Employers promote new youth employment measure

In reaction to a tight jobs market, the Luxembourg government has adopted certain measures to mitigate the effects of the economic crisis on youth employment. One such measure, the ‘Practical Experience’ Employment Initiation Contract, targets young graduates who, ‘in normal times’, would have found a job, but have not as a result of the economic crisis. The Union of Luxembourg Enterprises sees this measure as a positive opportunity for businesses.

Adjusted employment initiation contract

Instituted by ‘Act 5611’ regarding youth employment measures (LU0707039I), the Employment Initiation Contract (Contrat d’initiation à l’emploi, CIE) and the Employment Support Contract (Contrat d’Appui-Emploi, CAE) are geared towards less qualified young people and require the completion of 16 hours of training a month. A new measure introduced by the government to mitigate the effects of the economic crisis on youth employment – the ‘Practical Experience’ Employment Initiation Contract (Contrat d’initiation à l’emploi ‘Expérience pratique’, CIE/EP) – is only addressed to qualified jobseekers. This measure will run until the end of 2010.

Interested candidates can register online on a voluntary basis through the CIE/EP website. This is tantamount to registering with the Employment Administration (Administration de l’Emploi, ADEM). ADEM informs candidates of suitable job vacancies but does not assign them. The Employment Fund reimburses 40% of the minimal allowance to be paid by the employer, which amounts to 150% of the minimum social wage (currently €1,682.76 a month) for a person holding a higher education diploma and 120% for a holder of a technical qualification or a secondary-level qualification.

Recruitment premium

The Employment Fund therefore underwrites 40% of the allowance but also pays a premium equivalent to 25% of the allowance paid during the project if a company recruits the participant when the training comes to an end. The recruitment has to be on the basis of an open-ended employment contract. This compensation by the fund is lower than for the CIE and CAE. The holders of a CIE/EP contract, just like those of a CIE for poorly qualified jobseekers, should in addition enjoy priority recruitment; if, however, the company decides to recruit another person for such a post, it may be required to reimburse the allowance paid by the employment fund during the CIE/EP contract.

Employers welcome new provision

For the government, the measures will be effective if companies agree to the procedures defined. This is why the Union of Luxembourg Enterprises (Union des Entreprises Luxembourgeoises, UEL) has encouraged its members to make use of these youth-oriented provisions. The employer organisation believes that the provisions offer a positive opportunity to businesses. The Chamber of Commerce (Chambre de commerce, CDC) and UEL have furthermore pointed out, during a meeting held to explain the new measure to companies, that the CIE/EP originated as a joint proposal from the two organisations. It is therefore with a certain degree of satisfaction that the employer organisations are hoping to put a considerable amount of effort into the promotion of this new kind of contract.

Trade unions generally satisfied, despite some criticism

During the debates in the House of Commons, some members of parliament (MPs) on the opposition had described the CIE/EP as a ‘corporate gift’, offering companies qualified labour at cheaper cost. However, the trade union side is generally satisfied with the CIE/EP, although the President of the Luxembourg Confederation of Independent Trade Unions, (Onofhängege Gewerkschaftsbond Lëtzebuerg, OGB-L), Jean-Claude Reding, referred to it as a ‘stopgap’. According to Mr Reding, few highly-qualified young people are in fact registered with ADEM. For the trade union, it would be more judicious for efforts to be concentrated on the category of young people who are less qualified, or even on those with no qualifications at all.

OGB-L is especially satisfied with the new collaboration between the national education system, ADEM and the higher education system within the platform that is managing the CIE/EP website and which is coordinated by a government body, the National Youth Service (Service National de la Jeunesse, SNJ). The trade union is also satisfied with the right of staff delegations and joint committees to examine the CIE/EP contracts in order to prevent their abuse by employers. Similarly, recruitment of a project participant on the conclusion of an employment initiation or support contract can only be via an open-ended contract and without a trial period, as the OGB-L had requested.

Odette Wlodarski, Prevent