According to the Supreme Court, the free provision of healthy lunches to employees in 2017 and 2018, as part of the employer's occupational health and safety policy (arbobeleid) (HS Policy), qualifies for the occupational health and safety exemption (arbovrijstelling) (HS Exemption). The Supreme Court ruled this on May 24, 2024. However, from this Supreme Court ruling it cannot be concluded that in all circumstances healthy lunches can be provided to employees free of tax.
What is the Supreme Court case about?
In this Supreme Court case, an employer provided healthy, balanced lunch meals to its employees in 2017 and 2018. These meals were offered daily in the company restaurant and took into account the guidelines of the Health Council and the 'Schijf van Vijf' of the Dutch Nutrition Centre. The employer designated the provision of the healthy lunches as part of its HS Policy and argued that it should therefore qualify for the HS Exemption. However, both the Court of Appeal and the District Court ruled that the provision of healthy lunches did not qualify for the HS Exemption, as the healthy lunches only promoted the well-being and health of the employees.
Supreme Court
According to the Supreme Court, the wording of the HS Exemption (up to January 1, 2022) only requires that the provisions directly result from the employer's HS Policy. The HS Policy does not need to be limited to obligations directly arising from the Working Conditions Act (Arbowet). It can also include provisions serving a broader health purpose. In other words, according to the Supreme Court, the HS Exemption applies to health-related benefits provided by employers, as long as they align with the company's HS Policy.
Healthy eating reduces the risk of illness and promotes recovery after illness, making the provision of nutritious meals a legitimate component of an absenteeism prevention policy. According to the Supreme Court, the HS Exemption (up to January 1, 2022) should be interpreted broadly, so that policies aimed at preventing absenteeism can also be included. This applies even if the HS Policy more generally promotes the well-being and health of employees and is not specifically focused on work-related health aspects.
The Supreme Court dismisses the case itself. To do so, the Supreme Court first decides that the free provision of lunch meals by the employer directly stems from the employer's HS Policy. Additionally, the Supreme Court rejected the following arguments put forward by the inspector:
- that meals by their nature cannot qualify for the occupational health and safety exemption; and
- that this exemption does not apply to provisions that result in a significant private saving for the employee.
Based on the above, the Supreme Court concludes that the HS Exemption applies to the provision of healthy lunches by the employer in the years 2017 and 2018, as this provision arises from the policy implemented under the Working Conditions Act.
Relevance for practice
Although this Supreme Court ruling may give the impression that healthy lunch meals can now be provided under the HS Exemption, this is generally not the case. The employer's situation in this case involved a very specific set of circumstances, where the healthy, balanced lunch had to meet several criteria to qualify as such.
Furthermore, as of January 1, 2022, the wording of the HS Exemption has been amended, clarifying that only mandatory occupational health and safety facilities are exempt. This includes provisions:
- to combat or prevent safety or health risks associated with work;
- based on the state of scientific knowledge, professional services, and occupational hygiene strategies; and
- that can reasonably (in a specific situation) be required of the employer.
The provision must therefore be aimed at risks associated with the specific work. The HS Exemption applies (as of the amended wording as per January 1, 2022) only to facilities that employers are obligated to provide under the Working Conditions Act to prevent safety and health risks directly related to their employees' work. Providing a healthy lunch is unlikely to meet these criteria.
Meanwhile, the State Secretary of Finance has responded to parliamentary questions posed by VVD members following the Supreme Court ruling. According to the State Secretary of Finance, a healthy lunch does not qualify as a tax-exempt benefit under the HS Exemption. From 2022 onwards, only mandatory occupational facilities are exempt under the HS Exemption, and a healthy meal is not considered as such according to the State Secretary of Finance. However, employers do have the option, under certain conditions, to use the tax-free allowance within the employment cost scheme (werkkostenregeling) to provide a healthy lunch.
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