Collective bargaining law

Representatives of employers and employees (often through representatives such as trade unions) can lay down agreements in a collective labour agreement (CLA) regarding the terms and conditions of employment of employees working within a particular industry or for a particular employer. The CLA thus supplements the individual employment contract between the employer and the employee.

Generally binding

A collective labour agreement can contain the same agreements that can be agreed in an employment contract. These include, for example, arrangements for working hours, remuneration, wages, holidays, overtime and sickness. At the request of the parties involved in the collective labour agreement, a collective labour agreement can be declared generally binding. This means that the collective labour agreement is declared applicable to the entire industry, regardless of whether the employers concerned were (directly or indirectly) involved in the negotiations.

Why are some collective labour agreements declared generally binding?

Some collective labour agreements are declared generally binding (AVV) in order to ensure a level playing field within a sector and to offer employees in comparable positions the same terms and conditions of employment, even if their employer is not a party to the collective labour agreement. This is done at the request of the parties to the collective labour agreement and is assessed and ratified by the Minister of Social Affairs and Employment. Once a collective labour agreement has been declared generally binding, all employers and employees in the sector concerned are obliged to comply with its provisions. For entrepreneurs, this means that they must not only check whether a collective labour agreement applies, but also whether that collective labour agreement has been declared generally binding—because even then it is binding, even if one is not a member of an employers’ organisation.

What happens if my collective labour agreement has been declared generally binding, but the agreements are not being complied with?

If these agreements are not complied with, the employee can claim compliance through the courts, for example to enforce the correct wage, working hours or allowances. Trade unions can also take enforcement action and initiate compliance measures. For employers, this means that non-compliance can lead to wage claims, fines or reputational damage. It is therefore important to periodically check whether the collective labour agreement applies and is being correctly applied within the organisation.

No deviation

In principle, parties cannot deviate from a collective labour agreement that has been declared generally binding. This may mean that the provisions of the collective labour agreement take precedence over the terms and conditions of employment as set out in the individual employment contract. In the case of a minimum collective labour agreement, deviation is only permitted in favour of the employee.

If you have any questions about whether your company or your employees are bound by a (generally binding) collective labour agreement or other questions about a collective labour agreement, please contact us. The lawyers at Fruytier Lawyers in Business have extensive experience with legal questions concerning collective labour agreement law.

Authors: Employment law solicitors Judy Sliepen and Myrddin van Westendorp