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Parliamentary elections were held in June 2004, resulting in a new coalition government of the Social Christian Party (ChrA«schlech Sozial Vollekspartei, CSV) and the Socialist Party (Parti socialiste, LSAP) taking office on 1 August. It replaced the previous coalition of the CSV and the Democratic Party (Demokratesch Partei, DP), which had been in office since 1999.
Collective agreement negotiations (there are on average approximately 50 to 80 new and renewed collective agreements every year, and it is worth recording that there are currently 240 enterprise-level collective agreements and about 30 sectoral agreements) have simply addressed traditional issues, the most significant of which, in an economy with an unemployment rate of approximately 5.6%, has been salary rises of between 1% and 1.5%.
(It should not be forgotten that Luxembourg has an automatic salary indexation scheme which alone caused all salaries to rise by 2.5% in October 2005.)
As far as working hours are concerned, there have been no notable developments, if we leave to one side a few collective agreements that have made slight reductions in the statutory 40-hour working week.
Although collective agreements have been legally obliged since 1999 to comment on the enterpriseaeuroTMs training policy, efforts by the parties to maintain or increase employment and to combat unemployment, the implementation of the principle of equal treatment between men and women, and packages of further training, in practice none of these matters have been addressed. In 2005, too, the social partners by and large simply relied on legal provisions and formulated clauses setting out principles.
Salary negotiations covering the public sector and affecting 40,000 people resulted in an agreement that was described as satisfactory by the General Public Sector Confederation (ConfA©dA©ration GA©nA©rale de la Fonction Publique, CGFP).
This agreement will apply for the period 2005-2006, and provides for a 1% increase in 2005 and a 0.8% increase in 2006.
It has been described both by the private-sector trade unions and by the representative of the Union of Luxembourg Enterprises (Union des entreprises luxembourgeoises, UEL) as being adapted to the current economic situation, and capable of serving as a point of reference in negotiations of collective agreements in the private sector.
As all actors in economic and social life were more or less involved in the Presidency of the European Union during the first six months of 2005, there have been very few legislative developments.
A law of 1 July 2005 amending the law of 25 July 2002 concerning incapacity for work and labour market reintegration (see LU0107169F) has corrected a number of imperfections; the most important feature is the way in which the redeployment procedure is introduced.
Employees used to have to apply for total invalidity pension, and re-training was only considered when the application was turned down. In practice, it is now clear that workers prefer to exhaust their entitlements to sickness benefit before they apply for invalidity benefit. The new law aims to accelerate matters: from now on, the re-training procedure will be triggered when, in the course of a check, the Social Security Medical Control Board takes the view that the employee demonstrates that he or she was unable to carry out his or her previous job.
The Medical Control Board will forward the papers to the joint committee, which will ascertain whether the employee meets the criteria for re-training, and the papers will then be sent to the company medical officer, who will examine the employee. If the worker demonstrates that he or she is unable to return to his or her previous job, the joint committee will decide whether to conduct an internal or external re-training exercise.
A law of 3 August 2005 relating to sport states that trainers and players hired by an accredited federation or affiliated club may no longer be deemed to be salaried employees unless they carry out this work regularly as their principal employment, and the payment received does not annually exceed 12 times the minimum wage for skilled workers (i.e. EUR 21,649.32).
Those who meet these criteria are therefore not bound by contract law, and the parties may freely negotiate what their contracts say.
Since the law of 30 June 2004 concerning the collective employment relationship was introduced in October 2002 ( LU0211102F, tensions in the trade union world have abated after a period of ten years when feelings had been running high. An outcome of this legislation is that the Minister of Labour has recognised the Luxembourg Confederation of Independent Trade Unions (OnofhA¤ngege Gewerkschafts-Bond LA«tzebuerg, OGB-L) and the Luxembourg Confederation of Christian Trade Unions (LA«tzebuerger ChrA«schtleche Gewerkschafts-Bond, LCGB) as representative trade unions at national level.
Moreover, by a decree of the Minister of Labour and Employment dated 2 March 2005, the Luxembourg Association of Banking and Insurance Staff (Association luxembourgeoise des employA©s de banque et daeuroTMassurances, ALEBA) has been recognised as a trade union that has justified its representativeness in a sector that is particularly important for the economy, that is to say private-sector workers in banking and insurance.
This is the only case of recognition so far awarded by the Ministry of Labour.
In October 2005, the OGB-L and the Luxembourg Guild of Air Traffic Controllers (Guilde luxembourgeoise des contrA´leurs de la circulation aA©rienne, GLCCA) signed a cooperation agreement whereby the Guild will participate in the unionaeuroTMs meetings and will be involved in its work.
There were no strikes in 2005, and it is therefore appropriate to focus on only a few other important incidents.
In January 2005, 800 employees protested outside the DuPont de Nemours company, which was attempting to cause social disruption by seeking to abolish six public holidays, and at the same time cutting starting salaries by 15% and other salaries by 1%.
On 29 May 2005, over 1000 blue-collar building workers demonstrated in the city of Luxembourg to express their disgust of their employers who are benefiting themselves by slowing down negotiations on the renewal of the collective agreement that expired on 31 December 2002. They have demanded a 5% increase over the next three years.
There have been no developments in the field of workersaeuroTM participation, although it is worth noting that on 21 January 2005, and after receiving opinions from the UEL and the Joint European Secretariat of the OGB-L and LCGB trade unions, the government lodged a government bill complementing the European Company Statute. The social partnersaeuroTM comments, which did not consist of fundamental opposition and dissent, were all taken into account.
The bill is seen as a follow-up to the law of 28 July 2000 concerning the establishment of European Works Councils, and it accordingly includes solutions that were agreed as relevant and helpful when that law was passed (LU0101157F).
On 18 March 2005, the Chamber of Labour (Chambre de Travail) published an opinion which, although it contained a number of comments and criticisms, articulates its agreement with the government bill.
On 25 March, the Chamber of White-Collar Workers in the Private Sector (Chambre des EmployA©s PrivA©s, CEP-L) issued a fairly critical opinion of the bill.
In particular, the CEP-L stresses that if the European Company Statute formula turns out to be of economic benefit for Luxembourg, it must not be so to the detriment of workers.
Specifically, the Chamber calls for the government bill to be amended in line with the rules governing both the setting up of the special negotiating group and employeesaeuroTM participation in managing the Company Statute.
In the absence of opinions from the Chamber of Commerce (Chambre de Commerce) and the Chamber of Trades (Chambre des MA©tiers) a vote on the bill is most unlikely before the second half of 2006.
There have been no significant developments connected with European Works Councils in 2005.
In January 2005, the OGB-L, the LCGB and the CGFP met several members of the government in January 2005 with a view to persuading them that the Bolkenstein Directive, known in some quarters as the Frankenstein Directive because of the catastrophic social fall-out that is predicted, is unacceptable to them, although it could be utilised to encourage enterprises to relocate more, and it has been observed that such instances of liberalisation cut the number of jobs and lower the level of workersaeuroTM conditions of employment.
It goes without saying that the decision to carry out amendments to this bill was warmly welcomed by those involved.
The Luxembourg government has opted for the restrictions offered by the European Union in respect of labour migration from new Member States.
It has not yet announced if it plans to lift these restrictions in 2006.
No collective agreements deal with the issue of corporate social responsibility.
A genuine public debate on the issue has been launched by the CEP-L within the framework of a cycle of conferences entitled Corporate Social Responsibility (la ResponsabilitA© Sociale des Entreprises) that took place during 2003.
The full range of interventions has been brought together in a Thematic Dialogue (Dialogue thA©matique) (http://www.cepl.lu/ceplweb/communiqués/2004/c003-15-01.htm) illustrating the variety of possibilities in the field.
The Minister of Labour and Employment tried to show in the course of these conferences that corporate social responsibility cannot be simple be considered a fashionable phenomenon, but may be seen as a way of raising productivity.
In particular, the government stressed the fact that humankind is not just a resource.
Luxembourg has little experience of atypical work. The standard employment relationship involves contracts of indefinite duration.
According to a study of temporary employment in Luxembourg during 1999-2003, this kind of work accounts for 1.6% of the country's total employment. The sector is heavily dominated by French workers from the frontier zones (70%), who are followed by Belgians (7.7%) and Germans (1.6%) from the frontier zones; Luxembourgers account for only 1.7%.
The number of casual employees rose from 3737 in 1999 to 7665 in June 2003; 77.3% of them are men.
Assignments totalled 9205 in 1999, compared with 14,480 in 2003.
Although Luxembourg is still some way from the employment rate for women of 60% set out in the Lisbon Strategy, there has continued to be quite steady progress: in 2004, 37.5% of salaried employees were women, that is to say an employability rate of 52%.
Since 1988, the number of salaried women increased by 4.4%, compared with 3.8% for men.
In response to this development, there has been a sharp increase in demand for daytime child-minding facilities.
The WomenaeuroTMs Working Committee (ComitA© du Travail FA©minin) is aware of the problem, and in July 2005 called for the establishment of a aeuro~daytime parentaeuroTM status.
In 2003, there were 849 daytime parents who mainly carried out their work under the control of charitable organisations like the Red Cross and Caritas with the help of state subsidies.
It is not planned to set up a daytime parentaeuroTMs status in the sense of a genuine self-employed job, but rather as a kind of aeuro~transitory occupationaeuroTM.
People who do this work have to undergo training lasting 120 hours, and must in future qualify for the benefits given to all salary earners (i.e. membership of the social security scheme, a minimum wage, and unemployment benefit should they lose their jobs.
In January 2005, Luxembourg received a sharp shock when TDK discovered that sales of video cassettes were in free fall to the advantage of digital devices, and announced that it wanted to dismiss 230 of its 630 employees.
In the end, negotiations of the social plan had to be conducted in the National Conciliation Office (Office National de Conciliation, ONC). They stimulated a substantial disagreement between the two trade unions involved: on the one hand, the OGB-L negotiated for an intelligent restructuring with a view to losing no jobs, while on the other, the LCGB opted for increased redundancy payments for the 123 individuals who were finally dismissed. The latter approach won the day, and an additional payment of EUR 1600 for every year of service was eventually made.
Following a report presented in November 2004, the government proposed raising the minimum wage by 2% as from 1 January 2005.
This increase was based on movements in real salaries during 2002 and 2003, and affects 18% of salaried employees working in the Grand Duchy.
As from 1 October 2005, all salaries, pensions and benefits have been increased by 2.5% under the automatic salary indexation scheme; so that employees aged 18 will qualify for the full minimum wage of EUR 1503,42.
Throughout 2005, the employersaeuroTM sustained demand for a part abolition of the automatic indexation system prompted predictable responses from the three main trade unions, which are automatically opposed to the demand.
Since December 2004, the National Tripartite carefully scrutinised the competitiveness situation in Luxembourg on the basis of a report drawn up by the French Professor Lionel FontagnA©.
In November 2005, after a large number of meetings, the afore-mentioned Tripartite was able to draw up its action plan in line with the Lisbon Strategy. It is called National Pact for Innovation and Full Employment (Pacte national pour laeuroTMinnovation et le plein emploi), and contains 24 guidelines designed to open the way for greater competitiveness in Luxembourg. Two large chapters are devoted to the direction of economic policy and of employment policy.
The plan was presented to the Chamber of Deputies on 16 November 2005, and was approved with the inclusion of a few specific alterations.
A few days later, the National Tripartite met once more to find solutions to the tension characterising a labour market where the employers have promised to create a further 1000 apprentice posts, and where the Prime Minister has said that there will be no attack either on the current law relating to dismissal or on the benefits given to unemployed workers.
Lastly, it should be reported that at the General Meeting of the Union of Sickness and Maternity Insurance Funds (Union des Caisses de Maladies, UCM), the majority outvoted the trade unions and decided that, starting from 2006, only 90% of the cost of a consultation with the doctor would be reimbursed, compared with 95% at present.
In his statement on government priorities in October 2005, the Prime Minister made it quite clear that the good times were over, and that it was now necessary to pull in the belts in order to tackle a draft national budget with a deficit of 1.8% of GDP.
Unemployment has been rising steadily over the last ten years or so. It now stands at 5.9%, a figure that one would previously have said was unimaginable.
The year 2006 could well become widely known as a year of austerity in which a number of social acquis, particularly in the field of social security, will come under attack.
It is even possible that the holy cow of automatic indexation could be modified: this will not take the form of abolition, but of a restriction on a certain basic tax.
Lastly, it cannot be ruled out that 2006 will see the birth to one of the Labour MinisteraeuroTMs beloved children: a proper Labour Code, which has been in the process of being drafted for the last half-dozen years.
(Marc Feyereisen)