- Unilateral Change of Lease Car Arrangement Possible Under Certain Circumstances
- June 18, 2010 | Authors: Dennis Veldhuizen; Alexandra van Hogendorp-Rothenbücher
- Law Firm: Greenberg Traurig, LLP - Amsterdam Office
Recently, the court of appeal in Arnhem ruled that the employer (in this case, the Dutch labor authority / UWV) was allowed to make lease cars available to field sales employees and to require other employees to return their cars. A number of employees opposed this decision. The case ended up at the court of appeal.
According to the court of appeal, the UWV was entitled to invoke the unilateral changes clause in the collective car agreement, which formed part of the individual employment agreement. Since the employees were bound by this clause, they could not rely on the condition that the lease car agreement would remain in effect throughout the full term of their employment.
It follows from article 7:613 of the Dutch Civil Code that the employer is only entitled to invoke the unilateral changes clause if they can show a significant interest that reasonably outweighs the interest of the employee to be prejudiced by the change. The court of appeal ruled that the UWV was compelled to implement material budget cuts, amongst others a collective dismissal. Those measures were imposed by the Dutch government. As a result thereof, the lease car agreement no longer fit with the (image of the) organization.
The court of appeal ruled that the UWV had a major interest in changing the way that the lease car agreement would be applied. As part of its considerations, the court noted that the UWV had applied a reasonable transitional arrangement and had allowed the employees to buy the lease car against an interest-free loan.
The court ruling confirms that, in practice, it is less tough to change collective arrangements, such as a car lease or pension, with reference to a unilateral changes clause. To do so, however, the company needs to be in serious (financial) trouble. A unilateral changes clause can be included in an employment agreement, employment offer letter or personnel handbook. It is recommended to include a unilateral changes clause in new employment agreements or a personnel handbook. Please have the employee sign such a document.