National Action Plan includes measures to modernise work organisation

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Luxembourg's National Action Plan on employment was adopted by the Tripartite Coordination Committee in April 1998. Among other issues, the Plan sets out the terms on which working time legislation will be amended. The solutions identified do not represent a move towards a reduction in statutory working hours, but instead provide for greater flexibility.

All the EU Member States have drawn up National Action Plans (NAP s) for employment in line with the Employment Guidelines which arose from the special Employment Summit in Luxembourg in November 1997 (EU9711168F). The Guidelines set out a a framework for national action under the four "pillars" of employability, adaptability, entrepreneurship and equal opportunities. The NAPs were to be considered at the Cardiff European Council meeting in June 1998. The Tripartite Coordination Committee (Comité de Coordination Tripartite) adopted Luxembourg's National Action Plan on 18 April 1998. It did so following 11 meetings lasting over 50 hours altogether (LU9803151N), and at a time when current and future macroeconomic prospects were being described as "favourable".

The Plan, which is some 50 pages long, provides for a range of measures designed to achieve the objectives established by the Employment Guidelines. Further details are provided in LU9805158F. The focus of this article is on the area which involves the social partners most, the modernisation of work, part of the "adaptability" pillar.

Current legislation

Luxembourg's current legislation on working time dates back to the 1970s for blue-collar workers and to 1971 for white-collar staff. It provides for normal working time of eight hours a day and 40 hours a week, although collective agreements may specify shorter hours. Some categories of workers (eg in agriculture and hotels and catering) are not covered by either legislation or collective agreements in this area.

The law contains two mechanisms for deviating from these normal working hours:

1. the "compensatory dispensations" scheme, which allows normal working hours to be exceeded as long as they are made up at other times by rest periods of the same length as the extra hours worked. These additional hours do not attract higher rates of pay, and this system of varying working hours around an average over a reference period can go as far as becoming an annualised hours scheme. There is a daily maximum of 10 working hours and a weekly maximum of 48 hours; and

2. the "overtime" scheme, which requires prior ministerial authorisation in exceptional circumstances set out in the law. Working hours may not exceed 10 hours a day and 48 hours a week for blue-collar workers (44 hours for white-collar workers). Dispensations through collective agreements may not last for more than two years. In addition, the law automatically allows overtime to be worked without prior authorisation if it concerns measures for dealing with an actual or imminent accident, emergency work on machinery and tools, and work undertaken in circumstances of force majeure.

Negotiations between the social partners

In an opinion delivered on 3 May 1995, the Tripartite Coordination Committee urged the social partners to commence negotiations on new forms of working time organisation. These discussions have yet to reach a conclusion.

During the Tripartite Coordination Committee discussions on drawing up the NAP, the negotiations on working time began again (LU9804155N). The three parties that make up the Committee - government, employers and trade unions - have acknowledged the need for substantial modernisation to working hours legislation and the introduction of the key ingredients of "positive flexibility". This positive flexibility "will enable the enterprise to adjust its operation to the constraints of the modern global economy, while at the same time serving the interests of employees increasingly keen to organise their time more flexibly. This new organisation must be carried out without uncontrolled, undifferentiated deregulation, while at the same time safeguarding the interests of employees".

The new organisation of working time must also, states the NAP, seek to find solutions to the growing problem of unemployment in Luxembourg, by creating job opportunities and offering them to unemployed workers registered with public placement services.

Elements of the solution identified

According to the NAP, changes to working time and work organisation fall in the first instance within the purview of the social partners. At the same time, however, proposed legislation on collective agreements, currently at the drafting stage, will now also state that the social partners must examine all issues contained in the employment plan during their bargaining and, through their agreements, find solutions that will have a positive impact on jobs.

The Government has undertaken to provide financial incentives in the case of collective agreements that seek to reduce working hours and recruit registered unemployed workers. If registered unemployed workers are taken on, the Employment Fund pays their social security contributions (these range from 22.4% to 32.1% of gross pay) for five years.

The Plan sets out future changes to working hours legislation covering both full-time and part-time work.

Full-time working hours

• Statutory working hours will remain unchanged at eight hours a day and 40 hours a week. These hours will normally be divided into five days of eight hours each.

• Maximum daily working time will continue to be 10 hours. However, the relevant collective agreement or, in the absence of such an agreement, the Minister of Labour and Employment, may, in sectors and/or jobs to be specified by national legislation, increase the maximum daily working hours to 12 hours as long as the weekly maximum is not exceeded.

• Maximum weekly working time will be set at 48 hours for both white-collar and blue-collar workers.

• The rules on the "compensatory dispensations" scheme (see above), will be adjusted in line with the principles set out in the previous points. The scheme will be the same for both blue- and white-collar workers. There will be a minimum four-week reference period for hours variations (which will also apply to part-time work), applicable to all enterprises. Each company will have to establish, in consultation with the employees, a plan for the organisation of work within the reference period.

• The law will make it possible to establish shorter or longer reference periods by collective agreement, although always setting the maximum at 12 months (ie annualisation).

• In the absence of a collective agreement or provisions relating to a reference period, the Minister of Labour and Employment may, if an enterprise so requests, authorise a particular reference period for that company, following procedures normally requiring the opinion of trade unions and employers' representatives at national level.

• The social partners undertake to ensure, where possible - notably through collective bargaining - that overtime should increasingly be compensated with 50% additional time off, rather than pay. In other words, each hour's overtime will entitle the employee to one-and-a-half hours' off. This will apply both to blue- and white-collar workers, and the time off must be taken within a certain period. The law may provide for limited exceptions to be made in the case of very small enterprises.

• The Government will introduce a "time savings account" and a career breaks scheme, with the aim of boosting employment. The accent will be on leave for training purposes.

Voluntary part-time work

There is little part-time working in Luxembourg, and one of the reasons could well be the rigidity of the legislation covering this form of work.

As seen above, working hours will now be calculated on the basis of a minimum reference period of four weeks; in this way, "the argument that part-time work is more expensive than full-time work will cease to have any foundation". "Essential, protective components" will remain. This measure will be tried out on a temporary basis to see what impact it has on the labour market.

However, the Government will also be looking into the possibility of providing financial support for moves from full-time to part-time working, and particularly part-time work which can help certain categories of unemployed worker. This measure is mainly aimed at workers over the age of 50 who wish to make a partial withdrawal from employment, opening up jobs that can be offered to young and long-term unemployed people.

These measures are designed to raise employment levels in Luxembourg, while simultaneously having a positive impact on the labour market. Amendments to the law will be temporary, to see what impact they have on the labour market.

Commentary

The measures agreed relating to normal working time could scarcely be regarded as revolutionary, given that their origins can broadly be found in opportunities provided by the 1970 legislation. These opportunities have only rarely been taken up because of the reluctance of at least one nationally representative trade union.

The chosen solution of the Tripartite Coordination Committee is of particular importance in an international climate increasingly moving down the path of reduced working hours.

The Government's changed position on part-time workers, and the move to abandoned extremely strict legislation in this area, is more eye-catching. It appears to have been guided by a wish to give a second chance to a category of workers, most of them women, still wishing to enter the labour market. (Marc Feyereisen, ITM)