Your Introduction to Netherlands’s Collective Bargaining Agreement (CBA)

When doing business in the Netherlands, it’s important to know about collectieve arbeidsovereenkomst (CAO). This collective agreement can directly impact your employees and the benefits they are entitled to. Here’s a quick guide to help you learn more about what CAO is and its impact on you as you do business in the Netherlands.

What Is a CAO?

The CAO is a collective labor agreement that establishes the terms of employment for a large group of workers. They are similar to unions that can stretch across entire industries, but they can also be as small as representing the workers for a single company. These agreements can include agreements around wages, working hours, pensions, and notice periods.

There are two main types of collective agreements:

• Collective agreements within a company
• Collective agreements within a sector

If a CAO applies to your business and your employees, it applies to all employees.

As an Employer, How Do CAOs Affect My Business?

Depending on the sector you work with, you may have to interact with CAOs. If your employees are part of a CAO and require you to be compliant with the CAO, you must mention this in your employees’ employment contracts. If the employment contract is ever in conflict with the CAO, the CAO takes precedence.

The CAO outlines the minimum benefits that must be provided to your employees. It’s important to remember that these are only a minimum and you can go above and beyond those minimums to better attract and retain talent in your company. Providing more benefits than the minimum still counts as being compliant with the CAO.

While there may be some common areas of negotiated benefits like minimum wage, there is not a universal standard across all CAOs. For this reason, there is no universal guidelines of specifically what you need to do to stay compliant.

CAOs Are Not Compulsory

If a CAO is not compulsory, it is your responsibility as an employer to make your own agreements with your employees. This can be build out in regulations like a staff handbook, or they can be outlined in each employee’s employment contract.

While you are able to create your own agreements, remember you cannot break the federal employment laws. The federal minimum wage, the working hours act, and the civil code still apply.

Simplify Global Compliance with IRIS

IRIS Global Workforce Management provides comprehensive coverage for your company, helping you with your international payroll and HR needs. We help you manage international federal compliances, ensure you have the right documents and files (like employment contracts), and ensure your international employees are paid accurately and on time, every time. Speak to one of our experts and discover the difference IRIS can make for your company today.