If you have a company in the Netherlands, you may have to work with a Collective Labor Agreement also known as CLA or Collectieve Arbeidsovereenkomst, CAO in Dutch. CLAs are collective agreements between employers, employers’ organizations, employees, and employee organizations. It usually governs the basic employment conditions such as salaries, holiday rights, overtime, termination of contracts, etc. The government is not a party to these agreements.
The abbreviation CLA stands for: Collective Labor Agreement.
This agreement (CLA) applies to a large group of people. This can be for a company (for example Shell) or for an entire industry or sector, such as for example hospitality or transportation.
In the Netherlands there are nearly 900 different CLAs. Almost 85% of the working population of the Netherlands fall under a CLA.
A CLA has a maximum duration of 5 years and at the end of this timeframe it ends automatically by law or withdrawal. Sometimes these agreements are not without struggle, and this can lead to (national) strikes as a result.
The CLA agreements and negotiation are often conducted by trade unions.
Trade unions negotiate with the employer and employer organizations to bring a CLA into existence, or to reach an agreement. The first trade unions were founded around 1900 to stick up for the interests of the employees. The primary task of a trade union is to bundle the power of the workers so that a collective can be formed. The biggest trade unions in the Netherlands are the FNV, CNV and De Unie (The Union).
A CLA can be entered into per company and per business sector. The CLA must be recognized by the Ministry of Social Affairs and Employment or Ministerie van Sociale Zaken en Werkgelegenheid. If a CLA has been stated universally binding for your sector, you are obligated as an employer to abide by it. You must state in the individual employment contracts whether a CLA applies or not.
If a minimum CLA is in place, you may deviate from this if it benefits your employees. Deviations from a standard CLA are not permitted. Many sector organizations publish the CLA related to their sector on their website.
In the individual employment contract, you must state whether a CLA applies. When a CLA applies, it applies to all employees. If the CLA and an employment contract contradict each other, the CLA will still exist.
If your company is based outside the Netherlands and you temporarily place employees to the Netherlands, the EU Secondment Directive will apply to you. Under this directive, you must always check whether there is a mandatory CLA for your sector. If there is, you as a foreign company must observe several key provisions in this CLA. These include provisions about the minimum wage, working hours, holiday allowances, etc.
If there is no CLA, you must make an individual agreement with the employees about the labor conditions, preferably in writing. The legal rules are the basis for this agreement.
If there is no applicable CLA, as is often the case for corporate businesses, then the agreements are set forth in the individual labor contracts. Hereby the general rules of labor law as set forth in the Citizen’s Lawbook do still apply, such as minimum wage law, working hours law, and Labor and Health Law. There may never be a disadvantageous deviation from these rules.
TOSS has a lot of knowledge of different CLAs. We currently work with dozens of them and all of them are accessible in our system. Should there be any changes, then we always inform our customers who are active in that sector of work.
For more questions about Dutch collective labor agreements, please feel free to contact our TOSS experts.
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