Mileage Procedure Proposal Questions and Answers

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1 Mileage Procedure Proposal Questions and Answers Why and whom is driving this change? In January 2015 the Directors of the business were issued with a directive to reduce over-head costs. This was in response to increased pressure from customers and prospective customers to drive down our prices in order to remain competitive in the market. We have investigated various cost cutting initiatives and have so far made savings with our mobile phones, tablets, uniforms, PPE, vehicle leasing and staffing levels. The proposals in relation to fuel cards and fuel expenses are a part of this over all drive. Why does the Company want to remove the fuel cards? The Company wants to change the way in which we pay for the fuel for Company vehicles. At present, we cannot forecast the cost of fuel for our contracts as there are no restrictions or limits to the amount of expenditure our employees spend on fuel, including personal fuel costs. Having increased certainty on its fuel expenditure would enable the company to more accurately predict and also keep control over its over-heads for servicing customers contracts. The company believes that doing this is necessary in order to remain competitive in the market. The company also believes that payment of employees personal fuel mileage is a significant cost to the business which could impact on its ability to retain customers and compete for new work. It is also the company s belief based on research of similar companies that this benefit is out of step with industry standards and the terms and conditions offered by other companies. Why can t you reduce fuel costs by allocating jobs more effectively through the control centre? This was raised during the collective consultation process and it has been considered by the business. We are looking at various other efficiencies in connection with fuel; however at this stage we have been unable to identify any other cost saving measure relating to fuel expenses which would counteract the cost of paying for unlimited private mileage. As set out above, we believe that paying such mileage is out of step with the terms offered to employees by other employers and is a cost to the business which has the potential to limit our ability to retain business and compete for new business. Why can t you just charge people for their private mileage? We have considered this suggestion as part of the consultation process, however in our view it does not present a workable alternative to the existing proposals. We do not have the resources to calculate or validate employees personal mileage and then recoup these costs through payroll. When will the new proposed process start? This is a proposal at this stage, however we envisage the consultation process will be concluded by the end of October / beginning of November. Unless an alternative solution can be agreed through the consultation process, the company proposes to issue you with notice of the termination of your current contract of employment and offer you re-engagement on new terms of employment which include the proposed changes to your fuel / mileage entitlement. Therefore, the new process would take effect from the day your contractual notice period expired. How much notice would we get if we agree to the variation to our terms and conditions of employment? It is open to you to agree to the proposals at any stage in the consultation process, should you wish to do so. If you do so, you will receive one month s notice of this change.

2 What float will we receive and how will you calculate this? If the proposal goes ahead, you would start the new process with a full fuel tank. In addition to this you would receive a float of 2 weeks fuel based on your average usage calculated over the previous six months. The business is committed to ensuring that its employees are not out of pocket for business mileage. What is the actual wording of the contract variation that we would be required to sign? The variation wording is attached at the end of his document. You can choose to agree to the proposed changes to your contract at this stage by signing and returning the variation letter to Sonia Burridge. As set out above, if you do not agree to the proposed changes at this stage and no alternative solution can be agreed, it is proposed that your current contract of employment will be terminated on notice and you would be offered a new contract of employment which includes the new terms relating to fuel. My contract states I will be provided with fuel card? The company recognises it is a term of your contract of employment that you will be provided with a fuel card. It is for this reason that the Company has been engaging with you to try to seek your agreement to changing this term of your contract. If any proposed changes are implemented, we will ensure we have consulted with you and followed due process to enable us to vary your terms and conditions of employment in this way. Will the new process take into account JIB rates? Yes, we would ensure any new process complies fully with JIB rules. How will this affect my tax? If you have previously opted to use your van privately, you will have paid the associated tax rate. If the changes are implemented, you would no longer have that option and therefore will not pay the rate of tax for the benefit of using your vehicle privately. Is my home to work mileage included? Yes, if you are required to drive a company vehicle to and from work, these are deemed business miles. If I get TUPED to another company, would we get our fuel cards back? You would transfer with your existing terms and conditions however if the company operates a system different to ours you would be advised of this during the TUPE consultation stage prior to transfer If I am dismissed, will I be re-engaged on the same terms excluding the new fuel reimbursement process? Yes, your employment would be continuous and all other terms and conditions would remain unchanged. How often will the expenses be reimbursed? If you submit your mileage claim form by 9.00 a.m. on a Monday morning, you would be reimbursed on the Friday of the same week. What do we do if claims are rejected? Claims would only be rejected if we have contradictory evidence of journeys based on your shift patterns and or tracker data that is above a 10% variance. If your claim is rejected you will be advised of the reasons why and given the opportunity to rectify the

3 error or explain the varience in order for you to resubmit the mileage claim. We do not have faith in our current expenses system, what will be different with this? As a business, we want to implement the proposed system with minimal disruption. We are proposing an efficient streamlined process that we would monitor closely to ensure employees are paid in full and on time. The system has already been put in place for agency workers, which has given us an opportunity to monitor how it is working and make any improvements which are appropriate. The fact that this system is fully automated and there is no need for paper receipts reduces human error and the issue of paperwork getting lost. Have you made different agreements with different unions? No, as a result of the informal discussions that have taken place with different trade unions alongside the collective consultation process we have proposed some changes to the wording of the new contractual terms that we propose to put in place, however those changes would apply to everyone across the board. Who will the proposed changes impact? If the proposals go ahead, they would affect all company vehicle drivers within Managed Services including office based staff and senior management. How am I expected to do all this extra administration? The company appreciates that there may be an added level of administration required should the proposed system be put in place and has considered as part of the consultation process the impact this might have on employees and how it could be mitigated. You would need to record each of your business journeys and we would recommend that you write the start and end details in a notepad and then input them onto the system once a day. You would not be expected to do this in your own time and you would therefore be allocated reasonable time during your shift in order to complete this. What rate will we receive per mile? We would use the HMRC advisory fuel rates as a minimum guide and are currently paying 15 pence per mile for the majority of our vehicles where this system is already in place (i.e. for our agency workers). We are looking at some of our larger vehicles and would adjust the rates accordingly if necessary. However the business is committed to ensuring that no employee will be out of pocket for their business mileage. Can I park my van at Barking in between shifts? There currently isn t a facility for storing all of our vans at Barking. Does the rate include an allowance for carrying heavy equipment? The rate payable would reflect the cost of driving the vehicle for business purposes. It is not proposed that there would be a separate allowance for this. We are currently monitoring the actual costs incurred by drivers operating heavier vehicles to ensure that the HMRC rates cover this cost. What if I am driving around looking for a parking space or have to use a diversion? You would need to record the actual journey and mileage you have taken on the system to be reimbursed properly. If the mileage is legitimate and incurred solely for business reasons then it would be reimbursed.

4 What if I am stuck in traffic? You would be reimbursed for the full amount it costs you to drive a business journey so if any additional costs are incurred, we would review your payment and, if we are satisfied that the additional costs were legitimately incurred for business reasons they would be reimbursed. I drive a pool van, how will this impact me? When you collect your pool vehicle, the tank would be full and you should fill up just prior to returning the vehicle to ensure you only pay for the fuel you have used, remembering to accurately record the business mileage you have used. Are emergency call outs included? Yes, any business journey would be included. If I am asked to work at a site that is further out of London e.g. Heathrow or Reading, would this be classified as personal or business mileage? Again, working at another site would be business mileage and therefore you would be reimbursed for your travel expenses. Why can t we keep a paper diary of our journeys? Details of your business journeys would need to be input onto the system so we can reimburse you accordingly we recommend you do this in a diary or notebook. As part of this process we have considered the possibility of the company collating the information about your journeys from your paper records and inputting them into the system, however we do not believe this is feasible. We do not have the resources to input this data for all of our drivers and need journeys start and end data so that we can evidence your business travel expenditure. What if the price of fuel goes up or down? We would propose to monitor fuel costs in line with HMRC rates and adjust accordingly. Why can t you provide us with Oyster Cards? We have considered this suggestion, however in order to maintain a reliable service for our customers the Company requires you drive a company vehicle with our tools and equipment to site. The Company considers this to be necessary in order for you to be able to properly perform your role. If we are out of pocket, how do we demonstrate this? As per the wording on the proposed letter of variation below, you would be required to the HR department with details of the shortfall and you will be reimbursed accordingly. What if I do not have money for fuel to get to work? As set out above we are proposing a number of measures which we believe would address any financial hardship drivers might experience when transitioning to the new system, including a float and ensuring that all vehicles have a full tank of petrol when the system is put in place. However, if the proposal does go ahead and you are experiencing financial difficulties as a result of the new system, you should raise this with the HR Department. If you consider it likely that you may be in this position we would encourage you to raise this during the individual consultation process, together with any proposals as to how this might be addressed. If I use my vehicle privately, what happens? You would still be able to use your vehicle privately; however the Company would not fund the fuel for these journeys.

5 I use my car privately for Charity purposes? How will this affect my tax? This will depend on the status of the charity you are working for. Please seek independent advice as we are unable to give you guidance on this. All PAYE operatives sign a form confirming that they either use the company vehicles for private mileage or not. The operatives who don t use the vehicle privately or refuse to sign automatically go onto the new proposed mileage scheme (once all is agreed with all operatives following the group and personal consultation period). And pay for their private mileage as and when required out of their own pocket. For those who do use their vehicle for private mileage then declare this to the HMRC. And pay the benefit in kind from the personal allowance. (this is then claimed back by MJQ) They then keep the usage of the said fuel cards. Everyone who is declaring to the HMRC prove to MJQ they are doing so. In whichever way the company declares. Therefore MJQ know it s all being done above board. We have given this proposal consideration as part of the collective consultation process, however, we do not consider it to be a viable alternative. In order to maximise the full potential of this proposed scheme, the Company would apply this to all drivers and not just percentage of the overall population.

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7 AGREEMENT TO VARIATION OF TERMS AND CONDITIONS I,.(PRINT NAME) of.(insert ADDRESS) consent to the following variation to my contract of employment with M. J. Quinn Integrated Services Limited ( Contract of Employment ) to take effect from 01 December The following clause shall be an addendum to my Contract of Employment. Fuel Expenses The Company shall reimburse the Employee for the cost of fuel incurred wholly, properly and necessarily during business mileage (including the Employee s first journey and last journey from and to their home address on any day they are required to work) at the rates published by HMRC from time to time or such other rate as stipulated by the Company from time to time (such rate not to fall below the applicable HMRC rate), provided always that the amount for which the Employee is reimbursed for a journey shall not be less than the Employee s actual fuel costs for that journey. In the event that the Employee considers that their actual fuel costs have exceeded the amount of reimbursement they have received, the Employee must put this in writing, together with any relevant evidence, to the Human Resources Department within 14 days of reimbursement. The Company shall reimburse the Employee s fuel expenses on a weekly basis, provided that the Employee complies with the correct procedure for claiming expenses. The Company shall not be responsible for reimbursing any fuel costs incurred through personal use of the vehicle. The Employee shall abide by the Company's policies on expenses as set out in the Staff Handbook from time to time. To the extent that any existing clauses of my Contract of Employment conflict with the above clause, I confirm they shall no longer have effect with effect from 01 December Signed Date.