What is a Collective Agreement


CAO is an abbreviation that stands for collective labor agreement. Agreements about employment conditions are laid down in writing in a collective labor agreement. There are various collective agreements that can be linked to an industry, among other things. A collective agreement ensures clarity for employers and employees. Among other things, it contains agreements on salary, overtime allowances, notice period, probation period, pension and special allowances or benefits. An employee can ask the trade union or the employer under which collective agreement he or she falls.

How is a collective agreement established?

A collective agreement is established through consultation between employers and employees. Because employers often have joint interests, employers can unite in an employer organization. Employees also often have common interests, which is why they unite in trade unions and other employee organizations. In any case, one employer or employers 'organization must participate in collective bargaining, as well as an employees' organization. Employers usually have other interests than employees. For example, employers want to keep the wage costs of staff as low as possible because this is often the largest cost item for a company. Employees, on the other hand, want a good salary that's increased as a percentage by at least the inflation rate.

When the employer (s) and employees have package of requirements that differ greatly from each other, collective bargaining can be difficult. Trade unions can use strikes as a means to put more pressure on employers to respond to employees' demands. When an agreement is finally concluded, the agreements are recorded in writing. The collective agreement will then come about.

CLA agreements and the law

Law determines what companies and employees must adhere to when they enter into an agreement with each other. F or example, there are agreements in law about the minimum wage, but also about the minimum number of vacation hours that employees must be allocated by employers. The law thus forms the mandatory minimum lower limit of the rights for employees. The agreements laid down in a collective agreement are usually more favorable for employees than what is provided for by law. The CA wage is often higher than the minimum wage and the other employment conditions in a CA can also be better.

The collective bargaining agreements may never conflict with, for example, the Civil Code ...., the Working Hours Act and the Minimum Wage and Minimum Holiday Allowance Act. As a result, employees usually benefit from the law when collective bargaining takes place.

Types of collective agreements

There are two different collective agreements: the sectoral collective agreement and the company collective agreement. These two different collective agreements are briefly explained below.

Industry CLA is a CLA that applies within a sector. several employer organizations and employee organizations, such as trade unions, are often involved in the realization of this collective agreement. If the CA agreements have been laid down in writing after consultation, the CA applies to employers and employees or their representatives who have been involved in the CA negotiations. These collective agreements indicate a minimum. Engaged employers may pay their employees more salary or offer better secondary employment conditions, but less is not allowed. When certain matters are determined by law, such as care leave, this isn't specified in the collective labor agreement. The companies are already obliged to adhere to it.

Enterprise CLA is a CLA that applies to the employer and employees of one organization. The agreements in this collective agreement are therefore linked to one company. That's why it's referred to as a company collective agreement. One employer takes part in the negotiations of this CLA that negotiates on behalf of the interests of the company and one or more employee organizations can also participate in the negotiations. The collective agreement resulting from this doesn't apply to other (comparable) companies. Here too, the collective guidelines apply the legal guidelines as a lower limit and that employees generally benefit from the law.

General binding declaration (AVV)

After the establishment of a sectoral collective agreement, employers and employees can go to the Ministry of Social Affairs and Employment and ask whether the sectoral collective agreement may apply to the entire sector. If the Ministry of Social Affairs and Employment has assessed this application positively, a sectoral collective agreement is declared generally binding. After declaring a sectoral collective agreement generally binding, this collective agreement applies to the entire sector regardless of whether other employers were involved in the collective agreement negotiations. Companies that haven't participated in the collective bargaining agreements of a sectoral collective agreement must also adhere to the agreements of this collective agreement. Most industry collective agreements have been declared generally binding by the Ministry of Social Affairs and Employment. If an employer doesn't want to fall under a sectoral collective agreement, he must apply for an exemption. This is called dispensation. An employer can do this by completing and submitting the AVV dispensation form.

When there is no CLA

It's possible that an employee works for a company that isn't covered by a CLA. In that case, an employer makes agreements with the employees about the terms and conditions of employment such as salary, shift work allowance, vacation days, adv etc. Of course, these agreements are governed by law. The law and regulations with regard to employment conditions can be found in the Minimum Wage Act, the Working Conditions Act, the Work and Care Act and in the Civil Code. When employers and employees make agreements about employment conditions, it is advisable to record these agreements in writing. Oral agreements can be (unintentionally) forgotten or distorted.

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