Under what circumstances could my employer seize my corporate vehicle?
Starting a new gig at a company, you're handed the keys to a company car, allowing for both work-related and personal journeys. Later on, your boss throws you a curveball by requesting the return of the automobile. Is this within their rights?
According to Peter Meyer, a labor law specialist based in Berlin, a company car utilized for private purposes is essentially an integral part of your overall compensation, alongside your fixed wage or performance-based bonuses. "In most cases, employers are not authorized to reclaim this company car," Meyer explains.
There are, however, situations where an employer can request the return of the vehicle:
- Contractual stipulations: The employment agreement or company car policy may detail the circumstances under which the employer can seize the vehicle. For example, per Meyer, these could include a prolonged period of incapacity beyond six weeks or an internal transfer of an external employee to a position with reduced travel responsibilities.
- Termination of employment: Post-termination, the employer also has the right to claim back the company car, particularly if you've been released from job responsibilities. Nonetheless, a contractual agreement should be in place that supports their immediate claim for the vehicle after termination has been announced, Meyer adds.
No company car regulations mentioned in the agreement?
In the absence of any specific provisions in the employment contract regarding the early return of the company car, employees can continue utilizing the vehicle until the end of their employment, even during a termination period.
If an employer requests the return of the company car prematurely in an unfair manner, and the employee complies, Meyer indicates that they may be entitled to compensation. Typically, this compensation corresponds to the amount of tax the employee has paid for the car's private use.
About Peter Meyer: A labor law expert and a member of the executive committee of the Labor Law Working Group within the German Bar Association (DAV).
Based on Peter Meyer's explanations, if your employment agreement or company car policy does not specify when the employer can retrieve the vehicle, you're allowed to use it until the end of your employment. However, if your employer requests the return of the company car prematurely unfairly and you comply, you might be entitled to compensation equal to the tax you paid for the car's private use.
