the Fuel at my cost. Curently I claim the inland revenue apporved rates for milesage. 45p for the first 10,000 business miles and 25p thereafter. so based on my 20,000 business miles per year I have to do in my job that would mean I have to fund £4200 of fuel cost my self. Agian surely its unreasonable for an employer to expect that? Thanks
Hi, yes I certainly understand the impact top take home pay this will have but it does not stop them from actually doing this and implementing changes. If that happens it would then be down to you to challenge their actions and seek redress. Of course the more of an impact this will have on your pay the better your rights are likely to be, especially if there is no obvious reason for the changes, such as an urgent need to reduce expenditure by the company.One option for them to alleviate this issue and try to prevent any action by the employees is to offer some form of compensation for this, which whilst may not necessarily exactly match the losses suffered, can be used to soften the blow. But again, they can't be forced to do that and can simply bury their heads in the sand and let the employees try to resolve this by taking formal action against them. Some companies do it knowing that their employees are unlikely to do that in their masses and only a few may actually challenge this formally.
Ben Jones..... Last question I think... Taking the constructive dismissal route when they dismiss and rehire may be the only option available. If that is the only route open can you explain what that happens. I expect I would have to resign and claim constructive dismissal. Then start an appeal to a tribunal. What sort of claim can I put on them? I would lose my pension contributions from the company, salary and being close to retirment age the prospects of finding a similar job and pay are perhaps bleak. Would you be prepared to represent me at the tribunal and prepare the appeal? how are your costs covered? Many thanks
If your contract is terminated and a new one offered, then that is potential unfair dismissal, not constructive dismissal. By terminating your contract they have effectively dismissed you so you would be claiming unfair dismissal. You can reject the new contract and simply proceed with the claim in a tribunal by submitting it within 3 months of the dismissal. The claim for unfair dismissal will simply be looking at compensation for loss of earnings resulting from their breach. There will be an expectation on you to try and find a job ASAP to mitigate your losses so it may be prudent to continue in the job on the new terms but claim for the difference in pay as compensation.Unfortunately we are not allowed to take on clients through this site as that is against the terms here. If you need a solicitor then I suggest you take a look at the Law Society website available here:http://www.lawsociety.org.uk/choosingandusing/findasolicitor.lawI would be grateful if you could please press ACCEPT for the advice given so far. I can continue providing further advice if necessary. Thank you.
Specialist in UK Law with expertise in UK Employment Law
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