SLIDING PAY SCALE

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Luxembourg
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LUXEMBOURG
ÉCHELLE MOBILE DES SALAIRES ET TRAITEMENTS
SLIDING PAY SCALE

Mechanism whereby movements in pay follow changes in the cost of living. In Luxembourg, in 1975 the principle of index-linking that had been applied to the pay of established civil servants since 1963 was generalized to cover all employees, and it became a punishable offence for an employer to increase the pay of employees by less than the percentage resulting from operation of the sliding scale. Automatic adjustment of all pay and benefits fixed by law, collective agreement or individual contract, including the minimum wage , is triggered when the weighted retail prices index passes a certain threshold (when the average calculated over the preceding six months has exceeded 2.5 per cent.). The rigidity imposed by this comprehensive protection against the erosion of real earnings is unpopular with employers. Between 1981 and 1984 the Government's incomes policy imposed certain restrictions on the thresholds operated, which were fixed annually by law, but in 1985 the automatic adjustment mechanism was re-established (with provision for action to be taken in the event of a renewed economic crisis). See also List of Legislation at the end of the Glossary.


Please note: the European industrial relations glossaries were compiled between 1991 and 2003 and are not updated. For current material see the European industrial relations dictionary.