Reactions from social partners to the 2019 government budget, the results of social elections in the private sector, and the introduction of time saving accounts in the private sector are the main topics of interest in this article. This country update reports on the latest developments in working life in Luxembourg in the first quarter of 2019.
After announcing a range of new tax measures in December 2018, the Luxembourg government officially presented its 2019 budget bill on 5 March 2019. The measures included the previously announced €100 net increase of the social minimum wage, as well as a new 19.83% increase to the overall budget for work and employment (including a significant increase for the National Employment Fund).
Reactions from the main trade unions and employer organisations were largely positive. On the employers’ side, the Chamber of Commerce welcomed the increasing investment in the employment sector, while the Confederation of Independent Trade Unions of Luxembourg (OGBL) saw the move as a positive step away from austerity measures. However, the Chamber of Commerce also assessed the budget carefully because employers fear that the additional burdens, such as the increased minimum wage, will result in a loss of competitiveness.
The trade unions highlighted that inequalities remain and requested a further 10% increase of the social minimum wage, as well as consecutive adaptations of family allocations to the median wage.
Social elections were held on 12 March to determine the new composition of both the Chamber of Employees of Luxembourg (CSL) and the staff delegations in companies with over 15 employees. The participation rate was 34%, which is nearly as low as in 2013, and 8% of votes were invalid.
Preliminary results confirmed the national representativeness of both OGBL and the Luxembourg Confederation of Christian Trade Unions (LCGB), with the trade unions winning 35 and 18 seats in the chamber respectively (out of 60 available). Compared to the 2013 elections, the OGBL lost three seats to the LCGB. [1] The remaining seats were won by the Luxembourg Association of Banking and Insurance Employees (ALEBA), the National Federation of Railway Workers, Transport Workers, Civil Servants and Employees (FNCTTFEL), and the Christian Federation of Transport Personnel (SYPROLUX).
Concerning the election of new staff delegations in 3,800 companies, preliminary results based on votes counted in 2,660 companies revealed that 25% of the staff delegations are OGBL representatives, 15% are LCGB representatives and 4% are members of ALEBA. The majority of the staff delegations (55%) are independent and not linked to a trade union.
Working time accounts allow workers to save up time in order to complete personal projects. After they were successfully introduced in the public sector in 2018, the national parliament voted on a bill to implement them – on a voluntary basis -- in the private sector on 12 March 2019. [2]
Social partners were heavily involved in the negotiation process in the private sector. The OGBL and LCGB insisted on using collective agreements to design the working time accounts, while the Union of Luxembourg Enterprises (UEL) regarded as unfortunate the additional costs and management responsibilities for companies that chose to implement the accounts.
The law stipulates that employees must have had a work contract for at least two years in order to be eligible for a working time account. Such accounts are limited to 1,800 hours, and additional holidays, late hours or up to five regular holiday days can be used to supply them. Accounts have to be requested in writing and the employer must grant the request as long as there will be no negative impact on work-related matters.
Working time accounts can be created with collective agreements or by inter-branch social dialogue agreements approved by the Minister of Labour and Employment.
With the newly elected staff representatives in companies in charge of worker participation, they also face two broader challenges that will have an impact on industrial relations in Luxembourg. First, staff representatives face increased responsibilities, missions and the suppression of works councils through the 2015 reform of social dialogue (although the impact of the reform on worker representation in general is not yet clear due to the step-by-step implementation process).
Second, staff representatives have to deal with the increasing impact that digitalisation is having on employee welfare, skills mismatches, company business strategies (including restructuring), the disappearance of jobs and professions, and the emergence of new niche jobs. While both the social partners and companies in Luxembourg seem to feel unsure about these developments, the government is pursuing digitalisation.