BenefitsBit: A discretionary employee advantage or an acquired right?
The Supreme Court provides guidance (and not more than that).
The yearly Christmas bonus, the day off on the employee’s birthday or the employer’s contribution to the costs of an employee’s fitness subscription. These are just some examples of the advantages an employee can enjoy that are not laid down in the existing employment contract between the employee and the employer. Often the employer views these advantages as favours to the employee that are of a discretionary nature, while the employee views them as rights that he has acquired.
When an employer for whatever reason decides to no longer offer a certain ‘perk’, often the question comes up whether the employer is allowed to take such decision unilaterally. The employee, whether or not supported by the trade union, will in such case argue that he/she may have expected to continue enjoying the ‘perk’, since the employee received it for a certain period of time.
The question whether an employee has acquired a right to a certain non-contractual advantage, has led to varying case law rendered by lower courts. It is clear that an important factor for the courts has been the length of the period during which the advantage has been provided to the employee, but it is unclear where the turning point lies and what other criteria are relevant to the assessment whether or not an acquired right is the case. Professionals have been asking for more clarity in this respect.
Following the advice of the advocate general, the Supreme Court attempted to answer the call for clarity in its judgement of 22 June 2018 (FNV/Pontmeyer). After noting that there is no general answer to the question when a specific course of conduct of an employer results in an additional employee benefit, the Supreme Court formulated six viewing points to provide more guidance in answering such question:
- The substance of the course of conduct.
- The nature of the employment contract and the employer’s and employee’s position towards each other.
- The length of the period during which the employer followed the specific course of conduct;
- All that the employer and employee have said, or have not said, to each other with respect to the specific course of conduct.
- The nature of the advantages and disadvantages related to the specific course of conduct for the employee and the employer.
- The nature and size of the group of employees towards who the employer followed the course of conduct.
Relevance for the legal practice
With the Supreme Court’s judgement, lower courts now have a set of guidelines for their assessment, which was not available before. When lower courts start applying these guidelines, it should be possible to distract a common approach in the assessment whether or not an acquired right is applicable, which will help legal professionals in providing clients with their advice. The Supreme Court did not clarify the order of priority between the viewing points, the turning point, nor did it provide more guidance on how to substantiate the viewing points. These points should be crystallized in case law of the lower courts. Since the judgement, two months ago, the first lower court rulings on this topic have been published. The district court of Rotterdam applied the guidelines provided by the Supreme Court, which resulted in the conclusion that the employees in question have acquired the right to an allowance for on-call shifts. With reference to the Supreme Court’s judgement, the district court Midden-Nederland came to the conclusion (in preliminary-relief proceedings) that the use of the company car, the fuel card and mobile phone qualifies as an employment benefit.
Despite the guidance provided by the Supreme Court, the question when an employee has acquired a certain right will remain a hot topic. The guidelines could be helpful for ensuring as much as possible that certain perks that are offered by an employer remain perks and do not become acquired rights of an employee. Following the guidelines of the Supreme Court it is advisable for employers to examine the perks that they currently offer to their employees. Our Employment & Benefits team is of course more than happy to assist!
For more information contact your regular Loyens & Loeff advisor or Youssef el Harchaoui.
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