Employment law
Company car and notice period: why you cannot take the keys back straight away
On 3 March, Ibrahim places his resignation letter on the desk of the Managing Director of Sirakoro Distribution. Sales Director for six years, he will join a competitor at the end of his three-month notice period. The Managing Director releases him from coming to the office from the next day and asks for the keys to the pick-up truck he also uses in the evenings and at weekends. That last request can prove costly.
Sirakoro Distribution and the people mentioned in this article are fictitious: they are used as examples only.
1. What exactly are we talking about?
Sirakoro Distribution delivers food products to shops in Bamako and employs 120 people. All its sales staff drive a company vehicle. But these vehicles do not all have the same legal status.
A pool vehicle is reserved for work purposes: it stays at the depot in the evening and is not used at weekends. It is a work tool, like a computer. A company car is made available to the employee for work and for private life: personal trips, weekends, holidays.
This private use is a benefit in kind, meaning goods or a service provided by the employer in addition to the cash wage. Under the Labour Code, remuneration includes the base salary and “all other benefits, paid directly or indirectly, in cash or in kind” (Labour Code, article L.95). The company car is therefore part of the remuneration.
| Criterion | Pool vehicle | Company car |
|---|---|---|
| Use | Work only | Work and personal |
| Legal nature | Work tool | Benefit in kind, and therefore part of remuneration |
| Payslip | Does not appear | Must appear (article L.105) |
| Taking it back during a waived notice period | Possible | Not possible before the notice period ends, unless agreed in writing |
Why does this distinction matter? Because the law protects remuneration in all its forms. Withdrawing a benefit in kind amounts to cutting pay.
The most common mistake
Thinking that because the vehicle belongs to the company, it can be taken back at any time. Ownership stays with the company; it is the private use that forms part of the remuneration. The decisive criterion is what the contract says: if personal use is allowed, it is a company car.
The car belongs to the company. Its private use belongs to the pay.
2. The notice period: the contract runs until the last day
Ibrahim’s resignation does not end his contract on 3 March. It opens a period during which the contract continues to have full effect.
The notice period is the time between the announcement that an open-ended contract is being terminated and its actual end. A resignation must be notified in writing (article L.40). In the absence of a collective agreement or a decree in lieu thereof, the notice period is as follows (Labour Code, article L.41):
| Employee | Notice period |
|---|---|
| Paid by the day or by the week | 8 days |
| Paid by the month | 1 month |
| Supervisors and similar staff | 2 months |
| Executives and management staff | 3 months |
During the notice period, the employer and the employee remain bound by all their reciprocal obligations (Labour Code, article L.42). For Sirakoro Distribution, this means paying the salary and maintaining benefits. For Ibrahim, it means continuing to work, unless released, and not carrying out any competing activity (article L.16).
Ibrahim is an executive: his notice period runs from 3 March, the date he handed in his letter, to 3 June.
The most common mistake
Believing that a resignation frees the employer from its obligations as soon as it is received. As long as the notice period is running, the resigning employee is still an employee, with all their rights.
What you need to do
- Acknowledge receipt of the resignation letter in writing and record the start date of the notice period.
- Calculate the end date of the notice period according to the employee’s category and the applicable collective agreement.
- Maintain the salary and all benefits until that date.
3. Waiving the notice period: what you cannot take away
The Managing Director no longer wants to see Ibrahim at the office. He has the right to release him from working. But this decision has a price set by law.
Waiving the notice period is the employer’s decision to release the employee from the obligation to work during the notice period. Unless mutually agreed, it entails no reduction in the salary, benefits and holiday pay the employee would have received had they worked (Labour Code, article L.44).
The company car is a benefit. Ibrahim therefore keeps it until 3 June, along with his salary. Taking it back on 4 March means unilaterally cutting his remuneration. Yet salary is an essential term of the contract, meaning a term without which the employee would not have signed: the employer cannot change it without the employee’s consent (Labour Code, article L.58).
What an early withdrawal costs
Example. Ibrahim’s contract sets the value of the private use of the pick-up at XOF 250,000 per month. Sirakoro Distribution takes the vehicle back at the very start of the notice period.
Monthly value of the benefit: XOF 250,000
Remaining notice period: 3 months
Amount Ibrahim can claim: 250,000 × 3 = XOF 750,000
If the contract sets no value, the amount itself becomes a matter of dispute. Hence the value of writing it down as soon as the vehicle is allocated.
The only real way out: a written agreement
The law allows for “mutual agreement”. If Ibrahim agrees to return the pick-up before the end of the notice period, with or without compensation, draw up a signed agreement stating the return date and any amount paid. Without a written document, you will not be able to prove this agreement.
The gross misconduct exception
Gross misconduct is misconduct so serious that it justifies immediate termination of the contract, without notice; in the event of a dispute, the court assesses whether it is real (article L.41). With no notice period, the vehicle is returned as soon as the contract is terminated.
Mind the vocabulary: the Malian Labour Code does not recognise the French-law concept of “faute grave” (serious misconduct). Only gross misconduct allows termination without notice. Describing misconduct as “serious” in a letter therefore does not remove the notice period.
Released from work does not mean deprived of pay. The car stays until the last day of the notice period.
What you need to do
- Check in the contract whether the vehicle may be used for personal purposes before taking any decision.
- Leave the company car with the released employee until the end of the notice period, or sign a written agreement with them for early return.
- State in every contract the monthly value of the car benefit and the conditions for its return.
4. Resignation, dismissal, early departure: who keeps the car?
The rule on waived notice applies whichever party initiated the termination, resignation or dismissal. What changes the answer is how the notice period ends.
| Situation | Can the company car be taken back before the notice period ends? |
|---|---|
| The employer releases the employee from working | No, unless the employee agrees in writing (article L.44) |
| The employee asks to leave early and the employer accepts | Yes, on the departure date set in the written agreement |
| The employee leaves before the end of the notice period without agreement | Yes, as soon as they leave; they also owe compensation for the notice not worked (article L.42) |
| Dismissed employee who has found a job after working half the notice period | Yes, on actual departure, which they may take without paying compensation after informing you (article L.44) |
| Termination for gross misconduct | No notice period: immediate return, subject to review by the court (article L.41) |
| Pool vehicle | Yes, at any time: it is not part of the remuneration |
For Ibrahim, the Managing Director therefore has two options: leave the pick-up with him until 3 June, or negotiate an early return in writing. He chooses the second. Ibrahim returns the vehicle on 10 March, in exchange for a negotiated sum recorded in the agreement. This sum must then appear, item by item, in the final settlement handed over when he leaves: see our article Receipt in full and final settlement.
What you need to do
- Identify who initiated the early end of the notice period before asking for the vehicle back.
- Provide in the early departure agreement for the vehicle return date and what happens to other benefits.
- Itemise any compensation paid in the final settlement statement.
5. A closer look: a benefit that must be declared, and is subject to contributions and tax
A company car is not only a notice-period issue. As long as it is allocated, it must appear on the payslip, which lists benefits in kind (article L.105).
It is included in the base for social security contributions paid to the INPS, which covers all remuneration, including benefits in kind (Social Security Code, article 187). It is also subject to the tax on wages and salaries for half of its actual value; transport expenses, including fuel allowances, are expressly covered (Order No. 99-0894/MFC-SG of 18 May 1999, article 4).
Finally, its value counts in the calculation of termination payments. Severance pay is calculated on all payments that constitute consideration for work, excluding reimbursement of expenses (Labour Code, article L.53). For Ibrahim, who resigned with six years’ service, the question does not arise: the long-service payment is only due after ten years of continuous service (article L.54).
An undeclared benefit exposes the company to back payments of contributions and tax, and makes it harder to prove its value in the event of a dispute.
Key takeaways in 5 points
- Distinguish the pool vehicle, a work tool, from the company car, which is part of remuneration.
- Leave the company car with the employee until the last day of the notice period, even if they are released from working.
- For an early return, sign a written agreement setting the date and the compensation.
- Keep immediate withdrawal for gross misconduct, the only misconduct that removes the notice period in Mali.
- Declare the benefit on the payslip, to the INPS and for tax, and take it into account in termination payments.