A collective labour agreement (CLA) or collective bargaining agreement is a written agreement in which agreements are made about the terms of employment of a group of employees. It usually governs basic employment conditions such as: payment of wages, holiday rights, overtime, termination of contracts etc.
A CLA is concluded by one or more employers or one or more employers' organizations and one or more employees' organizations (usually trade unions). The employers involved are bound to the included employment conditions. For the question whether a CLA is applicable to the employer or employee, the scope rule of the CLA is relevant.
According Dutch law, CLA’s can be declared universally binding (in Dutch: “algemeen verbindend verklaring”) from time to time by the Minister of Social Affairs. As a result, the CLA is applicable during the periods in which the CLA has been declared universally binding and the company fits the scope of a certain CLA.
The employer might be granted dispensation from the obligation to participate in the CLA for the first three years.
For further questions regarding a collective labor agreement please contact our employment law attorneys here.