TUPE and Company Car / Car Allowance

Butch10

Hi All,
1st time poster, please be kind 

I am in a situation where I am about to be part of a TUPE process for the first time and I am a little concerned that I may end losing out - specifically when it comes to my company car.

My current contract states that I am entitled to "a Company Vehicle in Band 3 for business and private use, subject to the terms of the Company Car Scheme."
It also states "In the alternative, you may elect to be paid a Band 3 non-pensionable Cash Allowance of £**** per month in lieu of a company car".

My question is, does the new employer have the right to ONLY offer the cash alternative if they do not currently offer a company car as one of their usual perks?

If I was to switch to the cash alternative then I would be significantly worse off as I would not be able to get a vehicle for the amount on offer.

Hope that all makes sense.

Thank you.

Flugelhorn

honestly don't know much about company cars - I have been TUPE'd a ludicrous number of times and yes the  terms and conditions of the job have to remain the same.

most recent ended up with some of us  getting different rates of pay / travel allowances / reimbursement of professional subs (at one point £10k a year) to others in the new organisation doing the same job. 

No reason why new employer can't just carry on with the car as you have it - suppose they may decide later change the Ts*Cs for technical / operational reasons and not allow new one is the future 

Butch10

Thanks Flugelhorn,
My hope would be they would just transfer the lease over and everything would continue as current, but I'm a massive overthinker so am convinced everything but that will happen... 

Marcon

Butch10 said:

Thanks Flugelhorn,
My hope would be they would just transfer the lease over and everything would continue as current, but I'm a massive overthinker so am convinced everything but that will happen... 

You may or may not be able to keep your company car until the current arrangement (?lease) ends, at which point it would be reasonable for your new employer to switch you to a car allowance - BUT you are assuming they don't have  a company car scheme of their own. Maybe check that point before you panic?!

Wonka_2

Apart from the legality of what they have to offer what's the absolute financial position i.e. tax you'll no longer pay on your company car plus net car allowance ?

It's a few years since I've done this and it was in the time before lower BIK arrangements for EV's but it was rare, unless mileage was very high, that there wasn't an advantage to taking the allowance

Bue21

I suspect Flugelhorn is correct. It is likely current vehicles will be transferred over on the same terms but replacements will be phased out and you will only be offered the cash alternative.  If the new employer doesn’t currently offer a car scheme the cash alternative also is likely to be frozen at the current level unless increases are already written into your terms and conditions of service. My department has a mix of pay grades and car allowances due to TUPÉ!

Butch10

Thanks Marcon,
I am fairly confident that none of the companies that are in the running to be taking over the contract (not been confirmed which company as yet) currently offer a car but I will be sure to check once the company has been confirmed.

I hope I will be able to complete my current lease at least as I'm only 3 months into a 4-year lease - that would be ideal 

Butch10

Wonka_2 said:

Apart from the legality of what they have to offer what's the absolute financial position i.e. tax you'll no longer pay on your company car plus net car allowance ?

It's a few years since I've done this and it was in the time before lower BIK arrangements for EV's but it was rare, unless mileage was very high, that there wasn't an advantage to taking the allowance

I currently have an EV that I pay a ridiculously low amount per month (<£50 pcm) - however a personal lease for the same vehicle with the mileage required (25-30k) would be at least £700 pcm.

Andy_L

Butch10 said:

Hi All,
1st time poster, please be kind 

I am in a situation where I am about to be part of a TUPE process for the first time and I am a little concerned that I may end losing out - specifically when it comes to my company car.

My current contract states that I am entitled to "a Company Vehicle in Band 3 for business and private use, subject to the terms of the Company Car Scheme."
It also states "In the alternative, you may elect to be paid a Band 3 non-pensionable Cash Allowance of £**** per month in lieu of a company car".

My question is, does the new employer have the right to ONLY offer the cash alternative if they do not currently offer a company car as one of their usual perks?

If I was to switch to the cash alternative then I would be significantly worse off as I would not be able to get a vehicle for the amount on offer.

Hope that all makes sense.

Thank you.

To me that says the employer has to provide you with a car, but its your choice to take the cash instead.Unless there's something else in "the terms of the Company Car Scheme"

Wonka_2

Butch10 said:

Wonka_2 said:

Apart from the legality of what they have to offer what's the absolute financial position i.e. tax you'll no longer pay on your company car plus net car allowance ?

It's a few years since I've done this and it was in the time before lower BIK arrangements for EV's but it was rare, unless mileage was very high, that there wasn't an advantage to taking the allowance

I currently have an EV that I pay a ridiculously low amount per month (<£50 pcm) - however a personal lease for the same vehicle with the mileage required (25-30k) would be at least £700 pcm.

Hence my caveat re 'pre EV days' - and that may have some bearing on OP's decision

DullGreyGuy

Your contract doesn't change just because you have been TUPEd so current terms stand until such time as they decide to make changes which they have to follow normal processes to do so. 

They can however, depending on the exact terms of your contract, make it very detrimental to not change contracts. In a former TUPE (I wasn't TUPEd but we had new team members join from the acquired company) situation they made it clear that anyone not agreeing to the new contract would find that the discretionary bonuses and pay rises wouldn't be happening for those on the old contracts... for some people bonuses could be up to 50% of their pay so would be a big thing to give up to try and retain your old contract. 

You keeping the existing car itself is going to be complex as that would require the finance agreement being transferred too which requires the lease/finance house to agree with the both current and ex employer the transfer.