Air miles belong to company, not flier.

[Nottingham Nick]

Globe-trotting German executives stand to lose one of the perks of spending their lives in the air after a court ruled that air miles collected on business trips belonged to the company that paid for the trip.

The German Federal Labour Court in Erfurt ruled against a sales manager who argued he should be allowed to redeem €9,700 ($11,745, £6,737) worth of Deutsche Lufthansa frequent flyer miles earned on business travel for private use. His employer had demanded that they be used to pay for business flights.......

This story from the Financial Times website. You have to be logged in to read the full details, but the link is currently right at the bottom of the page.

How long before UK firms try this one????? [:(!]


Nick

[buns]

Nick

Nice find[y]

The offical policy of my organisation is that miles earned in the course of business travel should be used for business trips;)

I am sure everyone complies[:w][:w][:w]

Originally posted by Nottingham Nick

How long before UK firms try this one????? [:(!]
Nick

Hi Nick

Never having earned miles in this way it seems self-evident to me that the business who pays for the fare should gain the benefits. However your post strongly implies that the normal practice in the UK (and presumably Germany) is for the employee to retain the miles.

I apologise if my question is naive, but what is the counter argument ie the legal (or moral) basis for the employee having use of reward miles for private use?

[Decker]

In our company we fly people over a Saturday night and don't pay them overtime for doing so (to get an Apex fare). This is an expected part of the job but as a sop we allow individuals to keep the miles.

At my old employers the policy I implemented was that the miles were the company's and should be used for company business. Employees had to account for the miles with their expenses, and if they put down that they did not accure miles becuase they were, say, not a member of the scheme in question then they had to explain to me why they had squandered the opportunity to earn miles. In my case I tended to use them for upgrades, which was fair game under the policy I put in.

It is also part of the company policy that if we fly you, then you agree to show us your personal bookings if they relate to holiday taken from work. We had one guy who tried to use miles to buy a free ticket for personal use. It was really obvious, for a number of reasons. So we asked to see his booking and established the truth from there. I suppose he could have refused to show us the booking. In which case the outcome would have been the same for him (ie no job).

That's a tight ship you run there sailor;)

Cheers,
VS045

My firm's got the same policy as buns - I like that a lot...

[Nottingham Nick]

I am clearly showing MY naivety, here. As another who has never been in the position of my company paying for my flights, [:#] I had always assumed that FF points accrued by 'road warriers' were extra compensation for the days / weeks spent away from home and, as such, could be used as the employee saw fit.

I can see that - in a government / tax payer funded type of organisation - the accounting would be more stringent, but I always believed that those in the private sector got the points as a 'perk'. [}:)]

Nick

[Scrooge]

Well over here back in the late 80's early 90's it was pretty much a free or all,but now days it's the same for most companies..if they pay for the ticket they want to use the miles...Chuck may be able to tell us more on this subject.

[mcmbenjamin]

Many people seam to use the miles to upgrade. So what if you can not upgrade (cabin full) or chose to fly coach then quit your job? The mile are normally not transferable and if they are company assets, is that stealing? Should the employee pay the employer?

[preiffer]

Originally posted by Nottingham Nick
I had always assumed that FF points accrued by 'road warriers' were extra compensation for the days / weeks spent away from home and, as such, could be used as the employee saw fit.

Bingo - a somewhat pragmatic approach, Nick. [y]

Originally posted by sailor99
At my old employers the policy I implemented was that the miles were the company's and should be used for company business.

And I'm sure you compensated the employees for the overnight/long hours of THEIR time that were "given" to the company when travelling on their behalf? [?][:0]

Personally, if you tried to "implement" that policy in any company I worked for, you'd see the back of me with an additional finger for effect... [:w]

[Decker]

Yeah Paul and there'd be a queue of people behind you waiting to step into your shoes... welcome to the world of less than 100% employment. You get to a certain pay grade you're no longer 9-5... All you can hope for is enlightened employers

A practical approach would be to let the employee use their earnt miles as they see fit, simply because keeping tabs on an employee's FC account would be nigh on impossible. You could assume they have earnt the miles for a particular ticket, but what if they don't credit? Must the employee chase VS as part of their duties?

And then there's the whole "do you just trust the employee or do you need to check" issue, highlighted by Sailor. I don't particularly like the requirement to show your personal bookings to your employers. What happened to innocent until proven guilty?

You could say the employee's salary already reflects the fact they will additionally earn miles (i.e. notionally reduced), and thus it has been taken into account. That's perhaps an accountant's way of looking at things rather than a real-world view however...

[Pete]

Although I'm now self-employed, my last employer toyed with the idea of claiming the miles where for their use until they realised the extra admin it would involve, and that I was unlikely to show them the details of my personal frequent flyer account. The Flying Co scheme seems like a good solution, where they get their slice of flesh and the employee still gets side benefits of as part of the compensation for giving up evenings/weekends to be away on business.

I'm with Paul on this one. If an employer is that mean that they would insist on clawing back frequent flyer miles from an employee, it doesn't sound like my kind of place. Sure there might be a queue of people ready to take my job, but frankly they're welcome to it.

Pete

[preiffer]

Originally posted by Decker
Yeah Paul and there'd be a queue of people behind you waiting to step into your shoes... welcome to the world of less than 100% employment. You get to a certain pay grade you're no longer 9-5... All you can hope for is enlightened employers

I think that's kind of my point.

I'll often put in 70-80+ hours a week, if you wrap up my "travel time" with my "office time", with no moans/worries. This all comes down to flexibility and treating staff/benefits with sensible amounts of respect.

Treat people with a clock/penny watching attitude, and you'll receive the same back in return. [V]

[Scrooge]

In the end I guess if your going to travel for your company it should be spelt out to you when you are hired what the situation is,of course if you are unemployeed and need the job you may look at things differently.

[Decker]

Of course with my employer hat off I'd be appalled if an employer tried to take the miles UNLESS they were specifically paying me to be in the air by flying me in "work time". Then they'd have a moral leg to stand on. As Pix says the Flying Co thing does help too.

What is the Tax implication if you use airmiles earnt and paid for by the company on a leisure trip?.
Do you guys declare this as 'benefit in kind' to the taxman?

Wouldn't it be easier all round if the points were earned by the Company/Person who paid for the tickets and not by the person that actually flies.

As a side issue what happens to Membership rewards that are earnt when spending on Corporate Credit Cards?.
The Company I work for uses American Express, but I seem to recall that this particular scheme is not eligible for the Membership Rewards.

It's a very difficult area for a business to regulate. For example, I have just bought a ticket to DFW on my personal Amex card (which will earn membership rewards) but for which I will reclaim on company expenses (as my company credit card is full at the moment). And I used miles to upgrade myself from CW to FIRST, these miles being accrued in part from the last business trip I made on BA, and from personal travel. Oh, and the travel will have me in the USA entertaining clients in the evening and working 12+ hour days.

So, in balance:

(1) the trip will take a personal toll
(2) the seat in FIRST is paid for part by the company (eventually) in cash and miles and part by my miles/cash
(3) the trip will earn me membership rewards and BA miles
(4) said BA miles will probably go to upgrade me again on business so I can do more on the plane and be fresher for work

Moral balance is even, I think! And anyway, the trip is being paid for by the client in overall terms... should they be wanting something out of this?

BC

Originally posted by Nottingham Nick
I had always assumed that FF points accrued by 'road warriers' were extra compensation for the days / weeks spent away from home and, as such, could be used as the employee saw fit.

To second Paul's reply, that's exactly how I view it. For that matter, I think that's how all my employers have viewed it too - not one of them has imposed a policy of "all your miles are belong to us" . In fact, ISTR that my current & last employers have incentive schemes if you use your own miles - i.e. if you book a ticket using miles, they'll give you 50% of the cost of the equivalent journey back as a thank you (I think the same applies to upgrades with miles too, if the journey qualifies under the business class rules).

I think if the company isn't a member of a scheme like FlyingCo, it's even more of a cheek to request personal miles to be used for their benefit [n]

As Tom says, I do seem to recall something about "benefit in kind" rules by HMRC, but can't find it now [:(]

{edit to add: And yes, I'm with Pix - if that policy existed, I wouldn't be working for that company either}

Cheers

Michael

I'm with Pix, if the employer had such a tight and swingeing travel/miles policy, I'm not sure I'd want to work there anymore.

I've got friends who work for companies with downright weird travel policies - and have customised Travelocity portals that enforce said policy which the employee has to use in order to book any travel. Often, this policy ends up costing the company extra money, believe it or not.

I'm glad I work somewhere where I can just book my own travel...

Mike

Speaking legally any FC/FF program is between you/the pax and the airline. I'm surprised about this german ruling as FF programs arent set anything to do with an employer and unless it was specifically agreed in a contract of employment no employer would have the right to expect ownership of your miles.

Of course there are Flying Co schemes out there now to encorage corporate loyalty - but this is certainly seperate from personal FF programs.

I agree the situation becomes more complex in the public sector as they have specific rules regading freebies, but these rules are clear from the outset; not applied retrospectively.

I've never worked for a firm that "wanted" my miles! - in fact id refuse to fly unpaid if this became the case..
A friend of mines firm had a great compromise though..they'd pay 80% of the fully flex fare to the employee if they used their own miles!

I think thats fair as both parties benefit.

A few other thoughts sprang to mind:

a) miles arent generally transferable so are effectively useless/worthless to all but the individual

b) From a tax perspective airmiles have very little notional value so I believe would be not be declarable.
Also as companies themselves dont award them they cant appear on a P60

Of course if you join a company that has a travel policy that states you must spend your airmiles for business purposes and you agree all bets are off, as although you would still own the miles youve legally agreed to spend them on business needs.

[RichardMannion]

Jonathan,

All is different in Germany - The Workers Union has some unique policies. I know how many challenges I used to encoutner when trying to implement EMEA wide policies for support, measuring and rewarding individuals is stringent, even more so as the outsourcing company.

Just like in Australia air miles are a taxable benefit.

For my company, individuals can keep their own airmiles, but with a proviso that their choice of flight for a trip does not coincide with their status with the airline. So if BA is cheapest, then BA it is. However if its a small amount of difference, I discuss it with my manager as they see the benefit can be recouped such as the discount on car parking, and there is no expense for food and drink at the airport. The travel policy at my employer can get complicated, the class of travel depends on who you are and how many trips you make. The problem is that companies need to have a good policy as you get employees that take the piss, and thats just not on travel, its expenses as well. Like an individual who thought that paying for an upgrade to Concorde on the way home from NYC was acceptable.

Thanks,
Richard