Luxembourg’s trade unions call for companies to display social responsibility

Although the Luxembourg Economic and Social Council is advocating dialogue as the way out of the current economic crisis, relations between the trade unions and employer organisations are deteriorating. Meanwhile, the Tripartite Coordination Committee has produced a series of measures to tackle the crisis. The trade unions, however, are opposed to the more structural measures proposed by the employers and fear that the social dimension is being omitted from the debate.

Government proposes plan to tackle crisis

In consultation with the social partners on the Tripartite Co-ordination Committee (Comité de coordination tripartite) and after consulting the Chamber of Deputies (Chambre des Députés, CHD) through the Economic and Financial Crisis Committee, the Luxembourg government has issued a set of measures designed to counteract the effects of the current economic crisis. The measures focus on seven main areas of intervention, namely on:

• supporting purchasing power by means of targeted measures;

• supporting business activity by means of fiscal and other measures;

• creating an administrative environment which is favourable to economic activity;

• supporting business activity by means of public investment;

• directly supporting companies in difficulty;

• monitoring the effects of the crisis on employment;

• preparing for the post-crisis period.

Reactions of social partners

The Business Federation Luxembourg (Fédération des industriels luxembourgeois, FEDIL) welcomes the package of measures that has been put together to fight the economic crisis. However, the employer organisation regrets that the Tripartite Coordination Committee has been unable to address the possibility of more structural reforms, particularly those relating to companies’ competitiveness. The lack of such structural reforms is due to opposition from the trade unions, followed by that of government representatives. The government had announced that, during the Tripartite Committee meetings, it wishes to focus exclusively on emergency measures for tackling the current crisis, leaving any debate about possible reforms of a more structural nature to the next term of government. The country’s parliamentary elections were held on 7 June 2009, simultaneously with the European Parliament elections.

On the other hand, the Luxembourg Confederation of Independent Trade Unions (Onofhängege Gewerkschafsbond Lëtzebuerg/Confédération syndicale indépendente du Luxembourg, OGB-L) categorically rejects the proposals of the country’s umbrella federation of Luxembourg employer organisations, the Union of Luxembourg Entreprises (Union des Entreprises Luxembourgeoises, UEL). The employer federation presented a catalogue of anti-crisis measures at the last tripartite meeting, including the proposed ending or limitation of salary indexation and a general pay freeze or even pay reduction. The latter has been a longstanding claim of UEL, which recently reiterated its demand in a document entitled ‘100 measures to restore competitiveness and get the economy started again (in French, 210Kb PDF)’. Following an extraordinary meeting of its executive committee, OGB-L announced that it will maintain its refusal to negotiate on these points and restated its support for Luxembourg’s system of social protection, which should not be called into question during times of crisis.

Trade union calls for national mobilisation

In parallel to the European-wide demonstrations organised by the European Trade Union Confederation (ETUC) in mid-May 2009 (EU0906029I), OGB-L also decided to launch an extensive national mobilisation campaign in protest over the dismantling of the social protection system in Luxembourg and lacking social responsibility of business leaders. In its appeal to demonstrate (in French, 31Kb PDF), OGB-L called on all of the country’s trade union organisations to join the protest march in the streets of Luxembourg city on 16 May. Seven trade union organisations decided to support OGB-L’s campaign, namely: the Luxembourg Confederation of Christian Trade Unions (Lëtzebuerger Chrëschtleche Gewerkschafts-Bond, LCGB), the General Confederation of the Public Sector (Confédération Générale de la Fonction Publique, CGFP), the Luxembourg Association of Bank and Insurance Employees (Association Luxembourgeoise des employés de banque et assurance, ALEBA), the Trade Union of Luxembourg Railway Workers (Syndicat Professionnel des Cheminots Luxembourgeois, Syprolux), the National Federation of Luxembourg Railway and Transport Workers and Civil Servants (Fédération Nationale des Cheminots, Travailleurs du Transport, Fonctionnaires et Employés publics du Luxembourg, FNCTTFEL) and the General Federation of Local Authority Employees (Fédération générale de la fonction communale, FGFC).

All of these trade unions feared that the economic crisis might turn into a social crisis, since the expected sharp decline in revenue in 2009 could affect funding for the country’s social security and pension system. According to the OGB-L newsletter of 5 June 2009, several thousands of workers participated in the demonstration.

LCGB and OGB-L also argue that the bonds between employees and their companies should not be broken and that, instead, the ties of solidarity should be strengthened. Yet relations between the trade unions and the employers have worsened. The two trade union confederations have responded to the purely economic approach of the companies to tackle the crisis by emphasising the social responsibilities incumbent on all employers.

Economic and Social Council advocates dialogue

At the beginning of the year, the Economic and Social Council (Conseil Économique et Social, CES), in a climate that it has compared to that during the crisis in the metalworking industry in the 1970s, has issued its annual formal opinion on the country’s economic, social and financial developments in 2009. Unsurprisingly, a significant part of its advice focuses on the crisis and its consequences for Luxembourg. According to the CES President, Serge Allegrezza, the rise in the rate of unemployment constitutes a serious threat to the ‘tradition’ of peaceful labour relations in Luxembourg. The best way out of the crisis, he argues, is for the social partners and the government to step up social dialogue at national level and in companies to find negotiated solutions.

Odette Wlodarski, Prevent