Emerging Issues Relating to Employees' Use of Vehicles for Work

Over the past several months, there have been a number of emerging issues relating to employees’ use of motor vehicles for transporting clients in the course of their duties. Some of them have been triggered by changes to Motor Vehicle Act and ICBC regulations, and others have emerged based on employer questions to CSSEA staff. This CSSEA Info will consolidate the issues and answers.

Class 4 Driver’s License Requirements for Employees

Earlier this year, clarification was provided about the requirement for employees to hold (and be reimbursed for) Class 4 driver’s licenses to support the transportation of clients in typical “2 axle” vehicles such as an employee’s own vehicle or vehicle provided by an employer (not a bus). The legal opinion received by CSSEA concluded that unless an employer’s service involves charging fees specifically for the transportation of clients, the vehicle and driver would not typically require a Class 4 License. See this CSSEA Info for more information.

This bulletin was followed up when changes to ride-sharing rules were introduced to allow for companies such as Uber and Lyft to operate in BC. Upon receiving a supplemental legal opinion, CSSEA advised that the requirements for a Class 4 driver’s license had not changed. This CSSEA Info addresses the topic.

Amendment to the Insurance (Vehicle) Act – First Payor

Recent changes to this Act were made to assist ICBC in better managing its fiscal pressures. In particular, the treatment of wage loss benefits awarded by ICBC resulting from a motor vehicle accident (MVA) were changed. Wage loss benefits awarded by ICBC for MVAs occurring after May 16, 2018 position ICBC as a “second payor” instead of the “first payor” that it used to be. What this means for employers is that when an employee draws on sick credits resulting from a MVA related disability, the employer is now the “first payor” with the primary responsibility for paying wage loss benefits. ICBC (and/or employees) will no longer reimburse employers for the sick credits paid; when ICBC claims are resolved, the ICBC wage loss benefits paid will be reduced by the amounts paid by employers under the sick leave provisions of the collective agreement. Upon an employee exhausting his/her sick credits, ICBC would then re-assess their “first payor” status at that time.

This amendment may also impact long-term disability (LTD) and extended health care (EHC) plan payments. Insurers are also examining their “first payor” status in relation to the payment of LTD benefits and EHC paramedical (eg. physiotherapy) services without corresponding offsets from ICBC. Assuming there are reduced offsets available from ICBC, this may impact on health and welfare benefit plan premium rates in the future.

Amendment to Have Accident Records Follow Drivers

Under the previous ICBC model, at-fault crashes followed the vehicle owner, rather than the driver, whereas under the new model, at-fault crashes follow the driver, not the vehicle owner. However, ICBC recently advised that at-fault crashes will not follow an employee driving an employer’s fleet vehicle. This means that if an employee gets in an at-fault crash while driving a fleet vehicle, it will not affect their own ICBC policy or one where they’re a listed driver. Instead, at-fault fleet claims will remain with the fleet policy of the employer.

Changes in driver accountability regarding ICBC premiums does not result in changes to job requirements. Employees are expected to drive safely and defensively at all times, regardless of whether they drive their own or an employer vehicle. Employers may still continue to require employees to drive vehicles for legitimate work-related reasons.

Business Use Insurance

Questions have also emerged relating to the reimbursement to employees for the cost of business insurance coverage required by ICBC that exceeds the cost of insurance coverage associated with driving to/from work. The additional business use coverage may cost up to several hundred dollars per year.

Some employers have advised CSSEA that they reimburse employees for all or a part of the additional cost of insurance. Other employers have advised that they do not reimburse this amount. All employers are required to reimburse employees the transportation (mileage) allowance established under Article 26.9 of the Collective Agreement based on kilometres travelled in their own vehicle to conduct business on behalf of the employer. Grievances have been filed recently amongst the latter group of employers by employees claiming reimbursement, all of which have been resolved without prejudice.

CSSEA sought and received a legal opinion from RoperGreyell LLP. The legal opinion supports the ability of employers to continue their current practices on the basis that it is likely that all forms of vehicle insurance expenses were intended to be covered by the transportation allowances negotiated under Article 26.9. The current maximum transportation allowance that Canada Revenue Agency (CRA) permits to be paid to employees as a reimbursable expense is set at 59 cents/km. The CSSEA collective agreement rates are deemed to be comparable.

While it is encouraging to have legal support for the view that Article 26.9 fully covers this cost, there still remains a risk that an arbitrator finds that it doesn’t. Those employers who, under their policies and procedures, provide some amount of reimbursement to employees up to the additional insurance cost differential do minimize their risk of having to reimburse anything more.

CSSEA recommends that employers continue with their current practices. We ask that you contact us if grievances are filed, as this may be a matter that could be placed on the bargaining table to be addressed in the next round.

Should you have any other questions about these changes or other vehicle use-related changes, please contact your CSSEA Advocate/Consultant.