luxembourg - bsp | luxembourg employment law contract of employment and/or corporate mandate legal...

56
Luxembourg Employment Law January 2014

Upload: lyliem

Post on 21-Apr-2018

223 views

Category:

Documents


1 download

TRANSCRIPT

Page 1: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 1

LuxembourgEmployment Law

January 2014

Page 2: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

2 | Luxembourg Employment Law

Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could

never have existed if labor had not first existed. Labor is the superior of capital and

deserves much the higher consideration.

Abraham Lincoln

’’

’’

Page 3: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 3

GENERAL 4 Sources of Employment MainInstitutions RoleofNationalCourts

EMPLOYING PEOPLE 8 EmploymentStatusandCategoriesofEmployees EmployingForeignNationals TERMS OF EMPLOYMENT 19 Contract TermsandConditions REpRESENTaTIoNaNdCoNSulTaTIoN 24 EmployeeRepresentation RoleoftheStaffdelegation RoleoftheJointWorkCouncil JointCompetenceoftheStaffdelegationandJointWorkCouncil

EqualoppoRTuNITIES 32

dISCIplINEaNdTERMINaTIoN 37 discplineandTermination Collectivedismissals

EMployMENTRETENTIoNSChEME 48

hoWWECaNaSSISTyou 50

SUMMARY

B S P BONN STEICHEN & PARTNERS

Disclaimer : This brochure has been prepared for general information purposes only. Any information on the brochure is not intended and shall not be construed as legal advice. Whilst particular attention is paid to ensure that the information on the publication is correct, no warranty, express or implied, is given as to its accuracy and Bonn Steichen & Partners does not accept any liability for error or omission.

Page 4: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

4 | Luxembourg Employment Law

GEnEraL

Page 5: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 5

Luxembourg employment law is predominantly based upon the following:

• Euregulations;

• thedomestic labour Code (‘Codedu travail’): contracts of employmentwereoriginally governedby theprovisionsofarticles1779etseq.oftheluxembourgCivilCodeaswellasvariousotherlawswhichweregradually implemented to regulate all aspects of the relationship between employer and employee. however, alabourcode(‘thelabourCode’)compilingthevariouslawsenteredintoforceon1September,2006andhassinceresultedintherepealofmostofthelawsregulatingemployment;

• caselaw;

• collectivebargainingagreements;

• undercertaincircumstancescommonpracticesmayalsoactasasourceoflaw,inparticularasregardstheentitlementofemployeestobonuses.

Priority is given to mandatory provisions of European and domestic law, which take precedence over provisions in contracts of

employment and collective bargaining agreements, unless the latter are more favourable to employees.

’’

’’

Page 6: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

6 | Luxembourg Employment Law

The Labour Ministry The labourMinistry determines and supervises theimplementationofemployment/labourlawaswellasdefiningthedesignanddirectionofpoliciesrelatingtoemploymentandindustrialrelations.

TheEmploymentadministrationThe Employment administration (administration del’Emploi) registers and seeks work for unemployed persons.

The Labour and Mines InspectorateThe labour and Mines Inspectorate (Inspection duTravailetdesMines or ITM) is charged with:

• monitoring standards of health and safety for employees in all sectors of industry including commerceandtertiaryindustriesbutexcludingpublicservices;

• ensuring the implementation of all legislationrelatedtoworkingconditionsandtheprotectionof all employees subject to a contract of employment, except for those in the publicsector;

• the prevention and resolution of industrialdisputes;

• the granting of operating permits toestablishments or for activities designated bylaw,whichhavethepotentialtoincreaserisktothe health and safety of employees or the public orwhichcreateanuisance;

• thesupervisionofcollectiveagreements;

• the supervision of wages, working hours andholidays;and

• the monitoring of the election of employeerepresentatives.

TheNationalConciliationofficeThe National Conciliation office (office Nationalde Conciliation or oNC) which is charged with the responsibility of preventing or settling collectivelabour disputes.

TheComitédeConjoncture

The Comité de Conjoncture, which is charged withsupervising the development of the economic andcyclical situation in theGrand-duchyof luxembourgandthejobmarket,aswellassubmittingareporttotheGovernmentCouncileverymonth.Itisalsonotablyin charge of issuing an opinion on every requestfor short-time work and early pension/retirementadjustments(préretraiteajustement).

GENERAL

MaININSTITuTIoNS

Page 7: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 7

RolEoFThENaTIoNalCouRTS

ThelabourCourt(TribunalduTravail)hasjurisdictionover individual disputes between employersand employees arising from either the contracts of employment, apprenticeship contracts, orcomplementary pension schemes and any disputes arisingevenaftertheterminationofthecontract.

The action is brought by way of a written briefindicating the name, profession and domicile of theparties,aswellasthepurposeoftheactionandabriefaccount of the points in dispute.

The court summons the parties to a hearing toexaminethecase,afterwhichitpronouncesjudgment.The labour Court usually orders compensation fordamages as a result of unfair dismissal but may order thereinstatementoftheemployeeattheemployee’srequest if the continuation of the contract is stillpossible.

Eitherpartymayfileanappealagainstthejudgmentbefore the labour Court of appeal (Cour d’appel) within 40 days of being notified of the judgement.The appeal court will then pronounce a judgment on appeal(arrêt).

Furthermore,thecasemaybereferredtotheSupremeCourt (Cour de Cassation), but this may only be onquestionsoflaw.

Summaryproceedingsmaybefiledwiththepresidentof the labour Court where the judge may grantan interim order. Either party may file an appealagainsttheorderwithinaperiodof15daysfromthenotificationoftheordertotheparties.

Page 8: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

8 | Luxembourg Employment Law

EmpLoyinG pEopLE

Page 9: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 9

Contractofemploymentorcontractforservices

acontractofemploymentmaybedistinguishedfromotherformsofcontractssuchasa‘serviceagreement’.Thereexistsnodefinitionsetoutbythelegalprovisionsof a contract of employment.however, luxembourgcase law defines a contract of employment as anyagreement pursuant to which a person agrees to carry outworksubjecttotheauthorityoftheemployer(whois responsible for issuing orders and guidelines as well assupervising theemployeeand imposingsanctionsfor shortcomings on the part of the employee) in exchangeformonetaryremuneration.

The contract of employment is primarily characterised bytheelementofsubordinationoftheemployeewithregard to their employer: an employee must carry out work of whatever nature under the authority of anemployer who will be issuing orders and guidelines as well as supervising the employee and imposingsanctions.

Thereare,therefore,threeelementstoacontractofemployment:

• servicesrendered;

• paymentorremunerationinexchangeforthoseservices;and

• subordinationfromalegalstandpoint.

legal subordination is the most important elementas it excludes any other type of contract. Legal subordinationisusuallycharacterisedbythefollowingmain factors:

• requirementtoperformservicesaccordingtoafixedschedule;

• compliancewithdaily/weeklyworkinghours;

• dutytoreporttoandexecutionofordersgivenbyspecificindividuals;

• paymentorremunerationbytheemployer;

• registration of the employee with the socialsecurity administration by the employer andcompliance with the rules applicable to the paymentofsocialsecuritycontributions;

• withholdingoftaxesfromremuneration;and

• availabilityofworkingequipment.

EMployMENTSTaTuSaNdCaTEGoRIESoFEMployEES

Page 10: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

10 | Luxembourg Employment Law

Contractofemploymentand/orcorporatemandate

legal representatives of a company, such as themanagers, managing directors or members of theboard of directors carry out their duties as corporatemandateholderssubjecttothe legalprovisionsofthecivilcodegoverningmandatesand,therefore,maynotbe considered as employees in respect of such tasks. directors (administrateurs) and managers (gérants) are appointed at a company’s shareholders’/partners’meeting andmanaging directors are first approved attheshareholders’meetingandthenformallyappointedby the board of directors. The powers granted to managing directors or managers in charge of the daily managementofacompanyisfoundedonthedelegationofpowersgrantedbytheboardofdirectors,whofromalegalstandpoint,areentrustedwiththemanagementof the company.

The answer is crucial as it will determine whether employment protection rules are applicable. Whendetermining whether an agreement is a contract of employment, luxembourg courts are not bound bythe terms thepartieshave included in thecontract. Ifacorporatemandateisperformedunderthecoverofacontractofemployment,suchcontractisnullandvoid.

The second issue that is often encountered is: if anindividual isacorporateofficerofacompany,doeshemeet the requirements as determined by case law toconcurrently enter into a contract of employment? In thisscenario,thecontractofemploymentwillonlybedeemedvalidon thecondition that thedutiescarriedoutunder itsassignmentscanbeclearlydistinguishedfromtheonesderivedfromthecorporatemandate.

The first question to be raised relates to the nature of the contractual relationship: is it a relationship of employment or a corporate mandate?

’’

’’

EMPLOYING PEOPLE

Page 11: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 11

Contractofemployees

Employersmaybeemployedunderdifferenttypesofcontracts such as:

• those concluded for part-time (less than 40hoursaweek);

• thoseconcludedforanindefiniteperiodoftime:thesecontractsrunindefinitelyuntilterminationbythepartiesorbyeffectofthelaw;or

• those concluded for a fixed-term period inrespectof specificand temporary tasks,whichdo not form part of the normal activitiesperformedbytheemployer,suchas:

i. the replacement of an employee temporarily absent or whose contract of employment is suspendedforreasonsotherthanacollectiveconflictofworkorthe lackofworkresultingfromeconomiccausesor inclementweather,as well as the replacement of an employee underanopen-endedcontractwhosepositionhasbecomevacantuntil a further employeecanbehiredtoreplacetheoriginalemployee,onapermanentbasis;

ii.seasonal work defined by a grand-ducalregulation;

iii. jobs for which in certain areas it is usual not to resorttoacontractconcludedforanindefiniteperiodoftimeduetothenatureofthetaskscarried out or the temporary nature of the job,thelistofthesejobsbeingdrawnupbyagrand-ducalregulation;

iv.the performance of a defined and specifictask which does not form part of the normal andregularactivityoftheemployer;

v.theperformanceofaspecificandtemporarytask such as is in case of a temporary and exceptional increase in the company’s lineofbusinessor inthecaseofastart-uporanextensioninthesizeofthecompany;

vi.the performance of urgent works madenecessary to prevent accidents, such aspreparing for failures in equipment andorganising emergency measures at company premisesorbuildingssoastoavoidinjurytothecompanyanditsstaff;

vii.the employment of an unemployed personregistered with the administration ofEmployment;

viii.employment intended to support therecruitingofcertaincategoriesofjob-seekers;

ix. employment where the employer commits itself to ensuring professional training for the employee.

The contracts concluded for a fixed-term period may not be renewed more than twice and for a period of time exceeding 24 months.

’’

’’

Page 12: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

12 | Luxembourg Employment Law

luxembourglabourlawprovidesthatseniorexecutivesare excluded from the application of certain rules,for example, they are excluded from the scope ofapplicationofcollectivebargainingagreements,unlessotherwisestated,andfromtheapplicationofthelegalprovisionsgoverningworkingtime.

ThelabourCodedefinesseniorexecutivesasemployeesenjoyingahigherlevelofremunerationincomparisontootheremployeesfallingunderthescopeofacollectivebargaining agreement. This takes into considerationthe time necessary to perform their duties, whetherremuneration is given in return for effective and realmanagement powers, whether their tasks stipulate awelldefinedauthority,andfinallywhetherthereexistsa large amount of independence and freedom regarding working hours (notably absence of constraints to theworking schedule).

Seniorexecutives

EMPLOYING PEOPLE

Page 13: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 13

Who is concerned?

The following individualsdonotneed toapply for aresidencepermitwithauthorisationtowork:

• citizensofEumemberstates;

• citizensof thememberstatesof theEuropeanEconomicarea;

• Swisscitizens;

• spouses/partnersofanynationality,ofEuropeanor luxembourg citizens, who legally reside inluxembourg;

• directdescendantsofthecitizenofEumemberstates or his spouse/partners of child is under21;

• directascendantdependantonthecitizenofEumemberStatesorofhisspouse/partner.

The third countries nationals need to apply for aresidencepermitwithauthorisationtowork.

The legislation on immigration requires an authorisation to enter the Luxembourg territory and to perform a salaried activity on the employment marketplace: a residence permit with authorisation to work.

’’’’

EMPLOYMENT FOREIGN NATIONALS

Page 14: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

14 | Luxembourg Employment Law

Issuance of residence permit with authorisationtowork

aresidencepermitwithauthorisationtoworkmaybeissued in respect of:

• asalariedactivity;

• a highly qualified employee. a highly qualifiedemployee is defined as any third countrynational with a university degree or havingachieved a professional training of at least 5years, applying for an employment requiringspecificprofessionalknowledgeandskills;

• an employee temporarily transferred to another companywithinasamegroupofcompanies;

• apostedemployeeintheframeworkofacross-borderprovisionofservices.

Residence permit with authorisation to work in respect of any salaried activity

The application for a residence permit withauthorisationtoworkinrespectofasalariedactivitymustbefiledwiththeMinistryinchargeofimmigration(Ministry of Foreign affairs) by the employee whointends to work in Luxembourg for a period exceeding three months.

Theemployerinluxembourgmustdeclarethevacancywith theEmploymentadministration (déclaration de place vacante à l’ADEM:http://www.adem.public.lu/forms/employeurs/places_vacantes/emploi_salarie.pdf ).

Thisisanabsolutepre-requirementandtheapplicationwill be automatically rejected if the employer hasnot complied with this legal obligation unless theapplication is made in respect of a highly qualifiedemployee, an employee temporarily transferred orposted.TheapplicationtoobtainaresidencepermitwithauthorisationtoworkmustcontainthefollowingdocumentsinFrench,GermanorEnglish:

• acertifiedcopyofallthepagesofthepassport;

• anoriginalbirthcertificate;

• a recent extract from the police record or an affidavitissuedinthecountryofresidence;

• acurriculumvitae;

• acertifiedcopyofthediplomasandprofessionalqualifications;

• anemploymentcontract;

• anoriginalletterofmotivation.

Themotivationlettermustbedraftedbytheemployer.The employer must explain the reasons why it has recoursetoworkforcelocatedoutsidetheEu,whatarethe job/position requirements and thequalificationsof the employee.

The third-countrynationalmay confermandate toathirdpersontosubmittheapplicationinhis/herbehalf.In this case, the appointed person, must presenta duly signed and dated mandate from the third-countrynational.Thesignaturemustbeprecededbyahandwrittenphrase“goodforpowerofattorney”.Thisrequirementisnotapplicabletolawyers.

EMPLOYING PEOPLE

Page 15: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 15

aprovisoryauthorisationtoresideinluxembourgwillbe issued for a period of 90 days duringwhich theemployeewillhavetoentertheluxembourgterritorywith a valid passport and visa, if required, registerwith the city administrationwithin 3 days of arrivaland apply for a residence permit within 3 monthswith the Ministry of Foreign affairs. While applyingfor a residence permit with the Ministry of Foreign affairs,theapplicantwillhavetosubmitthefollowingdocuments:

• acopyof theprovisoryauthorisationto resideinluxembourg;

• thereceiptofthecityadministration;

• amedicalcertificate;

• evidenceofappropriatehousing,ifrequested;

• certifiedcopyofthepassport;

• aphoto(oaCIformat);

• evidence of payment of a tax of EuR 30.- onthebankaccountCCpln°lu461111258228140000(MaE,directiondel’Immigration).

Theresidencepermitwithauthorisationtoworkwillbevalid foradurationofoneyear foronesectorofactivity and one profession but for any employer. Itisrenewableforasubsequentperiodof2years.Thesecondrenewalandanysubsequentrenewal is foradurationof3years.

Theresidencepermittakestheformofastickerinthepassport. If the employee obtains a new passport in thecourseofhis/herstay,anewresidencepermitwillhavetobesought.

Residence permit with authorisation to work in respect of a highly qualified employee (“EU blue card”)

The third-country national who wishes to reside inLuxembourg for more than three months to work asahighlyqualifiedemployeemustbeholderofanauthorisation to stay “European blue card”. a highlyqualified employee holds a university degree withat least three years of study or has accomplished five years of professional relevant training, or acombinationofboth.

In order to obtain a blue card in luxembourg, ahighly qualified employeemust satisfy the followingconditions:

• beentitledtoenterandstayontheluxembourgterritory;

• haveenteredintoavalidemploymentcontractforhighlyqualifiedemploymentforaperiodofatleastoneyear;

• presentadocumentattestinghisorherrelevantprofessionalqualificationswhichareappropriatefor the job mentioned in the employmentcontract;

• haveagreedonaremunerationof1,5timetheaverage gross annual salary in luxembourg (in2013 the applicable amount was of 67.842.-EuR).

Furthermore, the highly qualified employee mustbringevidenceofappropriateaccommodation.

Page 16: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

16 | Luxembourg Employment Law

Theapplicationmustbemadeandfavourablyadvisedbefore entering on the Luxembourg territory.

The applicant must submit the following documents:• acertifiedcopyofhis/hervalidpassport, in its

entirety;

• abirthcertificate;

• arecentextractfromhis/herpolicerecordoranaffidavitissuedinthecountryofresidence;

• acurriculumvitae;

• a certified copy of his/her diplomas orprofessionalqualifications;

• acopyoftheworkcontract;

• amotivationlettertosupporttheapplication;

• amandate/proxy,ifneeded.

The Eu blue card is valid for a period of two yearsor for thedurationof theemploymentcontractplusthreemonths. Itcanbereneweduponrequest, ifallrequirementsaresatisfied.

TheEubluecardallowsthehighlyqualifiedemployeetohavealimitedaccesstotheemploymentmarketfora period of two years.

after this two-year period, the highly qualifiedemployee benefits from equal treatment withluxembourg nationals in respect to access to highlyqualified employment, except for employmentinvolving a direct or indirect participation to theexercise of public authority and to functions, whichhaveaspurposethesafeguardoftheinterestsoftheStateorofotherpublicauthoritiesfunctionsforwhichtheluxembourgnationalityisanabsoluteprerequisite.

Inaddition,theEubluecardholderandthemembersofhis/herfamilywhohavebeenresidingforat least18monthsinanotherEuMemberStateareallowedtoenter the Luxembourg territory and to apply for a new Eubluecardwiththeministrywithinthreemonths.

IncaseofunemploymentduringthevalidityperiodoftheEubluecard, it isnotwithdrawnand thehighlyqualifiedemployeeisallowedtostayinluxembourg,providedthattheperiodofunemploymentdoesnotexceed three months and occurs only once.

EMPLOYING PEOPLE

Page 17: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 17

Residence permit with authorisation to work in respect of an employee temporarily transferred in another company located in Luxembourg within a same group of companies

a residence permit with authorisation to work willbe issued in respect of an employee temporarily transferred to another company located in Luxembourg withina samegroupofcompaniesqualifyingasonesocialandeconomicentity.

The application must be filed by the undertakinglocated in Luxembourg to the Ministry in charge of immigration (Ministry of Foreign affairs) andmust mention the identity of the employees tobe transferred, the work to be performed and thedurationof the transfer. The concernedemployee(s)must be bound by an employment contract concluded foranindefiniteperiodoftimewithanothercompanyof the group.

Theresidencepermitwithauthorisationtoworkwillbeissuedforaperiodoftimeofoneyearandmayberenewedforthesameduration.

Residence permit with authorisation to work in respect of a posted employee in the framework of a cross-border provision of services.

The application must be filed by the undertakinglocated in Luxembourg to the Ministry in charge of immigration (Ministry of Foreign affairs) and mustmention the identity of the posted employees, thenatureanddurationoftheworktobeperformedandtheexceptionalcircumstancesthatjustifytheissuanceofanauthorisation.Theconcernedemployee(s)mustbeboundwiththeundertakingmakingthepostingbyanemployment contract concluded for an indefiniteperiod of time since at least 6 months before thepostingcommences.

Theresidencepermitwithauthorisationtoworkwillbe issued for the effective duration of theworks asforeseentoperformtheprovisionofservices.Itmaybeextendedinexceptionalcircumstances.

as an exception, the undertaking located in anyother Eu member states, in any member states oftheEuropeanEconomicarea,or inSwitzerland,maypost, in the frameworkofaprovisionof services, itsemployees, irrespective of their nationality, to theluxembourg territory, as far as thoseemployeesareentitledtoresideandworkduringthepostinginthecountrywheretheundertakingmakingtheposting,islocated.

Page 18: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

18 | Luxembourg Employment Law

obligationsoftheemployerhiringathird-countrynational

Any employer is obliged to:

i. require that a third-country national, beforetakingupanemployment,holdsavalidresidencepermitorotherauthorisationforhis/herstay,

ii. keepforatleastthedurationoftheemploymenta copy or record of the residence permit or other authorisation for stay available for possibleinspection,

iii.notifytheMinistryofForeignaffairsofthestartof employment within three working days from thefirstdayofworkofathird-countrynational.

In fact, employers that have fulfilled the obligationsset out above should not be held liable for havingemployed illegally staying third-country national,unless the employer knew that the document presentedhim/herwasaforgery.

Sanctionsinrespectofinfringementsoftheprohibitionreferred to above are financial, criminal andadministrative. In addition, the sanctionedemployershall be liable to pay:

i. any outstanding remuneration as defined inarticlel.572-9ofthelabourCodetotheillegallyemployedthird-countrynational,and

ii. anamountequaltoanytaxesandsocialsecuritycontributions that the employer would havepaid including relevant administrative fines, orlegal fees.

Respect by the employer of these obligations increase the legal security and proves the good faith of the employer.

’’

’’

EMPLOYING PEOPLE

Page 19: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 19

TErmS oF EmpLoymEnT

Page 20: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

20 | Luxembourg Employment Law

CoNTRaCT

a contract of employment enters into force as soon as the parties agree to themain elements characterising arelationshipofemployment.Theconsentofthepartiesmustbefreelygivenandthenatureofandreasonsforthecontractofemploymentmustbelegitimate.

Formalrequirements

a written individual contract must be drawn up foreach employee no later than the date an employee commences work. The contract must be drawn up in atleasttwooriginals,oneforeachparty.

There is no specific requirement as far as thelanguage is concerned. The contract of employment can, therefore,bewritten ineitheroneof the threeofficial languages inluxembourg:French,Germanorluxembourg,orinanyotherlanguageunderstoodbybothparties(usuallyEnglish).

If there is no written contract as required by law,the relationship of employment is valid, but onlythe employee may give evidence of the contract’sexistenceandofitscontent.Forexample,intheeventoflitigationontheagreedremuneration,theemployerwillnotbeallowedtoproveincourttheamountoftheremunerationasverballyagreedbytheparties.

Ifeitherparty refuses tosignawrittencontract, theother party may terminate the contract without any notice and without any payment of compensation.however, such actionmust be takenno earlier thanthreedaysaftermakingarequestforasignedcontractandnolaterthan30daysafterthecommencementofemployment.

A written contract is required regardless of whether the employment is for a fixed term or for an indefinite period of time.

’’

’’

TERMS OF EMPLOYMENT

Page 21: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 21

Implied terms

The majority of luxembourg labour law provisionsgoverning thecontractofemployment isofnationalpublicorder.Thepartiestoacontractofemploymentare authorised to depart from the mandatory provisionsofthelawonlyinawaymorefavourabletotheemployee,andanyclausethataimsatrestrictingtherightsoftheemployeeisnullandvoid.

provisions of collective bargaining agreements thataregenerallybindinginaspecificprofessionalsectorwill also automatically apply to a relationship ofemployment falling under its scope of application.according to the labour Code, collective bargainingagreements are defined as contracts coveringreciprocal relationships and general conditions ofemployment concluded between one or more trade unionorganisationsontheoneside,andoneormoreemployers’ organisations, or a single business or a

groupofbusinessesinthesamebusinesssector,orallthebusinessesinthesamesector,ontheother.Suchcollective bargaining agreements may be declaredgenerally binding on all employees and employers in thesectorinwhichtheyhavebeenconcluded.

Thepartiestoarelationshipofemploymentmustalsocomply,whileperformingtheirobligationsunderthecontractofemployment,withageneralobligationofgoodfaithderivedfromtheCivilCode.

Finally,theemployeemustcomplywithanyobligationsandinstructionssetoutinaninternalpolicyissuedbytheemployeronthebasisoftheemployer’srighttoinstruct its employees (this power derives from thelegalsubordinationoftheemployee).

Page 22: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

22 | Luxembourg Employment Law

TERMSaNdCoNdITIoNS

Express mandatory terms

any contract of employment must, as a minimum,statethefollowingparticulars:

• theidentityoftheparties;

• thedateofeffectivecommencementofwork;

• theplaceofemploymentor, in theabsenceofadeterminedplaceofwork,theemployeemaybeemployedinvariouslocationsand/or,morespecifically,abroadorattheemployer’sprivateresidence;

• the nature of the employment with, ifappropriate, a description of the employee’stasks or functions at thetimeof employment,without prejudice to any subsequentappointment;

• theemployee’snormalworkingdayorweek;

• thenormalworkinghours(schedule);

• the basic salary or wage to be paid, plusadditionalpayments;

• thelengthofholidayleavewithpaytowhichtheemployeeisentitled;

• thelengthofthetrialperiod(ifany);

• the lengthofthenoticeperiodtobeobservedbytheemployerandtheemployee;

• a reference to any applicable collectivebargainingagreement,anyderogationfromthegenerallawwherepermitted,andanyadditionaltermsthatthepartieshaveagreedupon;

• a reference to the existence and nature of a pensionscheme(ifany),whetheritismandatoryor optional and a description of the right tobenefits, as well as a reference to personalcontributions.

afixed-termcontractofemploymentmuststate thefollowingparticularsinadditiontotheabove:

• adefinitionofitsobject;

• the expiry date when the contract is concluded foradefiniteperiod;

• theminimum employment durationwhen thecontractdoesnotprovideanexpirydate;

• the name of the absent employee, when thecontract is concluded on account of the absence ofanemployee;

• thedurationofanytrialperiod;

• 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.

’’

’’

TERMS OF EMPLOYMENT

Page 23: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 23

optionalTerms

Trial periods

Trialperiodsmaybeprovidedbytheemployer foraminimumoftwoweekstoamaximumof12months,dependingontheemployee’squalificationsandsalary,and cannot be extended. Trial periods provide a mechanism for both partiesto terminate the contract on short notice withoutprovidinggroundsforterminationasnormallyrequired.Ifneitherpartyhasgivennoticeofterminationwithinthetrialperiod,thecontractisdeemedtobeeffectiveasofthefirstdayofthetrialperiod.

Exclusivity clause

The contract of employment may further providethatthroughouttheperformanceofthecontract,theemployee should devote substantially all of his/hertime,attentionandenergytotheemployer’sbusinessandshallactatalltimesinaccordancewithitsordersandfortheexclusivebenefitoftheemployer.pursuant to such a clause, the employee may notexercise any other professional activities, eitherdirectlyorindirectly,withoutthepriorwrittenconsentof the employer.

Non-competition clause

a non-competition clause is defined as a clausewhereby an employee agrees not to carry out, asa self-employed person, similar activities to thosecarried out by their former employer so as not to interferewiththeirformeremployer’sinterests,aftertheterminationoftheircontractofemployment.

Suchaclausemustbeinwriting,andisdeemednullandvoid,whentheemployeesigningthecontractofemployment, is under 18 years of age and/or if theemployee’sannualremunerationwhenheleavestheemployerdoesnotexceedacertainamount.Thenon-competeclauseisonlyeffectiveiftherestriction:

(i)applies toaspecificprofessional sectorandtosimilar activities to those carried out by theformeremployer;

(ii)doesnotexceed12months;

(iii) is limited toa geographical area (notoutsidethe Grand-duchy of luxembourg) where theemployeewouldbe inaposition toeffectivelycompete with his former employer.

Page 24: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

24 | Luxembourg Employment Law

REPRESENTATION AND CONSULTATION

Page 25: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 25

Trade unions

article11oftheluxembourgConstitutionguaranteesthe freedom to join a trade union. Employees as well asemployersareorganisedonavoluntarybasis intoa number of trade unions, trade and professionalfederations respectively, whose principal aim is tonegotiatecollectivebargainingagreements.

StaffdelegationStaffdelegationsmustbesetupineverybusinessintheprivatesectorwithatleast15employees.Thenumberofrepresentativeselectedtoastaffcommitteeshouldbeproportionatetothetotalnumberofemployees.

Joint works councilEverybusinessemployingatleast150employeesoverathree-yearreferenceperiodmusthaveajointworkscouncil. The number of members depends on the size

of the business. Joint works councils are composed of an equal number of the employers’ and employees’representatives.The employer’s representatives are chosen bythe company’s management and are elected viaproportional representation in a secret ballot of thestaffdelegates.

Employeeparticipationincompanymanagementasanexceptiontotherulethatdirectorsareappointedattheshareholdersgeneralmeeting,thelabourCodeconfers to the staff delegates the right to appointdirectorsrepresentingthestaffwiththeuseofaballotcarried out under proportional representation rules.This representationappliesonly toabusinessunderthe form of a joint stock company employing at least 1,000employeesoverathree-yearreferenceperiod.The number of directors is set to at least 9.

EMPLOYEE REPRESENTATION

Page 26: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

26 | Luxembourg Employment Law

RolEoFThESTaFFdELEGATION

General role of the staff delegation

The staff delegation is on a general basis in chargeof safeguarding and defending the interests of the employees with regard to working conditions,protectionofemploymentandofthesocialstatus,asfar as those tasks do not fall within the scope of the jointworkscouncil,ifany. Thestaffdelegationshallinparticular:

• expressanopinionadviceorissueproposalswithregard to improvement of working conditions,employment conditions and social situation ofthepersonnel;

• present to the employer any individual orcollectiveclaim;

• preventorsolveindividualorcollectivelitigationbetween the employer and any member of the personnel;

• refer any litigation or claim to the labour andMines Inspectorate concerning any breach of thelegalorcontractualprovisionsinrelationtoworkingconditionsandprotectionofemployeesattheworkplace;

• give advice on the implementation of orchangetoanyinternalpolicyandsupervisetheapplicationofsuchpolicy;

• suggestchangestotheinternalpolicy;

• participate in the trainingofapprentices if theundertakinghasmorethan150employees;

• organisetheapprenticeshipschemes;

• promotetheemploymentofdisabledpersons;

• participateincharities;

• participate in the protection of the workenvironmentandpreventoccupationalhazards;

• giveadvicepriortotheimplementation,changeor withdrawal of a complementary pension scheme.

Thestaffdelegationshallmoreover:• assistharassedemployees;

• assist employees when their parental leaveapplication has been rejected and report it tothelabourandMinesInspectorate;

• be consulted when the employer sets up a workorganisationplan,andbe informedof itsapplication;

• give advice on the terms and conditions ofthe application by the employer of provisionsregulating rest time as set out in a collectivebargainingagreement;

• beconsulted intheeventofapplicationtothelabourMinisterforanauthorisationconcerningovertimework;

• beconsulted intheeventofapplicationtothelabourMinisterforatemporaryauthorizationtopaywagesundertheminimumlevelasprovidedforbythelaw;

• beprovidedwiththelistofemployeesworkingonSunday,theirtasksandworkingtime;

• be informed of the employer’s decision topostponeaparentalleave;

• be informed of the use and risks of dangerous materials(e.g.asbestos,arsenic);

• be consulted by the employer prior to work stoppageduetoweatherconditions;

• be informed by the Labour and Mines Inspectorate of any breaches to labour law provisionsbytheemployer.

REpRESENTaTIoNaNdCoNSulTaTIoN

Page 27: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 27

(i) The employer must communicate to the staffdelegation any information on the running ofthe business, including the recent and probableprogression of the business operations and of theeconomic situation. This communication should takeplace on a monthly basis in businesses where a Joint WorksCouncilhasbeensetupandthreetimesayearin other businesses. When the company is incorporated under the form of a stock company, themanagementmust inform thestaffdelegationinwritingat leastonceayearoftheeconomic and financial progression of the business,as well as recent and probable activities of theundertaking. The management presents in this respect a report on business activities, income, global results of theproduction, orders, structural progression, levels ofremunerationandinvestments.

(ii) The employer must moreover communicate anyinformationon:

• the risks to health and safety, as well as anyprotectiveorpreventativemeasurestobetakenby either the business as awhole, part of thebusinessorforeachspecifictypeofjob;

• the protection measures that must be takenand,ifnecessary,theprotectionequipmentthatmust be used.

(iii) The employermust informand consult the staffdelegation aswell as the staff delegate in charge ofequality, on the situation, structure and probabledevelopment of employment, as well as anyanticipatorymeasures,especially intheeventwhereemployment is threatened. In this respect, the employermust provide the staffdelegationwithstatisticsonabiannualbasisshowingthe distinctionbetweenmen andwomen in respectof recruitment, promotions, transfers, termination,remunerationandtrainingcourses.

(iv) The employermust informand consult the staffdelegation prior to any decision which might entailmajormodificationsintheorganisationofworkandintheemploymentcontracts,aswellasonanydecisionto carry out a collective redundancy or transfer ofundertaking.

(v) The employermust inform and consult the staffdelegation on the conclusion of “contrats d’appui-emploi”,of“contratsd’initiationàl’emploi”,aswellas“contratsd’initiationàl’emploi-expériencepratique”.

(vi)Thestaffdelegationmustalsoappointadelegatetosupervisetheequalityoftreatmentbetweenmenand women and a delegate in charge of health and safety within the undertaking.

Information and consultation on the normal running of the business

Page 28: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

28 | Luxembourg Employment Law

General role

The joint works council decides on various matterssuch as:

• implementationorapplicationofany technicaldevices aimed at controlling the employees’behaviourandperformance,

• implementationof or change to anymeasuresregarding health and safety at work and preventionofillness,

• implementation of or change to the criteriaapplicable tohiring, secondment, transfer, andtermination,andeventuallytopre-retirement,

• implementationoforchangetogeneralcriteriaapplicabletotheappraisalofemployees,

• implementationoforchangetointernalpoliciestaking into consideration collective bargainingagreements,ifany,

• grantingofgratificationtoemployeeswhohavebrought to the company a useful contributionthrough initiatives or proposals for technicalimprovements.

Information and consultation concerning employees

The employer must inform and consult the joint works councilpriortoanymajordecisionrelatingto:

• theconstruction,alterationorextensionoftheproductionpremisesoroffices;

• theimplementation,improvement,replacementortransformationofequipment;

• theimplementation,improvement,replacementor transformation of methods of work,productionprocesses.

The employer must inform the joint works council abouttheconsequencesofthesemeasuresonworkingconditionsandontheworkingenvironment.The employer must at least once a year inform and consultthejointworkscouncilregardingexistingandforeseeablepersonnelneeds,trainingmeasures,andcourses.The employer must inform and consult the joint workscouncilat leastonceayear,ontheconclusionof “contratsd’appui-emploi”,of “contratsd’initiationàl’emploi”,aswellas“contratsd’initiationàl’emploi-expériencepratique”.

Information and consultation concerning company decisions

The employer must inform and consult the joint works council on every economical or financialdecision that could have a significant influence onthecompany’s structureor the levelofemployment(volume of production and sales, programme ofproduction, investments policy, projects of cessationor transfers of undertaking or part of undertaking,projects of restriction, extension or modificationsin the company’s organisation, projects of merger,projects of change in the organisation of the

RolEoFThEJoINTWoRkSCouNCIl

REpRESENTaTIoNaNdCoNSulTaTIoN

Page 29: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 29

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

’’

’’

undertaking, implementation, modification andabrogationofcomplementarypension.The information and consultation must state theconsequencesof thecontemplatedmeasuresonthevolume and structure of employment, aswell as ontheemploymentandworkconditions,socialmeasuressuch as professional training.In principle, information and consultation mustoccur prior to any decision, except if there is a riskof disturbing the management of the company or compromisinganoperation.Inthiscase,theemployermustgiveallnecessaryinformationandexplanationsto the joint works council within three days following the decision.

Information and consultation concerning the business’ current financial and economic position

The employer must submit a report on the activityof the business stating the turnover, global resultsofproduction,orders,evolutionofthestructureandlevelofremunerationandofinvestments.When the company is incorporated under the form of a stock company, the employer must present tothe joint works council, prior to the annual generalmeeting of shareholders, all documents presentedtotheshareholders,profitand lossaccounts,annualbalance sheet, report to the auditors, report to theboard of directors as well as any other documents presentedtothegeneralmeeting.

Company benefit plan

The joint works council supervises the companybenefitplansetupforemployeesandtheirfamilies,including measures concerning housing. The employermustcommunicate,atleastonceayear,areportrelatingtomanagementofthisplan.

Equality

The joint works council supervises the equalityof treatment betweenmenandwomen, as far asaccesstoemployment,training,workingpromotion,payment,andworkingconditionsareconcerned.

Page 30: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

30 | Luxembourg Employment Law

General provisions

Theemployermustprovidethestaffdelegation/jointworkscouncilwiththefollowinginformation:

• the list of positions that pregnant andbreastfeeding women cannot hold and thesteps taken in order to ensure healthy working conditionstotheseemployees;

• theyearlymedicalreport;

• thesettingupofasystemmanagingemployees’personal data.

Theemployermustconsultthestaffdelegation/jointworkscouncilpriortoanyrecoursetopart-timeworkand temporarywork, or to proceedwith temporarylending of workforce to another undertaking.

The staff delegation/joint works council may alsorequestspecialmedicalexaminationofemployees.

Theemployermust inform the staffdelegation/jointworks council prior to filing an application to theComité de Conjoncture to obtain indemnification intheframeworkofpartialunemployment.

Thestaffdelegation/jointworkscouncilshallexpressanopinionpriortotheconclusionofaprogressivepre-pensionschemeandthesettingupofatrainingplanfor employees.

In the event of transfer of the undertaking

Thetransferorandthetransfereeshallberequiredtoinformtherepresentatives(thestaffdelegationorjointworks council, if any) of their respective employeesaffectedbythetransfertothefollowing:

• thedateorproposeddateofthetransfer;

• thereasonsforthetransfer;

• the legal, economic and social implications ofthetransferfortheemployees;

• any measures envisaged in relation to theemployees.

The transferor must give such information to therepresentativesofhisemployeesingoodtimebeforethe transfer is carried out.The transferee must give such information to therepresentativesofhisemployeesingoodtime,andinanycasebeforehisemployeesaredirectlyaffectedbythe transfer as regards their conditions ofwork andemployment.Where the transferor or the transferee contemplates implementingmeasuresinrelationtohisemployees,heshallconsulttherepresentativesofhisemployeesin good time on such measures with the view toreachinganagreement,notwithstandingthefactthatthetransfermaynotbeacauseofterminationforthetransferor as well as for the transferee.The informationandconsultationshallcoverat leastthemeasuresenvisagedinrelationtotheemployees.The informationmustbeprovidedandconsultationstaken place in good time before the change in thebusinessaffectedbythetransfer.

JoINTCoMpETENCEoFThESTaFFdElEGaTIoNaNdJOINT WoRkSCouNCIl

REpRESENTaTIoNaNdCoNSulTaTIoN

Page 31: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 31

In the event of collective redundancy

The employer must enter into prior negotiationswith the staff delegation/joint works council beforeproceedingtocollectivedismissalsinordertocometoanagreementrelatingtotheestablishmentofasocialplan.Thesocialplanisawrittenagreementsignedbytheemployerandtheemployees’representativesthatcontainstheresultsofthenegotiations.Beforethestartofnegotiationswithaviewtoreachingan agreement on the signing of social plan, and atthe latest at the beginning of the negotiations, theemployermustinforminwritingthestaffdelegation/the joint works council of the proposed collectivedismissal andmust provide themwith the followinginformation:

• reasonsfortheproposals;

• numberanddescriptionofemployeesaffected;

• number and description of employees usuallyemployed;

• periodoftimewithinwhich thedismissals areproposed;

• methodofselectingemployeestobedismissed;

• proposedmethodofcalculatingtheamountofany redundancy payment.

In the event of employment retention schemes

The staff delegation and employeemembers of thejoint works council may initiate negotiations witha view to conclude an employment retention planwhentheyhavethefeelingthateconomicorfinancialdifficulties within the undertaking might have anegativeimpactontheemployment.The staff delegation and employeemembers of thejointworkscouncilshalltakepartinthenegotiationstosetupanemploymentretentionscheme.For further information on employment retentionscheme,pleasereferonpage49.

Page 32: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

32 | Luxembourg Employment Law

EqUAL OPPORTUNITIES

Page 33: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 33

anydirectorindirectdiscriminationaspertheabove-mentionedgroundsisprohibitedasregards:

• conditions of access to employment, self-employment or to occupation, includingselection criteria and recruitment conditions,whatever the branch of work and includingall levels of the professional hierarchy andpromotions;

• access to all types and all levels of vocationalguidance, vocational training, advancedvocational training and retraining, includingpracticalworkexperience;

• employmentandworkingconditions, includingdismissalsandpay;

• membership of, and involvement in, anorganisation of employees or employers, orany organisation whose members carry out aparticular profession, including the benefitsprovidedbysuchorganisations.

asanexception:a difference in treatment based on a characteristicrelatedtoanyoftheabove-mentionedgroundsshallnot constitute discrimination where, by reason ofthe nature of the particular occupational activityconcerned or of the context in which it is carried out, such a characteristic constitutes a genuine anddeterminingoccupationalrequirement,providedthatthe objective is legitimate and the requirement isproportionate.a difference of treatment on grounds of age shallnot constitute discrimination, if, within the contextof national law, it is objectively and reasonablyjustified by a legitimate aim, including a legitimateemployment policy, a labour market and vocationaltrainingobjectives.Themeansofachieving thataimmust also be appropriate and necessary.

Employees are protected against any dismissal or any otheradversetreatmentasareactiontoacomplaintor to legal proceedings aimed at forcing compliance withtheprinciplesofequaltreatment.anydismissaldecidedinbreachoftheprovisionsonequaltreatmentis deemed null and void. The employee concernedshall have the right to claim in court as amatter ofurgency, theannulmentof thedismissal andhis/herreinstatement within the business.

any persons who consider themselves wrongedbecause the principles of equal treatment have notbeenappliedtotheircase,maybringbeforeacourtorotherauthorityevidenceofthefactsfromwhichitmay be presumed that there has been direct or indirect discrimination.Itshallbefortherespondenttoprovethat there has been no breach of the principles of equaltreatment.

dISCRIMINaTIoN oN ThE GRouNdS oF RElIGIoN oRBElIEF,dISaBIlITy,aGEoRSEXualoRIENTaTIoN,EThNICaFFIlIaTIoN,RaCEoREThNICoRIGIN

Breach of the legal provisions providing for such principles shall lead to imprisonment of up to a minimum of eight days and a maximum of two years and a fine between EUR 251 and EUR 25,000.

’’

’’

Page 34: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

34 | Luxembourg Employment Law

Theprincipleofequalopportunitiesbetweenmenandwomen also applies to:

• conditions of access to employment, self-employment or to occupation, includingselection criteria and recruitment conditions,whatever the branch of work and includingall levels of the professional hierarchy andpromotions;

• access to all types and all levels of vocationalguidance, vocational training, advancedvocational training and retraining, includingpracticalworkexperience;

• employmentandworkingconditions, includingdismissalsandpay;

• membership of, and involvement in, anorganisation of employees or employers, orany organisation whose members carry out aparticular profession, including the benefitsprovidedbysuchorganisations.

As regards access to employment and including training leadingtosuchemployment,adifferenceoftreatmentbasedonsexshallnotconstitutediscriminationwhere,byreasonofthenatureoftheparticularoccupationalactivitiesconcernedorthecontextinwhichtheyarecarriedout,suchacharacteristicconstitutesagenuineanddeterminingoccupationalrequirement,providedthattheobjectiveislegitimateandtherequirementisproportionate.

The legal provisions prohibit any direct or indirectreferences to the sex of the employee in employment offers or notices and in criteria for professionalaptitudetests.

any legal or contractual provision violating theprinciplesofequaltreatmentisdeemedtobenullandvoid.allemployersmustensureequal remunerationfor men and women who do similar work or work of equal value. Theminimum statutory wage is legallyassuredtoanyemployedpersonirrespectiveoftheirsex.

Celibacy clauses are null and void, as are clausesproviding that a woman’s contract of employmentmaybeterminated,orthatafemaleemployeemaybedismissed on account of her marriage.

Employees are protected against any dismissal or any otheradversetreatmentasareactiontoacomplaintor to legal proceedings aimed at forcing compliance withtheprinciplesofequaltreatment.anydismissaldecidedinbreachoftheprovisionsofequaltreatmentisdeemednullandvoid.Theconcernedemployeeshallhavetherighttoclaimincourtasamatterofurgency,the annulment of the dismissal and reinstatement within the business.

any persons who consider themselves wrongedbecause the principles of equal treatment have notbeenappliedtotheircase,maybringbeforeacourtorotherauthority,evidenceofthefactsfromwhichitmay be presumed that there has been direct or indirect discrimination.Itshallbefortherespondenttoprovethat there has been no breach of the principles of equaltreatment.

EqualTREaTMENToFMENaNdWoMEN

EqualoppoRTuNITIES

Page 35: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 35

Moral harassment is not specifically regulated by the Labour Code but has been recognised by the Labour Courts and by a Convention signed by the social partners on June 25, 2009.

’’

’’

Sexual harassment

pursuant to the labour Code, sexual harassment isdefined as being any sexual behaviour or any otherbehaviour based on sex which knowingly hurts thedignityofapersonintheworkplace,where:

• the behaviour is inappropriate, abusive andhurtful;and

• a person refuses to accept such behaviourfrom the employer, another employee, clientor supplier is explicitly or implicitly used by the employer to affect the rights of this person inmatters of professional training, employment,continuance of employment, professionalpromotion,remunerationoranyotherdecisionrelatingtoemployment;and

• suchbehaviourcreatesafeelingofintimidation,hostilityorhumiliationforthevictim.

Theemployermustdowhateverisnecessarytoputanend to any act of sexual harassment as soon as they aremadeawareofit.Iftheyfailtodoso,thepresidentofthelabourCourt(présidentduTribunalduTravail) may order them to do so.

The labour Code also introduces a new ground oftermination of the contract of employment, namelyresignationbasedonsexualharassment.Thevictimisentitledtoterminatethecontractofemploymentwithimmediateeffectand theemployermayhave topaydamages to the employee if the court considers the resignationjustified.

moral harassment

Moral harassment at the workplace has been recognisedbytheconventionofJune25,2009,whichhas been declared generally binding on all employers byaGrand-ducalRegulationdateddecember15,2009.

Moralharassmentisdefinedbytheabove-mentionedConvention as being any erroneous, repetitive andintentionalbehaviour committedbyany individual inconnectionwith the business towards any employeeormanager,whichhastheeffectofeither,damaginghis/her rights or dignity, altering his/her workingconditions, jeopardisinghis/herprofessionalfutureincreatinganintimidating,hostile,degrading,humiliatingor offensive environment, or impacting on his/herphysical or mental health.

Inaddition,thesignatoriestothecollectivebargainingagreement for bank employees signed a branch agreement on moral harassment on September 17,2013. The saidbranch agreement sets the rules thatmustbefollowedbyanemployerinordertopreventortodealwithmoralharassment.anadvisoryunitoftheassociationforoccupationalhealthintheFinancialSector(aSTF)wasputinplacetoassisttheemployeesconfronted to a moral harassment.

VICTIMISaTIoNaNdhaRaSSMENT

Page 36: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

36 | Luxembourg Employment Law

Maternityleaveallpregnantemployeesareentitledtomaternityleaveas follows:

• 8weeksofpre-natalleave

• 8weeksofpost-natal leave,which isextendedto12weeksiftheemployeeisbreastfeeding,orinthecaseofprematureormultiplebirths.

at the expiry ofmaternity leave, the employeemayabstain from returning to work for a period of one year in order to take care of her child(ren),withouthaving to give notice to her employer and withouthaving topay any termination indemnities. Shemayrequesttobere-employedwithinoneyear, inwhichcasetheemployermustgiveherpriorityinpositionscorresponding to her qualifications. If the employerre-employs the employee, it must provide her withthesamebenefitsasthoseapplyingatthetimeoftheemploymenttermination.

paternityleaveEachfatherisentitledto2days’paternityleaveonthebirth of a child.

parentalleaveEach parent is entitled under certain conditions totake parental leave at the timeof birth or adoptionof a child. One parent must take it directly at the end of thematernity leaveperiod (‘first parental leave’);theotherparentmaytakeitatanytimeuntilthechildreachestheageof5(‘secondparentalleave’).Thedurationoftheparentalleaveperiodis6months,or12monthsiftheemployeekeepsworkingatleasthalfthetime.Theemployermaynotrefuseafirstparentalleave,butmayrequesttopostponeasecondparentalleaveforamaximumof2monthsundercertaincircumstancesasdefinedbythelabourCode.

Specialleaveforfamilyreasonsanyemployeemayrequestleaveforfamilyreasonsintheeventofachildwho is lessthan15yearsofageneedingthepresenceofoneparentintheeventofaseriousillnessoraccident.Thisspecialleavemaynotusuallyexceed2daysperyearforeachchild.

RIGhTSaVaIlaBlETopaRENTS

EqualoppoRTuNITIES

Page 37: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 37

DiScipLinE anD TErminaTion

Page 38: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

38 | Luxembourg Employment Law

dISCIplINEaNdTERMINaTIoN

disciplineThere are no statutory provisions governingdisciplinaryactionsthatanemployermaytake,exceptfordismissalbasedonthebehaviouroftheemployee.The labour Codemerely provides that an employeris entitled to temporarily suspend a contract ofemployment with immediate effect in the event ofgrossmisconductbytheemployeeuntiltheemployeeis notified of his/her dismissal. The employeetemporarily suspended remains entitled throughoutthis suspension period to his/her remuneration andto anyotherbenefitsuntil thedayofnotificationofdismissal.

Theemployerisentitledtodismissanemployeriftheemployee’sbreachisseriousenough.asageneralruleandintheeventofrecurrentbreachesof the contractual obligations by the employee, theemployer should send a letter of warning to theemployeebyregisteredmail,detailingtheemployee’sfailuresandthreateningtheemployeewithdismissal,shouldtheemployeenotimprovehis/herperformanceoralternativelycommitfurtherfailures.anemployeemay not be sanctioned twice for the same act ofmisconduct. If the employer has issued a warning letter for specific acts of misconduct, it will not beable to allege the same acts of misconduct as a ground fordismissal, except if newactsofmisconducthaveoccurredafterthewarningletter.

Terminationa contract of employment for a fixed termmay beterminatedbeforetheexpiryofitstermintheeventof serious misconduct or by common consent of the parties.acontractofemploymentforanindefinitetermmaybe terminated by either party:

• with immediate effect in the event of grossmisconductbytheotherparty,or

• with notice period where there is a real andseriouscausefortermination,

It may also be terminated by common consent of the parties.

Termination by the employer: dismissal

Dismissal with notice

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

• reasons connected with the employee’saptitude;

• reasonsconnectedwiththeemployee’sconduct;

• reasons arising from the operating needs ofthe business, establishment or department.any employer employing at least 15 persons,must notify the Comité de Conjoncture of any termination/redundancy taking placefor any grounds not linked to the employee’saptitude or attitude. Such notification must be carried out at the latest when the employee is notified of the termination.

A verbal or written warning is not a pre-requisite to dismissal.

’’

’’

dISCIplINEaNdTERMINaTIoN

Page 39: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 39

Iftheemployerwishestodismissanemployee,aletterofnoticeofdismissalmustbesentbyregisteredmail,failingwhichthedismissalmaybedeclaredinvalid.Theemployee’scountersignatureontheletterofdismissalis proof of receipt. any employer with 150 employees or more whocontemplates dismissing any employeemust, beforereaching any decision, interview the employeeconcerned.Noticeofsuch interviewmustbegiven inwritingbyregisteredmailorbyhanddeliverywithacknowledgedreceipt. The letter must give an indication of thepurposeoftheinterviewanditsdate,timeandplace.Whetherdismissalrequiresaperiodofnoticeorisforgrossmisconduct,notificationofsuchdismissalmustbe:

• noearlierthanthedayfollowingtheinterview;

• no more than one week later.

If the employeedoes not attend the interview afterbeing summoned to do so, notification of dismissalmust be:

• no earlier than the day following the day set for theinterview;

• no more than one week later. dismissedemployeesareentitledtonoticepayandseverancepay.

Noticepayisthepayrelatingtotheperiodofnoticeand which depends on the seniority of the dismissed employee. The notice pay is paid in the same wayasasalary,attheendofeachmonth.Theemployeris required to withhold taxes and social securitycontributions.

Fordismissal,noticeby theemployermustbegivenas follows:

Noticetakeseffectonlyonthefirstorthefifteenthdayofthemonth.Noticegivenbeforethefifteenthofthemonthtakeseffectonthefifteenth;noticegivenafterthefourteenthdaytakeseffectonthefirstdayofthefollowing month.

any dismissed employee is moreover entitled to aseverance pay if he/she has given to the companyat least 5 years of service. The severance pay isdeterminedon thebasis of the average gross salaryeffectivelypaidtotheemployeeoverthe12monthspreceding the dismissal notification. are taken intoaccountinthecalculationthesicknessbenefits,bonusand any recurrent payment, but excluding overtimecompensation,premiumpaidonadiscretionarybasisand reimbursement of expenses.

Length of service Notice required

lessthan5years 2months

Between5and10years 4 months

10years+ 6months

Length of service Notice required

atleast5butunder10 1 month

Between10and15 2months

Between15and20 3months

Between20and25 6months

Between25and30 9 months

Morethan30 12months

Page 40: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

40 | Luxembourg Employment Law

Dismissal with notice

The employee may request communication of thereasonsfordismissal,however,suchrequestmustbemade to the employer in a letter by registeredmailwithin onemonth of the date of the notification ofdismissal. The employer must state their reasons in detailwithinone furthermonth inanother letterbyregistered mail.

If the employer fails to provide the employee withthegrounds fordismissalwithin the legally requiredperiodoftimeor fails toprovidetheemployeewithdetailedgrounds,thedismissalisdeemedabusive.

Dismissal as a consequence of gross misconduct

Intheeventofgrossmisconductbytheemployee,theemployermayterminatethecontractwithoutnoticein thecaseofa contract concluded foran indefiniteperiodoftime,andbeforetheendofitsterminthecaseofafixed-termcontract.

Gross misconduct is considered to be any conduct that immediatelyandunequivocallymakesitimpossibletocontinuetheworkingrelationship.Theconclusionofthe existence of such conduct is factual and it is for the court to decide if such conduct is present.

The employer must give notification of dismissal ina letter by registeredmail. The employermust alsoimmediately state in the dismissal letter the explicitand detailed reasons for the dismissal.Iftheemployerfailstoprovidetheemployeewithdetailed grounds in the letter of dismissal, thedismissalisdeemedabusive.

Statutory claims – unfair dismissal

dismissal is regarded as unfair if:• theemployerfailstoprovidetheemployeewith

detailedgroundsasrequiredbylaw,

• the dismissal is not founded on valid groundsrelatedtotheemployee’saptitudeorconduct,or arising from the operating needs of thebusiness,establishmentordepartment,

• thereasonsarenotreal,

• thereasonsarenotseriousenough,

• the dismissed employee was legally protected againstanydismissal(duringsicknessleave).

If the employee challenges the reasons provided bythe employer in support of the dismissal, the onusis on the employer to prove not only the factualcircumstancesbutalsotheirvalidityandseriousness.

Theemployeemustactwithin3monthsasfollows:• directly bring an action in court for unfair

dismissalandclaimcompensationfordamages;or

• addressawrittenclaiminaletterbyregisteredmailtotheemployerwithin3months,claimingthat the dismissal is unfair and that the employee reservesallhis/herrightstoclaimcompensationfordamages.Inthiscase,thelegaltimeperiodinwhichtobringanactionincourtisextendedto1yearfromthedateofthewrittenclaim.

dISCIplINEaNdTERMINaTIoN

Page 41: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 41

Thethree-monthtimeperiodcommenceseither:• asofthedatewhenthedismissalletterissentout

if the dismissal took place for gross misconduct with immediate effect, or with notice if theemployee failed to request communication ofthe grounds for dismissal within one month followingthenotificationofthedismissal;

• asofthedatewhentheemployerprovidestheemployee with the grounds of the dismissal as requestedbytheemployeewithinthelegaltimeperiod,whenthedismissalhastakenplacewithnotice;

• asofthedatetheemployershouldhaverepliedto the employee providing him/her with thegrounds for dismissal, in the event that theemployee formally requested communicationofthegroundsbuttheemployerneverreplied.Forexample,saynotificationofdismissaloccurson12September.Consequently, theemployeethen requests communication of the groundsfordismissal ina letterby registeredmail senton8october,buttheemployerneverrepliestothis request. The employee must either bringan action in court or challenge in writing thedismissalandreservetheirrightsatthelateston8February(threemonthsafter8November,theexpiry date for the employer to reply).

The luxembourg labour Code does not provide forpre-determined compensation for damages. Thejudges in labour Courts have the widest powers tojudge, at their own discretion, the amount of theindemnification.however,generallycompensationfordamages is determined as follows:

moral damagesIn the event of unfair dismissal, the followingcriteria are taken into consideration in calculatingthe amount of damages:

• troublesraisedbythedismissal;

• circumstances in which the dismissal has occurred;

• age;

• lengthofservice.Compensation for moral damages generally rangesbetweenEuR1,000andEuR30,000.

Financial damagesFinancial damages greatly depend on the professional situationoftheemployeeafterthedismissalandaredetermined on a case-by-case basis by the courts.Thecourtstakeintoconsiderationareferenceperiodafterthedismissalthatisdeemedasufficientamountof time for the employee to find another job. Thereference period starts at the expiry of the period of notice or with the notification of dismissal if theemployee has been released from the obligation toworkduringthenoticeperiod.Thecompensationforfinancial damages is determinedon thebasis of thedifference between the remuneration paid to theemployee by the former employer and the salary or unemployment benefits paid to the employee aftertheexpiryoftheperiodofnotice.Thereferenceperiodisgenerallysetat6monthsandmaybeextendedupto12months,dependingontheageoftheemployeeandlengthofservice.Theemployermayalsoberequiredtoreimbursetheluxembourg State for the unemployment benefitspaidtotheemployeeoverthereferenceperiod.

Page 42: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

42 | Luxembourg Employment Law

Special statutory protection against dismissals

an employer who has been duly notified of theiremployee’s incapacity to work within the properlengthoftime(i.e.on thefirstdayof incapacity),orwhohasreceivedamedicalnotefromtheemployeeindueformwithintheproper lengthoftime(i.e.onthe thirddayof absenceat the latest), is prohibitedfrom notifying the employee of the termination oftheir contract or summoning them to the interviewpriortodismissal.anynotificationofdismissalbytheemployer to the employee during this period is unfair.Theemployer’s right todismissanemployee is thensuspendedforamaximumof26weeksfollowingthedate of incapacity.

The following employees enjoy a special protectionagainstterminationaswell:

• a woman whose pregnancy is medically approvedcannotbedismissedduringherperiodofpregnancyand for amaximumof12weeksfollowingthebirthofthechild.anynotificationof dismissal during this period is deemed to be nullandvoid;

• an employee during parental leave. anynotification of dismissal during this period isdeemedtobenullandvoid;

• staffrepresentatives,aswellastheiralternates,are protected against dismissal throughout their termofoffice.anydismissalisdeemedtobenullandvoid,whateverthereason.Thisprotectionperiod is extended to former representativesfor 6 months following the end of their termofoffice,andtocandidatesforelectiontosuchoffice for a period of 3 months following theannouncementoftheircandidacy;

• members of the JointWorksCouncilmayonlybe dismissed with the consent of the joint works council to which they form part.

dISCIplINEaNdTERMINaTIoN

Pregnant women, employees in parental leave, members of the Joint Work Council, staff representatives and their alternates enjoy a special protection against termination.

’’

’’

Page 43: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 43

Termination by the employee: resignation

anemployeewillingtoterminatehis/hercontractofemploymentmustsendaletterbyregisteredmailtothe employer.unless the contract of employment isterminated on account of gross misconduct on the partoftheemployer,theemployeemustgivenoticeof resignation. The period of notice required forresignation by the employee is half that required inthe case of dismissal by the employer.

Termination by common consent

parties to a contract of employment for a fixedor indefinite term may terminate the contract bycommonconsentat anytime.The commonconsentofthepartiesmustbestatedinwritingintwooriginaldocuments failingwhich the termination is declarednull.

Special termination procedure applicable to protected employees

The employer is entitled to suspend a staffrepresentative, amemberof the jointworks councilortheiralternatesorapregnantwoman(hereinafter‘protectedemployee’)intheeventofgrossmisconduct.during the suspension, the protected employeewillnotbeentitledtoremuneration,unlesstheymakearequesttothelabourCourt.The employermust immediately refer thematter tothelabourCourt,whichwill ruleontheterminationof the contract of employment based on the grounds of gross misconduct.

Automatic termination of the contract of employment

The contract of employment also automaticallyterminates in the following circumstances:

• death,physicaldisabilityandbankruptcyoftheemployer (except if the business is taken overby another employer further to a transfer of undertakingwithinthemeaningofthelaw);

• if the employee is declared unable to take up the envisagedpositionwiththeresultofamedicalexaminationpriortoemployment;

• when the employee meets the legal requirementsforanold-agepensionandatthelatest at the age of 65, this being conditionalupontheemployeebeingentitledtoanold-agepension;

• when the employee meets the legal requirementsforadisabilitypension;

• at the end of the employee’s entitlement tosicknessbenefits;

• foremployeeswhohavebeendeclaredunabletoperformtheirjob,thedayofnotificationofthedecision of a special commission charged with deciding the reinstatement of the employees outside the business.

Page 44: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

44 | Luxembourg Employment Law

dISCIplINEaNdTERMINaTIoN

CollECTIVEdISMISSalS

definitionofcollectivedismissalThestatutoryprocedureregardingcollectivedismissalsmust be followed as soon as an employer contemplates dismissingatleastsevenemployeeswithinaperiodof30daysordismissing15employeeswithinaperiodof90days.

Procedure to be followed in the eventofacollectivedismissal

Theemployermustenterintopriornegotiationswiththeemployeerepresentativesinordertocometoanagreement relating to the establishment of a socialplan. The social plan is a written agreement signedby the employer and the employee representatives,whichcontainstheresultsofthenegotiations.

The employee representatives are either the staffrepresentatives, the joint works council and/or thetradeunions,inthecasewhereacollectivebargainingagreement applies to the employer/employeerelationship.

Thenegotiationsshallatleastcoverwaysandmeansof:

• avoidingcollectiveredundanciesorreducingthenumberofemployeesaffected;

• mitigatingtheconsequencesoftheredundanciesby recourse to socialmeasuresaimedat, interalia, redeploying or retraining the employeesmaderedundant;and.;

• grantingfinancialcompensation.

Thefollowingmatterswillnotablyhavetobediscussed:• application of the law governing short-time

working;

• implementationofchangestoworkinghours;

• temporary reduction in working hoursand participation in training sessions orredeploymentofemployees;

• training sessions or redeployment within the company or within another company in the samesector;

• applicationofthelawgoverningthetemporarylendingofworkforce;

• personal support for a change of career, witheventualrecoursetoexternalexperts;

• applicationofthelegalprovisionsgoverningthepre-retirementregime;

• principles and procedures governing theimplementation and the follow-up of selectedmeasures.

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

’’

’’

Page 45: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 45

Companieswhoputinplaceanemploymentretentionscheme approved by the labour Minister in the 6months preceding the beginning of the negotiationsare exempt from the obligations provided by theabove-mentionedprovisions.

Beforenegotiationsstart,oratthevery latestatthebeginning of the negotiations, the employer mustinformtheemployeerepresentativesinwritingoftheproposedcollectivedismissalandmustprovidethemwiththefollowinginformation:

• reasonsfortheproposals;

• numberanddescriptionofemployeesaffected;

• number and description of employees usuallyemployed;

• periodoftimewithinwhich thedismissals areproposed;

• methodofselectingemployeestobedismissed;and

• proposedmethodofcalculatingtheamountofany redundancy payment.

The employer must send a written notification ofthe contemplated redundancies to the Employment administration(administrationdel’Emploi),aswellasacopyoftheabove-mentionednotificationbeforethenegotiations start. The Employment administrationwillthenforwardthewrittennotificationtothelabourandMines Inspectorate (InspectionduTravailetdesMines).

Theemployerandtheemployeerepresentativesmustcometoanagreement relating to theestablishmentof a social plan within 15 days from the start ofnegotiations.

atthisstage,ifthepartieshavecometoanagreement,theymustsignthesocialplan.afterthesigningofthesocial plan, the employer is entitled to notify eachemployeeoftheirdismissalonanindividualbasis.

Ifthepartieshavenotcometoanagreementwithinthe15-daytimeperiodasprovidedforbythelaw,theminutesofthenegotiationsstatingtheattitudeofthepartiesregardingtheissuesinnegotiationaresignedand immediately forwarded to the Employment administration.

Both parties must jointly refer the matter to theNational Conciliation office (office National deConciliation)within3daysof signing theminutesofthenegotiations.Within2daysof this thepresidentof the National Conciliation office will summon thejoint committee (Commission paritaire) and within 3days of the conveningnotice, the joint committeewill hold a meeting. The committee will considerthematter within 15 days of the firstmeeting. Theminutes of their discussions are forwarded to the Employment administration and to the labour andMines Inspectorate.

after the National Conciliation office has signedtheminutes the employer is entitled to notify eachemployeeofhis/herdismissalonanindividualbasis.any notification of the dismissal to the employeesbefore thesignatureof theminutes isnullandvoid.The dismissals come into effect after a period of 75days, notwithstanding any longer period of noticeas determined by the law or provided for in thecontractofemploymentorinthecollectivebargainingagreement.

Page 46: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

46 | Luxembourg Employment Law

dISCIplINEaNdTERMINaTIoN

Ifanemployeeisnotifiedofhis/herdismissalbeforetheprocedureorbeforethesocialplanissigned,itisdeemed null and void. Consequently, the dismissedemployees must be reinstated. Employees dismissed withinacollectivedismissalnotconformingtothelaw,are allowed to claim damages for unfair dismissal.

Theperiodofnotice startseitheron thefirstdayofthefollowingmonthoronthefifteenthofthemonthdependingonthedayofnotificationofthedismissal.The period of notice will start on the first of thefollowingmonth if notification has been given afterthefourteenthofthepreviousmonthandwillstartonthefifteenthifthenotificationhasbeengivenbeforethefifteenth.

Thenoticepayispaidinthesamewayasasalary,attheendofeachmonth.Theemployer is requiredtowithholdtaxesandsocialsecuritycontributions.

Thelengthoftheperiodofnoticedependsontheyearsofserviceofeachemployee.Thelengthvariesfrom75days where the period of employment was less than five years, to four months where employment wasbetweenfiveand10yearsand to sixmonthswheretherehasbeenmorethan10years’service.

Each employee is entitled to severance pay varyingfromonemonthto12monthsdependingonseniority.

any additional payment is not provided for by thelaw, or by a collective bargaining agreement, but iscommonpractice.Themethodofcalculationofsuchadditionalindemnitieswillexclusivelydependonthenegotiations.

Wemayprovideyouwithsomeexamplesasfollows:

redundancy indemnity

Suchindemnitiesvarywiththeage,lengthofserviceandfamilysituation

Increased notice pay

duringthenoticeperiod,theemployermaydecidetorelease some or all employees made redundant from theperformanceoftheirwork.Ifhedecidestohavesome of them keep working during part or all of the noticeperiod,heshouldthenpayanincreasednoticepay to compensate them. In caseof release, theemployermayprovide in thesocial plan that the payment of the notice pay willcease if the employee has found another job before theexpiryofthenoticeperiod.Theemployermayalsoprovidethatsuchnoticepaywillbepaidinanycase,eveniftheemployeefindsanotherjob.

Extended notice period

Trade unions sometimes request to extend thenotice period. This solution is more expensive forthe employer, as he must keep on paying his partof the social security contributions. The dismissedemployees will remain on the payroll longer than normally requiredby lawandwillonlybeeligible tounemploymentbenefitsattheexpiryoftheextendednoticeperiod.

Page 47: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 47

other examples

Indemnity for unemployed spouse, Indemnity foreachchildren,outplacementandanykindofsupporttofindanotherposition,organisationorpaymentofseminarsand(re)trainingcourses,draftingofdetailedworkcertificates,Re-employmentpriority,etc...

asocialplanmayprovideforothertypesofindemnitiesasdeterminedbythenegotiatingparties.

article115(10)oftheIncomeTaxlawprovidesthatanyallowances granted to employees in the framework of a social plan are tax exempted upon agreement of the “ComitédeConjoncture”upto12timesthemonthlyminimumsocialsalary,whichmeansthatcurrentlythetaxexemptionreachesEuR23.052,36(index775,17).The employer usually takes the commitment in the social plan to assist employees in obtaining such tax exemption.

an employee made redundant on a collective basishas the same rights as an employee made redundant onanindividualbasis.Inotherwords,suchemployeemay bring an action in court against the employerand claim compensation for damages as a result ofthedismissalthathe/sheallegedtobeunfair.hence,topreventtheemployeefromfilingaclaimwiththecourt,weusuallyrecommendtohaveeachemployeemaderedundantasaresultofthesocialplan,signalettermentioningthathe/sheisawareofthegroundsfortermination,thathe/sheacceptsthem,thatwiththe implementation of the social plan, all claimsagainst the employer on the basis of the employment contract and its termination have been fulfilled andthathe/shedoesnothaveanyfurtherclaimsagainstthe employer.

An employee made redundant on a collective basis has the same rights as an employee made redundant on an individual basis.

’’’’

Page 48: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

48 | Luxembourg Employment Law

EmpLoymEnT rETEnTion ScHEmE

Page 49: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 49

The “Comité de Conjoncture” may require socialpartners to enter into negotiations with a view tosigning an employment retention scheme, at anytimeandatthe latestwhenanemployercarriesout5 dismissals for economic reasons over a referenceperiod of 3 months or 8 dismissals for economicreasonsover6months.

The social partners within the meaning of the Labour Code are on one hand the employer or employers’organisationsandtheotherhandthestaffdelegation,employees’representativesofthejointworkscouncil,tradeunionshavingsignedtheCollectiveagreementsorrepresentativetradeunionsatanationallevel.

Theplanaimingatmaintainingthelevelofemploymentshall contain the results of the discussions on the following issues:

• application of the legal provision governingshort-termwork;

• implementation of changes to the duration ofwork;

• part-timeemployment;

• implementationoftimesavingaccounts;

• temporary reduction of working time andparticipationintrainingsessionsoredeployment;

• training sessions or redeployment within the company or within another company in the samesector;

• application of the legal provisions governingtemporarylendingofworkforce;

• personal support for a change of carrier,eventuallyhavingrecoursetoexternalexperts;

• applicationofthelegalprovisionsgoverningthepre-pensionregime;

• periodoftimeoverwhichtheplanisapplicable;

• conditions and procedures governing theimplementationandfollow-upoftheplan.

EMployMENTRETENTIoNSChEME

Page 50: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

50 | Luxembourg Employment Law

At BSP, we provide you the best advice to move forward.Because excellence is the standard we set for ourselves, we are leaders in each of the legal areas we practice.

Page 51: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 51

HOw wE CAN ASSIST yOU

oVERVIEWoFouRpRaCTICE

Withinexcessof60professionals,BonnSteichen&partnersisanindependentfull-servicelawfirmcommittedtoprovidingthehighestqualitylegalservicestodomesticandinternationalclientsinluxembourg.

developinglong-termandtrustingrelationshipswithclients,BSptakesadvantageoftheprovensynergybetweendepartmentstoensureareliableandconsistenthigh-standardservice.Thankstoawidevarietyofresourcesandexpertisewhicharecontinuouslyadaptingtonewlawsandregulations,situationsandchallenges,weprovidelegalsupportforourclientsindynamicbusinessenvironments.Besidesdeliveringtailor-madeadvice,thebroadrangeofconcreteskillsenablesourlawyerstobeproactiveandtoprovideanswersnotjustoptions.

atBSp,wehave createdanenvironmentwhere collegiality, trust and respect are the guidingprinciples underwhichweworktoday.overtime,wehavesuccessfullyattractedandretainedtalentedprofessionalsallowingustoachievelegalexcellence.Focusedonachievements,ourprofessionalsatalllevelsofsenioritybringtogethertheirexpertisearoundacommonobjective:creatingvaluefortheclient.

asleadersineachoftheareasinwhichwepractice,weofferourclientsawealthofknowledgeandexperienceinall aspects of Luxembourg law. These include :

Bank Lending, Structured Finance and SecuritisationBanking, Financial ServicesCapital MarketsCorporate, M&ACorporate Governance

Employment, Compensations and BenefitsGeneral commercialInsolvency, RestructuringInvestment Fundsip/iT

Litigation, ArbitrationPrivate EquityPrivate wealth & Business PlanningReal Estate & ConstructionTax

Page 52: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

52 | Luxembourg Employment Law

Employment,Compensations&BenefitsTheemployer-employeerelationshipisthecornerstoneofeverybusinessandassuch,ourlawyersmakeapointoffosteringandstructuringacoherentandeffectivedialogueintheirclients’workplace.assuch,ourpragmaticandresult-orientedapproachenablesustocounselonbothroutineandnon-routineissuesrelatingtolabourlaw. anneMorel has first stated practising for a couple of years almost exclusively litigation in the area of labourlaw,which enables her to succesfully represent our clients in court. From implementing preventivemeasurestorepresentingclients in labourcourtsandinout-of-courtdisputeresolutions,weassist inbothindividualandcollectiveemploymentrelationships. We can help on:

• draftingemploymentpoliciesandprocedures;

• draftingemploymentcontractsandgeneralemploymenttermination;

• assisting clients in information/consultation procedures in restructuring measures and transfer ofundertakings;

• negotiatingwithemployeesrepresentativesandtradeunions;

• enteringintocollectivebargainingagreementsandsocialplans;

• structuringschemesoralternativeformsofremunerationsuchasshareoptionplans,employeeparticipationschemes,andsupplementarypensionplans.

FoCuSoNSoMEEXpERTISE

Page 53: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 53

disputeResolutionNomatterwhattypeofdisputeisconcerned,gettinganearlyresolutionwithaslittleconflictaspossibleisthebestwaytoavoiditspirallingoutofcontrol.Withthisinmind,ourdisputeResolutiondepartmenthasbeenworkingtoachievethebestandmostcosteffectiveresolutionforourclients.

ourdisputeResolutionlawyersadviseuponabroadspectrumofdisputesfromsignificantroutinematterstolargeinternationalandhighprofiledisputesinawiderangeofsubstantiveareas.Weadviseourclientsatallstagesofcontentiousmatters(includinginthepre-litigationstage):

• businessdisputes;

• contractualdisputes;

• employmentdisputes;

• debtclaimsandrecovery;

• constructionandbuildingclaims;

• shareholderdisputes; Notwithstandingthevastexperienceofourlawyersinthisarea,wealsoencouragealternativedisputeresolution(adR)processeswiththeaimtoalleviatecostburdensandtoofferafasterandconfidentialalternativetotraditionallitigation.ourlawyersthusendeavourtoprovidestrategiclegaladviceinearlystagesofaproblemtopreventtheirclients from any dispute before the courts.

Page 54: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

54 | Luxembourg Employment Law

anne morELPartner Employment Compensation & BenefitsdisputeResolutionIT&GeneralCommercial

Contact:[email protected]

qualified

Luxembourg Bar, 1994

Education

•dESSendroitdesaffairesetFiscalité(ll.M.inBusinessandTaxlaw)-universitéNancyII,France•diplômedeJuristeConseild’Entreprise,dJCE(post-Graduatedegree inBusinesslaw),1993-universitéNancy II,

France•Maîtriseendroitdesaffaires(MasterinBusinesslaw),1992-universitéNancyII,France/universityofSaarbrücken,

Germany.

Selected Experience

•anneassistsclientsinindividualaswellascollectiveemploymentrelationships:suchasassistingclientsininformation/consultationprocedures,negotiationswithemployees’representativesandtradeunions

• She also advises on the scope of the application of the various collective bargaining agreements and collectivedismissals.

• Shehasanextensiveexperienceinstructuringschemesoralternativeformsofremunerationforlargeinternationalcompanies,suchasshareoptionplans,employeeparticipationschemes,andsupplementarypensionplans.

•her transactions include the restructuring and rationalisation measures of a uS worldwide industrial group ofcompanies,activeinthemanufacturingbusiness,whichentailedtheclosingoftheluxembourgoffice(assistancetoconsultationphaseanddraftingofalldocumentsrequiredtogetherwithassistancetonegotiationphaserelatingtocollectivedismissalandsocialplanimplementation).

•annealsorepresentedaclienthavingasmainactivitytheroadandairwaystransportationofgoods,incourtuptotheConstitutionalCourtandshefinallyassistedhimintheclosingofallactivitiesinluxembourg.

Professional Associations

• FoundingmemberandVice-presidentofElSa(EmploymentlawSpecialistassociation,luxembourg).•MemberofEEla(EuropeanEmploymentlawyersassociation)• InternationalBarassociation(IBa)•MemberofBarCouncil,2013-2014

Additional InformationanneisauthorofnumerousarticlesonlabourandEmploymentlawforlegalbooksandjournals.Sheisaregularspeakeratconferences(notablyIFE,Meetincs).

LanguagesEnglish,French,German

youRCoNTaCTS

Page 55: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

www.bsp.lu | 55

Luc COURTOISPartner InvestmentFundsContact:[email protected]

pierre-alexandre DEGEHETPartner Corporate,M&aContact:[email protected]

Linda HarrocHPartner privateEquityContact:[email protected]

Laurent LaZarD Partner Banking&FinanceInsolvency&RestructuringContact:[email protected]

Evelyn MAHERPartner CapitalMarketsInvestmentFundsContact:[email protected]

alain STEicHEnPartner Tax

Contact:[email protected]

Jean STEFFEnPartner BankingFinancialServicesprivateEquityContact:[email protected]

Fabio TrEViSanPartner disputeResolutionCommercial,RealEstateContact:[email protected]

Christine BEERNAERTSPartner Tax

Contact:[email protected]

Page 56: Luxembourg - BSP | Luxembourg Employment Law Contract of employment and/or corporate mandate legal representatives of a company, such as the managers, managing directors or members

56 | Luxembourg Employment Law

BoNNSTEIChEN&paRTNERS2,ruepeternelchenIImmeubleC2l-2370howaldIluxembourg

T.+35226025-1 [email protected] www.bsp.lu