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New Supreme Court judgment: ‘negligible scale’ as a quantitative threshold in scope-of-application provisions?

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Also in: Dutch

05-06-2026

4 minutes read

Robert Goedhart

On 22 May 2026, the Dutch Supreme Court (Hoge Raad) once again handed down an important judgment (ECLI:NL:HR:2026:795) concerning the interpretation of scope-of-application provisions in mandatory industry-wide (collective labour agreement and pension) regulations. The central question: must a company in which activities belonging to a particular industry are carried out only on a ‘negligible scale’ participate in the industry-wide pension fund associated with that industry, simply because the relevant (ministerial) mandatory participation decree contains no explicit ‘principal criterion’? The Supreme Court answers that question in the negative in this case but does so on different grounds than the Court of Appeal in the (annulled) preceding judgment.

Key insights

The Supreme Court confirms that scope-of-application provisions always entail a quantitative minimum threshold under the CLA standard, even where a mandatory participation decree makes no express provision to that effect.

The corrective route taken by the 's-Hertogenbosch Court of Appeal – invoking the limiting effect of reasonableness and fairness – is, according to the Supreme Court, unnecessary and incorrect, as the CLA standard accommodates the reading of an implied minimum threshold.

The judgment leaves open the precise method by which that quantitative threshold is to be determined in practice – for which Halsema's doctoral thesis offers a framework.

The qualitative and quantitative aspects of the scope of application

This case (ECLI:NL:HR:2026:795) concerns a so-called scope-of-application dispute between the mandatory industry-wide pension fund for the Fashion, Interior, Carpet and Textile Industry (bpf MITT) and Hazet, a wholesaler in cleaning and hygiene products. Hazet sells, among other things, workwear and offers customers the option of having a company logo applied to it. The products are mainly sold to large companies, such as fast-food chains, healthcare institutions, and hotels. In addition, Hazet provides extra services, such as repairs and delivering ordered products to the correct location.

Both the District Court and the Court of Appeal held that the activities relating to the application of company logos to workwear fall, at least qualitatively, within the scope-of-application provisions of the mandatory participation decree. According to the Court of Appeal, the addition of a logo must be understood as the processing of a garment that results in a different article for use, namely workwear for the relevant client.

In cassation, this case concerns the question whether the mandatory participation decree relating to bpf MITT should be interpreted in such a way that, although the scope provision does not explicitly provide for a ‘principal’ (activity) criterion (hoofdzaakcriterium) or any other requirement regarding the extent of the activities, it nevertheless implies a certain quantitative threshold. In other words, does the scale of the relevant activities within Hazet play a role in determining the applicability of the scope?

By way of illustration, figures from a Deloitte report submitted during the proceedings can be summarised as follows: revenue from embroidering logos on workwear averaged 0.13% of total turnover over the period 2017–2020, and 0.17% in 2021. If screen printing and heat transfer are also included, the share amounts to 0.93% in 2021. Of the more than 90 employees, 6 are involved in these activities (2.3 FTE).

The 's-Hertogenbosch Court of Appeal: no minimum threshold permissible ‘within’ the CLA standard

The 's-Hertogenbosch Court of Appeal previously ruled (ECLI:NL:GHSHE:2024:2339) that the mandatory participation decree for bpf MITT does not contain an explicit 'principal criterion'. Applying the so-called CLA standard (cao-norm), the Court of Appeal concluded that Hazet therefore falls within the scope of application in a quantitative sense as well, notwithstanding ‘the fact that the relevant activities constitute only a small part of its overall operations’. To hold otherwise would, according to the court, mean that the court itself would establish a minimum threshold. By doing so, the court would depart from the CLA standard and would itself give an interpretation to the text of the mandatory participation decree that is not there and cannot be derived from it, not even as an ‘implausible legal consequence’.

Although Hazet maintains a showroom, a website, and a special 'team' for the workwear, the court concludes that there are insufficient indications that the application of logos constitutes more than a minor business activity. This would mean, according to the court, that Hazet, which trades in thousands of products that have nothing to do with textiles but primarily with cleaning and hygiene, would be required to apply the bpf MITT pension scheme to all of its employees, even though only a fraction of its staff is engaged in activities for which the bpf MITT pension scheme is intended, and all employees already have a pension arrangement in place.

Weighing all the circumstances, the court rules that this constitutes such an exceptional situation that, in the given circumstances, it is unacceptable by standards of reasonableness and fairness for bpf MITT to invoke the mandatory participation decree. The court therefore declares that Hazet is not obliged to participate in bpf MITT.

The Supreme Court: a minimum threshold derived from the CLA standard

Bpf MITT filed an appeal in cassation against the judgment of the Court of Appeal. Hazet filed a statement of defence requesting dismissal of the appeal and filed a conditional cross-appeal in cassation. The Supreme Court deals with Hazet's cross-appeal first, even though it was filed conditionally, because it has the broadest scope.

In cassation, Hazet argues (in short) that the court failed to recognize that a reasonable interpretation in accordance with the CLA standard, having particular regard to the purpose and object of the Mandatory Participation in Industry-Wide Pension Funds Act 2000 (Wet bpf 2000) and the implausibility of the legal consequences, leads to the conclusion that not every activity of a business as described in the mandatory participation decree, however minor, falls within the scope of application of the mandatory participation decree. In short, a certain (quantitative) minimum threshold must indeed be assumed.

Before affirming this position, the Supreme Court refers to the established case law on the CLA standard. In brief, this means that scope-of-application provisions must be interpreted objectively. The text of the provision, read in the context of the entire regulation, is in principle decisive. In addition, account can be taken of the legal consequences of different possible interpretations of the text, and how plausible those outcomes are.

The Supreme Court then rules, in short, as follows. Even if a mandatory participation decree does not explicitly set a 'principal criterion' or any other requirement relating to the volume of the activities, it can nevertheless be interpreted, by application of the CLA standard, as entailing a certain minimum threshold. According to the Supreme Court, such an interpretation is warranted, given the implausibility of the legal consequences of an interpretation in which no minimum threshold whatsoever would exist. Without such a threshold, businesses that carry out activities almost exclusively outside the relevant industry would nonetheless fall under the mandatory participation decree.

According to the Supreme Court, the mandatory participation decree must therefore be interpreted as precluding the classification as an employer within the meaning of this decree if a business, relative to its total activities, turnover, total wage bill, and/or working hours, carries out activities as specified in the mandatory participation decree only on a negligible scale.

Since the Court of Appeal interpreted the mandatory participation decree incorrectly, Hazet's appeal in cassation succeeds. The Arnhem-Leeuwarden Court of Appeal must now assess whether Hazet carries out activities as specified in the mandatory participation decree only 'on a negligible scale'. If it turns out that this is not the case, a reassessment must be made as to whether, given the circumstances, it is unacceptable by standards of reasonableness and fairness for bpf MITT to invoke the mandatory participation decree. The Supreme Court ruled the latter with regard to the ground of appeal raised by bpf MITT.

Conclusion and significance for practice

The core of this judgment appears clear: even without an 'explicit' principal criterion, the CLA standard implies that mandatory participation decrees always contain a certain quantitative 'minimum threshold'. The legal consequences of an interpretation without any minimum threshold are (in principle) implausible, and this aspect belongs, contrary to what the Court of Appeal ruled, to the regular application of the CLA standard. A correction via the limiting effect of reasonableness and fairness is not required for this purpose.

With this, a fundamental question has once again been answered by the Supreme Court in this most recent 'scope-of-application judgment'. A logical follow-up question is how that 'quantitative minimum threshold' can best be determined in concrete cases, preferably in a consistent and reproducible manner. The Supreme Court offers no concrete guidance on this point to the referred court in this case.

The doctoral thesis of Mathieu Halsema (2025) does provide useful starting points for addressing this quantitative scope-of-application question. By examining patterns and relationships within the many Dutch industry-wide (CLA and pension) regulations, Halsema has developed a scientifically substantiated, mathematical model that enables the applicable scope of industry-wide regulations to be assessed and determined in a consistent manner.

Halsema's study also reveals, among other things, that it is uncertain whether a 'quantitative minimum threshold' or 'minimum percentage' (of, for example, 25%) can be derived from the scope-of-application provisions of all industry-wide (CLA and pension) regulations. In each case, a qualitative and quantitative assessment between the distinct industries will need to take place, with the standards of reasonableness and fairness serving as the ultimate safeguard of our legal system (as confirmed by the Supreme Court in the judgment discussed here). In this case, it will therefore be necessary to consider not only the scope-of-application provisions of the industry-wide regulations for the MITT (which are in any case relevant to the Hazet case), but also the scope-of-application provisions of the regulations of other industries in which the (other) employees of Hazet may be involved. The latter has not (visibly) occurred in the published judgments.

Furthermore, the following applies to the quantitative assessment. Even if scope-of-application provisions contain no explicit quantitative criteria, there are still employees involved in activities within the relevant industry. In the Hazet case, according to the Court of Appeal, this involves '6 of the more than 90' employees. The 'number of employees involved in' criterion described by Halsema can serve as a relevant variable in this regard. This approach aligns with the principle that the Supreme Court formulated in its judgment of June 2, 2023 (ECLI:NL:HR:2023:847): scope-of-application provisions are intended to designate businesses whose principal activity consists of the work referred to therein, and which therefore belong to that industry. Which industry that may be in the case of Hazet will have to be reassessed by the Arnhem-Leeuwarden Court of Appeal.