04 Nov 2021 Lease car: unconditional employment condition or not?
When it comes to terms of employment and the unilateral amendment by the employer, the leased car is a hot topic in practice. A ruling by the Den Bosch Court of Appeal answers the question: does the employee have an unconditional right to drive a lease car or not?
The case involved an employee who had been working for Ericsson, a legal predecessor of VodafoneZiggo, since 1985. In 2005, the employee was given a lease car. Ericsson informed the employee in writing that he would have to pay a contribution for the private use of the car. It was also made clear that the criterion was that the employee would drive at least 12,000 business kilometres per year. Ericsson checked this twice, but did not do so after that.
In 2013, Ericsson was taken over by Vodafone. The employment contract with Vodafone states that the employee will retain his right to a lease car for the duration of his current lease contract. When the current contract expires, the employee's eligibility for a lease car will be reassessed.
A few years later, in 2017, Vodafone entered into a partnership with Ziggo. In 2018, employee was informed that his formal employer remained unchanged and that a decision had been made regarding the intended change in organisational structure and location policy. It was further informed that his current employment conditions would remain unchanged for the time being and that harmonisation of employment conditions was expected to take place later in the year.
In November 2018, Vodafone informed employee by letter that about its new mobility policy: employer chooses more public transport and the right to a lease car will be limited to people with an itinerant position. According to Vodafone, this employee is no longer entitled to a lease car under the new scheme. However, there is a transitional arrangement: the employee retains the right to a lease car until 1 January 2019; the current lease contract was to end on 1 November 2018.
On 1 January 2019, the employee hands in the lease car. The employee was not satisfied with this and took his case to court. He claimed a declaratory judgment that the lease car was an employment condition and that unilaterally changing that condition was not allowed. Furthermore, he claimed that Vodafone should be ordered to provide him with a comparable lease car within 48 hours of the notification of the judgement. Should the Subdistrict Court rule that the lease car was no employment condition, the employee alternatively claimed that Vodafone should be ordered to pay equitable structural compensation, for the loss of the lease car until the end of the employment contract.
Judgment of the court of appeal
In the first instance the employee was unsuccessful before the court; his claims were rejected. The employee therefore lodged an appeal. Firstly, the court of appeal established that the employment contract was for an indefinite period with a relatively large employer. Whether it is to the employee's advantage that he has had a lease car at his disposal for a long period of time - 13.5 years - which he was also allowed to use privately, depends on the other circumstances of the case and is to a large extent dependent on the content of the lease car policy and what the employer and employee have stated about it.
With regard to the content of the policy, the Court of Appeal considers it clear that the employee was granted the lease car because he drove more than 12,000 business kilometres per year. The fact that Ericsson only checked these kilometres twice in the first few years of employment does not mean that the minimum requirement of business kilometres has also lapsed.
It is also important to note that prior to the takeover by Vodafone, Ericsson confirmed to the employee that the lease car criterion was based on actual kilometres. Vodafone subsequently confirmed that the terms and conditions of employment had been transferred and also informed the employee that he would keep this lease car for the duration of his current lease contract.
It was also stated that upon expiry of this contract, the employee's eligibility for a lease car would be reviewed. The employee did not protest against this. In April 2018, in the context of the merger with Ziggo, Vodafone informed employee that his current employment conditions would remain unchanged for the time being and that harmonisation was expected to take place later in the year. This harmonisation in the new mobility policy and its consequences were subsequently made known to employee, by letter in November 2018.
From all this, the Court draws the conclusion that Vodafone repeatedly communicated that the provision of the lease car was subject to conditions. In response to this communication, the employee did not let Vodafone know that he had a different opinion, although he had been invited to do so.
The Court of Appeal also attached importance to the fact that the Works Council had agreed to the new mobility policy, which applied equally to the employee and all other Vodafone employees, including colleagues from Ericsson.
If you want to read the full judgement, you can do so here.
In the case just discussed, the employee did not have an unconditional right to drive a lease car. The case also demonstrates the importance of a written lease car policy. We therefore always advise employers to put down on paper a clear, legally correct and up-to-date lease car policy. Do you need help with that? Or are you an employer or employee and do you have any other questions regarding unilateral changes to employment conditions? SPEE advocaten & mediation will be happy to help you on your way.