Luxembourg: New Labour Code measures for older workers

A bill modifying Luxembourg’s Labour Code and introducing measures on ageing policies was introduced on 3 April 2014. The aim of the bill is to ‘improve the place of older workers in the economic system’, helping them to stay in work or return to the labour market.

Reasons for reform

Luxembourg has a fairly low employment rate among older workers (those between 55 and 64). This rate was 40.5% in 2013, compared with 50.3% for the EU as a whole. However, long-term unemployment mainly affects older workers. While 24% of job seekers are 50 or over, 46.5% of long-term job seekers (who have been registered as such for at least 12 months) are 50 years or older.

The aim of a new bill that modifies Luxembourg’s Labour Code is to foster job retention for older workers and to respond to the Europe 2020 growth and jobs strategy. Bill No. 6678 amending the Labour Code and to introduce a package of measures on age policy (in French) follows the pension reform that took place at the end of 2012, sparking union demonstrations.

Plan for age management

The new bill’s main measure is the obligation for enterprises with more than 150 employees to develop a ‘plan for age management’ (new articles L. 281-1 to L. 281 of the Labour Code). The plan must cover at least three of the following points:

  • recruitment of older workers within the enterprise;
  • anticipation of the evolution of professional careers;
  • amelioration of working conditions and prevention;
  • implementation of preventive health measures;
  • planning for ending of careers and transition between work and retirement;
  • transmission of knowledge and competencies and development of tutorship.

The plan has to be developed in close cooperation with the relevant occupational health service and must cover a period of three to six years.

New rights for older workers

Employees over 50 with at least 10 years’ service now have the right to ask their employer if they can work part-time (Article L. 526-2 (1)). If the employer hires a job seeker to fill the remaining hours of the post, the Employment Fund will subsidise the employer’s social contribution for this employee (Article L. 526-2 (2)).

When workers are entitled to draw their pension they are now permitted, with their employer’s permission, to continue to work part-time while receiving part of the pension (Paragraph 2 Article L. 125-3).

One general provision of the Labour Code has also been changed. This concerns the period of reference, previously four weeks, over which the average working week is calculated for part-time work. The new bill changes this to four months.

Role of social partners

The bill gives the social partners an important role in developing the age management plan. Where there is a company collective agreement, the relevant unions will be signatories of the plan.

The bill gives a new body, the committee for the analysis and promotion of working conditions, the role of assisting social partners in drawing up and executing the age management plans. It will report to the Ministry of Health and advise employees and employers on how to improve working conditions to reduce work-related illnesses.

Opinion of social partners and civil society

At present three opinions have been published.

The first two were announced in the Chamber of Deputies, as part of the legislative procedure: one by the Chamber of Employees (CSL) on 19 June 2014 and the other by the Chamber of civil servants and public employees (CHFEP)on 3 July 2014. The third opinion that has been published so far is from the Centre for Equal Treatment (CET).

The different parties welcome this bill but consider that it has some weaknesses.

The CHFEP’s opinion is that the bill will help make the employer accountable for older employees. However, it deplores the fact that the age management plan only applies to enterprises with 150 or more employees. This criticism was also made by the Chamber of Employees and the Centre for Equal Treatment. The CSL and the CET are also critical of the vagueness of the elements which must be included in the age management plan.

The parties have also commented on modifications to the period of reference. First of all, the CSL’s opinion is that that this measure has no real links with the other provisions. The CET also believes that the change in the period of reference could lead to inequality between full-time and part-time workers. The idea behind having a reference period of four months is to promote a better reconciliation between working and family life, but CSL and CET argue that part-time employees often have circumstances that are incompatible with this kind of flexibility.

Commentary

The provisions of the new bill have been influenced by corresponding French provisions in the area of managing ageing workers. However the French provision applies to institutions with 50 or more employees rather than 150. The Luxembourg bill’s higher threshold could significantly reduce the impact of the reform. According to an article published in Le Quotidien, 97% of all Luxembourg companies will not have to draw up age management plans. Other critics suggest that the changes to the reference period for part-time work should be part of a separate bill as they have a broader scope and raise other issues.

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