Company car. Which monitoring and surveillance systems are legally valid for your employees’ correct use of a company car?

Providing workers with a company car so that they can perform the duties involved in their jobs is a very widely used system in various business sectors. The employees are also allowed to use this car for personal purposes; however the expenses incurred for such personal use must be borne by the employee, unlike the expenses incurred for using the vehicle for business purposes.


The problem that arises for us when applying this formula is the difficulties we encounter when deciding which expenses are solely incurred for the business use of the car and, on the other hand, which expenses are incurred for the aforementioned private or personal use thereof.


In particular, which methods can I use to monitor the distances driven during working hours and to therefore know the total kilometres corresponding to the business use of the car? Would installing a GPS system in the car violate the workers’ right to privacy and data protection? What risks could I face as an employer?


As a preliminary approach, we would like to point out that the legislation based on which the subject matter of this article has been determined is, precisely the Charter of Fundamental Rights of the European Union, in particular the provisions in its Article 8, i.e. the right to “personal data protection”.


This article states the following:


  1. Everyone has the right to the protection of personal data concerning him or her.


  1. Such data must be processed fairly for specified purposes and on the basis of the consent of the person concerned or some other legitimate basis laid down by law. Everyone has the right of access to data which has been collected concerning him or her, and the right to have it rectified.


  1. Compliance with these rules shall be subject to control by an independent authority


In this respect, the recent judgement ruled by the European Court of Human Rights on 13 December 2022 dealt with this issue and determined that installing a GPS system in a company car in order to check the kilometres and routes driven by the employees during their working hours and in their personal time does not imply a violation of Article 8 of the Charter of Fundamental Rights of the European Union.



  • In the case analysed here, the plaintiff was dismissed by his employer after the latter discovered he had included the kilometres he had driven for his personal use of the company car as though these distances had been for business purposes.


  • The plaintiff had been warned by the company that GPS devices were installed in the company cars, as well as the purpose for such installation and the data that was intended to be obtained from them.


  • The dismissal was challenged by the plaintiff in the Court of Vila Real, which considered that the dismissal was fair. Due to this the plaintiff appealed such ruling in the Court of Appeal of Guimarães that, albeit with different legal grounds, upheld the judgement of the lower court and also considered the dismissal was fair.


  • The plaintiff resorted to the European Court of Human Rights to file a claim against Portugal, because he considered that processing the GPS data obtained from such system and his dismissal on the basis of such data had violated his right to respect of his private life, pursuant to Article 8 of the aforementioned Charter, and hence the State had infringed its affirmative duty to protect the plaintiff’s right due to the courts deeming that the dismissal was fair.


Legal grounds and conclusions:

  • The judgement analysed the rulings of the aforementioned courts explaining that, although the first court considered the dismissal was fair because the plaintiff had been duly informed both of the installation of the GPS device and the use of the data that would be collected by the use thereof, the second court considered that the use of this information to verify the performance of the employees was not in accordance with the law, since this use would exceed the scope of remote surveillance that is prohibited by the Portuguese legal system, but it was in accordance with the law to check that the information related to the kilometres that the employee counted for his professional work was in accordance with the real situation.


  • Therefore, the European Court of Human Rights considered that the Court of Appeal of Guimarães restricted the scope of interference in the plaintiff’s private life to what was strictly necessary for the legitimate purpose sought, i.e. to monitor the company’s expenses.


  • Along the same lines, the European Court of Human Rights considered that the Court of Appeal of Guimarães had carefully taken into account the plaintiff’s right to respect of his private life and the right of his employer to ensure the company operated efficiently, bearing in mind the legitimate objective sought by the company, i.e. the right to monitor its expenses. Therefore, in this case, it did not raise the margin of consideration that was applied by the State. The Court of Justice concluded that the national authorities had not breached its affirmative duty to protect the plaintiff’s right to respect of his private life.


  • Therefore, the Court concluded that, in this case, the State had not violated the right included in Article 8 of the Charter of Fundamental Rights of the European Union.


So, is the use of devices, such as GPS, always a means of monitoring and surveillance by the employer that fulfils the provisions in Article 8 of the Charter of Fundamental Rights of the European Union?

No. The specific features of each case must be analysed, in particular the predominance must always be assessed between the interests that the company intends to safeguard with the aforementioned measure and the greater or lesser alteration affecting the worker’s right.


In any case, the circumstances arising in each case and the specific legislation for such purpose that could have been determined by each country must be analysed.


What risks could I face as an employer if a monitoring and surveillance system is installed that is later considered to violate the rights related to my employees’ privacy and data protection?

We should clarify that if, by using surveillance systems that are not in accordance with the law, this results in a worker being dismissed and later this means of evidence is ruled null and void, we could be faced with various consequences:


  1. The penalty could be ruled inadmissible, if there are not sufficient grounds for the dismissal by considering the reasons alleged for this have not been proven. In the event of such ruling, within a term of five days, counted from the date notice of the judgement is served, the employer may choose to reinstate the worker or pay compensation equivalent to thirty-three days salary per year worked.
  2. The dismissal could be ruled null and void, which would take place when the decision for dismissal adopted by the employer was due to any of the reasons for discrimination prohibited by virtue of the Spanish Constitution or the law or the worker’s fundamental public rights and freedoms have been violated, as well as if any of the reasons for objective nullity arise. The ruling that the dismissal is null and void would imply the worker must be reinstated in his/her job and the relevant salary while the case was being processed must be paid. This could also imply acknowledgement of the right to compensation for the damages caused to the worker.


However, it is important to stress that the ruling of specific means of evidence being null and void does not imply automatic nullity, nor simply inadmissibility, since the dismissal can be based on other means of evidence that, nevertheless, must be in accordance with the law.


Author: Miguel Capel, partner at RSM