Major reform of civil service to affect status and pay

On 18 July, the trade union representing public sector workers, the General Public Sector Confederation, reached agreement with the government on two significant collective agreements. Both agreements will lead to profound changes in the status of civil servants and the way they are paid. They address the way public sector employees are trained, how they progress up the career ladder, how they are helped to address weaknesses and how their pay scale is structured.


Luxembourg’s government programme for 2009–2014 referred to the need for reform and the modernisation of the state, which includes making changes to the way the civil service works and how civil servants are paid.

Prime Minister Jean-Claude Juncker had already talked of reforming the civil servant appointment structure, the introduction of vocational assessments and even a sanction process for civil servants who do not fulfil their statutory obligations.

The government’s programme specifically stated that the entire wage policy, particularly in relation to new entrants to the civil service, had to be reformed in the light of recent studies on civil servants’ wages and a benchmarking exercise carried out in the private sector.

The entire reform package focuses on guaranteeing a better quality, more efficient and more transparent public administration.

Tough negotiations

However, by December 2010, negotiations on these reforms had already reached stalemate as the civil servants’ trade union, the General Public Sector Confederation (CGFP), strongly disagreed with government proposals set out by the Civil Service Minister François Biltgen and the Minister for Administrative Reform Octavie Modert.

The union firmly rejected the introduction of vocational assessment processes, and a decrease in the starting wage for new recruits, measures regarded by both ministers as fundamental prerequisites to its programme, as reported in L’Essentiel newspaper.

Nevertheless, after several meetings between January and July 2011, the social partners finally succeeded in reaching the necessary compromises to overcome the deadlock.

Reform aimed at enhancing careers

In relation to statutory reform, the Civil Service Minister said that reforming the current system of training was inevitable.

Making a comparison between a customer who is dissatisfied with the service they receive from their baker, and a member of the public who receives poor public service, in an interview in Le Quotidien the Minister pointed out that while a customer can go to a different bakery, the public have no choice about the public services available to them.

This remark illustrates why the government is willing to carry out significant changes to the way the civil service is currently run.

As a result, the government has called for the following changes:

  • upgrading of personal development and training of skills and competencies within the civil service;
  • consideration of the experience, lifelong learning, commitment and responsibility of staff when looking at promotion and career path, in addition to the traditional system of classifying people according to their educational background and seniority.

As a result, and despite strong opposition from the CGFP, public workers will be subjected to vocational assessments, including self-assessments and annual improvement interviews. This will support the policy of ‘management by objectives’ in all civil service departments.

More controversial is the introduction of an ‘incompetence procedure’, which will consist of identifying a civil servant’s personal and professional weaknesses before designing a tailored programme to help support them.

The social partners wished to prioritise internal dialogue through the creation of a new post of mediator to facilitate communication between the state and its employees.

Wage agreement: a three-year plan

However, although the CGFP expressed its disagreement with many of the reform measures, it seems that a compromise by the government on wages eventually convinced the unions to soften their approach.

Representatives of public employees succeeded in convincing Ministers Biltgen and Modert to abandon the proposed reduction in wages for new entrants to the civil service.

Both sides have agreed instead that an additional year will be added to entrants’ training period, increasing it to three years. During this time, trainees will receive 80% of their starting wage for the first two years, increasing to 90% in the third.

Apart from these changes, no other financial measures were agreed for 2011. State employees will be granted a one-off bonus in 2012, which will correspond to 0.9% of their wages on the universal scale. Then, on 1 January 2013, the basic wage index will be increased by 2.2%.

Finally, the most popular announcement had to be the ending of the crisis tax ( impôt de crise’), which amounted to an additional 0.8% tax contribution, imposed in the aftermath of the global economic downturn for the tax years 2011 and 2012. Indeed, the decision is all the more significant since it will also benefit employees in the private sector.

Following the signing of both agreements, Jeannot Berg, personal assistant to Minister Biltgen, explained in an interview in PaperJam that although the wage agreement would undeniably increase public spending, the reform of the civil service would lead to cost reductions in the long term.

Legislation planned for autumn 2011

Drafts of bills and preliminary bills will make up the framework for the reform agreement’s implementation across the civil service. Some 24,000 civil servants and public employees are directly affected, along with a further 30,000 people in the extended public services.

Ministers Biltgen and Modert have given assurances that the various associations of public workers within the civil service and public administrations will be consulted during the entire legislative process.

As the CGFP led negotiations of the draft reforms at national level, it will be interesting to see how much success it has in discussions with other employee organisations. Indeed, the Neutral Trade Union of Luxembourg (NGL-SNEP) has already denounced in a newspaper article what it considers to be a ‘demagogic’ wage agreement, which emphasises the gap between private and public workers in times of economic crisis .

Guy Castegnaro & Ariane Claverie, CASTEGNARO, member of Ius Laboris, for HERA

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation