Employers Association E-commerce Netherlands Receives Exemption from the Collective Labor Agreement for Food Companies

The reason for granting the exemption is that the business characteristics of online supermarket Picnic differ significantly from those of other companies. Therefore, online supermarkets are allowed to apply their own collective labor agreement for e-commerce. The activities of Picnic have not been compared with those of large retailers – such as Albert Heijn and Jumbo. They fall under a different collective labor agreement, the Supermarket VGL agreement.

A collective labor agreement (CLA) is concluded by employers and trade unions. If certain conditions are met, a CLA is declared generally binding by the Ministry of Social Affairs and Employment. All companies in that sector must adhere to it. This ensures a level playing field and curbs competition on employment conditions between companies. Companies that fall under the CLA can apply for an exemption. The General Binding Declaration Act (AVV) and the associated assessment framework include certain criteria. There must be a specific CLA that has been concluded with an independent trade union, and the specific business characteristics must differ significantly from those of other companies that fall under the CLA.

The decision states that there are compelling arguments to grant the exemption. The specific business characteristics of online supermarkets differ significantly from those of franchisees and independent retailers. Online supermarkets exclusively engage in online sales and deliver without exception to peoples homes. The distribution structure they use is entirely set up for that purpose. It is thus different from the way franchisees and independent retailers operate their businesses and possibly deliver groceries. Therefore, online supermarkets are allowed to apply their own CLA.

Minister of Social Affairs and Employment Mariëlle Paul: “Our CLA system prevents unfair competition between companies and also provides space for entrepreneurship and innovative companies. This request for exemption has been independently assessed against the criteria set out in the law. It shows: the business model of online supermarkets is truly different from that of independent retailers or franchisees. At the same time, I want to appeal to all parties involved. The world is changing, and ordering and delivering is becoming increasingly normal. It would be good if they sat down again and came to a solution that all parties can agree on.”