ATMC View – September 2012


Duty of care trends making an impact on corporate travel

By Rob Dell, committee member,
the Association of Travel Management Companies


AUSTRALIA’S unique geographic position and the naturally gregarious nature of our people have resulted in us having one of the world’s highest per capita travel propensities.

In corporate travel, international long haul travel (flights over eight hours) is particularly strong when compared to the key European and North American markets where flights are often less than three hours and involve same day travel.

A typical business trip from Australia to emerging Asian markets might involve seven to 10 or more days of average duration and usually more than one destination.

This in turn provides duty of care challenges for employers as increasingly travellers are exploring less well known areas where local conditions vary considerably and communications are sometimes difficult or unavailable.

In the past travel to, for example, Mongolia was for the most part only for the most adventurous. But in today’s business travel environment, travel management companies (TMCs) are seeing increasing trends towards such destinations.

TMCs are constantly improving their systems and employee’s knowledge of these new destinations and expanding their networks in order to deliver on-the-ground customer assistance if it is required.

TMCs are providing very specific information about local conditions and guidance to customers on how to manage disruption to travel and unexpected events.

Corporate travel managers’ increasing focus on the duty of care for travelling employees is the result of the progressive strengthening of legislation in many markets, notably the UK, where there are heavy penalties for companies and individual directors who fail to ensure duty of care processes are in place.

The recent growth of low cost carriers in many regions coupled with strong “best fare of the day” policies have placed corporate travel managers in a difficult position where cost and the safety and financial integrity of the airline must be balanced with the responsibility of the employees’ safety.

Not so very long ago several Australian business travellers were injured and one was killed in an air-
craft accident in Asia involving a low cost carrier, now out of business, high-lighting the need for greater caution.

Companies that do not mandate travel purchasing through TMCs, allowing employees to “do their own thing” run significant risks insofar as their duty of care is concerned.

An employee not following policy in the booking process will cost the employer more in the long run, will prevent the employer from understanding where they are, and put themselves at risk as a result.

It is also important for corporate travel managers to be aware of their organisations’ insurance policies in detail where they relate to travel. There have been several recent cases where an employee travelling internationally has fallen ill and has taken it upon themselves to re-book themselves to return home without consultation, incurring additional costs, sometimes very significant.

Many travellers and corporate travel managers may assume that because the credit card which is used to purchase travel has insurance as part of the offering, that this insurance is comprehensive. This is not the case, and it should not be assumed that specific travel insurance is not required.

TMCs strongly recommend a process of an annual audit of the entire duty of care approach within a company, including review of any specific traveller facing documentation and take the opportunity to refresh and re-distribute throughout the business.

ATMC View will appear quarterly.