Boss wants to cancel the company car? It's not that simple!

Company car: more than just a means of transportation

In Germany, the company car has long been more than just a tool for the job. For many, it is part of their salary - and a status symbol to boot. Around one in five new cars on the road is a company car. And employees are often allowed to use them not only for work, but also for private use. But what happens if the boss suddenly pulls the plug and bans private use?

The Federal Labor Court (BAG) has now answered precisely this question - with far-reaching consequences for anyone who drives a company car.

Revocation only with good reasons - and a contract!

Basically, if the employment contract allows private use of the company car, then this is not simply a bonus that the boss can simply take back. No, it is a non-cash benefit - i.e. part of the salary.

This also means that a ban on private use is not permitted without a clear contractual provision. And even if such a clause exists, the employer may not act arbitrarily. The BAG requires comprehensible reasons. These include:

• Economic distress of the company
• Prolonged illness of the employee (more than six weeks)
• Breaches of contract such as misuse of the vehicle

It must also be clear in advance under what circumstances revocation can take place. In other words, employees should know what they are getting into. Surprise actions by the employer? A no-go according to the court.

Watch out for the tax trap: when the car is gone in the middle of the month

Another sticking point concerns income tax. Anyone who also uses their company car privately pays tax on this benefit at a flat rate - every month, usually using the famous 1% rule. If the car is now withdrawn in the middle of the month, the full tax burden remains - but without consideration. According to the BAG, this must also be taken into account.

And: If the car is taken away unjustly or for too short a time, the employee can demand compensation for loss of use. Along the lines of: If you take my car, you have to pay me for the damage.

Put an end to the company car dictate!

What the Federal Labor Court has decided here is an important step towards fairness in everyday working life. Company cars are not just nice extras, but a hidden part of the salary. If you tamper with it, you also tamper with your income - and that's just not an option.

Many bosses make the mistake of believing that they can dispose of company cars at will. Wrong thinking. This ruling shows that a contract is a contract. And once you've promised a car as part of your salary, you can't simply cancel it if the mood changes or the budget gets tight.