Luxembourg: Labour Legislation

Luxembourg Legislation

An employment contract is compulsory and generally permanent. Fixed-term contracts are regarded as an exception to this rule, and the circumstances in which it is possible to conclude a fixed-term contract are circumscribed by law.

All employers are bound by the minimum wage. Remuneration of most blue-collar workers and some white-collar employees is set by collective bargaining contract. Increases in the cost of living automatically trigger wage hikes. The remuneration of executives is set by negotiation.

Employees enjoy extensive protection. After an initial probationary period, it is difficult to discharge employees. Employees who have been discharged because the employer was experiencing economic problems are entitled to be the first to be rehired when the company expands. Acquired rights are protected by law in situations where a company is merged into or taken over by another.

The workforce has broad rights to information and consultation, and in some cases determination of company policies. Equal pay must be given for equal work.

The legal working week (five days) is 40 hours. The maximum working week (inclusive of overtime) is 48 hours. The statutory maximum daily working time is ten hours. In businesses with continuous operation or shift work, longer hours are permissible, but in most circumstances the permission of the Labour and Mines Inspectorate will be needed.

The statutory minimum overtime rate (at the time of writing) is 25% for wage earners and 50% for salaried employees. Overtime rates for working on Sundays and public holidays are much higher. In some circumstances, time off must be given in addition to paying overtime.

EU labour law is of course of great and growing importance. Employment may be terminated in several ways:

• Termination by mutual agreement (resiliation d'un commun accord). If the parties reach an agreement to terminate the contract, the only requirement is that the agreement must be confirmed in writing.
• Termination with notice. Either party may terminate the contract by giving the required period of notice. In the case of dismissal by the employer, there must be reasonable and substantial grounds relating to the employee's conduct or competence or to the operational needs of the enterprise and the employee is entitled to receive, upon request, a written statement of these reasons (see statement of reasons for dismissal with notice ). In addition, an employee with at least five years' length of continuous service is entitled to severance pay. In enterprises with 150 or more employees, notice of dismissal may not be given until after a pre-dismissal interview.
• Termination for grave cause (resiliation pour motif grave). Either party may terminate the contract without notice when there is grave cause deriving from an act or misconduct by the other party, with damages payable by the party whose act or misconduct has occasioned this summary termination ( resiliation immediate ). For the purposes of this provision, the circumstances deemed to constitute grave cause consist in any act or misconduct which renders continuance of the employment relationship immediately and permanently impossible. In the case of summary dismissal by the employer, for which the general rules on a pre-dismissal interview apply (see above), in assessing whether the employee's conduct constitutes grave cause the courts take into consideration all influencing factors such as a possible history of misconduct and the consequences of such dismissal for the employee, who loses the normal entitlement to severance pay. Notification of summary dismissal for grave cause must be given in writing, stating the act or misconduct invoked, within one month of the date on which it came to the employer's knowledge (the same time-limit applies to summary termination for grave cause by the employee). Pending the date of notification of summary dismissal, the employer may exclude the employee concerned from the enterprise by imposing immediate suspension with pay .

• 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 oversight of wages, hours of work and holidays
• the monitoring of the election of employee representatives, including adjudication on complaints of irregularities, for the whole area of working conditions including health and safety in those establishments employing more than 15 people
• the accreditation of certifying bodies under various Article 100A directives
• the production of standards as the competent standards making body for Luxembourg.

• to enter any place of work at any time of day or night without giving prior notice
• to enter during day-time any premises which can reasonably be assumed to be a place of work
• to carry out any examination, inspection or enquiry necessary to establish compliance or alternatively non compliance with the law
• to question any employer or employee and to require them to make a written statement of the matters on which they are questioned
• to require the production of any book, register, file or document relating to working conditions
• to require notices to be displayed in accordance with the relevant legislation.