Many employers are not aware that also on the basis of the activities they carry out as a company, they may fall within the scope of a mandatory collective agreement, and that they are thus obliged to (at least) apply the employment terms and conditions of the collective labour agreement applicable within that industry. Also the membership of an employers’ association can lead to automatic applicability of a collective labour agreement.

Mandatory collective agreements are generally applicable in the transport, installation, secondment and healthcare sectors, regardless of whether this has been agreed between the employer and the employee.

If, on the basis of a mandatory collective agreement applicable within the industry or on the basis of the membership of an employers’ association, a collective labour agreement is applicable to the employment relationship, and it is nevertheless not applied, this may have far-reaching consequences. Employees may claim reimbursement of a shortage of payment of wages from their (former) employer for as far back as five years. Also the incorrect calculation of the right to days’ holiday may have a significant financial impact for employers, since the employees may claim such rights years later.

The above claims are also a point to consider for employers in case of mergers and acquisitions. It is necessary to check the compulsory application of collective labour agreements in the industry and if desired, to enforce guarantees in this respect.

Often, sectors with a mandatory collective agreement, also have a mandatory pension fund for the entire industry. Generally, in such cases, it is not allowed to have deviating pension arrangements in place for the employees.