Use the correct CAO to prevent claims

How to check which CAO is the right one for an employment contract differs according to the situation. 

What is a CAO?

A collective agreement includes agreements about topics such as the minimum wage, pension schemes, overtime and allowances, but also breaks or workplace design.  If a collective labour agreement applies to your branch or industry, you must always use it. Which CAO applies to your situation may not always be clear. So, sometimes employers choose not to use a CAO, or they use the wrong agreement.

Is a CAO mandatory?

No, not every business is legally required to have a CAO. But in many business sectors there is a sector-wide CAO, and in such cases it is mandatory to apply it.

Which CAO applies to my business?

There are various scenarios possible

CAO for the whole sector or industry

Check first of there is a CAO for your sector. You can do this using the CAO overview from the Ministry of Social Affairs (in Dutch). Please note: when you search for a CAO in this list, you will see several results. This is because the search results also show collective agreements from previous years. Some entrepreneurs choose the wrong CAO from this list. So, always check the date when looking for the right CAO. You can find the date at the end of the file name.

Once you have found the right CAO check if it has been declared generally binding. That means it applies to all employers in the branch or industry. This is not always mentioned in the CAO itself because a CAO can be declared generally binding at a later date. You can find out if a CAO is generally binding on the website of the labour union that made the agreement. 

CAO via an employers’ organisation

Are you a member of an employers’ organisation? Check whether your employers’ organisation has concluded a CAO with a trade union. That agreement will then apply to you as well.

Establishing a business sector CAO with other employers

If there is no business sector CAO in place for your sector and you are not a member of an employers’ organisation, you can enter into a CAO with a trade union together with other employers. This is referred to as a sectoral CAO (bedrijfstak-cao). You must always use the employment conditions in this CAO. 

CAO for the whole business

You can draw up a CAO for your business yourself. This it is called an an ondernemings-cao (company CAO). Large companies often do this to save time on negotiations. If you want to draw up a company CAO, you should first check if there is already a sectoral CAO for your branch or industry. Is there a sectoral CAO, but you do not use it? Then the labour union or employee can demand employment conditions after the fact, such as a pension scheme that is included in the sectoral agreement, but not in your company agreement.

Be careful with the SBI code

Please note: entrepreneurs who use their SBI code (code that describes the company’s activities) to find the right CAO can sometimes have problems. Your business activities may be different from the activities covered by the SBI code.  

For example: you have a copy shop that also sells paper and makes prints. You are registered in the Business Register with the SBI code for ‘trade in paper and cardboard’. The collective agreement for non-food retail (in Dutch) that applies to the SBI code does not apply to all of your employees: someone who does print work falls under the collective agreement for graphic media (in Dutch).

Keeping an eye on CAO developments

If you have concluded a CAO, it is wise to keep an eye on its developments. The CAO viewer (in Dutch) has information about the most recent CAO agreements.