2002 Annual Review for Luxembourg

This record reviews 2002's main developments in industrial relations in Luxembourg.

Political developments

Luxembourg has been governed since August 1999 by a coalition comprising the Social Christian Party (Chrëschtlech Sozial Vollekspartei, CSV) and the Democratic Party (Demokratesch Partei, DP). There were no elections in 2002.

Collective bargaining

Collective bargaining in Luxembourg is conducted mainly at company level, with a few sectoral agreements, and there was no change in this area in 2002. A total of approximately 250-300 collective agreements, mainly at company level, are currently in force in Luxembourg, with some 100 agreements renewed each year. Bargaining largely addressed traditional issues during the course of 2002, the most significant of which, in an economy with an unemployment rate of approximately 3.2%, was pay rises.

Pay

The estimated average collectively agreed pay increase in 2002 was around 2% (without indexation). This was somewhat higher than the 1.8% or so recorded in 2000 and 2001, and the 1% in previous years. Furthermore, Luxembourg has an automatic indexation system whereby all wages, pensions and benefits are automatically adjusted one month after the average of the cost-of-living index over the previous six months has gone up by 2.5%. The six-monthly average of consumer prices exceeded the 2.5% figure on 1 May 2002, and all wages therefore rose by 2.5% from 1 June 2002 (LU0206102N).

In terms of individual agreements, on 21 March 2002, the Luxembourg government and the General Public Sector Confederation (Confédération générale de la fonction publique, CGFP) signed a three-year deal providing for an annual pay rise for around 40,000 public sector workers of 1.6% in 2002, 2003 and 2004. (LU0204102N).

In July 2002, a new two-year agreement in the banking sector was finally concluded after significant difficulties and complications (LU0208101N). This agreement was signed only by the Luxembourg Association of Bank Staff (Association luxembourgeoise des employés de banque, ALEBA), following a ruling by the administrative courts (LU0011152F) that this union was nationally representative and thus able to sign agreements, notwithstanding protests from the two other nationally representative trade unions, the Luxembourg Confederation of Christian Trade Unions (Lëtzebuerger Chrëschtleche Gewerkschafts-Bond, LCGB) and the Luxembourg Confederation of Independent Trade Unions (Onofhängege Gewerkschafts-Bond Lëtzebuerg, OGB-L). After several rounds of fruitless talks, a meeting took place at the National Conciliation Office (Office National de Conciliation, ONC) at which the ONC chair submitted a proposal that involved a 'transitional' one-year collective agreement, retrospectively granting a basic pay increase of 1.05%, and a further increase of 0.55% earmarked for the performance bonus for 2002. The final deal takes on board these proposals in provides for a review in the second year of pay scales in the framework of a one-off 1.65% increase in total paybill.

Working time

There were no notable bargaining developments in terms of working time during the course of 2002. There were, however, some slightly reductions to the statutory 40-hour working week made by a few collective agreements. A new collective agreement in the private bus transport sector provided for drivers to receive at least seven hours' pay for an 11-hour daily period of availability to work. Previously, they were paid only for hours actually worked (LU0207101N).

Job security

The issue of job security in the context of collective redundancies and restructuring was not as prominent in Luxembourg as in some other Member States in 2002. However, in January 2003, SES Astra, the Luxembourg-based satellite operator, announced plans for 32 job losses (a major workforce reduction in the Luxembourg context). Subsequently, a redundancy programme negotiated with the LCGB trade union succeeded in avoiding any compulsory redundancies, through the use of internal and external transfers and early retirement (LU0302105F).

In October 2002, the trade union-backed Objective Full Employment (Objectif Plein Emploi, OPE) network and the Luxembourg Horticultural Employers' Association (Fédération horticole luxembourgeoise) signed a pioneering framework cooperation agreement, whereby unemployed workers will made available from an OPE 'pool' to the association's member companies, while being given training to ensure that they have a better chance of finding work in the sector (LU0211101N).

Equal opportunities and diversity issues

Luxembourg appears to be having some success in narrowing the gender pay gap. Official figures from Luxembourg's Central Statistics and Economic Studies Service (Service central de la statistique et des études économiques, STATEC), issued in February 2002, indicate that the pay gap between men and women is narrowing fast. The study found that in 2000, as far as blue-collar workers were concerned, the wage gap between men and women had narrowed by between 66% and 84% since 1995, depending on the economic sector. Among white-collar staff, the gap had narrowed by 65%-72%. For white-collar administrative workers and intermediary professions, pay differentials between women and men now range from 4% to 6%, while the gender pay gap for skilled blue-collar workers still stands at 26%. Further, the proportion of executives and senior managers who are women rose from 3% in 1991 to 13% in 2000 (LU0203101N).

Legislative developments

In December 1999, in response to the social partners’ failure to regulate working hours in the hotels and catering sector by collective agreement since 1970 (the sector was excluded from the general legislation on the issue), the minister of labour announced that he would legislate on the matter (LU0001124N). The hotels and catering sector in Luxembourg (known as HORESCA) consists of 2,500 enterprises employing a total of 11,000 staff.. In July 2001, the Minister of Labour presented a bill which, among other matters, regulated the working hours of blue-collar staff, apprentices and trainees employed in the sector (LU0108172N). In December 2002, the Chamber of Deputies thus adopted new legislation introducing a statutory 40-hour working week in this sector, in three stages, starting in January 2003 (LU0301107F).The law essentially applies to the HORESCA sector the general terms of Luxembourg's legislation on working time, that is to say an eight-hour day and a 40-hour week, with the possibility to vary these hours limits, while respecting them on average, over reference periods that differ according to the size and nature of the enterprise.

In November 2002, the minister of labour and presented a new bill dealing with collective labour relations, the regulation of collective labour disputes, and the National Conciliation Office (ONC). The bill redefines the controversial concept of the 'national representativeness' of trade unions, while at the same time 'professionalising' the work of the ONC and setting up a national Observatory of Professional Relations and Employment (Observatoire des Relations Sociales, ORPE) within the Ministry of Labour (LU0211102F). The bill provides for three kinds of trade union representativeness and introduces a new procedure for recognition of a union as representative by the minister of labour, under the control of the administrative courts. To guarantee the ONC’s optimum effectiveness, its president and permanent assessors are to become paid professionals. In return, these members’ attendance at meetings will be compulsory.

The bill is particularly innovative in terms of the procedure for negotiating collective agreements. Under the terms of the 1965 law concerning collective agreements, it is normally possible for only a single trade union to sign a collective agreement, if it has nationally representative status. The bill, however, provides for a 'bargaining committee' to be set up for the negotiation of each collective agreement. Unions with general nationally representative status, or sectoral representative status in the relevant sector, will be entitled to representation on the bargaining committee. These unions may unanimously decide to allow other unions to take part in the negotiations. The Minister will decide in the event of a refusal to admit a unions or a non-unanimous decision.

The organisation and role of the social partners

The issue of the national representativeness of trade unions was again prominent in 2002. The abovementioned bill, presented in November 2002, on the national representativeness of trade unions is based on a draft reform issued on 29 October 2001 (LU0111102F). This was issued in response to a number of decisions whereby ALEBA, a sectoral trade union in the banking industry, was awarded nationally representative status, and the aim is to redefine the notion of national representativeness, in certain conditions allowing sectoral unions to negotiate collective agreements. In January 2002, three unions representing white-collar employees in the private sector - ALEBA, the Confederation of Private Sector White-Collar Employees/National Union of Private Sector White-Collar Employees - Reformist (Confédération des employés privés/Syndicat national des employés privés-Rénovateurs, COEP/SNEP-R) and the Union of Private Sector White-Collar Employees (Union des employés privés, UEP) - responded by adopting a joint position opposed to the draft reform. It described the draft as a 'declaration of war on the employment status of private sector white-collar employees'. (LU0202102N)

On other issues, in the wake of a scandal over the alleged embezzlement by its president of members' savings, the independent Trade Union Federation of Luxembourg Postal Delivery Staff (Fédération syndicaliste des facteurs luxembourgeois, FSFL) was wound up in order to enable its 1,000 members to recover some of the money they had lost (LU0202103F). Members of FSFL have since joined an affiliate of the CGFP public sector confederation.

Industrial action

The only strike in 2002 took place in the road transport sector in November. With the backing of OGB-L, about 100 lorry drivers organised a five-day strike and blocked areas with heavy traffic. These road-blocks were eventually dispersed following police intervention. LCGB did not play an active role in this strike as it did not achieve the 75% of the votes required in a strike ballot. The dispute had not been resolved at the end of the year.

Employee participation

Arbed (Luxembourg), Usinor (France) and Aceralia (Spain) merged in 2002 to create the world's largest iron and steel producer, Arcelor. In January 2002, the Luxembourg government and social partners agreed that the Luxembourg state should remain an active shareholder in the new group, and that the model of co-determination and tripartism that marks Arbed should continue and be strengthened in Arcelor's Luxembourg operations (LU0201191F).

Telework

2002 saw no specific response in Luxembourg to the agreement on telework signed in July 2002 by the EU-level central social partners (EU0207204F), which is to be implemented by the national social partners in the Member States (by July 2005). Luxembourg has no legislation that deals specifically with teleworking, and there is no draft legislation specifically on the subject. Employment legislation automatically applies to teleworkers, and the matter is therefore not considered to be especially urgent by the country’s social partners. However, the current government’s policy statement provides for the introduction of legislation on teleworking and homeworking. In February 2000, OGB-L asked the Ministry of Labour to call a meeting with a view to initiating the tripartite discussions that were announced in the government statement, designed to analyse shortcomings and practical difficulties encountered in teleworking (LU0003129N). However, there have as yet been no developments in this area.

Vocational training

There was no specific response in 2002 by the Luxembourg social partners to the 'joint framework of actions for the lifelong development of competencies and qualifications ' agreed by the EU-level social partners in March 2002 (EU0204210F).

In September 2002, the forthcoming establishment of a training institute for the building industry was announced (LU0210102F). The creation of the new body was provided for by a collective agreement signed in 2000. The Building Sector Training Institute (Institut de formation sectoriel du bâtiment, IFSB), which will offer skills training to enterprises and employees, will be funded by a mandatory annual levy of 0.65% of total paybill on the enterprises in the sector.

New forms of work

The year saw no significant legislative or collectively agreed developments in the area of 'new' forms of work. With regard to temporary agency work, a collective agreement for agency workers signed by the OGB-L and LCGB trade unions and the Luxembourg Union of Temporary Employment Agencies (Union Luxembourgeoise des Entreprises de Travail Intérimaire, ULEDI) is valid from 1 January 2001 to 31 December 2003. A Grand-Ducal Regulation of 11 August 2001 extended this agreement to the whole temporary agency work sector. This form of employment is becoming increasingly common in Luxembourg, with the number of 'mission' contracts for agency workers rising constantly since 1995 - see the table below.