Driving a lease car for ten years: an employee's acquired right

It happens regularly that employers at a certain point in time wish to limit the right of their employees to drive a leased car. But from an employment law perspective, this is not something that should be taken lightly!

The subdistrict court Midden-Nederland gave the following ruling at the end of December 2020. Employee has been working for the employer as Contract Manager (later Senior Contract Manager, now: Senior Legal Counsel) since 1 June 2008. Since then, the employee has access to a lease car based on the company’s lease scheme. This scheme distinguishes between so-called 'functionally representative' lease cars and 'employment-related' lease cars (for positions above a certain salary scale).

Employee drives a 'functional lease car' from the the beginning. However, as of 1 November 2018, the employer introduced a new mobility policy. This policy limits the right to a lease car to employees who have a job requiring travel; 'employment-related' lease cars will no longer be granted. The Works Council has agreed to this new policy.

Employee receives a letter on November 19, 2018, stating that he does not have a job requiring travel and that he will fall under the scope of the transitional arrangement. Employee receives an businesscard for public transport (also for private use) plus a monthly mobility allowance based on his lease amount until 15 October 2025.

The employee is not happy with this: he objects to the employer's decision, but his complaint is declared unfounded. In May 2019, the employee's lease contract ends. The employee starts a case with the subdistrict court to seek justice. He claims a declaratory judgment stating that the provision of a lease car to him, at the expense of the employer, was a primary or secondary condition of employment and that the unilateral change to his condition of employment with regard to the lease car was therefore not valid.

The subdistrict court found in favor of the employee: a lease car is an employment condition. Employee indicated that his position was classified as 'requiring travel' until 2018, but that in reality it was not a job requiring travel. After all, he only visited a customer on average once every two months from the moment he started working.

In response, the employer indicated that, initially, employee often accompanied bid managers to clients as part of his job, but that the - as the issues became more complex – the job no longer required travel.

The subdistrict court indicated that the mere circumstance that the employee regularly went to visit clients for some time did not justify the fact that the employee actually fulfilled the conditions for the granting of a lease car. In short: the employee was given a lease car upon commencement of employment, but he never met the requirements set out in the lease scheme.

For the employee, the provision of the lease car became an essential part of the benefits arising from his employment contract from 2008 onwards. The fact that private use of the car was permitted and that the employee had a fuel card, weighed in the balance.

Although this employee did not meet the conditions for the granting of a lease car according to the lease scheme, the employer extended the car twice: employee was allowed to drive a lease car for 10 years. The employee was therefore entitled to a legitimate expectation that he would also enjoy this benefit for the rest of his employment.

The subdistrict court also stated that the employer was not allowed to unilaterally change the employment condition, even though the employment contract and the lease scheme contain a so-called ‘unilateral changes clause’. According to the subdistrict court, the circumstances put forward by the employer were not as compelling that the interests of the employee - on the grounds of reasonableness and fairness - should give way to the interests of the employer. The subdistrict court also ruled that the employer had not substantiated its interest in pursuing a uniform and balanced lease car policy. Insufficient attention was paid to the equality of the employees' salaries; the salary and the other terms and conditions of employment must be compared.

According to the subdistrict court, the fact that the employer is striving to achieve fewer and more sustainable travel movements is sympathetic. However, compared to the employee's interest in having unchanged employment conditions, this is not so compelling that the employee's interest must give way on the grounds of reasonableness and fairness.

You can read the full judgment here: ECLI:NL:RBMNE:2020:5770, Rechtbank Midden-Nederland, 8498875 UC EXPL 20-3557 JH/1050 (rechtspraak.nl)

Do you also have questions about lease car arrangements, harmonization of employment conditions, (unilateral) changes to primary or secondary employment conditions or other employment law dilemmas? Ask the employment lawyers of SPEE advocaten & mediation.

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