If you run a company in the Netherlands, you may have to work with a collective labour agreement (Collectieve Arbeidsovereenkomst, CAO). CAOs are collective agreements between employers (or employers' organisations) and trade unions about wages and other conditions of employment.
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 it with the trade unions yourself;
- if you are a member of an employer's organisation that has concluded a CAO for your business sector;
- if you are not a member of an employer’s organisation, but the Ministry of Social Affairs and Employment has declared a CAO binding to your sector.
if you are not a member of an employer’s organisation, and no CAO has been declared binding for your sector, but you work with your own CAO.
When are you allowed to deviate from a CAO?
If a minimum CAO is in place, you may deviate from this if it benefits your employees. Deviations from a standard CAO are not allowed. Many sector organisations publish the CAO relevant to their sector on their website.
CAO and employment contract
In the individual employment contract, you must state whether a CAO applies. When a CAO applies, it applies to all employees. If the CAO and an employment contract contradict each other, the CAO prevails.