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Removal of Company Car from an Employee on Sick LeaveBack

MILSLogo2 “If an employee is off on sickness absence but has the use of a company car, can we take the car back whilst they are off?

It may be possible, but it will depend upon what the relevant contractual clause and/or any policy document/handbook says.  In some cases, the remuneration package includes benefits in kind, for instance personal use of a car, wording could be included to state it may be removed at a specified point during long term absence.

Where there is no such wording in the contract, policy or handbook, the position is less clear.  Employers should bear in mind the implied terms in employment contracts, particularly the obligation of mutual trust and confidence.  This implied term provides that the employer must not, without reasonable and proper cause, conduct itself in a manner calculated and likely to destroy, or seriously damage, the relationship of trust and confidence between employer and employee.  It is therefore possible that removal of a company car could amount to a breach of trust and confidence, particularly if a consistent approach is not followed.  As is always the case, much will depend on the specific circumstances in each situation.

Another point to note is where the long term sickness absence is due to a disability.  In these circumstances consideration should be given to whether the removal amounts to disability discrimination and legal advice should be sought.

Remember this advice is general in nature and will need to be tailored to any one particular situation. As an RMI member you have access to the RMI Legal advice line, as well as a number of industry experts for your assistance. Should you find yourself in the situation above, contact us at any stage for advice and assistance as appropriate.

Andrew Macmillan, Partner, Motor Industry Legal Services

Posted by Sue Robinson on 05/02/2016