Company car/change of contract terms

[Cockney Guy]

I ask this question on behalf of my son who is a company sales representative. His employment contract says that he is entilted to the use of a company car, which he currently has. The company are about to change the rules shortly by no longer providing company cars. The plan is to insist that the employees return their company cars and force them to take out a hire purchase agreement to buy their own car, arranged through the company but paid for by the employee. A car allowance will be paid. This arrangement is apparently mandatory. My son does not want to enter into any HP agreement. Can the company enforce the changes? Even ACAS seem unsure of the answer.
Thank you in advance of answers.

[factor-fiction]

Must be a blow.
But many employers don't provide a car and expect staff to provide their own vehicle in order to do the job. At least the employer is helping in some way by arranging the purchase, and your son will no longer be heavily taxed on a benefit in kind.
But the terms seem unusual. Are you sure the loan agreement with the car seller will be in your son's name if the company is organising it? It seems unfair if your son is being forced to take out a loan of size and terms chosen by the employer - or can he organise his own purchase of a vehicle if he prefers?

[Cockney Guy]

Thanks factor30. The HP agreement will have to be in my sons name and it is against his princibles to get into debt. He has no credit cards or any other borrowed money, on princible. If he wants something he will save for it or he would rather go without it. It happens to be my princible too.
Cheers again for your answer

[meglet]

Tell to have a look at personal contract hire agreements as he may be more comfortable with this arrangement.

[Stu Dent]

This is an employment/contract law issue. In simple terms, an employer cannot change the terms and conditions of an employees contract without their consent - contracts are at the very least, bilateral agreements. Change without consent is a breach of contract.

But realistically employers can pretty much do what they like since the employee must (after following a grievance process) resign and then claim unfair dismissal. Even then, for the claim that the contract has been breached to be successful, the breach must be 'material'.

The breach (supposing it occurs after your son has exhausted the grievance process) could well be material, because it will affect his salary/income. The question is: does your son lose out by taking on the H.P.?

H.P. is quite expensive, but on the other hand, the expense of enetering an H.P. agreement may be cancelled out by benefiting from paying less income tax as a company car is a taxable benefit.

Rather than taking legal advice, I think at this stage your son should seek the advice of an accountant. If he loses out from this change then he should raise a grievance, but he may actually gain from the proposed change.

[Cockney Guy]

Thanks Stu Dent. Sounds like you know your stuff. As I stated earlier, on principle he does not borrow money, which he would need to do in this case.
Thanks again

[Stu Dent]

You are more than welcome, CG. I empathise with your son's principles - it took me some time to realise that living on credit is a fools game - many others will come to the same conclusion I fear over the next few years. Unfortunately his principles won't win a case before a court or tribunal though. If he loses out he has a case. If not, the change will in all liklihood be held to be 'reasonable'.

[Ghostrider]

There are other implications though that do need to be looked at rather than purely financial. What happens if he decides to leave? What happens if he is dismissed? He may be stuck making payments on a car that he may not want. So although I would agree with student I would also suggest that legal advice is taken out, I would suggest that the legal issue of having the agreement in his name needs to be analysed and possible outcomes clarified with the business.

[Cockney Guy]

Thanks Ghostrider. In fact your comments are very interesting. Today, we spoke with ACAS and those very points came into the conversation. Even though my son had no plans to leave, if he did he would no doubt have another company car with his new job and consequently be left with a car and a debt that he didn't want. ACAS seem not to have come accross a situation quite like this before. A lot might be clearer after Monday as HR are coming to his depot to discuss his reluctance to agree with the change to his contract terms
Thanks again for your contribution and intersting comments

[Stu Dent]

Absolutely, Ghostrider. Very good analysis and advice!

The whole prospect of the offer seems entirely unreasonable on those grounds.

[Cockney Guy]

Further development. My son works for a national company, in fact it's international and he has just won the award for the highest achiever in his region. Additionally, he has also won the national award for the highest achiever in the UK. These are monetary awards and certificated awards presented at a luncheon arranged specifically for the purpose. I suggest a respected employee,wouldn't you? However, HR have arranged to meet him for the purpose of discussing his reluctance to agreeing for the terms of his contract being changed in repect of the car situation. Judging by what he has told me, it appears that the company are now making his working life very uncomfortable. He has keys for the office and volanteraly goes in on Sundays to do paperwork which helps to free up his time to see his clients during his working week. He has now been told that he must come in each working day to do his paperwork, effectivly 'tieing' his hands with regard to further acievements. I suggest that It all appears, to be designed to encourage him to leave and hence solving the contract/car situation.
I would be interested in points of view so many thanks in advance of your response