Statutory holiday pay dispute resolved

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The industrial relations climate in Luxembourg in the second half of 1999 was soured by a fundamental disagreement over the issue of payment for work when a statutory holiday falls on a Sunday. Following the presentation in December 1999 of draft legislation by the Minister of Labour which supported the trade union line, the Employers' Liaison Committee backed down on the grounds that it wanted to show goodwill and re-establish social dialogue.

Since the law of 10 April 1976, Luxembourg law has provided for 10 statutory holidays per year: New Year's Day, Easter Monday, 1 May, Ascension Thursday, Whit Monday, the Grand-Duke's official birthday (23 June), the Assumption, All Saints' Day, Christmas Day and 26 December. Under an order of the Ministry of Labour, if one of these days fell on a Sunday, it was automatically carried over to the following Monday. Any employee working on a statutory holiday was entitled to a 100% pay premium for the hours worked, plus one day's leave to be taken within the following three months. It was therefore impossible for a Sunday work to be paid as a statutory holiday, as such holiday were always carried forward to the Monday.

Both as part of the National Action Plan (NAP) on employment (LU9903197F) and a desire to maintain the competitiveness of Luxembourg enterprises with their foreign rivals, the government decided in 1998 to remove the automatic carry-over and bring in a new system whereby, when a statutory holiday falls on a Sunday, there is no holiday on the following Monday, but employees are entitled to an additional day's leave to be taken within three months.

Problems of interpretation and application

The first statutory holiday to fall on a Sunday was 15 August 1999. Some employers failed to pay their staff working on this day both the statutory 70% premium for Sunday working and the 100% statutory premium for working on a statutory holiday. The trade unions argued that employees who worked on 15 August 1999 were entitled to both the Sunday and statutory holiday premia. On 6 August 1999, the Chamber of Private Sector White-collar Workers (Chambre des Employés Privés) and the Chamber of Labour (Chambre de Travail) issued a press release setting out their legal arguments on the matter.

The Federation of Luxembourg Industrialists (Fédération des industriels luxembourgeois, FEDIL) formally rejected union criticisms, saying that the trade unions have not abided by their commitment to a national policy of pay restraint under the NAP, and say that the matter should be resolved by the Labour Tribunals.

Against this background, and with the employers' associations and the unions accusing one another of not abiding by the spirit of the NAP, the new Minister of Labour and Employment in the government which came to power in August 1999 (LU9909111N) interpreted the law in a way that favoured the trade union position.

Unsuccessful meeting of the Standing Committee on Employment

A meeting of the Standing Committee on Employment (Comité permanent de l'emploi) (LU9903198N) on 7 December 1999, attended by the Minister of Labour, left the unions and the employers incapable of reaching an agreement on work organisation issues under the NAP: the key factor in this failure to agree continued to be the unresolved question of statutory holiday pay.

The Minister indicated that he would assume responsibility for the problem, and present an "interpretative law" on the NAP to the Chamber of Deputies with a view to resolving the disputed issues.

Trade union position

The Luxembourg Confederation of Independent Trade Unions (Onofhängege Gewerkschafts-Bond Lëtzebuerg, OGB-L) and the Luxembourg Confederation of Christian Trade Unions (Lëtzebuerger Chrëschtleche Gewerkschafts-Bond, LCGB) say that they are happy with the position taken by the Minister.

LCGB called a demonstration for 16 December 1999, and its president predicted a "hot winter", as other issues such as health insurance (LU9912118F) and private sector pensions (LU9812183N) could trigger fresh disputes. OGB-L had earlier organised a protest meeting on 28 September 1999: the issue of statutory holiday pay was high on the agenda.

Employers' position

In a press release issued on 9 December 1999, the Employers' Liaison Committee (Comité de liaison patronal, CLP) countered the public statements made by union leaders, claiming that they did not accurately reflect how discussions had gone in the Standing Committee. CLP stated that the unions had been presented with a proposed compromise providing for the a pay premium of 100% for hours worked on a statutory holiday falling on a Sunday. When this was turned down by the unions, the Minister of Labour put forward a second proposal providing for a 170% premium for 15 August 1999 and 26 December 1999, and the application of the proposal formulated by the CLP (a 100% premium) for 2000. This proposal was also rejected by the unions, which were obdurately opposed to any compromise in this area.

The initiative announced by the Minister of Labour and Employment to adopt an interpretative law establishing a 170% premium in 1999 for hours worked on a statutory holiday falling on a Sunday was not accepted by CLP, as it ignored the employers' proposal and said nothing on the situation beyond 1999.

In conclusion, CLP, "anxious to maintain good industrial relations, invited the trade unions to review positions that were marked by a lack of responsibility and credibility and, in the interests both of employees and of business competitiveness, once again to go down the road of social dialogue."

Preparation of law causes employers to change tack

As promised at the 7 December 1999 meeting of the Standing Committee, the Minister of Labour presented draft legislation on 17 December aimed at clarifying interpretation of the amended law of 10 April 1976 on statutory holidays. This interpretative law states: "All employees who worked on 15 August [and] 26 December 1999 receive their basic pay (100%) enhanced by the premium provided for under legislation dealing with statutory holidays (100%), and further increased by the premium provided for by the law on Sunday working (70%), in such a way that they are entitled to total pay of 270% of their basic rate."

At a subsequent meeting with the Minister of Labour on 23 December 1999, CLP finally agreed to the Minister's proposal in order to "show goodwill and re-establish social dialogue".

The Minister stressed that he was in favour of continued social dialogue, and called on the social partners to include this matter in more broadly-based discussions on work organisation. He indicated that if the employers applied the provisions he had announced, the need for an interpretative law would become less urgent. So as not to prejudge the outcome of forthcoming negotiations between the social partners, the Minister has asked the bodies dealing with the draft legislation to halt their deliberations for the time being.

Commentary

The issue of payment for working on public holidays falling on a Sunday, which initially appeared to be of little consequence, prompted strong reactions among the social partners, who accused one another of not keeping their promises. The industrial relations climate had been extremely tense since September 1999, and there was concern that social dialogue could well break down.

With this stumbling-block now out of the way, one can only hope that social dialogue can be re-established, and that problems will once more be resolved in the spirit of the famous "Luxembourg model". (Marc Feyereisen)