Loss of use of company car

"Reasonable use - nonsense", an employer recently told the Employment Tribunal when an employee moved out of town and added $18,000 a year to the running costs of his Company car commuting to and from work.

Easy Products employed Ross Harris for around 6 years. He did not have a written employment contract, but it was agreed that he would receive a base salary plus the use of a company car. He was allowed "reasonable" private use of the car.

Mr Harris originally lived relatively close to his work place in Auckland. However, he later moved to Snell's Beach some 81 kilometers away. This added 162 kilometers to the car's odometer each day.

The Company regarded this as excessive, and outside the scope of "reasonable" private use. It directed that he no longer be allowed to use the car to travel to and from work, and made arrangements for it to be left at its premises each night.

Mr Harris complained, and the Company offered him an additional $35 per week to cover the loss of use of that car to travel to and from work. Mr Harris regarded this as inadequate and sought $150. The parties could not agree, and eventually Mr Harris resigned his employment. He brought a personal grievance against the Company over his loss of use of the car.

The Employment Tribunal rejected his claim.

"Reasonable use of a vehicle is exactly that, reasonable use. It does not mean that it can be used without discretion and without recognition that a considerable addition of kilometers has an affect that is bound to flow on into other considerations such as depreciation and the costs of running the vehicle" the Tribunal said.

The Tribunal calculated that the extra cost involved was around $18,000 per year.

In determining what "reasonable" private use meant, the Tribunal said that the word "reasonable" had to be considered in the context of the parties' original understanding when the deal was first struck.

Mr Harris did not live at Snell's Beach at that time and the extra burden of the added kilometers and depreciation were not then envisaged.

"Mr Harris cannot now rely on [his] understanding [that he could use] the vehicle to transport himself to and from his work place.

[Living at Snell's Beach] was a choice that he made, he cannot rely on those contractual terms to be enforced, as such extra kilometer usage is well outside the apparent terms of the original verbal contract", the Tribunal said.

More on Termination & Dismissal

An employer's rights: Surfing all the day	Driver lost license
Dealing with absent employees	Importance of procedural fairness
Must consult in redundancy dismissals	Dismissal must be procedurally fair
Misconduct discovered after dismissal	Another procedural fairness example
Dismissed for benefit fraud	Terminated before started
The danger of secret witnesses	Expired employment contract
Cannot intimidate employer	Cannot rely on police enquiry
Reasonable notice of redundancy	Contractural obligation must be met
Reinstatement and workplace democracy	Employment and criminal investigation
Attack not always good defence	Dismissal of persons in authority
Employee responds by going on offensive	Legality of secret video surveillance
ERA classifies contractor as employee	Redundancy law unchanged by ERA
Loss of use of company car	Significant difference
Resolution of criminal charges	Redundancy and changed hours
Discrimination for being non Asian	Cannot take retaliatory action
Failing to meet sales targets	Misconduct outside of work
Abuse of Internet & Email	Suicide and communication
Redundancy definition	Unjustified dismissal for pornography
Abandonment of employment

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