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Collective labor agreement - is it necessary for everyone?


Wages and labor relations are a complex and multifaceted topic. From time to time in our articles we dwell on certain issues related to it. So, for example, we have already considered the changes that came into force on January 1, 2020, which were brought by the Law on the Balance of the Labor Market (wab) - You can view here ; talked about the features work on Sundays or on holidays. 

Today we want to talk about, perhaps not everyone is familiar, but a very important document used in labor relations - the collective agreement.


What is a collective bargaining agreement?

Collective labor agreement (collective labor contract –CAO) is an agreement between employers, on the one hand, and trade unions (usually, but not necessarily) on the other. Such an agreement contains terms of employment: questions regarding wages, bonuses, overtime pay, probationary period, rules for dismissal or pension, etc.

A collective bargaining agreement applies to a (large) group of people, it can be either an industry collective agreement (almost all of them are binding), or just one company. It often has more favorable conditions than those provided for in the legislative framework. It is necessary to understand that the positions of the collective agreement (if any) take precedence over the same positions in the individual labor agreement.

For example, the salary shown in CAO, may be higher than the statutory minimum wage. Or employees get more vacation days, etc.

Is this agreement obligatory for everyone?

No, not everyone should have it, but it is mandatory in four cases, namely:

  1. If you yourself have entered into such an employment contract.

In other words, CAO is concluded with one or more employee organizations / associations (usually trade unions). It can also be called a corporate collective bargaining agreement, and it contains provisions tailored for your company. As a rule, this happens in large enterprises.

  1. If you are a member of an employers' organization that has a collective bargaining agreement for your sector / industry.

That is, an employers' organization can also enter into a sectoral collective agreement. This means that such a collective bargaining agreement applies to the type of work / services of your company, so the employee automatically subscribes to its terms.

  1. If the Minister of Social Affairs and Employment (Minister van SZW) made a collective bargaining agreement binding on your sector / industry.

In case you are not a member of an employers' organization, a collective bargaining agreement may still be binding. The minister SZW can declare collective bargaining agreements binding (algemeen verbindend verklaren) for all employers and workers in a particular industry.

This prevents employers from competing with each other on terms of employment. For example, you cannot offer working conditions worse than those stipulated in the collective bargaining agreement.

  1. If you have a point / mention about CAO, included in the employment contract

Sometimes the terms of the collective agreement are already taken into account in the individual labor contract, which the employee enters into with the employing company. And this condition does not depend on the employee's membership in the trade union.

Types of collective bargaining agreements

There are currently two types of collective bargaining agreements in the Netherlands:

  • Collective labor agreement of the company

This contract is applied internally and is concluded between the employer and the employee association / associations.

  • Industry collective agreement

This is a sector / industry contract. It is between employers or employers 'organizations and trade unions / workers' associations. A collective bargaining agreement applies only to companies and employees who represent the parties to it.

Obligation to use it for a number of industries

There are several large industries that have collective bargaining agreements in one form or another. Among them:

  • Retail (retail)

In retail, there is often a mandatory collective bargaining agreement. For shop owners, there are different types of them depending on the trade sector.

  • Wholesale (groothhandel)

Many wholesale companies operate under collective bargaining agreements, for example, wholesales food supplies, wholesales machinery, etc.

  • Building (bouw)

In construction, there are also different collective bargaining agreements for each sector (for example painters or carpenters), of which one of the most important is the collective bargaining agreement for construction and infrastructure. (Construction & Infra).

  • Obodies, restaurants, cafes (horeca)

Currently in hospitality there is a binding collective agreement in force. The two largest trade union organizations royal Hotels and Restaurants The Netherlands –KHN и NVC Professionals unite most of the workers in this industry.

  • Business Services (zakelijke dienstverlening)

In business services, there are binding sectoral collective bargaining agreements. For example, for architects and architectural firms, for information, communication and office technologies (Information-, communication- and kantoortechnologie -ICK), or for cleaning and window cleaning companies.

  • Domestic services (persoonlijke dienstverlening)

There are binding collective bargaining agreements in the industry, for example for hairdressers, funeral homes, laundries and dry cleaners. However, it must be borne in mind that in many sectors a mandatory collective agreement does not apply.

For how long is the collective agreement concluded?

A collective agreement always has a fixed term, usually one or two years. Towards the end of this period, the parties to the collective bargaining agreement must meet again to conclude new agreements or renew existing ones. If, during the period of revision of the collective labor agreement, its validity period ends, then for this period there are separate provisions for the protection of workers' rights.

I am an employee. How do I know if there is a CAO in an organization / enterprise where I work?

If there is a trade union at your enterprise with such a question, we recommend that you contact there. Or check with your employer. In addition, links to certain points CAO (if it exists) will be indicated in your individual employment contract.

I am an employer and I want to understand if my employees need to have a collective agreement?

If available at your enterprise CAO You no longer need to spell out in detail all the clauses of the individual employment contract with each of your employees - in the individual employment contract, a reference to one or another provision of the collective labor agreement is sufficient. In addition, thanks to a collective labor agreement, you can answer any question from employees, avoiding possible disagreements.

We recommend that you carefully read the four mandatory conditions for a collective agreement, and if you fall under one of them, immediately start drawing up and approving such an agreement. Or accept CAO voluntarily - this is not prohibited, and in many ways even preferable.

If you have any difficulties, doubts or questions about the topic discussed today or about labor relations in general, please contact us, and we will definitely advise and help you!


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