Company Car Misfuelling in New Zealand: Who Is Liable?

The Employment Agreement Question

New Zealand employment law does not specifically address misfuelling, but the general principle is clear: where an employee causes damage through negligence or carelessness, the employer may seek to recover costs. Whether this is practical — and whether it is appropriate — depends heavily on the specific employment agreement, the workplace vehicle policy, and whether misfuelling was a single incident or a pattern of careless behaviour.

Vehicle Policy Is the Key Document

Employers with clear vehicle policies — stating the fuel type for each vehicle, requiring drivers to check before fuelling, and specifying consequences for damage caused by driver error — are in a stronger position to recover costs. Employers without a written vehicle policy, or who have never briefed drivers on fuel type requirements, will find it difficult to enforce cost recovery.

Insurance Typically Sits with the Employer

Fleet insurance policies generally treat misfuelling as a single incident covered under the policy (subject to excess). Employers rarely recover the excess from employees for a first incident. Repeated incidents, or incidents where the driver ignored clear labelling, may be treated differently. Consult your employment lawyer before attempting cost recovery from an employee.

The Practical Recommendation

Invest in a clear vehicle policy, brief every driver at onboarding, and label every vehicle with its fuel type. The cost of prevention is a fraction of the cost of recovery, liability disputes, and staff relations damage that follows a misfuel incident.