Collective agreement (cao) breach: what can you claim?

If your employer does not comply with the collective labour agreement (cao) that binds it, the terms of that agreement still apply to you. A less favourable clause in your individual contract is void and the cao provision applies in its place, so an employer paying below the scale is simply in arrears. The main exception: this only works if the employer is actually bound by the agreement, which is the first thing to establish.

When is an employer bound by a collective agreement?

An employer is bound if it signed the agreement itself or is a member of the employers’ organisation that concluded it. In addition, the Minister of Social Affairs and Employment can declare a sector agreement generally binding (algemeen verbindend verklaring). It then applies to every employer and employee in that sector for the period of the declaration, whether or not they are members.

According to article 14 of the Collective Labour Agreements Act (Wet op de collectieve arbeidsovereenkomst), a bound employer must also apply the terms of employment in the agreement to the employment contracts that fall within its scope. Many employers also apply a cao voluntarily by referring to it in the employment contract. In that case it binds them as part of the contract.

What happens to a contract clause that conflicts with the cao?

It is void. Article 12 of the Collective Labour Agreements Act provides that any term between an employer and an employee that conflicts with a cao binding them both is void, and that the cao provisions apply instead. You do not need to have the clause set aside first: the cao term applies automatically.

What can you claim?

You can claim performance of the cao terms and payment of the difference. Think of unpaid wage increases, allowances, overtime pay, holiday pay and contributions to a scheme. Wage claims become time-barred five years after each payment fell due (article 3:308 BW). Several years of underpayment can therefore usually still be recovered, but each month you wait, the oldest month drops out.

On late wage payments you can also claim the statutory increase for late payment (article 7:625 BW), which can reach 50% of the amount owed. The court may reduce that increase to a reasonable amount. Statutory interest can be claimed in addition.

How do you raise a breach with your employer?

Start in writing. State which cao provision applies, what should have been paid or done, over which period, and give a reasonable deadline to put it right. Attach a calculation; it forms the basis of any later claim. A clear written claim also interrupts the limitation period, so keep a copy and proof of sending.

What if your employer does not respond?

Then there are two routes. You can bring a claim before the subdistrict court (kantonrechter), which hears employment cases whatever the amount and where you do not need a lawyer. If you are a member, your trade union can also take the matter up. A union that concluded the cao can claim compensation for its own loss and for the loss of its members (article 15 of the Collective Labour Agreements Act).

What can the Labour Authority do?

Less than many people expect. The Netherlands Labour Authority (Nederlandse Arbeidsinspectie) supervises statutory standards such as the minimum wage, working hours and health and safety. It does not decide individual disputes about cao terms and cannot award you money.

For a generally binding cao, only the parties to that agreement can ask the Labour Authority for an investigation (article 10 of the Wet AVV). The result is a report of findings, without a conclusion on compliance. The parties then decide on further steps. Enforcing your own entitlement runs through the civil route.

What should you check as an employee?

• Check whether your employer is bound: as a signatory, a member of the employers’ organisation, through a general binding declaration or through your contract.
• Compare your pay and allowances with the cao wage scale and job grading for each month.
• Send a written, calculated claim and keep proof of sending; it interrupts the five-year limitation period.
• Ask your union whether it will take up the claim under article 15 of the Collective Labour Agreements Act.

What should you check as an employer?

• Check which cao applies to your actual business activities, including any general binding declaration.
• Check your employment contracts for clauses that are less favourable than the cao; they are void under article 12.
• Apply each cao wage increase and allowance from its effective date.
• Correct underpayments promptly, as late wages can attract a statutory increase of up to 50% (article 7:625 BW).

What can we do for you with a cao dispute?

Our employment lawyers advise employees and employers on applying a collective agreement.

• We establish whether the employer is bound by the cao and which provisions apply.
• We calculate the arrears, the statutory increase and statutory interest.
• We draft the written claim that also interrupts the limitation period.
• We bring or defend the claim before the subdistrict court.

Summary

• A cao binds an employer that signed it, is a member of the employers’ organisation that concluded it, or falls under a general binding declaration.
• A contract clause that conflicts with a binding cao is void; the cao term applies instead.
• You can claim the difference for up to five years back per payment, plus the statutory increase and interest.
• Start with a written, calculated claim; if that fails, go to the subdistrict court or involve your union.
• The Labour Authority investigates only at the request of the cao parties and does not award individual claims.

Frequently asked questions