Can we offer employees a car allowance where previously we provided a company car?

Posted in : First Tuesday Q&A NI on 2 September 2015
Emma-Jane Flannery
Arthur Cox
Issues covered:

Assuming that your company cars are provided as a contractual benefit, moving employees on to a car allowance can be done, but it is not simply a matter of providing the requisite notice. In broad terms, you must first establish whether there is a power in your contracts of employment to vary specific benefits.

These kinds of flexibility clauses are often included in clauses dealing with insured benefits (such as private medical insurance) but may or may not be included in the company car clause.

A flexibility clause is not subject to an implied obligation of reasonableness, so an employer can rely on this type of clause even if it makes changes that are detrimental to the interests of the

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Back to Q&A's This article is correct at 02/09/2015

The information in this article is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.

Emma-Jane Flannery
Arthur Cox

The main content of this article was provided by Emma-Jane Flannery. Contact telephone number is 028 9023 0007 or email

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