After Transfer of Undertaking the Employee Retains Entitlement to the Agreed Salary, even if it is Higher than the CLA Permits

Since an employee's salary was higher than permitted under a CLA that became applicable after the transfer of an undertaking, it had been agreed with the employee that the excess part of the wages would be regarded as a personal supplement and that this personal supplement would continuously be phased out with further increases of the CLA wages. This “freezing” of wages, however, was inconsistent with the legal protection the employee enjoys in the event of the transfer of an undertaking.
Following the sale of his employer's company, a lorry driver had entered the service of a company that offered logistics services. Originally, the employee worked for a company that prepared and delivered medicines. In that position he was responsible for the home delivery of medical products to kidney patients. Following a series of transactions, each of which qualified as the transfer of an undertaking within the meaning of the law, he landed in the service of his current employer. In 2013, during one of the transitions, the CLA for the professional freight transport had become applicable to the employment contract. In a new employment contract, this CLA was also declared applicable. This CLA was a so-called “standard CLA”, meaning that the CLA may not be deviated from, even if it would be to the benefit of the employee. The employee, however, had a salary that was considerably higher than the collectively agreed wages. Therefore, it was included in the employment contract that this excess part would be referred to as a personal supplement, which would continuously be reduced on each increase of the CLA wages.
In this way, in effect, the employee's salary was "frozen" until it would no longer exceed the CLA wage.
In 2020, in proceedings before the Sub-district Court, the employee claimed, among other things, that the employer should pay him the original personal supplement, without the reduction and in accordance with the wage increases. When the Sub-district Court granted the claim, the employer lodged an appeal to the Court of Appeal.
The employer itself had claimed that the employee should repay the entire personal supplement because it would be conflicting with the CLA, due to the generic nature of the CLA. The Court of Appeal rejected this claim because the generic nature only applies to matters or areas that are regulated in the CLA. According to the Court, the personal supplement was granted in the context of the transfer of a company and the CLA does not contain any provisions on the transfer of a company.
In appeal, the employee's claim for payment of the full personal supplement, without a reduction, was reduced. because the employee had withdrawn his claim that the CLA wage increases should also be calculated for the personal supplement.
The question that then remained was, whether the employer was allowed to phase out the personal supplement in the event of increases in the CLA wage. According to the Court, a provision in the CLA that prohibits the phasing out of a personal supplement that is granted when an employee moves to a lower position did not apply in this case. The Court of Appeal pointed out that, according to the Court of Justice of the European Union, a European Directive entails that the composition of the salary shall not be changed in the event of a transfer of an undertaking, even with an unchanged total amount of the salary. Likewise, if a CLA becomes applicable in the event of the transfer of undertaking, the employees shall not suffer a substantial loss of salary.
According to the Court of Appeal, the phasing-out clause would lead to a substantial loss of salary.
According to case law of the European Court, an employee may not validly waive the rights conferred on him by the Directive, even if the disadvantages he may experience as a result of the transfer are compensated by other advantages, so that, on balance, the arrangements shall not be disadvantageous for the employee. The Court of Appeal therefore concluded that the employee shall retain his entitlement to the original personal supplement, without phasing it out.

CLA’s are usually minimum CLA’s, which means that deviations from the CLA in favour of employees are permitted. Parties to the CLA may also agree, however, that deviations from the CLA in favour of the employee are not permitted. In that case a standard CLA applies. In the above case, this was at issue. In such a case, a wage that is higher than the CLA wage is not permitted.
The European Directive, offering protection to employees in the event of the transfer of an undertaking, has been included in Dutch legislation, but for the interpretation of the Dutch legislation the Dutch Court has to follow the case law of the European Court and to interpret the Dutch legislation as much as possible in conformance with that case law. As a result, the operation of the CLA as a standard CLA also had to give way to the protective effect of the European Directive as interpreted by the European Court.