CAO (Collective Labour Agreement)
If you run a company in the Netherlands and you hire staff, you may have to work with a collective labour agreement (Collectieve Arbeidsovereenkomst, CAO). Find out if a CAO applies to your business, and when your employment offering and conditions can differ from a CAO.
What is a CAO?
CAOs are collective agreements between employers or employers' organisations, and employees or employees' organisations, such as trade unions, about the terms of employment, such as wages, working hours, notice periods, or pensions. The collective labour agreement may never contain conditions that are less favourable for employees than those dictated by law.
There are 2 types of collective agreements:
- sectoral collective agreements: collective agreements that apply within a sector (in Dutch)
- company collective agreements: collective agreements that apply only within a company (in Dutch)
When does a CAO apply?
A CAO can apply to a single company or a business sector. You must work with a CAO if:
- You have concluded a CAO with the trade unions yourself.
- You are a member of an employers' organisation that has concluded a CAO for your business sector.
- You are not a member of an employers' organisation, but the Ministry of Social Affairs and Employment has declared a CAO binding to your sector (algemeen verbindend verklaard, AVV). You can check if there is a CAO for your business sector (in Dutch).
- You are not a member of an employers' organisation, and no CAO has been declared binding for your sector, but you decide to follow an existing CAO. This CAO is included in your employees’ employment contracts.
Many sector organisations publish the CAO relevant to their sector on their website.
When are you allowed to deviate from a CAO?
Whether you are allowed to deviate from your CAO depends on the type of CAO:
- Is a minimum CAO in place? Then you may deviate from the CAO if this benefits your employees.
- Is a standard CAO in place? Then you are not allowed to deviate from the CAO.
The CAO will state if it is a minimum or standard collective agreement. For example, a minimum CAO clearly states that you may deviate from agreements if this is favourable for your employees.
CAO and employment contract
As an employer, you must state in the individual employment contract whether a CAO applies and which one. When a CAO applies, it applies to all employees. If the CAO and an employment contract contradict each other, the CAO prevails.
CAO not compulsory: make arrangements on terms of employment
If a collective labour agreement is not compulsory, you make your own agreements with your employees. You can lay these down in regulations, such as a staff handbook, or in an individual employment contract. However, the general rules of employment law do apply. These can be found, for example, in the Minimum Wage Act, the Working Hours Act and the Civil Code (Book 7, from Article 610 onwards, in Dutch).