Privately usable company cars are remuneration for work

Federal Labour Court (Bundesarbeitsgericht): Privately usable company cars are remuneration for work - therefore no entitlement after expiry of continued remuneration (judgement of 14.12.2010, 9 AZR 631/09).

The provision of a car for private use is an additional payment for work, according to the Federal Labour Court. And as part of the remuneration, the employer only has to grant it for as long as it owes remuneration at all. However, this is only the case until the end of the statutory six-week period in the event of incapacity for work due to illness.

Conclusion: In the event of incapacity for work due to illness, the company car entitlement generally ends at the end of the continued payment of remuneration, i.e. generally six weeks after the start of the incapacity for work.

If the employee can demand continued payment of remuneration for a longer period on the basis of a collective agreement or employment contract, the company car entitlement also exists for a correspondingly longer period.

It is also possible to have special contractual provisions on company car entitlement that are more favourable to the employee and grant them the right to use the car even after the (six-week or longer) period of continued remuneration has expired. However, if there are no concrete indications of such a special agreement, the company car authorisation ends at the end of the continued remuneration period.