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What is a CAO?

Collectieve Arbeids Overeenkomst" or in English "Collective Labour Agreement".

If you run a company in the Netherlands, you may have to deal with collective labour agreements, which specify collective agreements concluded between employers, employers’ organisations, employees and employee organisations regarding wages and other conditions of employment. The government is not a party to these agreements.

A CAO can be entered into per company and per business sector. The CAO must be registered with the Ministry of Social Affairs and Employment. If a CAO has been declared universally binding for your sector, you are obliged as an employer to comply with it. You must state in the individual employment contracts whether a CAO applies.

Obligations under collective labour agreements for businesses outside the Netherlands

If your business is based outside the Netherlands and you temporarily post employees to the Netherlands, the EU Secondment Directive will apply to you. Under this directive, you must always check whether there is a mandatory CAO for your sector. If there is, you as a foreign business must observe a number of key provisions in this CAO. These include provisions about the minimum wage, working hours and breaks and holiday entitlements.

If there is no CAO, you have to make an individual agreement with the employees about the labour conditions, preferably in writing. The legal rules are the basis for this agreement.
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Comments (3)
Comment by Albert on Tue, Oct 11th, 2016 at 10:59 AM
Hello Arjan, My Irish Limited Company is posting pilots who fly for Ryanair, but work for me to Eindhoven. It is on a permanent basis, however How do I begin the process of making a CAO in this industry sector - as a foreign employer/withholding agent? Also is it necessary to provide a CAO in this situation?
Comment by Arjan Enneman on Mon, Oct 17th, 2016 at 1:04 PM
In my opinion it is not necessary to provide a CAO in your situation. It looks like individual airlines have agreed CAO‘s with their employees and there is no general CAO for all pilots. You can consult with Ryanair about this,
Comment by Shiloh Miller on Mon, Oct 17th, 2016 at 7:21 PM
Question: I wish to set up a BV that will employ professionals from various foreign countries, (NOT from The Netherlands), and they will be seconded to a construction company in Africa/Nigeria (NOT in the Netherlands). Will the various rules in the Netherlands apply in such situation upon the dutch BV? Will the employees have any rights in the Netherlands towards their employer. The applicable law on the Employment contract will not be Dutch.
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