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Ben Jones
Ben Jones, UK Lawyer
Category: Law
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Experience:  Qualified Solicitor
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My company offers a company car scheme or a car allowance payment

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My company offers a company car scheme or a car allowance payment each month in lieu of a company car. I have a company car. The scheme states an employee can switch to the cash option or vice versa. At least this was the case. I resigned on 12th June giving my contractual notice of 3 months. I bought a car so wanted to swap to the cash option for my remaining month and a half. The company got wind a colleague who also resigned and myself were going to do this. They changed their car policy on 20th July to say no such change is allowed if the employee has tendered their resignation, well after we had resigned. The electronic repository where the policy is stored shows the version history of the document, when it was changed and the Commercial Director left track changes on inadvertently which showed he added the offending paragraph. Does this constitute a breach of contract? If so, do I still need to adhere to my notice period if contract is breached by the employer?
Ben Jones : Hello, my name is ***** ***** it is my pleasure to assist you with your question today. Was the policy part of your contract?

The contract does not explicitly mention the car policy


My contract says I am entitled to a car or cash allowance.


I've doubled checked all this over night Ben. My contract says I am entitled to the car. It refers me to the staff hand book for details of company cars. The staff hand book then refers me to the car policy guide for details of the schemes.

Ben Jones :

Apologies for the slight delay, I experienced some temporary connection issues earlier on. All seems to be resolved now so I can continue with my advice.

The key in this case would be whether the policy you refer to formed part of your contract. It is entirely possible for a policy to be non-contractual in which case it would not be subject to a potential breach of contract if it is amended. In order to work out whether the policy was contractual you would need to check for any specific wording that may refer to this or a clearer-cut case would be if the policy was actually included in the wording of your contract.

From what I understand the contract does not contain this policy and the initial reference to anything linked to it would be the staff handbook. So you should check to see if anything is mentioned about the handbook having a contractually binding effect or forming part of the contract. It could be that this is just a document which exists for reference and is not part of your contract and there would have to be some specific wording to include it in the contract. The simple mention in the contract that a staff handbook exists does not make it part of it.

This is further complicated by the fact that the policy was not part of the handbook but was also referenced in it as a separate document. So this could further dilute the contractually binding effect of such a policy because even if the handbook was contractual, this is a document that is outside of it and is just referenced by the handbook. Therefore, unless there is some specific wording to link all three documents to the contract and state that they are intended to be part of it or to have contractually binding effect, then it is unlikely they would be such and technically changing these documents would not amount to a breach of contract and it would just require the employer to notify you of any changes as they are introduced.

So if you were to rely on this as a breach of contract to leave without serving your notice period, that could place you in breach of contract instead. Whilst it is unlikely that the employer will pursue you for this, because this is rarely done, they could mention it in a reference they provide to any future employers.

Hope this clarifies your position? If you could please let me know that would be great, thank you


Hi Ben, the contract states "the company handbook contains details of your obligations regarding the use of company vehicles and you are required to comply with them"


The handbook then states "the company operates a cash allowance scheme and this is outlined in the Car Policy Guide". Is all this too vague?

Ben Jones :

you would need more specific wording that states these documents form part of your contract of employment so as it stands this may not be enough to make them contractually binding I'm afraid


Ok, thanks for your answer. It looks like I'll have to suck it up. Interesting that it's rare for an employer to pursue an employee though. Thanks.

Ben Jones :

you are welcome, all the best

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