The Dutch system of collective labour agreements (CAO) is showing signs of strain and needs urgent maintenance, employers’ organisation AWVN has warned in a new position paper calling for reforms and broader dialogue with trade unions.

The organisation is concerned that support for collective agreements is eroding, particularly in newer sectors of the economy. The AWVN, which plays a role in many of the 628 CAOs currently operating in the Netherlands, said the system risks becoming outdated and less effective. “Without a CAO, it’s every company for itself,” acting director Guido van Woerkom told the Financieele Dagblad.

Traditionally, around 80% of Dutch employees were covered by a collective agreement, but that figure has now fallen to just over 70% and continues to decline slowly.

The warning comes ahead of government proposals expected this summer on how to strengthen the Dutch consensus approach to negotiations, known as the poldermodel.

An European directive requires countries with a collective bargaining coverage rate below 80% to present an action plan to raise that level. Social affairs minister Eddy van Hijum is due to send a letter to parliament on that subject in the coming weeks.

In particular, fast-growing sectors such as ICT are increasingly reluctant to join industry-wide agreements, Van Woerkom said. He pointed to examples such as Picnic, the online supermarket embroiled in a legal dispute over being forced to join the supermarket sector’s CAO. Similar disputes have emerged in the delivery and security sectors.

Union membership in the Netherlands has continued to fall, with just 15% of workers affiliated at the end of 2023.

The AWVN said employers and unions must work together to include non-unionised employees in the process and give independent workplace initiatives, such as WIM at Ikea or Our Next Move at ABN Amro, a voice.

Van Woerkom rejected suggestions that employers lacked urgency. “We can see the system creaking. It’s up to us – employers and workers – to take responsibility for maintaining it. Without CAOs, we risk a race to the bottom. Nobody wants that.”