What are the legal consequences of an employer's reduction of the benefit to an employee of a company vehicle?

Athens 28/1/2025

Legal Notice

I was asked the following question: What are the legal consequences of an employer's reduction of the benefit to an employee of a company vehicle?

My position on that question is as follows:

From the provisions of Articles 361, 648, 649, 653 CC and Article 1 of the 95/1949 International Convention "on the Protection of Wages" ratified by N. 3248/1955, it follows that in the contract for the provision of employment  a salary is considered to be any benefit which, according to the law or the contract, the employer is obliged to pay to the employee in return for the work provided.

The salary awarded to the employee is, as a rule, monetary. However, the salary may also be paid in kind (in whole or in part). Benefits in kind which have economic value and are provided precisely because of the employment relationship constitute salary in kind. Wages in kind are thus the grant of certain goods by use or ownership, such as the assignment of a company car.

 The employment contract is one of the so-called "atypical contracts" (CC 158), i.e. it does not need to be in a specific form (e.g. written text) in order to be valid in its entirety or in specific terms. Therefore, it is validly concluded in whole or in part - and therefore creates a legal commitment - and verbally. This means that even if it is not explicitly stated in the individual employment contract that a company car will be provided to the employee, the company is legally bound to provide this benefit if the agreement for this benefit took place orally and is implemented. It is also legally irrelevant as to the binding nature of such an agreement whether it took place at the initial conclusion of the employment contract or at a later stage (in the latter case it is simply a contract amending the original one). Based on the above, benefits (in kind) of the employer to the employee, which are not explicitly reflected in the employment contract, but have been orally agreed and granted, are fully binding.

Furthermore, if no agreement (oral or written) has taken place between the employee and the employer for the granting of a certain benefit (in cash or in kind), this benefit is called "voluntary", i.e. it is given at the employer's will and not on the basis of an obligation. It is possible that a benefit which began as 'voluntary' may develop during the employment contract into a 'business habit' and become compulsory. This may be the case where the benefit is granted consistently and uniformly over a long period of time, in such a way that the circumstances created implicitly indicate the willingness of the employer to maintain it in perpetuity and of the employee to accept it, looking forward to it as a wage benefit. This means that it is produced then an implied agreement, according to which the benefit in kind becomes a condition of the individual contract of employment and thus acquires a wage character, and the employer may not unilaterally terminate its granting unless he has expressly stated from the outset, or even before the conditions of binding effect arose;  its reservation to unilaterally discontinue voluntary provision in the future (. Supreme Court 2/2024). The case-law also accepts that benefits in kind may assume the character of a business habit and thus become mandatory, with the consequence that their subsequent reduction by the employer constitutes a unilateral detrimental change in working conditions ( Supreme Court 95/2009).

 If the provision of a company car constitutes according to the above term of the individual employment contract, any reduction by the employing company without the consent of the employee constitutes a unilateral detrimental change of working conditions. The employee has in this case the following rights:

1) Appeal to the Labour Inspectorate and repel the change by demanding compliance with the terms of the employment contract, i.e. the continuation of the concession of the company car, and in case the employing company refuses after the employee's protest to continue granting the benefit, the employee may lawfully refuse to provide his services under the new conditions and claim the payment of overtime wages.

2) to consider this change in accordance with article 7 of Law 2112/1920, as termination of the employment contract  by the employer and to claim the payment of legal compensation, if the contract is of indefinite duration. It should be noted that a unilateral detrimental change in working conditions does not in itself entail the termination of the employment contract.

3) The employee may, in addition, claim compensation for non-material damage, if the unilateral detrimental change is accompanied by circumstances offensive to his personality.

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