Employer deductions.

[ashleyqprw12]

A friend who works at a local main dealer service department has had an accident in one of the cars, in his contract he has a £1000 excess, his boss has told him he's lucky he hasn't taken it in full.
the
A quick look online seems to suggest that this is unlawful? gov.uk seems to suggest they cannot any more than 10% of his monthly before tax figure? Based on some quick maths the deductions taken would also mean he is working under minimum wage?

We are looking to write out a letter offering a repayment plan that suits everyone however he has already taken £500 before my friend seeked help as he assumed that as it's "in his contract" that there was "nothing he can do" as said by his boss? Would it be reasonable to expect the £500 to be refunded at least in part to agree a payment plan?

Thanks in advance for any help

[grumpyscot]

Look at it this way: If he had his own insurance with £1,000 excess, do you really think the insurance company would go ahead and fix the car before getting the excess paid to them?

However, I think it's a bit much to take so much in one foul swoop - but let's face it - in car sales, you only last as long as you make the company a big profit - they'll get rid if you cost them anything!

[TwigtheWonderkid]

grumpyscot said:

Look at it this way: If he had his own insurance with £1,000 excess, do you really think the insurance company would go ahead and fix the car before getting the excess paid to them?

If it was his own insurance, he could choose the excess he was comfortable with. In this case, he has no choice.

His employer has to act within employment law.

[ging84]

If it was not personal use of the vehicle, rather then questioning if the deduction is lawful, I would be questioning if making the employee responsible for the insurance excess while working is even lawful at all.

[Devil2575]

ging84 said:

If it was not personal use of the vehicle, rather then questioning if the deduction is lawful, I would be questioning if making the employee responsible for the insurance excess while working is even lawful at all.

This was my thought too.

[TwigtheWonderkid]

Devil2575 said:

ging84 said:

If it was not personal use of the vehicle, rather then questioning if the deduction is lawful, I would be questioning if making the employee responsible for the insurance excess while working is even lawful at all.

This was my thought too.

Yes it is, so long as it's incorporated into the contract.

But few employers charge their employees the insurance excess and if they do, it's for the 2nd or 3rd accident, not the first.

Sounds like a crap employer.

[grumpy52]

The carriers that I used to work for had a £1000 excess that had to be paid by the driver .
They also paid all parking invioces (yes those !) And then deducted it from the wages of the 'offending ' driver .
I won't ever work for another company operating this system .

[bitchstewie]

Just curious if this is widespread in the motor trade?

Only ask as I work in IT, chalk and cheese obviously, but I've never ever come across a situation where an item has been damaged and an employee has been expected to pay towards the damage.

[elanfan]

Common enough - even encouraged by insurers - the intent being to encourage safe driving and improve claims experience. Probably better to have an incentive scheme where you lose a bonus if you crash rather than punish by making them pay the excess. Normally you would expect no action if this was a first incident.

Not great for morale either maybe worth asking to substitute an incentive scheme for existing one.

[calibrax]

This all seems very wrong to me.

What if an employer has a £10,000 excess to keep the cost of his premiums down? Is the employee expected to pay that?

The excess should be covered by the business in my opinion.

[Jonsv8]

bhstewie said:

Just curious if this is widespread in the motor trade?

Only ask as I work in IT, chalk and cheese obviously, but I've never ever come across a situation where an item has been damaged and an employee has been expected to pay towards the damage.

In terms of the tech, I've never seen it either. But I have worked for IT employers that reward company car drivers that don't make a claim. It was something like an extra £20/month on the car allowance which over 3 years is £720 (you got it when you came to get your next car). I've not worked for that company for years so no idea if the practice still goes on.

[TwigtheWonderkid]

elanfan said:

Common enough - even encouraged by insurers - the intent being to encourage safe driving and improve claims experience. Probably better to have an incentive scheme where you lose a bonus if you crash rather than punish by making them pay the excess. Normally you would expect no action if this was a first incident.

Not great for morale either maybe worth asking to substitute an incentive scheme for existing one.

It's not encouraged by insurers as it leads to staff failing to report accidents which then leads to bigger problems. As you say, insurers are far happier with incentive schemes, like bonuses for claim free driving. Employees, if they have a claim, are far happier to lose a bonus than pay a fine, so claims are then reported.

[nikaiyo2]

ging84 said:

If it was not personal use of the vehicle, rather then questioning if the deduction is lawful, I would be questioning if making the employee responsible for the insurance excess while working is even lawful at all.

We run a small fleet, 10HGV and about the same number of cars, claims have fallen by about 30% since we introduced drivers paying the excess. It is only £250 but we were encouraged to do this by our broker as according to them in EVERY company that did it claims were significantly reduced!

[dacouch]

TwigtheWonderkid said:

It's not encouraged by insurers as it leads to staff failing to report accidents which then leads to bigger problems. As you say, insurers are far happier with incentive schemes, like bonuses for claim free driving. Employees, if they have a claim, are far happier to lose a bonus than pay a fine, so claims are then reported.

I agree, it has a tendancy of claims not being reported and then the Insurer discovering the claim at a much later date than desired leading to increased costs such as credit hire etc.

It also frequently causes the at fault driver to try and blame the other driver which again can lead to increased costs.

As you mentioned Insurers tend to prefer incentive schemes such as £20 a month bonus for being incident free and / or driver training and / or putting processes in place to properly record the full details of an accident at the scene and immediately report it to the Insurer so they can start working on it

[Sheepshanks]

calibrax said:

This all seems very wrong to me.

What if an employer has a £10,000 excess to keep the cost of his premiums down? Is the employee expected to pay that?

The excess should be covered by the business in my opinion.

That was my objection when my last big corporate employer did this - they're saving money and getting employees to cover the risk and cost.

I think there could be an argument for paying it if you're "off-duty", but certainly not while driving for work. I was told (after I joined) that if I didn't agree then I didn't have a job, so I signed under protest.

In practice it was rarely enforced - the only time I knew of was a guy who wrote off his car returning it on his last day.

[barker22]

nikaiyo2 said:

We run a small fleet, 10HGV and about the same number of cars, claims have fallen by about 30% since we introduced drivers paying the excess. It is only £250 but we were encouraged to do this by our broker as according to them in EVERY company that did it claims were significantly reduced!

Claims have fallen, but what about actual incidents? I guess you would never find out.
There are many insurance where it leaves no damage to one vehicle and quite a bit on the other, especially in the case of a hgv.

[TwigtheWonderkid]

nikaiyo2 said:

We run a small fleet, 10HGV and about the same number of cars, claims have fallen by about 30% since we introduced drivers paying the excess. It is only £250 but we were encouraged to do this by our broker as according to them in EVERY company that did it claims were significantly reduced!

There's a shortage of good HGV drivers at the moment. With a policy like that, I'm surprised you've still got any.