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Issue 110, January 70

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Employment and Labour Law: 2nd edition Bookmark Page Print Page

Luxembourg Employment

4 Feb 2012

Employment and Labour Law: 2nd edition - Luxembourg

Editors: Bonn Schmitt Steichen Alex Schmitt and Anne Morel

1. SOURCES OF EMPLOYMENT LAW

Luxembourg employment law is based upon European law, domestic legislation, contractual agreements, collective bargaining agreements and case law.

Priority is given to mandatory provisions of European and domestic law.

1.1 Employment legislation

Employment contracts have been primarily governed by the provisions of Articles 1779 et seq of the Luxembourg Civil Code and by various laws, which have been gradually introduced to regulate every aspect of the relationship between employers and employees.

The bill introducing a labour code was enacted on 31 July 2006 and published on 29 August 2006 in the Official Gazette (‘Labour Code’). The Labour Code entered into force on 1 September 2006.

As a result of the introduction of the Labour Code, most of the laws regulating employment law have been repealed.

1.2 Collective agreements

According to Article L-161-2 of the Labour Code, collective bargaining agreements are defined as contracts covering reciprocal relationships and general conditions of employment concluded between one or more trade union organisations on one side, and one or more employers’ organisations, or a single undertaking or group of undertakings in the same undertaking sector, or all the undertakings in the same sector, on the other side.

Such collective bargaining agreements shall be declared generally binding on all employees and employers in the sector for which they have been concluded.

2. PRINCIPAL INSTITUTIONS

The Employment Administration (Administration de l’Emploi) which registers and seeks work
for unemployed persons.
The LAbour and Mines Inspectorate (Inspection du Travail et des Mines or ITM) is a division
within the Ministry of Labour. The ITM is in charge of:

monitoring standards of health and safety for employees in all sectors of industry including commerce and the service industries but excluding those in public service;
ensuring the implementation of all legislation relating to the working conditions and protection of all employees subject to a contract of employment except those in the public sector;
the prevention and resolution of industrial disputes;
the issue of operating permits to establishments and activities designated by law with the potential to create risks to the health and safety of the employees or the public or to create a nuisance;
the supervision of collective agreements;
the supervision of wages, hours of work and holidays; and
the monitoring of the election of employee representatives.

The National Conciliation Office (l’Office National de Conciliation or ONC): has responsibility for preventing or settling collective labour disputes.

3. ROLE OF THE NATIONAL COURTS

The Labour Court (Tribunal du Travail) is competent to hear disputes relating to employment contracts and contracts of apprenticeship arising between employers and employees, even after termination of the contract.

The action is brought by way of a written brief indicating the name, profession, and domicile of the parties, as well as the object of the action and a concise account of the points of dispute.

The court summons the parties to a hearing to examine the case, after which it pronounces judgment. The Labour Court usually orders compensation but may order reinstatement of the employee at the employee’s request, if the continuation of the contract of service is possible.

Either party may file an appeal against the judgment within 40 days from the date of notification of the judgment to the parties before the Labour Court of Appeal (Cour d’Appel). The Appeal Court pronounces a judgment on appeal (arrêt).

The matter may furthermore be referred to the Supreme Court (Cour de Cassation) only on strict legal grounds.

Summary proceedings may be filed with the President of the Labour Court. The judge pronounces an interim order. Either party may file an appeal against the order within a period of 15 days from the notification of the order to the parties.

4. EMPLOYMENT STATUS AND CATEGORIES OF WORKERS

4.1 Employment status and relevance of the distinction

An employment contract may be distinguished from other forms of contract such as a service agreement.

The employment contract is primarily characterised by the element of subordination of the employee to his employer: an employee must carry out work of whatever nature, under the authority of an employer who issues orders and guidelines, supervises, and imposes sanctions.

4.2 Main categories of worker

The legislation distinguishes between private employees, manual workers and senior

executives.

A manual worker is a worker of either sex performing predominately manual work.

An employee is a person of either sex performing predominately intellectual work.

A senior executive is a worker who has a higher remuneration taking into account the necessary time for the performance of his/her work.

Workers may be employed under different types of contract such as :

those concluded for an indefinite period of time : these contracts run indefinitely until the expiry of the notice given by the employer in case of dismissal or, in case of resignation by the employee or, at retirement or death of the employee;
- those concluded for a fixed-term period in respect of a specific and temporary task such as replacement of a sick employee, for seasonal jobs, for specific tasks which do not form part of the normal activities of the undertaking, or in case of a temporary increase of the workload ;
- Such contracts may not be renewed more than twice and for a period of time exceeding 24 months.
those concluded on a part-time basis (less than 40 hours a week).

4.3 Position of directors

Directors of companies are not subject to legal provisions of employment law because the essential element characterising an employment contract is missing (submission to the employer).

However, a director may under certain circumstances enter into a separate employment contract with the company provided that the duties performed under the employment contract are different from those performed as a director.

5. CONTRACT

5.1 Definition

According to a Luxembourg Court decision dated 2 February 1989 (Jean Wenzel and Charlotte Majerus v SA Texaco Luxembourg) an employment contract can be defined as an agreement pursuant to which a person agrees to perform an activity under the subordination of another person in exchange for remuneration.

There are therefore three elements to this definition:

the performance of work;
the payment of remuneration or salary; and
the submission of the employee to the authority of the employer.

5.2 Formal requirements

A written contract is required regardless of whether the employment is for a fixed term or for an indefinite period of time. An individual written contract must be drawn up for each employee no later than the day of the commencement of work. The contract must be drawn up in two originals, one for each party.

If no written contract has been signed, the employee may use any means to prove the existence and the content of his contract. The Labour Code does not, however, allow this right to the employer.

5.3 Implied terms

Luxembourg Labour Law is of public order. Legal provisions of the Labour Code are notably therefore mandatory.

The parties are authorised to depart from the provisions of this law only in a more favourable way for the employee and any clause which aims at restricting the rights of the employee, is null and void.

6. TERMS AND CONDITIONS

6.1 Terms that must be included in a contract

Any employment contract must, as a minimum, state the following specific information:

the identity of the parties;
the date of effective employment;
the place of employment or, in the absence of determined place of work, the employee may be employed in various locations and/or, more specifically, abroad or at the employer’s private residence;
the nature of the employment with, if appropriate, a description of the employee’s tasks or functions at the time of employment, without prejudice to any subsequent appointment;
the employee’s normal working day or week;
the normal working hours;
the basic salary or wage to be paid, plus additional payments;
the length of holiday leave with pay to which the employee is entitled;
the length of the trial period (if any);
the length of the notice period to be observed by the employer and the employee;
a reference to any applicable collective bargaining agreement, any derogation from the general law, where permitted, and any additional terms that the parties have agreed upon; and
- a reference to the existence and nature of a pension scheme, whether it is mandatory or optional, description of the rights to benefits, as well as a reference to personal contributions.
- An employment contract for a definite period of time must state the following information in addition to the above:
a definition of its object;
the expiry date when the contract is concluded for a definite period;
the minimum duration when the contract cannot provide for an expiry date;
the name of the absent employee, when the contract is concluded on account of the absence of an employee;
the duration of any trial period; and
any renewal clause.

The contract may simply refer to these statutory provisions, or may set out further conditions that are more favourable to the employee.

6.2 Working time and rest breaks

Working time is limited to eight hours a day and 40 hours a week for both manual workers and for private employees.

The absolute maximum time that may be spent at work (for either manual workers or private employees) is 10 hours a day and 48 hours a week.

Sunday work is in principle prohibited. However this prohibition does not apply to certain employees, businesses and occupations.

Where time off is taken in compensation for Sunday work, a supplementary payment of 70 per cent applies. Where no such time off is taken the work is remunerated at a rate of 170 per cent of normal rate (200 per cent for juveniles). The employee is entitled to at least half a day where he/she works less than four hours on a Sunday, and where the employee works more than four hours on a Sunday he/she is entitled to a day off.

Both private employees and manual workers are entitled to additional leave of six days a year when they are not able to rest for 44 hours in a row per week.

6.3 Annual leave

Both private employees and manual workers are entitled to 25 days’ leave per year irrespective of the employee’s age.

The right to such holiday begins on the completion of three months’ uninterrupted service with the same employer.

The 25 days’ leave must usually be taken during the calendar year but can be taken until March 31 of the following year in case of operating needs or legitimate wishes of other employees.

If the employment terminates during the course of the calendar year, the employee is entitled to one-twelfth of the annual holiday not yet taken for each full month worked.

7. EMPLOYEE REPRESENTATION

7.1 Trade unions

Article 11 of the Luxembourg Constitution guarantees freedom to join a trade union. Employees as well as employers are organised on a voluntary basis into a number of trade unions, respectively trade and professional federations, whose principal action is to negotiate collective bargaining agreements.

7.2 Staff delegation

Staff delegations must be set up in every undertaking of the private sector with at least 15 employees. Where there are fewer than 100 workers, a single delegation representing manual workers and private employees is jointly elected. Where the undertaking has more than 100 workers, with a minimum of 15 private employees and 15 manual workers, each group elects separate representatives. The number of representatives elected to a staff committee is proportionate to the total number of workers.

7.3 Joint works council

Every undertaking employing at least 150 employees over a three-year reference period must have a joint works council. The number of members depends on the size of the business. Joint works councils are composed of an equal number of employers’ and employees’ representatives.

The employer’s representatives are chosen by the business’ management, and the employees’ representatives are elected by proportional representation in a secret ballot of the staff delegates.

7.4 Employee participation in company management

As an exception to the rule that directors are appointed by the general meeting of the shareholders, the Labour Code confers on the staff delegates the right to appoint directors representing the staff, by a ballot carried out under proportional representation rules. This representation applies only to business under the form of a joint stock company employing at least 1,000 employees over a three-year reference period. The number of directors is set at least at nine.

7.5 Involvement of employees in the European company

A recent law dated 25 August 2006 supplementing the Statute for a European company has been enacted. Article 3 of this law provides that a special negotiating body representative of the employees of the participating companies and concerned subsidiaries or establishments for the establishment of a European company shall be created in accordance with the conditions stated in the law.

The provisions of this law provide essentially for the composition and operation of the special negotiating body, in addition to the procedure for the information and consultation of employees.

8. INFORMATION AND CONSULTATION

8.1 Staff delegation

Information and consultation concerning employees

The staff delegation may:

give advice or issue proposals with regard to improvement of working conditions, employment conditions and social situation of the personnel;
present to the employer any individual or collective claim;
prevent or solve individual or collective litigation between the employer and any member of staff;
refer any litigation or claim to the Labour and Mines Inspectorate concerning any breach of the legal or contractual provisions in relation to working conditions and protection of employees in the work place;
give advice on the implementation or change of any internal policy and supervise the application of such policy;
suggest changes to the internal policy;
participate in the training of apprentices if the undertaking has more than 150 employees;

• organise the apprenticeship schemes;

promote the employment of disabled persons;
participate in charities;
participate in the protection of work and environment and prevent occupational hazards; or
give advice before the implementation, change or withdrawal of a complementary pension scheme.

Information and consultation concerning the company’s decisions

The employer must inform employee representatives each month of the undertaking’s operations.

Health and Safety

The employer must in particular communicate any information on the risks to health and safety, as well as any protective or preventive measures or activities taken.

The staff delegate must appoint a delegate in charge of health and safety within the undertaking.

Equality between men and women

The employer must provide on a biannual basis statistics on the recruitment, promotions, transfer, termination, remuneration and training courses underlining the difference between men and women.

The employee delegate must appoint a delegate to supervise the equality of treatment between men and women.

8.2 Joint works council

The joint works council decides on various matters such as:

implementation of any technical installations aiming at controlling the employees’ behaviour and performance;
implementation or change of any measures regarding health and safety at work;
implementation or change of the criteria applicable to hiring, secondment, transfer, and termination;
implementation or change of general criteria applicable to the appraisal of employees; and
implementation or change of internal policies or collective bargaining agreements.

Information and consultation concerning employees

The employer must inform and advise the joint works council before any major decision relating to:

the alteration or extension of the building and/or the work place;
the implementation, replacement or transformation of equipment; and
the implementation, replacement or transformation of work practices. The employer must inform and consult the joint works council:
- about the consequences of these measures on working conditions and working environment;
- • once a year regarding existing and foreseeable personnel needs, training measures, and courses; and
before creating part-time jobs.

Information and consultation concerning the company’s decisions

The employer must inform and consult the joint works council on every economic or financial decision, which could have a significant influence on the company’s structure or the level of employment (production; sales; projects of restriction, extension or modifications in the company’s organisation; projects of merger, implementation, modification, abrogation of complementary pension).

In principle, information and consultation must occur before any decision, except if there is a risk of disturbing the management of the company or compromising an operation. In this case, the employer must give all necessary information and explanations to the joint works council within three days following the decision.

Information and consultation concerning the business’ situation

The employer must inform and consult in writing the joint works council at least twice a year, regarding the economic and financial situation of the business.

The employer must present to the joint works council a report concerning the activity, turnover, global results of production, evolution of structure and amounts of staff remuneration, and investments.

Companies with share capital must present to the joint works council, before the annual general meeting of shareholders, all documents presented to the shareholders.

Company benefit plan

The joint works council supervises the company benefit plan set up for employees and their families, including measures concerning housing. The employer must communicate, at least once a year, a report relating to this plan.

Equality

The joint works council supervises the equality of treatment between men and women, as far as access to employment, training, working promotion, payment, and working conditions are concerned.

9. EQUAL OPPORTUNITIES

9.1 Forms of prohibited discrimination

The universal declaration of human rights confirms the principle of non-discrimination, that all humans are born free and equal and may exercise any rights and freedom regardless of their sex. Discrimination is not therefore permitted with respect to access to employment, nor regarding conditions of remuneration. The employer is thus obliged to take appropriate preventive measures against discrimination.

Sex, gender reassignment, race and ethnic origin, religion or belief, sexual orientation

Discrimination is prohibited against concerned individuals under the grounds mentioned above, and in particular, when an employer refuses to employ, gives a sanction to or dismisses such a person on those grounds.

Equal treatment between men and women

Employment access and criteria for professional aptitude tests

The provisions of Articles L 241-1 et seq of the Labour Code provide that equal treatment as to conditions of access to employment position must be assured. These provisions prohibit any direct or indirect references to the sex of the employee in employment offers or notices and in criteria for professional aptitude tests.

The employer may not refuse or impede access to a position on account of expressed or implied reasons based on the sex of the applicant.

Any legal or contractual provision violating the principle of equal treatment is deemed to be null and void.

Marital status

Celibacy clauses are null and void, as are clauses providing that a woman’s employment contract may be terminated, or that a female employee may be dismissed, on account of her marriage.

Equal pay

All employers must ensure equal remuneration between men and women for similar work or work of equal value.

The minimum statutory wage is legally assured to any employed person irrespective of his or her sex.

Sexual harassment

An employee must not be affected in its rights in matters of professional training, employment, continuance of employment, professional promotion, remuneration or any other decision relating to employment when he/she refuses an inopportune, abusive and hurtful behaviour from the employer, another employee, a client or a supplier, during the employment relationship.

The employer must do whatever is necessary to put an end to any act of sexual harassment as soon as he is advised of it. If he fails to do so, the President of the Labour Court may require him to do so.

The harassed employee is entitled to terminate the employment contract with immediate effect based on sexual harassment, and the employer may have to pay damages to the employee if the court considers her (or his) resignation was justified. In this case, the burden of proof is incumbent on the employer.

Disability discrimination

A disabled employee may not be discriminated against in terms of remuneration.

Obligatory employment of disabled employees

According to Article L 562-3 paragraph 1 of the Labour Code, public sector businesses are required to employ full-time disabled employees to a proportion of 5 per cent of their total staff, provided that disabled employees comply with the general requirements of training and legal access.

Article L 562-3 paragraph 2 of the Labour Code provide that private sector businesses are required to employ full-time disabled employees in the following proportions: • one disabled employee in businesses with at least 25 employees;

two per cent of total staff for businesses with at least 50 employees; or
four per cent of total staff for businesses with at least 300 employees.

A disabled employee may not be discriminated against in terms of remuneration. Moreover, disabled employees are granted additional paid leave of six days per year.

9.2 Rights available to parents

Maternity leave

All pregnant employees are entitled to a protected period during which any pregnancy-related absence must be discounted. They are thus entitled to eight weeks of pre-natal leave and eight weeks of post-natal leave, this latter provision is extended to twelve weeks where the mother is breast feeding, or in the case of premature or multiple births.

Parental leave

Each parent is entitled under certain conditions to take parental leave at the time of birth or adoption of a child. One parent must take it directly at the end of the maternity leave period (‘first parental leave’); the other parent may take it at any time until the child reaches the age of five (‘second parental leave’).

The duration of the parental leave period is six months, or 12 months if the employee keeps working at least half time.

10. DISCIPLINE AND TERMINATION

10.1 Termination

10.1.1 Termination by the employer: dismissal

Dismissal with notice

Termination with notice is possible only in the case of a contract concluded for an indefinite period of time. If the employer wishes to dismiss an employee, notice of dismissal must be sent by registered letter under penalty of invalidity. The employee’s countersignature on the letter of dismissal is proof of receipt.

Notice by the employer must be given as follows:

Length of service Notice required

Less than 5 years 2 months

Between 5 and 10 4 months

10 and over 6 months

Notice takes effect only on the first or the fifteenth day of the month. Notice given before the fifteenth of the month takes effect on the fifteenth; notice given after the fourteenth day takes effect on the first day of the following month.

The employee may request communication of the reasons, although such request must be made of the employer by registered letter within one month of the date of the notification of dismissal. The employer must state his reasons in detail within a further month by registered letter.

Dismissal as a consequence to gross misconduct

The employer may terminate the contract, without notice in the case of a contract concluded for an indefinite period of time, and before the end of its term in the case of a fixed-term contract, in the event of gross misconduct by the employee.

The employer must notify the dismissal per registered letter. The employer must however immediately state in the dismissal letter the explicit and detailed reasons for the dismissal.

Grounds for dismissal

Reasons for dismissal must be supported by demonstrable and explicit facts. Such facts may include:

In case of dismissal with notice:

reasons connected with the employee’s aptitude;
reasons connected with the employee’s conduct; or
reasons arising from the operating needs of the business, establishment or department.

A new law dated 22 December 2006 which introduced new provisions into the Labour Code, has introduced the requirement for any employer with at least 15 regular workers, to notify any dismissal for reasons not related to the concerned employees, ie a dismissal based on economic grounds, to the economic committee (Comité de conjoncture). The employer may furthermore be requested under certain conditions to enter into negotiations in order to set up a retention plan.

In case of dismissal as a consequence of gross misconduct:

Gross misconduct is considered as any conduct, which immediately and definitively makes it impossible to continue the working relationship. The appraising of this notion is purely factual and completely lies with the courts.

Procedure

Any employer with 150 employees or more who contemplates dismissing any employee must, before reaching any decision, interview the employee concerned.

Notice of such interview must be given in writing by registered letter or by hand duly acknowledged as received. The letter must give an indication of the purpose of the interview and its date, time and place.

Dismissal, whether with notice period or for gross misconduct, must be notified:

no earlier than the day following the interview; or
- no more than one week later,
- If the employee does not attend having being summoned to an interview, the dismissal may be notified:
no earlier than the day following the day set for the interview; or
no more than one week later.

Legal payments in case of dismissal with notice period

Dismissed employees are entitled to notice pay and severance pay.

Notice pay is the pay relating to the notice period depending on the seniority of the dismissed employee. The notice pay is paid in the same way as a salary, at the end of each month. The employer is required to withhold taxes and social security contributions.

Any dismissed employee is legally entitled to severance pay after at least five years of seniority.

Years of service	Months of salary	Months of salary
	Manual workers	Private employee
At least 5 but under 10	1	1
Between 10 and 15	2	2
Between 15 and 20	3	3
Between 20 and 25	3	6
Between 25 and 30	3	9
30 and over	3	12

Statutory claims – unfair dismissal

Dismissal is regarded as unfair if it takes place for unlawful reasons, or if it is not founded on valid grounds related to the employee’s aptitude or conduct, or arising from the operating needs of the business, establishment or department.

If the employee challenges the reasons claimed by the employer in support of the dismissal, the onus is on the employer to prove not only the facts but, their validity and seriousness.

The employee may bring an action for unfair dismissal and damages before the court within a period of three months from the letter of dismissal (where dismissal was for gross misconduct) or the letter of justification (where dismissal with notice period took place).

If the employee has introduced a written claim to the employer within three months, an action for unfair dismissal may still be introduced within a new period of time of one year from the date of the written claim.

Compensation for damage

Luxembourg Labour Code does not provide for pre-determined compensation for damage. The judges in Labour Courts have the widest powers to appreciate at their own discretion the amount of the indemnification. However, compensation for damages is in general determined as follows:

MORAL DAMAGE: In the event of unfair dismissal, the following criteria are taken into consideration to assess the amount of the damages:

troubles raised by the dismissal;
age; or
length of service.

FINANCIAL DAMAGE: Financial damage greatly depends on the professional situation of the employee after the dismissal and is determined on a case-by-case basis by the courts.

Special statutory protection against dismissals

An employer who has been duly notified of his employee’s incapacity to work within the proper time (on the first day of incapacity), or who has received the medical certificate in due form within the proper time (on the third day of absence at the latest), is prohibited from notifying the employee of the termination of his contract or summoning him to the interview prior to dismissal. Any dismissal notified by the employer to the employee during this period is unfair.

The employer’s right to dismiss is then suspended for a maximum of 26 weeks following the date of incapacity.

A woman whose pregnancy is medically proved cannot be dismissed during the period of pregnancy and for 12 weeks following the birth of the child. Any dismissal notified during this period is deemed to be null and void.

An employer may not dismiss an employee during parental leave.

Staff representatives and their alternates are protected against dismissal throughout their term of office. Any dismissal is deemed to be null and void, whatever the reason. This protection period is extended to former representatives for six months following the end of their term of office, and to candidates for election to such office for a period of three months following the announcement of their candidacy.

10.1.2 Termination by the employee: resignation

An employee willing to terminate the contract of service must send to the employer a registered letter. Unless the employment contract is terminated on account of gross misconduct on the part of the employer, the employee must give notice. The notice period required on resignation by the employee is half that required in the case of dismissal by the employer.

10.2 Special disciplinary rules applying in certain situations

Although staff representatives and their alternates are legally protected against dismissal, the Labour Code provides for a specific procedure for termination.

The employer is entitled in the event of gross misconduct by a staff representative, to pronounce a temporary suspension.

During the suspension, the staff representative will not be entitled to remuneration, unless he makes the request to the Labour Court.

The employer must immediately refer the matter to the Labour Court, which will decide the termination of the contract of service on account of a breach of contract.

The employer is entitled to pronounce a temporary suspension in the event of a gross misconduct by the pregnant woman. The same procedure as described above for the staff representatives is applicable for the pregnant woman temporarily suspended.

The employer is entitled to pronounce a temporary suspension in the event of gross misconduct of the employee until the notification of the dismissal with immediate effect. The employee temporarily suspended remains entitled throughout this period to his/her remuneration and to any other benefits until the day of notification of the dismissal.

11. COLLECTIVE DISMISSALS

A new law dated 22 December 2006 has created an employment maintaining plan which shall be established according to the conditions stated in the aforementioned law. For this purpose, the new law provides that every undertaking employing regularly at least 15 workers, must notify to the economic committee (Comité de conjoncture) any dismissal for reasons not related to the concerned employees.

11.1 Definition of collective dismissal

The statutory procedure regarding collective dismissals must be followed as soon as an employer contemplates dismissing at least seven employees within a period of 30 days or dismissing 15 employees within a period of 90 days.

‘Collective redundancies’ means dismissals effected by an employer for one or more reasons not related to the concerned employees.

11.2 Collective dismissal procedure

The employer must enter into prior negotiations with the employees’ representatives in order to come to an agreement relating to the establishment of a social plan. The social plan is a written agreement signed by the employer and the employees’ representatives, which contains the results of the negotiations.

The employees’ representatives are either the staff representatives, the joint works council or/and the trade unions if a collective bargaining agreement applies to the employer/employee relationship.

The negotiations shall, under penalty of invalidity, refer to possibilities to avoid or reduce the number of collective dismissals or possibilities to weaken the consequences through accompanying social measures which aim to assist the dismissal workers to be reclassified and possibly be immediately reintegrated into the labour market.

The following subjects shall be, in particular, discussed:

application of the part-time unemployment provisions;
eventual adjustments of the duration of work;
temporary reductions of the duration of work not falling under the field of part-time unemployment provisions, providing, if necessary, the participation in continuous trainings during released working hours;
possibilities of formation allowing workers’ reassignment inside the company;
possibilities of formation allowing workers’ reassignment to another company, belonging if necessary to the same branch of industry;
application of the legal provisions concerning the temporary work;
personal accompaniment of career transitions, if necessary with external experts assistance;
application of the legal provisions concerning early retirement; and
principles and procedures governing the implementation and the follow-up of selected measures.

Companies having an employment maintaining plan approved by the Labour Minister six months before the beginning of the negotiations are exempt from the obligation provided by the abovementioned provisions.

Before the negotiations begin, and at the latest at the beginning of the negotiations, the employer must inform in writing the employees’ representatives of the proposed collective dismissal and must provide them with the following information:

reasons for the proposals;
number and description of employees affected;
number and description of employees usually employed;
period of time within which the dismissals are proposed;
method of selecting employees to be dismissed; and
proposed method of calculating the amount of any redundancy payment.

A written notification of the contemplated redundancies must be sent to the Employment Administration by the employer, as well as a copy of the above-mentioned notification before the negotiations start. This notification is forwarded by the Employment Administration to the Labour and Mines Inspectorate.

The employer and the employees’ representatives must within a period of 15 days from the beginning of the negotiations come to an agreement relating to the establishment of a social plan.

At this stage, if parties have come to an agreement, they must sign a social plan. After the signature of the social plan, the employer is entitled to notify the dismissal to each employee on an individual basis.

If the parties have not come to an agreement within the 15 day period as provided for by the law, the minutes of the negotiations stating the motivated attitude of the parties regarding the negotiated issues is signed and immediately forwarded to the Employment Administration.

Both parties must jointly refer the matter to the National Conciliation Office (Office National de Conciliation) within a maximum period of three days since the signature of the minutes. Within two days the President of the National Conciliation Office will summon the members of the equal representation (Commission paritaire). Within three days maximum of the convening notice, the equal representation shall hold a meeting. The committee will consider the matter within a maximum of 15 days from the date of the first meeting. The minutes of the deliberations are forwarded to the Employment Administration, and to the Labour and Mines Inspectorate.

After the signature of the minutes by the National Conciliation Office, the employer is entitled to notify the dismissal to each employee on an individual basis. Any dismissal notified to the employees before the signature of the minutes is null and void. The dismissals come into effect after a period of 75 days, notwithstanding any longer notice period as determined by the law or provided for in the employment contract or in the collective bargaining agreement.

11.3 Consequences of not complying with the applicable procedures

Any dismissal notified before the procedure or before the signature of the social plan is deemed null and void. The dismissed employees must therefore be reinstated. Employees dismissed within a collective dismissal being not in conformity with the law, are allowed to require damages for unfair dismissal.

11.4 Employees’ rights in the event of collective dismissal

Notice period

The notice period starts either on the first day of the following month or on the fifteenth of the month depending on the day of notification of the dismissal. The notice period will start on the first of the following month if the notification was given after the fourteenth of the previous month and will start on the fifteenth if the notification was given before the fifteenth.

The notice pay is paid in the same way as a salary, at the end of each month. The employer is required to withhold taxes and social security contributions.

The length of the notice period depends on the years of seniority and varies from 75 days where the period of employment was less than five years, to four months where it was between five and ten years and to six months where there has been more than ten years’ service.

Severance pay

Each employee is entitled to a severance pay varying from one month to twelve months depending on the seniority.

Additional payments

Any additional payment is not provided for by the law, nor by the collective bargaining agreement but is common practice. The method of calculation of such additional indemnities will exclusively depend on the consultations.

The employee may request communication of the reasons, although such request must be made to the employer by registered letter within one month of the date of the notification of dismissal. The employer must state his reasons in detail within a further month by registered letter.

An employee made redundant has the same rights as an employee dismissed on an individual basis and may therefore claim in court compensation for damages as a result of the dismissal, which he considers to be unfair.

11.5 Are the other circumstances which trigger collective dismissals right (eg closure of workplace)

In case of closing of business and subsequent liquidation of the legal entity, the employer must terminate the employment contracts and make every employee redundant. The statutory procedure regarding collective dismissals as described above must be followed.

12. FORTHCOMING LEGISLATION

The following bills are at the present before the Luxembourg parliament and will be enacted
in the future:
• one relating to the reform of the Labour and Mines Inspectorate;
• one relating to the implementation of Council Directive 2002/14/EC of 11 March 2002

establishing a general framework for informing and consulting employees in the European Community and modifying Titles I and II of the Book IV of the Labour Code; and

• one relating to the implementation of Council Directive 2002/15/EC of 12 March 2002 on the organisation of the working time of persons performing mobile road transport activities.

13. USEFUL REFERENCES

The government link – www.gouvernement.lu

The Labour Ministry – www.mt.etat.lu

The Labour and Mines Inspectorate – www.itm.etat.lu

The social security organisation – www.ccss.lu
and
www.secu.lu/legis/legis

The European Lawyer