Governance
Collective Labor Agreement
An agreement between employers/employer organizations and trade unions setting terms of employment.
Definition
A 'collectieve arbeidsovereenkomst' (CAO) is a collective agreement that sets out terms and conditions of employment, including wages, working hours, and other benefits, for a group of employees in a specific sector or company. Under Dutch law, CAOs cannot stipulate wages or holiday allowances lower than the statutory minimums established by the WML, serving as a crucial governance mechanism.