Luxembourg: EIRO Annual Review - 2009

  • Observatory: EurWORK
  • Topic:
  • Published on: 10 Januar 2011


The current government was formed as a result of the legislative elections of 7 June 2009. The electorate returned the 60 members of the national parliament and the six Luxembourg MEPs. There were 3 collective agreements at sectoral level and 73 collective agreements at company level signed in 2009. On 1 March 2009, salaries were index-adjusted in line with changes in prices. There was one strike in the public sector. A few large restructurings took place. The govermnent took a series of anti-crise measures among which measures for the employment of young people.

1. Political developments

The current government was formed on 23 July 2009. It is led by the Prime Minister and also consists of a Deputy Prime Minister and 13 members with the title of Minister.

  • Jean-Claude Juncker (CSV), Prime Minister
  • Jean Asselborn (LSAP), Minister for Foreign Affairs
  • Marie-Josée Jacobs (CSV) Minister for the Family and Integration, Minister for Development Cooperation and Humanitarian Action
  • Mady Delvaux-Stehres (LSAP), Minister for National Education and Vocational Training
  • Luc Frieden (CSV), Minister of Finance
  • François Biltgen (CSV), Minister for Justice, Minister for the Civil Service and Administrative Reform, Minister for Higher Education and Scientific Research, Minister for Religious Affairs
  • Jeannot Krecké (LSAP), Minister for the Economy and Foreign Trade
  • Mars di Bartolomeo (LSAP), Minister for Health, Minister for Social Security
  • Jean-Marie Halsdorf (CSV), Minister for the Interior and the Greater Region, Minister of Defence
  • Claude Wieseler (CSV), Minister for Sustainable Development and Infrastructure
  • Nicolas Schmit (LSAP), Minister for Work, Employment and Immigration
  • Octavie Modert (CSV), Minister for Culture, Minister for Relations with Parliament, Minister for Administrative Simplification to the Premier Minister, Delegate Minister for the Civil Service and Administrative Reform
  • Marco Schank (CSV), Minister for Housing, Delegate Minister for Sustainable Development and Infrastructure
  • Françoise Hetto-Gaasch (CSV) Minister for Small and Medium-Sized Enterprises and Tourism, Minister for Equal Opportunities
  • Romain Schneider (LSAP) Minister for Agriculture, Viticulture and Rural Development, Minister for Sport, Delegate Minister for the Cooperative Economy

Composition of the government from January 2009 to 22 July 2009: see EIRO Annual review 2008 - Luxembourg.

The current government was formed as a result of the legislative elections of 7 June 2009. The electorate returned the 60 members of the national parliament and the six Luxembourg MEPs.

The present is is a continuity government. No major upheavals are expected. The post of Minister for Work has changed hands and the new incumbent is from a different political party.

2. Collective bargaining developments

In 2009 there have been 3 agreements at sectoral level and 73 at company level.

There was no major change in collective bargaining. On the other hand, on 1 March 2009, salaries were index-adjusted in line with changes in prices. The index-based supplement represents a 2.5% increase in all salaries, pensions and unemployment benefits.

3. Legislative developments

The law contributing to the restoration of full employment

The law of 17 February 2009 amends the provisions of the Labour Code on the payment of benefits to workers in the event of partial unemployment. The law stipulates that, as a departure from the normal system, the partial unemployment benefit paid by the employer during 2009 and 2010 will be fully reimbursed by the State. The reduction in working hours may exceed 50% of the total working hours per month, although by the end of the year it may not have exceeded 50% of the total working time of the employees concerned as fixed by law or agreement, corresponding to six months of the current year. The government has also introduced an increase in the rate of benefits for partial unemployment time to 90% if the employee is participating in a training or vocational re-education measure.

Language leave

The law of 17 February 2009 creates a language leave to enable employees of all nationalities to attend courses in the Luxembourgish language. This language leave is intended to supplement the individual training leave (see EIRO Annual review 2008 - Luxembourg).

Restoration of full employment

The law of 3 March 2009 introduces measures in the Labour Code aimed at restoring full employment. The law seeks to provide a legal framework for so-called social initiatives to promote employment – whose common goal is to help people who have become estranged from the employment market, to improve their employability through training and work, and to manage structures which are adapted to the specific needs of the target group in question.

It should be stressed that the law places private-sector companies and the associative sector on an equal footing. In order to gain subsidisation for their vocational integration or reintegration activities or their socio-economic activities, employers must obtain ministerial authorisation and conclude a cooperation agreement with the minister responsible for employment. Among other things, this agreement will mention the services to be provided by the employer to the beneficiaries and more particularly the planned support measures, the maximum financial contribution of the Employment Fund – the activities concerned being subsidised from credits from this fund – the arrangements by which dossiers will be managed so as to enable beneficiaries to receive high-quality socio-professional monitoring and assessment, and the means of information-gathering, control and sanction available to the State with regard to the beneficiary’s obligations.

The decision to guide a job-seeker into a social initiative to promote employment lies with the Employment Administration (ADEM).

The law stipulates the possibility of co-financing open-ended contracts for job-seekers who are incapable of re-entering the primary employment market.

Such a measure is accessible to job-seekers who are out of work (regardless of age) who are not bound by an employment or apprenticeship contract, or are not attending any active employment-promotion measure six months at the latest after registering with the Employment Administration; or who are not bound by an employment or apprenticeship contract on the first working day after the end of an active employment-promotion measure.

End-of-life compassionate leave

The law of 16 March 2009 introduces a special form of leave into the Labour Code which enables anyone to take time off work in order to be at the bedside of a loved one who is terminally ill.

The law restricts this leave to situations where one of the following is seriously ill:

- a first-degree relative in the direct ascending or descending line, i.e. the employee’s father, mother or children;

- a second-degree relative in the collateral line, i.e. the employee’s brother or sister;

- the employee’s spouse or partner.

Involvement of workers in a European Cooperative Society

The law of 18 March 2009 transposing Council Directive 2003/72/EC of 22 July 2003 supplementing the Statute for a European Cooperative Society with regard to the involvement of employees sets out the rules on employees’ involvement in a European cooperative society and introduces these rules into the Labour Code.

Employment of young people

The Government Council approved a bill on 11 September 2009 on certain measures aimed at mitigating the effects of the economic crisis on young people’s employment.

The purpose of the bill is to prevent unemployment among young graduates leaving colleges and universities, who under normal circumstances would have found a job quickly. To this end, the bill specifies the use of and temporarily adapts (until 31 December 2010) two existing instruments: the employment initiation contract (CIE) and the employment support contract (CAE). In this context the plan is to:

  • - make it possible to conclude employment initiation / practical experience contracts (CIE-EPs) in the context of a less onerous procedure;
  • - adapt both the employment initiation contract (CIE) and the employment support contract (CAE) so as to extend them to qualified young people.

The instruments are particularly based on the principle whereby the Employment Fund pays the employer a partial reimbursement for the pay assigned to the young person. The employer will also be entitled to a bonus in the event of the young person being taken on under an open-ended contract without any trial period at the end of the measure. The young people involved in such a measure will benefit for a certain period after the measure is over from recruitment priority at the company concerned for jobs which match their qualifications.

4. Organisation and role of the social partners

There were no changes to the organisation and role of social partners in Luxembourg during the course of 2009.

5. Industrial action

- The municipal workers of Luxembourg City responsible for gas and electricity services held a one-day strike to protest against the bill which is intended to privatise their service.

- Around 40% of milk producers took part in the ‘milk strike’ in September.

6. Restructuring

Kaupthing Luxembourg: restructuring following the takeover by Blackfish Capital

45 out of the 145 employees were laid off. Another 50 employees took voluntary redundancy when the bank’s payments were declared suspended. The creation of the redundancy programme did not cause any problem. The employees’ notice period was doubled and they received a substantial training grant.

Closure of Qatena in Luxembourg (printing sector)

Production was transferred to the group’s factory in Slovakia. 80 jobs were cut in Luxembourg. The employees demonstrated their dissatisfaction with the fact that they had to train their Slovakian colleagues to enable the subsidiary to obtain ISO certification before they were informed of the closure of the Luxembourg site. The trade unions also believe that the transfer was not economically justified.


The Swiss group Duscholux, which specialises in the production of showers and bathroom fittings, has disposed of most of its activities in the Grand Duchy. It has justified this decision on the basis of falling demand. The two Duscholux group sites in Luxembourg made 76 people redundant. There were no particular problems with negotiating a redundancy programme.

Villeroy&Boch: closure of the Luxembourg site The closure of the Luxembourg production site has affected 230 workers. The closure process has led to numerous clashes between the company’s management and the trade unions. The unions believed that the management has failed to comply with the undertakings it has given. A job retention plan was initiated at the outset. This stipulated the organisation of one or more job fairs to facilitate the affected employees in finding a new job. It was also agreed that any employee who found a new job would be released from his position but would still receive the negotiated redundancy compensation. It was agreed that only employees in ‘key positions’ would be unable to leave immediately. When the first job fair was organised, the management specified that it would be unable to allow the departure of more than 16 production workers and 20 administrative staff. The trade unions argued that the management had declared nearly 190 production workers to be in ‘key positions’ and protested on the grounds that the management was impeding the future careers of these people.

Another incident contributed to the trade union’s discontent. Under the ‘tripartite’ principle, Luxembourg law in principle does not allow employees to strike, unless the national conciliation office has drawn up a report confirming the failure of conciliation. However, the law does allow employees to organise a ‘plenary session’ behind closed doors once a year, without specifying the scope of that session. Some left the buildings to make their views known, while remaining on the V&B site. The management claimed that this action was illegal and would result in several employees being sacked. The Minister for Work then invited the employees’ representatives and the management to attend a meeting at the Ministry in order to restore calm. The management did not go through with its threat to sack the employees in question.

7. Impact of economic downturn

In order to cushion the impact of the crisis and prepare the country to come out of the crisis, the government took a number of measures in close consultation with the social partners on the Tripartite Coordination Committee and after consulting the Chamber of Deputies via the Economic and Financial Crisis Committee. On 6 March 2009 it introduced a raft of measures based around seven main elements:

  • - support for purchasing power through targeted measures,
  • - support for business activity by means of tax and other measures,
  • - the creation of an administrative environment favourable to economic activity,
  • - support for business activity by means of public investment,
  • - direct support for struggling companies,
  • - monitoring of the effects of the crisis on employment,
  • - preparation for the post-crisis phase.

The employers’ organisations backed these measures, but regretted that the Tripartite Coordination Committee, following opposition from the trade unions, who were supported in their view by the government, had not embarked upon that part of the plan involving reforms of a more structural nature, and in particular those relating to companies’ competitiveness. However, the government at that time was at the end of its legislature.

The next meetings of the Tripartite Coordination Committee, scheduled for February and March 2010, are regarded as more important, as the employers' organisations will insist on the introduction of structural measures. Questions relating to public finance and pensions are bound to be on the agenda. However, the thorniest and most urgent question for the employers' organisations will be companies' competitiveness. The employers believe that Luxembourg's economy needs to be able to diversify and reduce the relative importance of its financial sector. In Fedil's view, the difficulties encountered by many businesses in Luxembourg have highlighted structural weaknesses in sectors exposed to international competition, due to production costs which are often higher than those in neighbouring countries.

8. Other relevant developments

There have been no other relevant developments in Luxembourg during 2009.

Odette Wlodarski, Prevent

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