What's a collective labour agreement (CAO)?
Table of Contents
Terminology #
The whole sphere of collective labour agreements is often filled with specialist jargon. Here’s an overview to clarify the main terms.
| Dutch | English | Description |
|---|---|---|
| Algemeen verbindend verklaring (AVV) | Generally binding agreement | If a collective labour agreement is generally binding, then the agreement holds for all workers in a role who meet specific conditions. Employing companies are bound by generally binding agreements and can’t opt out. |
| Bedrijfstak or sector | Industry | For example ’tech industry’, ‘manufacturing industry’, ‘hospitality industry’. |
| Beroep | Profession | The work or role you do in exchange for wages or other forms of payment. |
| Collectieve arbeidsovereenkomst (CAO) | Collective labour agreement | A contract that is usually signed between one or more employer, and one or more worker organisation |
| Onderneming | Enterprise, venture, or company | In the context of collective labour agreeents and works councils, the term generally refers to an employing company as an entity. |
| Ondernemingsraad (OR) | Works council | Dutch law requires organisations of 50 or more workers to have a works council. Smaller organisations can also have a works council if they elect to do so. Through the works council, representatives from the company talk directly with the boss. |
| Vakbond | Workers’ union | A workers’ union is a set of its members, the workers who have joined the union. |
| Werkgeversorganisatie or werkgeversvereniging | Employer organisation, employer’s union | There are at least two forms of employer unions:
|
| Wet open overheid (WOO) | Law open government | A law that entitles people to get information from the government on any government operations and decisions. In some countries this is also known as a freedom of information act. |
What types of collective labour agreement are there? #
There are two main types of collective labour agreement in the Netherlands: an industry collective labour agreement, and a company collective labour agreement.
Industry collective labour agreement #
An industry collective labour agreement is an agreement signed between:
- an employer or employer organisation (industry collective)
- an employee organisation (industry union)
An industry collective labour agreement is only applicable to workers at companies in that industry. For example, only workers at companies registered as metal and technology businesses can be part of the metal and technology collective labour agreement, while workers at for example Booking.com are covered by the travel industry collective labour agreement.
Company collective labour agreements #
A company collective labour agreement is an agreement signed between:
- an employer
- an employee organisation (generally a union)
A company collective labour agreement is only applicable to workers at the company that signed the agreement. Workers in similar roles at other companies must get their own collective labour agreement.
What’s in a collective labour agreement? #
A collective labour agreement can cover pretty much any aspect of work and working conditions that can be collectively agreed. This can include, for example:
- Job description
- Work hours
- Payment, such as salary or bonuses
- Travel allowance
- Holidays
- Budget for training or schooling
- Guidelines for promotion
- Pension plans
Here are some examples of collective labour agreements:
- Collective labour agreement for workers at technical installation companies (in Dutch)
- Collective labour agreement for workers at the ING Bank (in Dutch)
- Collective labour agreement for call centre workers (in Dutch)
When is a collective labour agreement generally binding? #
In some cases a collective labour agreement is declared generally binding. A generally binding collective labour agreement applies to all workers in a certain role, as long as they meet certain conditions as specified in the agreement. Generally binding calls remove the need for workers to get collective labour agreements on a company-by-company basis.
Is it a good thing if a collective labour agreement is generally binding? #
A generally binding collective labour agreement often works out as a net positive for workers in an entire profession. For example, in August 2023, call centre workers had a collective labour agreement declared generally binding for anyone who works as a call centre worker—regardless of what their individual companies had agreed. (Or failed to agree.) A total of 40,000 workers are now covered by the call centre worker collective labour agreement.
Does every worker have a collective labour agreement? #
Not all workers have a collective labour agreement that applies to their role.
Also, beware of bosses saying something like the following:
Sure we follow the collective labour agreement! We just haven’t officially signed on to it
Such comments from bosses are red flags. As a worker, if your employer hasn’t signed on to a collective labour agreement, and if no collective labour agreement is generally binding for your role, then your boss is in no way bound by a collective labour agreement.
Further resources #
Would you like to learn more about collective labour agreements in the Netherlands? Here are some further resources:
- What is a collective labour agreement (in Dutch)
- What is an employer organisation (in Dutch)
- List of CAOs (in Dutch)
Want more help understanding your collective labour agreement? Or whether you even have one? A fellow tech worker is happy to help! Join Tech Workers Coalition Netherlands.