A former CSIRO employee has been denied his request for reinstatement, following his resignation after being called to account over using a company car to go through a fast food drive-thru.
Jack Hoffman was employed by the CSIRO for 10 years, and prior to his departure was subject to an internal misconduct investigation after he was observed by colleagues buying a burger in a McDonald's drive-through whilst driving a work vehicle in May 2012.
As a result, he was stood down over his private use of the CSIRO car, as personal use of vehicles was specifically prohibited. However, Hoffman was later reinstated in June of the same year. However shortly afterwards the worker resigned, but claimed to the workplace watchdog that he was forced out by a campaign of bullying and harassment. Yet his alleged case of constructive dismissal was thrown out by the Fair Work Commission, as the former technician missed the cut-off date to submit the application by 119 days.
A common reason the private use of company vehicles is heavily restricted is due to the fringe benefit tax liability that additional usage may incur.
For example, in cases where a company car is provided for business purposes only, there is no fringe benefits tax liability. However in cases where the car is used for private purposes, the employer is liable to pay a fringe benefits tax for every day there is private use of the vehicle.
The Australian Taxation Office defines ‘private use’ of a company vehicle as including:
Using the car to travel between home and work
Garaging the vehicle at employee’s home, or nearby
If the car in principally under the employee’s “custody or control”.
Importantly, an employer is not liable to pay a fringe benefits tax if the car is considered a commercial vehicle – namely that it carries company branding, or is a taxi, panel van or utility, and the only instance of the vehicle being used for private use is in work-related travel, and the vehicle being garaged at the employee’s residence after having been used for work purposes.
For more information, consult the ATO’s FBT — A guide for employers and the FBT car calculator