Actors and institutions in Luxembourg

The Ministry of Labour, Employment and the Social and Solidarity Economy (Ministère du Travail, de l’Emploi et de l’Économie sociale et solidaire, MTE) has two areas of influence: employment policy, and labour law and industrial relations. The ministry designs and directs the implementation of policies, ensures their overall coordination and prepares legislation.

The Inspectorate of Labour and Mines (Inspection du Travail et des Mines, ITM) works under the authority of the ministry. Its role is to monitor working conditions and protect employees who have an employment contract, excluding administration officials.

The Labour Tribunal (Tribunal du travail) has a court magistrate, who is the president of the court, and two assessors: one chosen from among the employers and the other from among the employees. The tribunal is competent in matters of employment contracts, apprenticeship contracts, supplementary pension schemes and insolvency insurance. The courts of appeal, which fall under the Supreme Court of Justice (Cour supérieure de justice), are competent in matters of appeal against the rulings of the Labour Tribunal.

Health and safety issues are mainly dealt with by the Department of Occupational Health (Division de la Santé au Travail) of the Ministry of Health (Ministère de la santé). This department is responsible by law for the control and coordination of the functioning and organisation of occupational health services; it also serves as an appeal body for employers and employees in the event of disputes about doctors’ opinions. It cooperates with the ITM.

ADEM is governed by the MTE (Labour Code, Article L. 621-1). Its competence extends throughout the territory of Luxembourg. It has seven regional offices. A reform was introduced in 2011 to help Luxembourg to meet the challenges of the current economic and social context and effectively help jobseekers to find employment.

The Collective Employment Relationships Act (Loi sur les relations collectives de travail) of 30 June 2004 introduced and specified the criteria that determine the representativeness of a trade union (Labour Code, Articles L. 161-3 and L. 161-4). Thus, as soon as a trade union meets the legal criteria for representativeness, whether at national or sectoral level, it is entitled to conclude collective bargaining agreements. There are two kinds of representativeness, which can be at general national level (Labour Code, Articles L. 161-4 and L. 161-5) or at sectoral level in a sector that employs at least 10% of the private sector employees in the country (Labour Code, Articles L. 161-6 and L. 161-7). Unions are representative when they have received a minimum share of the votes within the Chamber of Employees (Chambre des salariés) in the latest social elections: 20% at national level and 50% within the sector. Article L. 161-4 describes the general national representativeness of a union in terms of its capacity to support a major labour dispute at national level.

It is necessary to point out a recent important development. In January 2023, the Administrative Court began to study the sectoral representativeness of the Luxembourg Association of Banking and Insurance Employees (Association luxembourgeoise des employés de banque et d’assurance, ALEBA), withdrawn in 2021 by Minister Dan Kersch at the request of the Luxembourg Confederation of Independent Trade Unions (Onofhängege Gewerkschaftsbond Lëtzebuerg, OGB-L) and the Luxembourg Confederation of Christian Trade Unions (Lëtzebuerger Chrëschtleche Gewerkschafts-Bond, LCGB). The banking syndicate is calling for the minister’s order to be rescinded. The final decision refused to recognise the representativeness of ALEBA.

There are no statutory regulations setting out the criteria for the representativeness of employer organisations. Their representativeness is based on mutual recognition.

About trade union representation

Article 11 of Luxembourg’s Constitution guarantees employees the freedom to join a trade union. The current legislation that applies to unions (based on the law of 30 June 2004 regulating labour relations) was included in the Labour Code (Article L. 161-3). Employees are organised on a voluntary basis into a number of trade unions, whose principal aim is to negotiate collective bargaining agreements and to defend the interests of trades and professions. It should be noted that unions are not established in companies or establishments, as the only existing employee representatives at this level are elected employees. However, these representatives may be union members.

Trade union density in Luxembourg decreased from 42% in 2002 to 32% in 2018 (based on Organisation for Economic Co-operation and Development (OECD) data). During this period, the absolute number of union members increased, but unions were not able to keep pace with the rapid increase in overall employment generated by Luxembourg’s strong economic growth. Unions are still well established in a number of sectors (the public sector, manufacturing), but union presence and collective bargaining coverage is weak in other sectors (commerce, catering and hotels, business services). At the same time, trade unions continue to exert significant political influence through tripartite institutions and their participation in public policymaking.

Trade union membership and trade union density, 2010–2019

Notes: * Proportion of employees who are members of a trade union. ** Based on administrative data on the aggregate membership of the main confederations organising blue- and white-collar employees, and independent unions of financial and managerial staff, clerical workers and white-collar employees, in the private and public sectors. This information was obtained from trade union websites, European Industrial Relations Observatory (EIRO) and the European Trade Union Confederation. Active membership is estimated based on Belgian data on membership among retired workers; OECD and AIAS, 2021. *** Trade union membership of employees was derived for the total union membership and adjusted, if necessary, for trade union members outside the active, dependent and employed labour force (i.e. retired workers, self-employed workers, students, unemployed people). n.a., not available; OECD, Organisation for Economic Co-operation and Development.

Main trade union confederations and federations

Luxembourg’s trade unionism is marked by structural pluralism. Two of the largest trade union confederations (LCGB and OGB-L) are recognised as nationally representative unions and are mainly active in the private sector. One other large confederation is active in the public sector (the General Confederation of Civil Servants (Confédération Générale de la Fonction Publique, CGFP). Important unions also exist at sectoral level. These include ALEBA, in the banking and insurance sector. ALEBA was recognised as representative at sectoral level, but this is no longer the case.

Main trade union federations and confederations

Note: n.a., not available.

On 13 March 2019, about 526,000 employees and retired workers were invited to vote to elect representatives at the Chamber of Employees, and active employees were invited to elect staff delegations, which are similar to works councils. Both elections are held every five years in Luxembourg. Elections for staff delegations are organised in the companies, while elections for the Chamber of Employees are organised at national level on the basis of a postal vote. In total, 3,071 firms submitted their procedures (ITM, undated): 2,542 when majority voting applied and 529 when proportional voting applied. The OGB-L and the LCGB were the two most popular trade unions, with 23.7% and 14.0% of the vote, respectively. ALEBA received 3.93% of the vote. The next workplace election was scheduled to be held in March 2024.

About employer representation

Employers are organised on a voluntary basis in a number of professional federations, and there is a system of guild chambers. Affiliation to the guild chamber is mandatory for all private individuals or legal entities established in the grand duchy as craftspeople. This is also the case for the Chamber of Commerce (Chambre de Commerce du Luxembourg, CDC), which is an institution of public law, encompassing all companies, except those in agriculture and the craft industry, that have their own guild chambers. At present, there are three chambers for employers: the Chamber of Commerce, the Chamber of Trades (Chambre des Métiers) and the Chamber of Agriculture (Landwirtschaftskammer Luxemburg). Chambers have the statutory right to be consulted by the public authorities on all social and economic issues affecting their members’ interests. They also have the right to submit proposals for legislation. In certain policy areas, such as statistics and vocational training, they even function as public administrative bodies.

There have been no significant changes within employer organisations in recent years. However, some important changes to the heads of the largest employer organisations occurred in 2014 (Union of Luxembourg Enterprises (Union des Entreprises Luxembourgeoises, UEL), the Luxembourg Bankers’ Association (Association des Banques et Banquiers, Luxembourg, ABBL) and the Chamber of Trades), with a new generation of entrepreneurs joining them.

Employer organisations – membership and density, 2012–2019 (%)

Note: * Percentage of employees working in an establishment which is a member of any employer organisation that is involved in collective bargaining. n.a., not available.

The largest employer confederation is the UEL, representing private sector companies. The UEL has eight member organisations (including the Chamber of Commerce and the Chamber of Trades), covering about 35,000 employers and about 80% of all employees. The UEL was founded in 2000 through the formalisation of an existing liaison committee of sectoral business organisations. The UEL signed the rare economy-wide agreements that mainly implement European framework agreements.

Within the UEL, the main organisation is the Luxembourg Business Federation (Fédération des industriels luxembourgeois, FEDIL), which represents companies in construction, manufacturing and business services. FEDIL is affiliated to BusinessEurope, and its members cover about 25% of the national workforce.

There is no rivalry between the seven main employer organisations, as they operate in different sectors and cooperate closely because they are affiliated to the UEL.

Main employer organisations and federations

Notes: * Only collective bargaining to implement some EU directives. ** Only a few sectoral federations are affiliated to the employer organisation, but not the organisation as a whole.

Luxembourg’s social model is characterised by tripartite consultation, which brings together the government, representatives of employers and representatives of workers.

It was introduced in the 1970s, at a time when it was necessary to reorganise the iron and steel industry and deal with social problems. This tripartite model kept thousands of steel workers from becoming redundant, made the steel industry fit for the global economy and introduced social policy measures aimed at keeping the unemployment rate very low. Since 1977, the Tripartite Coordination Committee has been used several times by the government to get consensus on crucial reforms (for example, the implementation of the first national action plan on employment as part of the European Employment Strategy in 1998, and the introduction of the unique working status in 2006).

The financial crisis of 2007–2008 fundamentally altered the tripartite model because the deterioration in public finances meant that employers and employees had to take on more of the financial burden of social dialogue. Moreover, trade unions and employer organisations disagreed on the causes of the crisis and wanted to implement different solutions. Employers wanted to reinforce competitiveness by reducing costs, whereas trade unions wanted to strengthen economic demand. The financial crisis led to the failure of tripartite dialogue in 2010. In 2015, after signing one bilateral agreement with employer representatives and another with unions, Luxembourg’s government encouraged the social partners to return to the country’s former tradition of tripartite consultation. In 2019, for example, the unions gave reasons for wanting to continue the dialogue, particularly in the steel sector, and wanting to resume negotiations. A difficult resumption led to an agreement in principle at a tripartite meeting in December 2020. The Economic and Social Council (Conseil économique et social) plays a role in cooperation and consultation along with the Economic Committee (Comité de conjoncture). The government consults the committee on projects aimed at changing legislation or regulations that affect different sectors or the whole national economy. The government may also consult the committee on specific issues to obtain its advice. The committee also coordinates the involvement of the social partners in the European Semester consultation process. Other tripartite bodies are the Permanent Committee of Labour and Employment (Comité permanent du travail et de l’emploi), the Women’s Labour Committee (Comité du travail féminin) and the Observatory of Industrial Relations and Employment (Observatoire des relations professionelles et de l’emploi), which are all part of the Ministry of Labour.

Main tripartite and bipartite bodies

The main channel for employee representation at workplace level is the staff delegation (délégation du personnel), which is directly elected by all employees in companies with more than 15 employees (Labour Code, Article L. 414-4).

The law of 23 July 2015 reforming social dialogue within companies, which was adopted in the same month, changed the regulation of employee representation. In 2019, the staff delegation became the single body representing the interests of employees and was granted the powers that joint committees previously had, particularly with regard to co-determination once the threshold of 150 employees was exceeded. The employee representatives are elected for five years. The number of employee representatives depends on the number of employees in the company (Labour Code, Article L. 412-1).

The staff delegation is there to ‘safeguard and defend the interests’ of employees. It makes every effort to prevent and mitigate any individual or collective conflict that could emerge between the employer and the workforce. The staff delegation can, in the absence of any conflict resolution, refer to the ITM any complaint or observation relating to the application of legal, regulatory, administrative or contractual provisions (such as those set out in a collective agreement) that affect the working conditions and protection of employees in their workplace. Article L. 414-4 of the Labour Code enumerates the topics that must be submitted to the staff delegations for information and/or consultation and provides for some formal requirements.

According to the Labour Code, management is obliged to inform the staff delegation (and the equality delegate) about the structure and the situation of the undertaking (or establishment), and forecasts of changes to its activities. This information should be provided during meetings with the management of the establishment (see Labour Code, Article L. 414-4).

Employee representatives are elected every five years – through social elections (élections sociales) – by all employees in the workplace. They can be nominated by unions or by at least 5% of all employees. The last elections were held in March 2024.

The legislation sets out a minimum number of meetings for the staff delegation (six a year).

The law of 23 July 2015 makes the delegation the only body that represents employees’ interests, fulfilling functions such as presenting complaints or suggestions to companies on issues such as safety at work, part-time work, harassment and training. The size of the delegation depends on the number of employees in the company, ranging from one member for companies with 15–25 employees to 25 members for companies with between 5,101 and 5,500 employees.

Staff delegates benefit from increased paid leave and more time for training to fulfil their duties. In companies with at least 250 employees, some delegates (délégués libérés) are exempted entirely from work to fulfil their staff representation duties. The employer provides the delegation with information about the company, including developments in its activities, its financial outlook and foreseen changes in its employment situation. In companies with at least 150 employees, this happens either once a month or at the request of the delegation; in smaller companies, it happens at least annually. Staff delegations have the co-decision rights of the previous joint committees; they also have co-decision rights on vocational training issues (Labour Code, Article L. 414-2). Staff delegations in companies with fewer than 150 employees have no co-decision rights on these topics, but they are informed and consulted, and they do not have to agree with the employer.

Furthermore, in companies with at least 51 employees (instead of 150 employees, as was the case before the reform), staff delegates have more opportunities to seek the advice of external counsellors or have experts to assist them on technical matters. The employer pays the experts’ fees. Another innovation is the right to use mediation in the event of disputes about the application of the Labour Code in relation to staff delegations.