A company may consider terminating their Services Agreement with the Electric Car Scheme. However, this decision may not always be in the company's best interest, as it would result in employees no longer being able to participate in the EV salary sacrifice offered through the scheme in the future.
Its good to remember that if no employees have a car under the Scheme (maybe they have returned it), there will be no ECS Admin Fee to pay.
The terms of the Agreement state that it is effective for a minimum period of 2 years (referred to as the "Term" in the Agreement) and will continue thereafter with a 90-day termination notice by either party, whether it is the company or the Electric Car Scheme.
Can the Services Agreement be terminated before the minimum period ends?
The Agreement can be terminated immediately, before or after the 2 year minimum period, by either party upon written notice if:
- The other party commits a serious breach of any term of the Agreement, which cannot be remedied, and fails to rectify the breach within 30 days of receiving written notice specifying the breach.
- The other party becomes bankrupt, fails to make payments when due, applies for company restructuring, appoints an administrator, goes into liquidation, or is considered insolvent.
- The company also has the right to terminate the Agreement if a "Pause" is put into effect for a period of one or more months. A "Pause" refers to the company reserving the right to temporarily suspend the scheme for new employees signing up. In order to initiate a pause, the company must provide written reasoning to the Electric Car Scheme at least 30 days in advance. If the pause period exceeds one month, the Electric Car Scheme may decide that it is no longer economically viable to continue providing their services and may choose to terminate the Agreement.