Last reviewed 1 September 2023

Tackling pollution, and the causes of it, is a serious social issue, and it’s a problem for many major cities. However, at least one of the solutions is controversial, as we have seen this week in London with the expansion of the Ultra Low Emission Zone (ULEZ) scheme to all of Greater London, bringing hundreds of thousands of motorists within its scope. There are a number of HR considerations to this too, that employers need to be aware of and manage. In this article, Stacie Cheadle, Croner-i Content Consultant and employment law researcher, examines what these are and how employers can deal with them.

What is an ULEZ and why is it needed?

The goal of low emission zones is to clean up the air, making people healthier and reducing the burden on the NHS by reducing the levels of two key pollutants in the air through limiting the number of petrol and diesel vehicles that don’t meet certain emission standards. The pollutants, nitrogen dioxide (NO2) and fine particulate matter (PM2.5), have been blamed for causing thousands of premature deaths and stunting the growth of children's lungs.

The ULEZ is one of these schemes. London is not the only city to operate something like this, though. Similar schemes are operated elsewhere in the UK, including in Birmingham and Glasgow.

There has been significant attention on the ULEZ scheme in London because from 29 August 2023, it was extended to cover all of Greater London. This means that hundreds of thousands more drivers are now caught by the requirement to pay £12.50 each day when travelling through the area.

A scrappage scheme has been in place for some time and was extended to all Londoners from 21 August 2023. Eligible drivers can get up to £2000 for scrapping a car (although note that the amount of money on offer differs for vans and motorbikes). However, there have been complaints that this scheme won’t help everyone, especially during the cost-of-living crisis and when the cost of second-hand ULEZ-compliant cars has also risen. It is likely therefore that affected employees will turn to their employers to ask how they plan to help absorb the cost.

HR considerations

Typically, how an employee gets to work is up to them, and their employer is not involved at all in organising or funding this. However, now that the cost of travelling through London has risen, this might be set to change.

For those employees that do drive to work, it may no longer be cost-effective to do so. Those that work overnight will be particularly affected, as they will have to pay twice under the scheme, both on their way to work and on their way home. There is also the matter of those who only work for a short number of hours: an employee engaged to work the lunch shift at a school may only work for an hour or two, and with National Living Wage (the highest minimum wage rate) only at £10.42, is it still worth it if their vehicle is not ULEZ-compliant?

For many employees affected by this, there may not be alternatives that are suitable to their needs, especially where their commute takes in a number of stops, such as dropping children off at school or childcare, car sharing with another whose journey starts and ends at different points or their working hours mean travelling by public transport is either not possible or inconvenient. If this is the situation, what is the solution?

Practical steps to help employees

Below we have compiled some of the practical steps employers can take to help their employees.

  • Adjust working hours — if possible, and in many cases it might not be, adjusting working hours around public transport availability might make this a viable option for some employees.

  • Help arrange car shares — splitting the ULEZ charge between two or more employees can make using a private vehicle an option for those who prefer to drive.

  • Raise awareness of the government scrappage scheme — it may be that there are some employees who don’t know about this, so raising awareness of the scheme by sharing government information could help them to afford a compliant vehicle.

  • Consider offering a car loan — as long as it is arranged properly, through the use of a formal agreement confirming the amount and the terms of paying it back, some employers might choose to provide loans to their staff to help them purchase a new car that is compliant with ULEZ rules. This has the benefits of helping the employee and also making them more likely to stay committed to the business, at least for the duration of the financial arrangement.

  • A season ticket loan could work too — for those employees that can use public transport, but have previously driven to work, a season ticket loan may help make it more accessible to them, by spreading the cost of commuting via a re-payment plan, rather than having to meet the cost upfront.

  • Fine-tune the expenses system — where an employee is required to travel into the area covered by the ULEZ on work business, the employer should pay for the cost of the ULEZ charge. If this cannot be covered directly by the employer, ensuring a quick turnaround for expenses claims will mean the employee is not financially out of pocket for an extended period.

  • Think about moving to a hybrid system — whilst we have previously written about a drive to get people back into the office, the expansion of the ULEZ scheme will mean this is even less of a palatable option for employees. Allowing for regular homeworking will help employees to manage their commuting costs better.

  • Ask employees to attend regional offices — for those businesses that operate across a number of sites, it may be more cost-efficient for some employees to travel to a regional office instead of to one located within London.

  • Think about making a contribution to the ULEZ charge — practically, this is unlikely to be affordable for many businesses, as they too are struggling through the cost-of-living crisis. But for those that can, making some form of contribution towards the ULEZ charge for those commuting into London could make a big difference to employee satisfaction, and even retention, as it lessens the impact of the charge.

Conclusion

Employers that are based in London, or require their staff to travel there regularly, are going to be impacted by the expansion of the ULEZ scheme. Of that there is no doubt. However, by taking one or more of the steps listed above, the negative effect on employees can be managed, and not always to the cost of the employer. In turn, this can improve employee satisfaction. It can also improve how attractive the business is to join as an employee, as it becomes known what ULEZ support it offers, and could be the difference between an existing employee staying with the business or not.