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06 June 2018 / news

Be careful! Mandatory industry-wide regulations in the Netherlands

Nobody likes to be subsequently confronted with unexpected payments. An employer certainly doesn’t want to be faced with payments that could bring his business at serious risk. Employers should be aware of the mandatory industry-wide regulations that are applicable to most companies in the Netherlands.

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These regulations require a company to (1) participate in an industry-wide pension fund, (2) participate in one or more industry-wide collective social funds and (3) apply a collective labour agreement. Over 50 industries with this kind of regulations exist in the Netherlands. It’s important to check whether one of these mandatory systems of industry-wide regulations apply to the company. What happens if a company does not apply these regulations at all, or perhaps the wrong ones? Be aware of the fact that a company that does not fall under the scope of mandatory industry-wide regulations is an exception to the rule. The possibility exists that (for instance) a trade union or an administration-office of industry-wide funds turns up on the company’s doorstep. When a ‘presumption of applicability’ of the regulations exists, the company is compelled to allow an investigation into this applicability. Finally, the court can pass a judgment that the company falls within the scope of mandatory industry-wide regulations. The (financial) consequences of such a judgment can be significant. Therefore, we strongly recommend not to await such an investigation and following judgment. Timely ascertain whether, and if so, which mandatory industry-wide regulations apply to the company. Assessing this risk should be made a top priority, as the financial stakes are usually high. We can provide a so-called ‘quick-scan’ to assess whether such a risk exists. The sooner, the better: the best day for a quick scan is today!

More info? Contact your regular Loyens & Loeff adviser, or Mathieu Halsema or Robert Goedhart.

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