This agreement is not a lease, because there is no payment required from the employee. It is a 'gratuitous' bailment.
In such cases, the bailee (the borrower) is not responsible for any fair wear and tear to the goods. However, they are under a strict duty to care for the goods and will be liable for any harm caused by even the slightest negligence.
The bailee must also only use the chattel in the manner for which it has been given to them - otherwise they will be liable for any damage that happens to the chattel.
Although the gratuitous bailee is not responsible for fair wear and tear to the goods, they must cover any maintenance expenses arising out of their use of the chattel.
It is possible for the bailee to exclude liability for negligence but they must do so very explicitly, for it to be effective.