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 (trade unions) about, for example, wages, working hours, notice periods, or pensions. These are the collective terms of employment.

There are 2 types of collective agreements:

• Sectoral collective agreements (collective agreements within a sector, in Dutch)
• Company collective agreements (collective agreements 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 it with the trade unions yourself
• you are a member of an employer's organisation that has concluded a CAO for your business sector
• 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 (AVV). You can check with the Uitvoeringstaken Arbeidsvoorwaardenwetgeving(UAW) if there is a CAO for your business sector(in Dutch).
• 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?

Is a minimum CAO in place? Then you may deviate from the CAO 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

As an employer, you must state in the individual employment contract whether a CAO applies and precisely 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 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).