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Employment Law in Luxembourg

Employment relationships and conditions in the Grand-Duchy of Luxembourg are regulated in considerable detail by legislation, mainly in the form of the Labour Code (Code du Travail/Arbeitsgesetzbuch). The Code contains almost all statutory provisions related to individual and collective employment matters and is continuously added to and amended as new laws and regulations are adopted. Case law interprets the Labour Code.

The Social Security Code (Code de la Sécurité Sociale/Gesetzbuch der Sozialen Sicherheit) deals with matters such as benefits for employees on sickness, maternity or parental leave. The Criminal Code (Code Pénal/Strafgesetzbuch) is relevant to aspects of discrimination in employment.

Other important sources of employment law are collective agreements (which cover around half of private sector employees) and individual employment contracts. Collective agreements may derogate from the Labour Code’s rules in some areas — notably working time and rest breaks/periods — though only if their provisions are as least as favourable for employees as the statutory rules. Where a collective agreement applies to an employment relationship, any provision in the employment contract that is contrary to the collective agreement is null and void, except where the provision is more advantageous to the employee.

This article deals only with the private sector.

Temporary COVID-19 crisis measures (as at 20 April 2020)

During the COVID-19 pandemic, the Luxembourg government has taken a number of temporary measures affecting some of the issues covered in this topic. For example:

  • an employer must not dismiss an employee during the first 26 weeks of sick leave; the application of this rule has been suspended, so that absences during the pandemic do not count towards the 26-week limit

  • employers in essential sectors may cancel annual leave already granted and refuse to grant leave requests

  • in essential sectors, the normal maximum limits on employees’ working hours may be exceeded, up to 12 hours per day and 60 hours per week (see Normal, Overtime and Maximum Hours)

  • working parents may take leave for family reasons to care for children while schools and nurseries are closed

  • in companies that have ceased operations on government orders, or have temporarily laid off staff because of the crisis, employees serving probationary periods have had these periods frozen until the businesses reopen or the employees return to work.

Employment Law in Luxembourg: Quick Facts
  • Employers must notify all vacancies to the public employment service. Recruitment and Selection

  • The minimum permissible probationary period is two weeks and the maximum is generally six months, though three months for low-skilled employees and 12 months for those earning above a certain threshold. Recruitment and Selection

  • All employment contracts must be drawn up in writing, individually for each employee, at the latest when the employee starts work, and contain certain terms and information. Employment Contracts

  • Fixed-term contracts (which generally have a maximum duration of two years) may be used only for the performance of “precise and non-permanent tasks”, and not to fill in a lasting fashion a job linked to the company’s normal, permanent activity. Employment Contracts

  • If an employer wants unilaterally to amend an essential clause in the employment contract to the employee’s disadvantage, it must follow the same statutory procedure as applies to a dismissal. Employment Contracts

  • There is a national minimum wage and all employees’ wages are automatically index-linked to inflation. Pay and Benefits

  • Normal working time must not generally exceed eight hours a day or 40 hours per week, though these limits may be exceeded under permitted working time flexibility arrangements. Overtime may be worked only in specified circumstances and employees must not generally work more than 10 hours on any day or 48 hours in any week. Working Time, Rest and Holidays

  • Employees must be granted minimum rest breaks and daily and weekly rest periods (usually including Sundays), and are entitled to 26 working days of paid annual leave. Working Time, Rest and Holidays

  • Working parents are entitled to maternity leave (20 weeks) and parental leave (generally up to six months), during which they receive state benefits. Employees can also take other types of leave and time off to provide care and deal with family and personal matters. Parenthood and Work-life Balance

  • Employees are entitled to receive full pay from their employer during sick leave, for up to 15 weeks, and cannot be dismissed during the first 26 weeks of absence. Parenthood and Work-life Balance

  • Discrimination in relation to employment is prohibited on grounds of sex (including marital status, family status and sex change), membership or non-membership (real or supposed) of a racial or ethnic group or a nationality, religion or belief, disability, age or sexual orientation. Equality and Discrimination

  • Enterprises with 15 or more employees have a special equality delegate with the role of ensuring equal treatment for women and men and preventing sexual harassment. Equality and Discrimination

  • Individuals have a right to set up and join trade unions, and it is a criminal offence for an employer to discriminate against job applicants and employees on grounds of their trade union activities. Industrial Relations and Collective Rights

  • Around half of employees have their pay and conditions set by collective agreements, and employers are obliged to negotiate with ”representative” trade unions on request. Industrial Relations and Collective Rights

  • An employee delegation, with various information, consultation and other rights, must be elected by the workforce in all enterprises with 15 or more employees. Industrial Relations and Collective Rights

  • Employee representatives make up a third of the board of directors of public limited companies with at least 1,000 employees. Industrial Relations and Collective Rights

  • Employers have a general duty to ensure the health and safety of employees in every aspect related to work, and have numerous detailed obligations in the field of health and safety. Occupational Health and Safety

  • An employer may dismiss an employee with notice only for a ”real and serious” reason that is either linked to the employee’s aptitude/conduct or based on the company’s operational needs. It may also dismiss an employee summarily for a ”very serious” reason resulting from the employee’s misconduct or actions. Termination of Employment

  • Statutory notice periods apply to termination by the employer or employee. Termination of Employment

  • If an employee on an indefinite-term contract is dismissed after five years’ service, they are generally entitled to a ”departure indemnity” of up to one year’s pay. Termination of Employment

  • Employees with at least six months’ service with their employer are entitled to take paid training leave, while those with at least two years’ service may also be entitled to unpaid training leave. Other Key Issues