Trade unions call for proposed employment bill to be rejected

The Luxembourg government has forwarded a bill to the Lower House of Parliament for discussion and approval on a series of measures intended to restore balance in the labour market, to control public finances in general, and to guarantee the financing of large sections of environmental policy in order to achieve the targets set out in the Kyoto Protocol. The Luxembourg Confederation of Independent Trade Unions, the Luxembourg Union of Private Employees and the Christian Trade Union Confederation have reacted negatively to measures intended to maintain current employment levels, in particular the centralisation of information on redundancies and a revision of unemployment legislation.

Agreement signed within Tripartite Coordinating Committee

On the basis of an in-depth analysis of the economic, financial and social situation of the country, in May 2006, the government announced a series of initiatives to prepare the country for the expected challenges that Luxembourg is set to face in the coming years. The government’s analysis and decision had already been accepted by the social partners in principle; the discussions had led to the unanimous signing of a memorandum within the Tripartite Coordinating Committee (Comité de coordination tripartite) on 28 April 2006 agreeing to the government’s overall objectives (LU0606019I).

The measures proposed in the government bill pertain to three main areas, namely:

  • employment policy;
  • modification of a number of articles relating to the social security code;
  • new sources of financing for the environmental policy through fiscal reform in relation to road vehicles and fuels in particular, with the aim of achieving the targets set in the Kyoto Protocol (an amendment to the international treaty on climate change, which assigns mandatory targets for the reduction of greenhouse gas emissions to signatory nations).

Measures aimed at maintaining employment

With regard to employment policy, measures are aimed at maintaining employment through better anticipation of economic restructuring efforts. Two methods of achieving this include the centralisation of information on redundancies owing to economic difficulties and the creation of a new plan for maintaining employment. The bill would thus require companies with more than 15 employees to notify the secretariat of the Economic Situation Committee about any redundancies for reasons other than individual dismissal. In this context, the committee may, at all times – or at the latest when it records five redundancies over a period of three months, or eight redundancies over a period of six months – call on both sides of industry to engage in discussions with a view to drawing up a plan to maintain employment.

However, the Luxembourg Union of Private Employees (Chambre des Employés Privés-Luxembourg, CEP-L) considers that the system is not a real ‘anticipatory restructuring management procedure’ as the policy for maintaining the employment level relies on the goodwill of both sides of industry. According to CEP-L, the measure is not sufficiently restrictive of employers’ actions. Furthermore, the trade union regrets that the measures do not apply to employers with fewer than 15 workers. The union considers that, if the system could be extended to all companies, the Economic Situation Committee would be better able to monitor economic developments throughout the country.

Reform of unemployment legislation

Other measures concerning unemployment legislation drew reactions from both the Luxembourg Confederation of Independent Trade Unions (Onofhängege Gewerkschaftsbond Lëtzebuerg, OGB-L) and CEP-L. These measures include, in particular, the following:

  • discontinuing the payment of unemployment benefit to young people, who may or may not be graduates, who have not found a job after being registered as jobseekers for six months;
  • suspending the immediate payment of unemployment benefit to young unemployed persons who have completed an active measure in favour of employment: a six-month delay period would be introduced;
  • limiting – to 80% of the minimum social wage for unskilled workers – the benefit payable to young unemployed persons on an ‘introduction to work’ contract. This contract offers in-service training to unemployed persons aged under 25 years, and 25% of the benefit paid by the employer is reimbursed by the unemployment fund.

Trade union concerns

CEP-L considers that the changes in unemployment legislation represent a generalised deterioration of the rights of unemployed people, and that the measures to promote employment constitute in effect a series of excessive provisions impacting on all unemployed people, and young school leavers in particular, in order to prevent occasional abuses of the system.

The compensation for the discontinuance of the unemployment benefit at the end of schooling for young people who had not found a job, proposed by the government, consists of a set of three alternative measures: either an employment promotion measure, vocational training and preparation courses, or voluntary service. These three possibilities fall under the responsibility of three different ministries, comprising the Ministry of Labour and Employment (Ministère du travail et de l’emploi), the Ministry of National Education and Professional Training (Ministère de l’éducation nationale et de la formation professionnelle), and the Ministry for Family and Integration (Ministère de la famille et de l’intégration). Thus, according to CEP-L, this mechanism requires the intervention of three ministries to assess the best solution for each young person, but it is not clearly stated in the bill who will assume the role of coordinating such tasks.

CEP-L criticises these mechanisms, in particular for clearly worsening the financial situation of young unemployed persons, because remuneration is optional during a vocational training course or voluntary service. Furthermore, according to CEP-L, the suspension of immediate payment of unemployment benefit after an active measure to promote employment penalises people who are already in an unenviable situation.

Calls to halt adoption of bill

For its part, OGB-L believes that the adoption of the bill must be stopped, as it puts an extra burden on young unemployed people and on young people in general. Moreover, the trade union calls on young people to mobilise against this bill.

The Luxembourg Confederation of Christian Trade Unions (Lëtzebuerger Chrëschtleche Gewerkschafts-Bond, LCGB) has also reacted similarly, stating that young people need jobs and not sanctions.

Trade unions are thus generally disappointed with the way that the agreement of the Tripartite Coordinating Committee has been transposed by the government into the proposed measures.

Odette Wlodarski, Prevent

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