News

“You don’t #$$% with another man’s vehicle”

February 11, 2016
Martyn Top, Höcker Advocaten, Netherlands

Hocker-logo“You don’t #$$% with another man’s vehicle. You just don’t. It’s against the rules.” John Travolta as Vincent Vega in the film Pulp Fiction (1994).

The average employee is very attached to his or her lease car. If an employer seeks to take back an employee’s lease car, this frequently gives rise to disputes, with litigation all the way up to the court of appeal not being all that uncommon.

Employee? Appeal? Litigation?

I’m sorry to disappoint Pulp Fiction fans, but what follows below is not a meditation on Pulp Fiction, but a brief survey of the court decisions on taking back lease cars and the lessons which employers may draw from these decisions.

Amsterdam Court of Appeal
The Amsterdam Court of Appeal was forced to consider a dispute between ING and six employees in 2011. ING had a lease car scheme, under which employees above scale 12 were provided a lease car. The employees could use this car for private purposes as well. In 2002, ING decided to no longer make a lease car available to employees in scale 12. ING had promised the employees who were then in scale 12 that this change would not affect them. Eight years later, in 2010, ING decided to terminate this ‘transitional scheme’, so that the employees would no longer get a lease car after the lease contract ended. The Court of Appeal ruled that ING was only entitled to break the promise (from 2002) under very exceptional circumstances. Thus, in this instance, a specific, individual promise precluded a change.

Fast forward two years later to the same court of appeal. This time it was Heineken versus nine employees. The employees, all of whom were lawyers, were given a lease car upon their appointment without any stipulations. They did not have to keep track of how many kilometres they drove for private purposes. Heineken subsequently changed the lease car scheme, and several employees had to turn in their cars because of the new criteria for granting cars. The Court of Appeal found that, although a changes clause had been included in the lease car scheme, this scheme did not apply to the employees concerned. They had all received an individual promise. So they got to keep their lease cars.

Rotterdam and Amsterdam Sub-District Courts
Let’s jump to the summer of 2015. Two disputes: one between the housing association Stichting Havensteder and two employees, and one between Chubb Fire & Security and a single employee. The latter case involved a company car scheme under which an employee was only eligible for a lease car if the employee drove at least 15,000 kilometres on business each year, including commuting. This limit was maintained in a later scheme, without reference being made to commuting. In early 2014, Chubb Fire & Security told the employee that he would no longer be entitled to a lease car as from 1 June 2014. Proceedings before the sub-district court followed. Notwithstanding that the conditions of the company car scheme had not been enforced for years, the company was able to take the lease car back. A factor in this was that the taking back of the car was prompted by a necessary cost reduction, which the employee failed to dispute sufficiently.

At housing association Havensteder, three lease car schemes applied as a result of a merger. Havensteder wanted to do away with two of the three schemes and offered a phase-out scheme. The works council did not consent to the change. Havensteder then invoked a changes clause in one of the schemes. And what was the employees’ defence? “We never received any lease car scheme, just a pre-printed contract.” The Sub-District Court later held that the changes clause was therefore inapplicable and that the reason for doing away with the lease car scheme was not so serious that the employees should nevertheless have been obliged to accept the phase-out scheme.

Lessons
Employees are often permitted to also use lease cars for private purposes. This becomes a fringe benefit (wages in kind) then, and it is not easy for the employer to just change this. A number of ‘best practices’ can be inferred, though, from cases brought before the courts in recent years:

• Formulate clear conditions for granting cars, which conditions include a changes clause. This is where it often goes wrong: Employees are not bound by a scheme or have made different agreements. Make sure that these conditions apply to the individual employee and reserve the right to revoke the scheme for the employee if the employee no longer satisfies the conditions. Further, see to it that the conditions are applied consistently.
• If a collective change is made to the lease car scheme, the existence of a unilateral changes clause and consent by the works council can provide support. If the works council has not already made its consent conditional on a phase out scheme, it makes sense in principle to offer such a scheme to employees, even if the works council is involved in the change (or there is no works council).

Pulp Fiction
Back to Pulp Fiction. Yes, it’s true that Vincent Vega’s car had not been seized by his employer (Marcellus Wallace), but had been vandalised by an unknown third party. Didn’t this all take place in California, too, so that none of this has any bearing on changing lease car schemes under Dutch law? Absolutely correct!

Still, doesn’t Pulp Fiction perhaps merit another viewing?