Working life in Luxembourg

Notes: Values for real GDP per capita are chain-linked volumes (based on 2010 data; €). The employment rate for men and women is the annual average as a percentage of the active population aged 20–64 years, and the youth employment rate is the annual average as a percentage of people aged 15–24 years. GDP, gross domestic product.

Sources: Eurostat [sdg_08_10], for real GDP per capita, calculation LISER; [lfsi_emp_a], for employment rate by sex and age (data extracted on 23 April 2024).

Unemployment rate

Notes: The unemployment rate for men and women is the annual average as a percentage of the active population aged 15–64 years, and the youth unemployment rate is the annual average as a percentage of people aged 15–24 years.

Source: Eurostat [lfsa_urgan] (data extracted on 23 April 2024)

Economic and labour market context

Luxembourg’s gross domestic product (GDP) per capita was almost three times higher than the EU27 average in 2022. With growth of almost 2.3% in 2019, Luxembourg’s economy is one of the strongest in the EU.

On 31 December 2023, Luxembourg had 672,050 inhabitants. The proportion of foreigners living in the grand duchy was high. On the same date, foreign residents accounted for 317,678 people, representing 47.3% of the total population.

Source: Statec, 2023a

The labour market remains very active, as, in addition to the 288,918 workers resident in Luxembourg, 227,623 cross-border workers cross the Belgian, French and German borders every day to work in Luxembourg (December 2023).

Employment situation 2021–2023

Note: People with a job in domestic employment in Luxembourg.

Source: Ministry of Social Security, General Inspectorate of Social Security (IGSS), 2023 (calculations by Luxembourg Institute of Socio-Economic Research (LISER))

The growth rate of total domestic employment between 2021 and 2022 (December) was 3.1%. For cross-border employment, it was 3.6%, and for the employment of Luxembourg residents (Luxembourgish and foreigner), it was 2.8%. The growth rate was lower between 2022 and 2023 (December) : 1.4% for all domestic employment, 1.7% for cross-border employment and 1.1% for the employment of Luxembourg residents.

In December 2022, 15,760 unemployed residents were registered with the National Employment Agency (Agence pour le développement de l’emploi, ADEM) as available for employment (ADEM, 2023a). This was a decrease of 3.9% compared with December 2021 (ADEM, 2023b). In 2022, the unemployment rate stood at 4.8% (adjusted for seasonal variations). To observe similar values, we have to go back to the end of 2008 and the beginning of 2009. A total of 18,198 unemployed residents were available for employment as of 31 December 2023 (unemployment rate of 5.5%), this represented an increase of 2,438 people (15.5%) compared with 31 December 2022. The latest data state that the number of resident jobseekers registered with ADEM was 17,654 on 31 March 2024 (unemployment rate of 5.6%), an increase of 2,322 (or 15.1%) compared with March 2023.

Legal context

All labour legislation regarding employer representation, trade union representation and collective bargaining is included in the Labour Code. The legal working week is 40 hours, which can be extended to 48 hours. However, there was a major change in the Labour Code in 2016 concerning working time regulation, where a temporarily valid system of reference periods was replaced by a permanent one. This system enables the reference period to be extended up to four months under certain conditions and with certain constraints, or even up to 12 months by collective bargaining. In practice, this reform makes it possible to increase weekly working time beyond the established hours, provided that it remains less than 48 hours per week on average over a period of four months, or more depending on collective agreements.

Furthermore, the law reforming employee representation in companies progressively entered into force in 2016, and a reform of parental leave came into force on 1 December 2016.

Finally, the law of 25 April 2019 amending the Labour Code extended the minimum duration of statutory holidays to 26 working days per year, irrespective of the age of the employee – that is, one day more than before, to which is added a statutory public holiday on 9 May (Europe Day).

Industrial relations context

The concept of the ‘Luxembourg model’ is often referred to when discussing social dialogue or labour relations within the grand duchy. The model is of a social dialogue structure and culture capable of settling disagreements, and of bringing the main players from different backgrounds together to reach consensus on what measures will enhance the country’s economic and social well-being. This dimension continues to resonate greatly among those involved in social dialogue at every level. Another characteristic of Luxembourg’s social dialogue is its traditionally tripartite dimension, involving trade unions, employer organisations and the government. The state is regarded as a social partner in its own right. Most of the important agreements reached at national level – for example, on inflation control, budget balance, corporate competitiveness and the labour market situation – are negotiated by all three parties. Up to 2010, Luxembourg’s tripartite model was not questioned (Thill and Thomas, 2010). The first serious breach of tripartite dialogue happened in April 2010, when the Tripartite Coordination Committee (Comité de coordination tripartite) announced the failure of discussions about the competitiveness of Luxembourg’s economy, employment policies and public finances to result in agreement. However, the government, which has led the country since December 2013, has emphasised its commitment to social dialogue and aims to restore tripartite coordination. After signing a bilateral agreement with unions (in November 2014) and another with employer representatives (in January 2015), the government encouraged the social partners to return to the country’s former tradition of tripartite consultation (Eurofound, 2015). Despite the government’s commitment, social dialogue at national level has been slowing down since 2016. Several bipartite meetings were held, but there was no national tripartite bargaining on the agenda. It was only on 30 June 2019 that a tripartite meeting concluded with new agreements in the steel sector. Several tripartite meetings took place during the COVID-19 crisis to discuss the management of the pandemic and the implementation of measures to moderate the effects of wage indexation.

Trade unions, employer organisations and public institutions play a key role in the governance of the employment relationship, working conditions and industrial relations structures. They are interlocking parts in a multilevel system of governance that includes European, national, sectoral, regional (provincial or local) and company levels. This section looks at the main actors and institutions and their role in Luxembourg.

Public authorities involved in regulating working life

The Ministry of Labour, Employment and the Social and Solidarity Economy (Ministère du Travail, de l’Emploi et de l’Économie sociale et solidaire, MTE) has two areas of influence: employment policy, and labour law and industrial relations. The ministry designs and directs the implementation of policies, ensures their overall coordination and prepares legislation.

The Inspectorate of Labour and Mines (Inspection du Travail et des Mines, ITM) works under the authority of the ministry. Its role is to monitor working conditions and protect employees who have an employment contract, excluding administration officials.

The Labour Tribunal (Tribunal du travail) has a court magistrate, who is the president of the court, and two assessors: one chosen from among the employers and the other from among the employees. The tribunal is competent in matters of employment contracts, apprenticeship contracts, supplementary pension schemes and insolvency insurance. The courts of appeal, which fall under the Supreme Court of Justice (Cour supérieure de justice), are competent in matters of appeal against the rulings of the Labour Tribunal.

Health and safety issues are mainly dealt with by the Department of Occupational Health (Division de la Santé au Travail) of the Ministry of Health (Ministère de la santé). This department is responsible by law for the control and coordination of the functioning and organisation of occupational health services; it also serves as an appeal body for employers and employees in the event of disputes about doctors’ opinions. It cooperates with the ITM.

ADEM is governed by the MTE (Labour Code, Article L. 621-1). Its competence extends throughout the territory of Luxembourg. It has seven regional offices. A reform was introduced in 2011 to help Luxembourg to meet the challenges of the current economic and social context and effectively help jobseekers to find employment.

Representativeness

The Collective Employment Relationships Act (Loi sur les relations collectives de travail) of 30 June 2004 introduced and specified the criteria that determine the representativeness of a trade union (Labour Code, Articles L. 161-3 and L. 161-4). Thus, as soon as a trade union meets the legal criteria for representativeness, whether at national or sectoral level, it is entitled to conclude collective bargaining agreements. There are two kinds of representativeness, which can be at general national level (Labour Code, Articles L. 161-4 and L. 161-5) or at sectoral level in a sector that employs at least 10% of the private sector employees in the country (Labour Code, Articles L. 161-6 and L. 161-7). Unions are representative when they have received a minimum share of the votes within the Chamber of Employees (Chambre des salariés) in the latest social elections: 20% at national level and 50% within the sector. Article L. 161-4 describes the general national representativeness of a union in terms of its capacity to support a major labour dispute at national level.

It is necessary to point out a recent important development. In January 2023, the Administrative Court began to study the sectoral representativeness of the Luxembourg Association of Banking and Insurance Employees (Association luxembourgeoise des employés de banque et d’assurance, ALEBA), withdrawn in 2021 by Minister Dan Kersch at the request of the Luxembourg Confederation of Independent Trade Unions (Onofhängege Gewerkschaftsbond Lëtzebuerg, OGB-L) and the Luxembourg Confederation of Christian Trade Unions (Lëtzebuerger Chrëschtleche Gewerkschafts-Bond, LCGB). The banking syndicate is calling for the minister’s order to be rescinded. The final decision refused to recognise the representativeness of ALEBA.

There are no statutory regulations setting out the criteria for the representativeness of employer organisations. Their representativeness is based on mutual recognition.

Trade unions

About trade union representation

Article 11 of Luxembourg’s Constitution guarantees employees the freedom to join a trade union. The current legislation that applies to unions (based on the law of 30 June 2004 regulating labour relations) was included in the Labour Code (Article L. 161-3). Employees are organised on a voluntary basis into a number of trade unions, whose principal aim is to negotiate collective bargaining agreements and to defend the interests of trades and professions. It should be noted that unions are not established in companies or establishments, as the only existing employee representatives at this level are elected employees. However, these representatives may be union members.

Trade union density in Luxembourg decreased from 42% in 2002 to 32% in 2018 (based on Organisation for Economic Co-operation and Development (OECD) data). During this period, the absolute number of union members increased, but unions were not able to keep pace with the rapid increase in overall employment generated by Luxembourg’s strong economic growth. Unions are still well established in a number of sectors (the public sector, manufacturing), but union presence and collective bargaining coverage is weak in other sectors (commerce, catering and hotels, business services). At the same time, trade unions continue to exert significant political influence through tripartite institutions and their participation in public policymaking.

Trade union membership and trade union density, 2010–2019

Notes: * Proportion of employees who are members of a trade union. ** Based on administrative data on the aggregate membership of the main confederations organising blue- and white-collar employees, and independent unions of financial and managerial staff, clerical workers and white-collar employees, in the private and public sectors. This information was obtained from trade union websites, European Industrial Relations Observatory (EIRO) and the European Trade Union Confederation. Active membership is estimated based on Belgian data on membership among retired workers; OECD and AIAS, 2021. *** Trade union membership of employees was derived for the total union membership and adjusted, if necessary, for trade union members outside the active, dependent and employed labour force (i.e. retired workers, self-employed workers, students, unemployed people). n.a., not available; OECD, Organisation for Economic Co-operation and Development.

Main trade union confederations and federations

Luxembourg’s trade unionism is marked by structural pluralism. Two of the largest trade union confederations (LCGB and OGB-L) are recognised as nationally representative unions and are mainly active in the private sector. One other large confederation is active in the public sector (the General Confederation of Civil Servants (Confédération Générale de la Fonction Publique, CGFP). Important unions also exist at sectoral level. These include ALEBA, in the banking and insurance sector. ALEBA was recognised as representative at sectoral level, but this is no longer the case.

Main trade union federations and confederations

Note: n.a., not available.

On 13 March 2019, about 526,000 employees and retired workers were invited to vote to elect representatives at the Chamber of Employees, and active employees were invited to elect staff delegations, which are similar to works councils. Both elections are held every five years in Luxembourg. Elections for staff delegations are organised in the companies, while elections for the Chamber of Employees are organised at national level on the basis of a postal vote. In total, 3,071 firms submitted their procedures (ITM, undated): 2,542 when majority voting applied and 529 when proportional voting applied. The OGB-L and the LCGB were the two most popular trade unions, with 23.7% and 14.0% of the vote, respectively. ALEBA received 3.93% of the vote. The next workplace election was scheduled to be held in March 2024.

Employer organisations

About employer representation

Employers are organised on a voluntary basis in a number of professional federations, and there is a system of guild chambers. Affiliation to the guild chamber is mandatory for all private individuals or legal entities established in the grand duchy as craftspeople. This is also the case for the Chamber of Commerce (Chambre de Commerce du Luxembourg, CDC), which is an institution of public law, encompassing all companies, except those in agriculture and the craft industry, that have their own guild chambers. At present, there are three chambers for employers: the Chamber of Commerce, the Chamber of Trades (Chambre des Métiers) and the Chamber of Agriculture (Landwirtschaftskammer Luxemburg). Chambers have the statutory right to be consulted by the public authorities on all social and economic issues affecting their members’ interests. They also have the right to submit proposals for legislation. In certain policy areas, such as statistics and vocational training, they even function as public administrative bodies.

There have been no significant changes within employer organisations in recent years. However, some important changes to the heads of the largest employer organisations occurred in 2014 (Union of Luxembourg Enterprises (Union des Entreprises Luxembourgeoises, UEL), the Luxembourg Bankers’ Association (Association des Banques et Banquiers, Luxembourg, ABBL) and the Chamber of Trades), with a new generation of entrepreneurs joining them.

Employer organisations – membership and density, 2012–2019 (%)

Note: * Percentage of employees working in an establishment which is a member of any employer organisation that is involved in collective bargaining. n.a., not available.

The largest employer confederation is the UEL, representing private sector companies. The UEL has eight member organisations (including the Chamber of Commerce and the Chamber of Trades), covering about 35,000 employers and about 80% of all employees. The UEL was founded in 2000 through the formalisation of an existing liaison committee of sectoral business organisations. The UEL signed the rare economy-wide agreements that mainly implement European framework agreements.

Within the UEL, the main organisation is the Luxembourg Business Federation (Fédération des industriels luxembourgeois, FEDIL), which represents companies in construction, manufacturing and business services. FEDIL is affiliated to BusinessEurope, and its members cover about 25% of the national workforce.

There is no rivalry between the seven main employer organisations, as they operate in different sectors and cooperate closely because they are affiliated to the UEL.

Main employer organisations and federations

Notes: * Only collective bargaining to implement some EU directives. ** Only a few sectoral federations are affiliated to the employer organisation, but not the organisation as a whole.

Tripartite and bipartite bodies and concertation

Luxembourg’s social model is characterised by tripartite consultation, which brings together the government, representatives of employers and representatives of workers.

It was introduced in the 1970s, at a time when it was necessary to reorganise the iron and steel industry and deal with social problems. This tripartite model kept thousands of steel workers from becoming redundant, made the steel industry fit for the global economy and introduced social policy measures aimed at keeping the unemployment rate very low. Since 1977, the Tripartite Coordination Committee has been used several times by the government to get consensus on crucial reforms (for example, the implementation of the first national action plan on employment as part of the European Employment Strategy in 1998, and the introduction of the unique working status in 2006).

The financial crisis of 2007–2008 fundamentally altered the tripartite model because the deterioration in public finances meant that employers and employees had to take on more of the financial burden of social dialogue. Moreover, trade unions and employer organisations disagreed on the causes of the crisis and wanted to implement different solutions. Employers wanted to reinforce competitiveness by reducing costs, whereas trade unions wanted to strengthen economic demand. The financial crisis led to the failure of tripartite dialogue in 2010. In 2015, after signing one bilateral agreement with employer representatives and another with unions, Luxembourg’s government encouraged the social partners to return to the country’s former tradition of tripartite consultation. In 2019, for example, the unions gave reasons for wanting to continue the dialogue, particularly in the steel sector, and wanting to resume negotiations. A difficult resumption led to an agreement in principle at a tripartite meeting in December 2020. The Economic and Social Council (Conseil économique et social) plays a role in cooperation and consultation along with the Economic Committee (Comité de conjoncture). The government consults the committee on projects aimed at changing legislation or regulations that affect different sectors or the whole national economy. The government may also consult the committee on specific issues to obtain its advice. The committee also coordinates the involvement of the social partners in the European Semester consultation process. Other tripartite bodies are the Permanent Committee of Labour and Employment (Comité permanent du travail et de l’emploi), the Women’s Labour Committee (Comité du travail féminin) and the Observatory of Industrial Relations and Employment (Observatoire des relations professionelles et de l’emploi), which are all part of the Ministry of Labour.

Main tripartite and bipartite bodies

Workplace-level employee representation

The main channel for employee representation at workplace level is the staff delegation (délégation du personnel), which is directly elected by all employees in companies with more than 15 employees (Labour Code, Article L. 414-4).

The law of 23 July 2015 reforming social dialogue within companies, which was adopted in the same month, changed the regulation of employee representation. In 2019, the staff delegation became the single body representing the interests of employees and was granted the powers that joint committees previously had, particularly with regard to co-determination once the threshold of 150 employees was exceeded. The employee representatives are elected for five years. The number of employee representatives depends on the number of employees in the company (Labour Code, Article L. 412-1).

The staff delegation is there to ‘safeguard and defend the interests’ of employees. It makes every effort to prevent and mitigate any individual or collective conflict that could emerge between the employer and the workforce. The staff delegation can, in the absence of any conflict resolution, refer to the ITM any complaint or observation relating to the application of legal, regulatory, administrative or contractual provisions (such as those set out in a collective agreement) that affect the working conditions and protection of employees in their workplace. Article L. 414-4 of the Labour Code enumerates the topics that must be submitted to the staff delegations for information and/or consultation and provides for some formal requirements.

According to the Labour Code, management is obliged to inform the staff delegation (and the equality delegate) about the structure and the situation of the undertaking (or establishment), and forecasts of changes to its activities. This information should be provided during meetings with the management of the establishment (see Labour Code, Article L. 414-4).

Employee representatives are elected every five years – through social elections (élections sociales) – by all employees in the workplace. They can be nominated by unions or by at least 5% of all employees. The last elections were held in March 2024.

The legislation sets out a minimum number of meetings for the staff delegation (six a year).

The law of 23 July 2015 makes the delegation the only body that represents employees’ interests, fulfilling functions such as presenting complaints or suggestions to companies on issues such as safety at work, part-time work, harassment and training. The size of the delegation depends on the number of employees in the company, ranging from one member for companies with 15–25 employees to 25 members for companies with between 5,101 and 5,500 employees.

Staff delegates benefit from increased paid leave and more time for training to fulfil their duties. In companies with at least 250 employees, some delegates (délégués libérés) are exempted entirely from work to fulfil their staff representation duties. The employer provides the delegation with information about the company, including developments in its activities, its financial outlook and foreseen changes in its employment situation. In companies with at least 150 employees, this happens either once a month or at the request of the delegation; in smaller companies, it happens at least annually. Staff delegations have the co-decision rights of the previous joint committees; they also have co-decision rights on vocational training issues (Labour Code, Article L. 414-2). Staff delegations in companies with fewer than 150 employees have no co-decision rights on these topics, but they are informed and consulted, and they do not have to agree with the employer.

Furthermore, in companies with at least 51 employees (instead of 150 employees, as was the case before the reform), staff delegates have more opportunities to seek the advice of external counsellors or have experts to assist them on technical matters. The employer pays the experts’ fees. Another innovation is the right to use mediation in the event of disputes about the application of the Labour Code in relation to staff delegations.

The central concern of employment relations is the collective governance of work and employment. This section looks at collective bargaining in Luxembourg.

Bargaining system

Collective agreements must be negotiated between the social partners in accordance with certain formalities and filed with the ITM for approval by the Minister of Labour. There are two types of collective agreements:

• standard collective agreements negotiated between an employer or a group of businesses (or their representatives) and a trade union, which are legally binding between signatories
• collective agreements extended by a grand-ducal regulation and applicable to all employers and employees of the profession concerned

• The most important levels of negotiation are sectoral and company levels. The relative importance of the two levels of agreement varies from sector to sector. Sectoral agreements exist in sectors such as banking, insurance, private security, construction and all related crafts, and the hospital and social sector. These single-industry agreements cover 100% of the workforce and are extended by the Ministry of Labour. However, many sectors have no industry-level agreements. In 2018, 59% of all employees had their terms and conditions of employment regulated by collective bargaining (Statec, 2022a), which is quite high despite the high level of decentralisation of collective bargaining and the weakness of collective bargaining in some sectors. Unless stipulated otherwise in the collective agreement, senior management are not subject to the working and salary conditions established in the collective agreement that applies to the staff. Employees whose salary is significantly higher than the salaries paid to the staff covered by the collective agreement are considered to be senior management. This salary has to be related to authoritative and effective management powers, independence in the organisation of work and flexibility in working hours.

   

Wage bargaining coverage

There is no national collective bargaining on wages. However, there is a mechanism for wage indexation. Salaries and wages (including the minimum wage) are adjusted in line with the cost of living. When the consumer price index increases or decreases by 2.5% during the previous quarter, salaries are automatically adjusted by the same proportion. The consumer price index and its impact on the sliding wage scale are published monthly by the national statistics body (the National Institute for Statistics and Economic Studies (Statec)). The employer must increase all wages by 2.5%. Sectoral collective agreements may include salary rates linked to pay grade and a coefficient. At company level, collective agreements on wages are often concluded for 12 to 24 months.

Collective wage bargaining coverage of employees

Sources: Eurofound, European Company Survey 2013/2019 (including private sector companies with establishments with more than 10 employees (NACE codes B–S), the question in the survey was a multiple choice question and multiple responses were possible); Eurostat [earn_ses10_01], [earn_ses14_01], [earn_ses18_01] (including companies with more than 10 employees (NACE codes B–S, excluding O), with a single answer for each local unit); OECD and AIAS, 2021; Statec, 2019.

The latest national data about collective bargaining coverage are based on the EU Structure of Earnings Survey 2018. Based on this survey, Statec estimates that 59% of employees are covered by a collective labour agreement. According to Statec (2022a), a large difference exists between the public sector (100%), education (92%) and social and care activities (75%), and some activities in the private service sector, such as retail (38%), hotel and restaurant activities (21%) and technical and scientific activities (14%). The coverage differs with the size of the company, from 30% (for companies with 10 to 49 employees) to 79% (for companies with over 1,000 employees). The global rate based on the Structure of Earnings Survey includes the public sector. If public sector employees are excluded, the collective bargaining coverage rate stands at 53% in Luxembourg (Statec, 2022a).

Bargaining levels

Intersectoral agreements are rare and never cover issues such as wages or working time. They mainly implement EU-wide agreements concluded by the social partners, for example on telework or harassment in the workplace.

The most important levels of negotiation are the sectoral and company levels. Sector-level agreements initially apply only to companies that belong to the employer organisations that have signed the agreement, but are often extended by the government to the entire sector. The relative importance of the two levels of agreement varies from sector to sector. Sectoral agreements exist, for example, in sectors such as banking, insurance and private security. However, many sectors have no industry-level agreements.

Levels of collective bargaining, 2022

Articulation

The issue of articulation is quite theoretical in Luxembourg, as where a sectoral collective agreement exists it is extremely rare to find a company with its own company-level collective agreement. Therefore, collective agreements at both levels rarely have to be coordinated. However, if the two levels of collective agreement exist, the principle of favourability towards higher-level agreements applies. Company-level agreements cannot provide poorer employment and wage conditions than sector-level agreements. If collective agreement provisions are worse than the legal minimum requirements, or limit rights provided by a sector-level agreement, they are declared null and void and have no effect.

Timing of bargaining rounds

There are no major bargaining rounds at national level. Collective bargaining on wages exists in some sectors and at company level over various periods. In the banking sector and insurance sector, the social partners generally conclude collective agreements for a period of three years. At company level, collective agreements on wages are often concluded for shorter periods (the law provides that the minimum duration of an agreement is six months and the maximum is three years).

Coordination

The most important form of wage coordination is the wage indexation mechanism. In April 2006, the social partners and the government decided in the Tripartite Coordination Committee to modulate the application of the wage indexation mechanism for 2006–2009. The modulation postponed the periodic adjustment of wage levels in line with inflation by up to seven months. This was justified by concerns over economic competitiveness following the rapid increase in oil prices. During this period, wages increased by less than general prices. However, wages are normally indexed to changes in the cost of living. Therefore, when the consumer price index falls or rises, they are in principle adjusted in the same proportion. The aim is to preserve the purchasing power of employees. Other than that, there is no coordination of wage bargaining, either between or within bargaining levels.

Extension mechanisms

Sectoral collective agreements initially cover only those companies that belong to the employer organisations that have signed the agreement. However, the social partners at sectoral level nearly always ask the government to extend them to the entire sector. In 2022, two sectoral agreements were declared to be of ‘general obligation’ by the Ministry of Labour and Employment. There are no other voluntary mechanisms of extension or application of the terms of collective agreements.

Derogation mechanisms

There is no possibility of derogating from collective agreements in order to pay wages below the collectively agreed level. Derogation is possible only to pay wages above the collectively agreed level. Furthermore, according to the favourability principle, collective agreements must comply with the provisions set out in law.

Expiry of collective agreements

In order to denounce a collective agreement (always concluded for a fixed term), in part or as a whole, the social partners must request its termination with respect to the notice period established in the collective agreement (a maximum of three months). Then, parties must open new negotiations, which must in any case begin at the latest six weeks before the agreement or the provisions to be renegotiated come to term. The terminated collective agreement stops being valid as soon as a new agreement enters into force or, at the latest, on the first day of the 12th month following the termination request, but the social partners may agree on a new expiry date. If there is no request for the termination of the collective agreement (or some of its provisions) before its end date, it is extended for an undetermined period. It may subsequently be terminated while respecting the notice period set out in the agreement.

Peace clauses

According to Article L. 162-11 of the Labour Code, during the period of validity of the collective agreement, the contracting parties must refrain from taking any actions that may potentially compromise their compliance with the agreement. They must also refrain from taking part in any strike or lockout on a subject regulated by the collective agreement.

Legal aspects

Luxembourg’s Constitution states: ‘Trade union freedoms are guaranteed. The law shall organise the exercise of the right to strike.’ The right to commence strike action is subject to the observation of preliminary conciliation procedures. Every industrial dispute arising in a company must be referred – before any stoppage or cessation of work – to the National Conciliation Office (Office National de Conciliation, ONC). When the conciliation process has been exhausted, the ONC draws up a memorandum stating the points still in dispute. Once non-conciliation is declared, the parties in conflict may still refer the dispute to arbitration by a chairperson nominated by the government. Once the arbitrator is designated, both parties have the freedom to accept or reject them. If they accept the arbitrator, they are obliged to accept the decision of the arbitrator. Otherwise, if attempts at conciliation and arbitration prove unsuccessful, strike action may be initiated lawfully, and an employee’s participation in such a strike does not constitute grounds for dismissal. Furthermore, striking on issues regulated by a collective agreement is not allowed during the period of validity of a collective agreement. Apart from strikes, which are extremely rare in Luxembourg, other industrial disputes consist mainly of demonstrations. No data on strikes in Luxembourg have been published for several years.

Dispute resolution mechanisms

Collective dispute resolution mechanisms

The industrial relations culture is based on trust and discussion between the social partners. A report by the Centre for Population, Poverty and Public Policy Studies (CEPS)/Instead (Rey, 2010) stresses the low number of industrial disputes in Luxembourg. All four studies quoted by CEPS/Instead show an absence of collective action and strikes. The report explains that this ‘social peace’ is the result of various means of dispute resolution, such as conciliation facilitated by the ONC (see the section ‘Legal aspects’). If the conciliation before the ONC is unsuccessful, it is possible for the social partners to request the designation of an arbitrator.

Individual dispute resolution mechanisms

An employer or employee may ask the ITM to resolve an individual industrial dispute. If the parties agree to accept the recommendation resulting from conciliation, the dispute is considered resolved (Labour Code, Article L. 652-1). However, such initiatives are rare, and no data are available.

Use of alternative dispute resolution mechanisms

In its annual report, the Ministry of Labour provides data about the number of cases of collective disputes examined by the National Conciliation Office.

Number of cases using alternative dispute resolution mechanisms, 2012–2021

Note: ONC, National Conciliation Office.

Source: Annual reports published by the Ministry of Labour 

‘Individual employment relations’ refers to the relationship between the individual worker and their employer. This relationship is shaped by legal regulation and by the outcomes of social partner negotiations over terms and conditions. This section looks at the start and termination of the employment relationship and entitlements and obligations in Luxembourg.

Start and termination of the employment relationship

Requirements regarding an employment contract

According to the Labour Code (Article L. 121-4), it is compulsory to conclude a contract in writing, detailing the nature and conditions of the work relationship, either before or on the first day of employment. The minimum working age is 16. Otherwise, there are restrictions on the employment of workers under the age of 18.

An employer recruiting a new employee in response to a lasting need for personnel to participate in the normal and permanent activity of the business generally must conclude a permanent employment contract (contrat à durée indéterminée, CDI ) with the employee. The employer can only use a fixed-term contract (contrat à durée déterminée, CDD) in exceptional cases (that is, in response to the specific needs of the business), according to the Labour Code (Article L. 122-1).

Dismissal and termination procedures

The Labour Code contains provisions regarding the termination of employment contracts and protection against dismissal. However, some collective agreements may provide greater protection against dismissal than that provided by law.

In addition to termination of the contract during the trial period (if stipulated in writing), there are four different types of termination of a permanent employment contract: dismissal with notice, dismissal without notice for gross misconduct, resignation and termination by mutual consent.

Any employer employing at least 15 people must notify the Economic Committee of any termination/redundancy taking place for reasons not linked to the employee’s aptitude or attitude. Such notification must be given at the latest when the employee is notified of the termination.

Any employer with 150 employees or more who contemplates dismissing any employee must, before making a decision, interview the employee concerned.

All categories of workers are protected against dismissal, in the sense that their employment relationships may only be terminated in accordance with the specific provisions of employment legislation. If the employer wants to dismiss an employee, a letter of notice of dismissal must be sent by registered mail.

Certain employees or categories of employees benefit from specific additional legal protection as employee representatives.

Entitlements and obligations

Parental, maternity and paternity leave

A parental leave reform was enacted in 2015 and came into force in 2016. The law of 3 November 2016 reforming the system of parental leave entered into force on 1 December 2016. Its aim was to improve work–life balance and encourage parents in general, and fathers in particular, to make greater use of parental leave. Because of this law, both parents are able to take parental leave until the child is 6 years old (instead of 5 years old under the previous system). Furthermore, on 1 January 2018, paternity leave was increased from 2 to 10 days, under legislation passed in December 2017. The law, aimed at improving work–life balance, also introduced more flexibility for parents to use leave to take care of a sick child, but reduced some permissible leave for personal reasons.

The law of 22 December 2023 abolishes the condition of affiliation to Luxembourg social security at the time of birth or reception of the child. Concretely, the amendment includes the children of the employee's spouse or partner born of a previous relationship, in line with the EU definition of ‘family members’.

Statutory leave arrangements

Sick leave

The Labour Law specifies the obligations of the sick employee as well as his or her rights (Labour Code, Article L. 121-6). Social security legislation (Book I of the Social Security Code) regulates the sickness and maternity insurance schemes.

An employer must continue to pay their employee during sick leave due to illness or an occupational accident and must do so until the end of the month during which the 77th day of sick leave occurs, during a reference period of 12 successive months. This reflects the principle of the ‘continuation of pay’ (Lohnfortzahlung).

As of the month following the 77th day of sick leave, the National Health Fund takes over from the employer in paying sickness benefits to the employee on sick leave. From this point on, the employer no longer has to pay a salary to the employee while benefits from the fund are being paid.

Retirement age

Since the reforms introduced in 1996 and 1998 the public pension system has covered all individuals economically active in the public and private sectors. The pension scheme comprises disability, retirement and survivor pensions. As part of the reform of the single statute in 2008 (Loi du 13 mai 2008 portant introduction d’un statut unique), aiming to merge the statute of the worker with the statute of the employee, a single pension scheme was created for the whole private sector: the National Pension Insurance Fund (Caisse nationale d’assurance pension).

The retirement benefit has two components: a flat-rate amount dependent on years of coverage and an earnings-related amount. The pension system is financed through contributions shared equally between the employer, the employee and the state. The rate, half of which is payable by the employer and half by the employee, amounts to 16% of assessable income. The state contributes a further 8% of total assessable income (European Commission, 2007). The statutory retirement age is 65. An early retirement scheme becomes available after 40 years of contributions, which allows an individual to claim their pension from the age of 57. However, the law of 21 December 2012 on pension reform, which entered into force on 1 January 2013, introduced changes to ensure the sustainability of the public pension system, reducing the attractiveness of early retirement and changing how the pension is calculated.

Occupational system

Companies may offer their employees a pension, choosing between three types of plans: pension funds, group insurance or book reserve schemes. As reported by the OECD, ‘pension funds may be established as Sociétés d’épargne-pension à capital variable (SEPCAVs), Associations d’épargne-pension (ASSEPs) or other types of pension funds. The SEPCAV is similar to an investment trust, while the ASSEP is a new type of company inspired by mutual insurance associations and organised like a partnership’ (OECD, 2009).

Voluntary occupational pension plans can be defined benefit plans or defined contribution plans, or a hybrid of the two. According to the OECD (2009), in 2006, ‘approximately half of all privately managed pension funds financed defined benefit plans and the other half defined contribution schemes. However, defined benefit plans, which are typically linked to final salary earnings, covered approximately 87% of pension plan members.’

For workers, pay is a reward for their work and their main source of income; for employers, it is a cost of production and a focus of bargaining and legislation. This section looks at minimum wage setting in Luxembourg and guides the reader to further material on collective wage bargaining.

In recent years, many observers of Luxembourg’s economy have worried about an excessive increase in wage costs based on the concept of nominal unit wage costs. However, the Chamber of Employees argues that Luxembourg’s nominal unit labour costs are in line with the performance of neighbouring countries and the euro zone. A report by Statec (2019) indicates that people's standard of living in Luxembourg increased steadily between 1996 and 2018. After a slight decline in 2016, it returned to the same level in 2017 as in 2015. The increase continued in 2018, when the standard peaked. If this standard of living is expressed in real terms (that is, taking inflation into account), then the median standard of living of individuals increased by 34.5% between 1996 and 2018. Compared with 2017, the standard of living rose sharply (by 10.5%) in 2018, surpassing the peak in 2015, after falling sharply (by 5%) in 2016.

Average gross annual wages of full-time workers, by economic activity (€), 2005–2022

Source: Statec, 2023a

Minimum wages

In Luxembourg, the wage indexation mechanism means that salaries and wages are adjusted in line with the cost of living. Therefore, the minimum wage can be affected by two types of adjustment (Guichet.lu, 2021).

1. Adjustment of social minima: Like other social minima, the minimum wage can be adjusted every two years according to the change in the average level of remuneration. When the average level of remuneration has increased relative to the minimum social wage, the minimum wage can be increased to partially or completely fill the gap. For this purpose, the government has to submit a report every two years to the Chamber of Deputies on the change in general economic conditions and incomes. Where appropriate, the employer must increase the wages of minimum-wage employees so that their wages match the new rate.
2. Salary indexation: Wages, salaries and social benefits (including the minimum wage) are indexed to the trend in the cost of living. When the consumer price index has increased or decreased by 2.5% in the previous semester, wages, salaries and social benefits are in principle adjusted in the same proportions. The consumer price index and its impact on the sliding wage scale are published monthly by STATEC. The employer must, if necessary, increase the wages of all employees by 2.5%.

On 1 January 2024, the statutory minimum monthly wage reached €2,570.93 for non-qualified employees over the age of 18. Qualified employees (skilled workers) over the age of 18 receive 120% of the national minimum wage, as there was no automatic increase.

The full minimum wage is paid from the age of 18. Employees aged 17–18 years old receive 80% of the adult rate for non-qualified employees. Employees aged 15–17 years old receive 75% of that rate.

Minimum wage, 2015–2024 (€)

Note: These values are correct as of 1 January of each year.

Sources: Ministry of Social Security, General Inspectorate of Social Security (IGSS) 2015 to 2024, Ministry of Social Security, 2024.

Working time is ‘any period during which the worker is working, at the employer’s disposal and carrying out his activity or duties, in accordance with national laws and/or practice’ (Directive 2003/88/EC). This section briefly summarises the regulation of and issues regarding working time, overtime, part-time work and working time flexibility in Luxembourg.

Working time regulation

According to the Labour Code, standard work time for employees is 8 hours a day or 40 hours a week. Collective agreements can only stipulate more favourable provisions.

By law, the employer may determine a reference period (usually one month) during which working time may be flexible. To do this, the employer must set up either a working hours plan (plan d’organisation du travail) or introduce flexible working hours (flexitime (horaire mobile)).

Before implementing the working hours plan, the employer must consult with the staff delegation or, if there is no delegation, with all the staff concerned. If the employer’s proposal is refused twice in a row, the employer may refer the case to the ITM to enable an agreement to be reached.

Maximum working hours cannot exceed 10 hours a day or 48 hours a week. The employer must also grant minimum rest periods to their employees of 11 consecutive hours within each 24-hour period, and at least one rest period of 44 consecutive hours within each 7-day period. Where the daily work time exceeds six hours, each salaried worker is entitled to at least one rest period, whether paid or not.

The law of 23 December 2016 on the organisation of working time, which entered into force on 1 January 2017, has increased working time flexibility (see the section ‘Working time flexibility’).

Overtime regulation

If overtime is worked, the maximum working time cannot exceed 10 hours a day or 48 hours a week. Any working time exceeding the normal working time (40 hours a week or 40 hours a week on average within the reference period) is considered overtime.

In order to benefit from an increase in normal working time, the employer must notify the ITM of any overtime being worked.

The employer must also send a statement of hours worked by employees to the ITM at the end of each authorised period. Before any overtime is worked, the employer must:

• consult the staff delegation or, failing this, the employees that will work overtime
• send an overtime notification to the ITM

In principle, the employer must compensate any employees who work overtime by granting them 1.5 hours off for every hour of overtime worked. This time off in lieu may be, at the employer’s discretion, either taken as compensatory time off or put into a time savings account. The employer is free to choose between these two methods of compensation. Exceptionally, payment may be made to the employee for overtime worked at a rate of 1.4.

Part-time work

Part-time work is regulated by law. The Labour Code (Article L. 123-1) considers part-time work to be work amounting to less than 40 hours a week or less than the weekly working time set out in collective agreements.

Even if part-time employees have a work schedule inferior to the standard work schedule, they can work more than the daily and weekly hours stipulated in their contract, provided that:

• the weekly work schedule calculated over a four-week reference period does not exceed the duration of weekly working hours stated in the contract
• the actual daily and weekly working times do not exceed the standard daily and weekly working times stated in the contract by more than 20%

Any employer wishing to recruit an employee on a part-time basis must conclude an employment contract either before or on their first day of work. The contract must respect certain obligations regarding form and content. It can be either a permanent contract or a fixed-term contract. In addition, the contract is subject to specific legal provisions. Part-time employees must have the same rights granted to full-time employees under the applicable law or collective agreement.

About 16.5% of the workforce was employed part-time in 2019 in Luxembourg, lower than the EU27 average (17.8%). Part-time employees are mainly female. The rate of female part-time employment in Luxembourg as a percentage of total employment reached 35.1% in 2017, falling slightly (to 29.9%) in 2019, which is above the EU27 average of 29.4%. From 2012 to 2019, the rate of male part-time employment increased from 4.3% to 5.1%, which was below the EU27 average of 7.8% in 2019.

People employed part-time in Luxembourg and the EU27 (% of total employment), 2013–2023

Note: Data relate to people aged from 15 to 64 years old.

Source: Eurostat [lfsi_pt_a], data extracted on 7 May 2024

Night work

According to the Labour Code (Article L. 211-14), night work (work carried out between 22.00 and 06.00 in all sectors excluding hotels/restaurants; work carried out between 23.00 and 06.00 in hotels/restaurants) is not prohibited; nor is it subject to authorisation from the ITM. However, the employer must ensure that the normal working time for night workers does not exceed 8 hours on average over a 24-hour period calculated over 7 days.

The following workers are considered night workers:

• those who work at night for at least 3 hours of their daily working time
• those who work partly at night in accordance with an agreement concluded between social partners at a national or sectoral level or a collective agreement and for more than 25% of their annual working time.
• adolescents, who are authorised to work until 22.00 for businesses and services operating continuously (adolescents may not work during the night, i.e. for a period of 12 consecutive hours including the compulsory interval between 20.00 and 06.00). Employers can ask for an exemption regarding night work for adolescents who are in professional training in healthcare; socio-educational sectors; hotels/restaurants if they are doing an apprenticeship (they are authorised to work until 22.00 at the latest); armed forces; cake shops and bakeries.

The definition of and payment for night work may vary for certain types of workers, in particular:

• employees, apprentices and trainees in the hotel/restaurant business
• 'mobile' employees (road transport)
• adolescents

Pregnant or breastfeeding women may be exempted from night work.

The employer has to pay employees additional compensation for night work, at a minimum rate of 15% of regular pay for all sectors if a collective agreement is applicable (the exact rate of the increase is set by the agreement) or 25% from 01:00 onwards in the hotel and restaurant sector (either in compensatory leave or in cash).

Shift work

There is no legal definition of shift work, but the European Working Time Directive stipulates that shift work refers to ‘any method of organising work in shifts whereby workers succeed each other at the same work stations according to a certain pattern, including a rotating pattern, and which may be continuous or discontinuous, entailing the need for workers to work at different times over a given period of days or weeks’.

Weekend work

In principle, Sunday work (from 00:00 to 00:00) is prohibited for all employees and apprentices. But it is authorised for certain categories of employees, in certain sectors of activity and for specific tasks that cannot be carried out during the week.

The employer has to notify the ITM if they require an employee to work on a Sunday. Each time an employee works on a Sunday, the employer must grant them either their standard hourly pay plus a 70% premium for each hour worked, or compensatory rest and a 70% premium for each hour worked.

Rest and breaks

Where the daily work time exceeds six hours, each salaried worker is entitled to one or more rest periods, whether paid or not. However, the law does not stipulate the length of the rest period. The daily rest period is 11 uninterrupted hours. Each employee is entitled to a weekly rest period of 44 uninterrupted hours that should include the Sunday.

Working time flexibility

As mentioned, the standard working time for salaried workers is 8 hours a day and 40 hours a week. The employer may, after consulting with the staff delegation, determine a reference period during which working time may be flexible. In this case, the employer must set up either a working hours plan or introduce flexible working hours (flexitime). It is necessary to determine a reference period before setting up a plan or flexitime.

The law of 23 December 2016 on the organisation of working time entered into force on 1 January 2017. Its key aim is to enable employers to extend the reference period used to calculate the duration of work from one to four months, if they provide supplementary leave for employees. An employer can therefore decide to extend the reference period without having to negotiate an agreement with the relevant trade unions. The maximum duration of weekly working time is, depending on the reference period, 44 or 45 hours for employees working 40 hours per week. But the law provides some compensation: employers must allocate additional days of leave to employees based on the duration of the reference period: from 1.5 days, for a reference period of between one and two months, to 3.5 days, for a reference period of between three and four months. Furthermore, an employee must be informed three days before any change in their working time schedule. However, the social partners may negotiate a collective agreement to extend the reference period up to 12 months, and negotiate compensation that is appropriate to the needs of the business and the employees.

Flexitime, or flexible working, allows salaried workers to organise their daily working hours and time in accordance with their personal needs, as long as they respect operational needs, co-workers’ reasonable needs and the maximum working time allowed (10 hours a day and 48 hours a week).

According to the law of 23 December 2016, the decision to establish flexitime, and its scheduling, content and modalities, including amendments, should be determined by collective agreement or by mutual agreement between the employer and the staff delegation or, failing that, the employees concerned (Labour Code, Article L. 211-8).

The opportunity for employees to adapt the start and end of their working day according to their personal needs is quite limited in small companies (41%). However, more than half of the workforce can do so in companies with over 250 employees (54%).

Maintaining health and well-being should be a high priority for workers and employers alike. Health is an asset closely associated with a person’s quality of life and longevity, as well as their ability to work. A healthy economy depends on a healthy workforce: organisations can experience loss of productivity through the ill health of their workers. This section looks at psychosocial risks and health and safety at work in Luxembourg.

Health and safety at work

The ratio of accidents per 1,000 employees decreased between 2008 and 2018, from 37.3% to 24.6%.

Accidents at work resulting in four days’ absence or more per 1,000 employees and percentage change from previous year (2008–2020)

Note: n.a., not available.

Sources: Eurostat [hsw_mi01] and [lfsa_eegaed]

According to national statistics provided by the Occupational Accident Fund (Association d’assurance accident, AAA), the frequency of occupational accidents causing an absence from work of at least one day has decreased steadily: it was 11.08% in 2000; 7.75% in 2005; 6.28% in 2010; 5.18% in 2015; 5.09% in 2016; 4.81% in 2017; 4.78% in 2018; 4.57% in 2019; 3.40% in 2020; and 3.53% in 2021 (AAA, 2018, 2019, 2020, 2021, 2022).

Psychosocial risks

According to the ITM, there is currently no specific regulation addressing psychosocial risks at work, and statistics are not available. However, employers are legally obliged to evaluate psychosocial risks and to take the necessary measures to ensure the protection and security of employees’ mental and physical health (Labour Code, Article L. 312-1). On the other hand, the law of 29 March 2023 introduced into the Labour Code a system for protecting against moral harassment and sexual harassment in the workplace.

Skills are the passport to employment; the more highly skilled an individual, the more employable they are. People with good skills also tend to secure better-quality jobs and better earnings. This section briefly summarises Luxembourg’s system for ensuring skills and employability and looks at training provision.

National system for ensuring skills and employability

The state plays a very active role in the provision of continuing training as a whole. It enhances legislation in this area to improve collective and individual access, co-fund company investments and facilitate the governance of the training system.

The employers’ professional chambers and the employees’ professional chambers are also involved in shaping education and vocational training policy through the recommendations they make. Professional chambers are strongly involved in upskilling.

The National Institute for the Development of Continuing Vocational Training (Institut national pour le développement de la formation professionnelle continue) is a public institution under the supervision of the Ministry of Education, Children and Youth (Ministère de l’Education nationale, de l’Enfance et de la Jeunesse). Its tasks are to promote lifelong learning within economic networks and unite all social and economic stakeholders in developing continuing training.

There are currently several sector-specific bodies that are involved in delivering continuing vocational training. Private sector companies that are legally based in Luxembourg and that mainly carry out their activities there can obtain training support worth 20% of the sum invested annually. The state’s financial contribution increases to 35% for participants’ salary expenses if certain criteria are met on the date on which the training plan starts; the employee must have either no recognised diploma and less than 10 years’ service in the business, or a recognised diploma and either have more than 10 years’ service or be aged over 45.

Training

The responsibilities for regulating and developing training are shared between the Ministry of Labour and the Ministry of Education, Children and Youth. The Ministry of Labour supervises the public employment service, ADEM. The Ministry of Education, Children and Youth supervises the Department of Adult Education (Service de la formation des adultes) and the Vocational Training Service (Service de la formation professionnelle). The National Centre for Continuing Vocational Training (Centre national de formation professionnelle continue) also plays a role in providing professional training.

The principle of equal treatment requires that all people – and, in the context of the workplace, all workers – have the right to receive the same treatment, and will not be discriminated against on the basis of criteria such as age, sex, disability, nationality, race and religion.

According to the Labour Code (Articles L. 253-1 to L. 253-4), any direct or indirect discrimination on the grounds of religion or belief, disability, age or sexual orientation, or real or supposed racial or ethnic origin is prohibited. A law of June 2016 includes discrimination related to gender reassignment in discrimination on the ground of gender.

This applies to conditions for accessing employment, self-employment and occupations, including selection criteria and recruitment conditions, whatever the branch of work. It applies to all levels of the professional hierarchy and promotions. The law covers:

• conditions of access to employment, including selection criteria and recruitment conditions, whatever the sector of work and for all levels of the professional hierarchy and promotions
• access to all types and all levels of vocational guidance, vocational training, advanced vocational training and retraining, including practical work experience
• employment and working conditions, including dismissals and pay
• membership of, and involvement in, an organisation of workers or employers, or any organisation whose members are in a particular profession, including the benefits provided by the organisation

According to the Penal Code (Articles 454 to 457), the sanctions for breaches of discrimination are imprisonment for between eight days and two years, and/or a fine of between €251 and €25,000.

The public body that is entrusted with ensuring equality at work is the Centre for Equal Treatment (Centre pour l’égalité de traitement), set up by the laws of 28 and 29 November 2006. It started work in 2008. The centre carries out its missions independently, and its purpose is to promote, analyse and monitor the equal treatment of all people without discriminating on the basis of race, ethnic origin, sex, sexual orientation, religion or beliefs, disability or age.

Equal pay and gender pay gap

Under the law of 15 December 2016, the main provisions ensuring equal pay for equal work appear in the Labour Code (Articles L. 241.1 to L. 241.11). These provisions complement and reinforce the law of 8 December 1981 relating to the principle of equal opportunities for men and women.

For access to employment and training leading to employment, differential treatment based on sex does not constitute discrimination where, because of the nature of the particular occupational activities concerned or the context in which they are carried out, it constitutes a genuine and determining occupational requirement, provided that the objective is legitimate and the requirement is proportionate.

The legal provisions prohibit any direct or indirect references to the sex of the employee in employment offers or notices and in criteria for professional aptitude tests.

Any legal or contractual provision violating the principles of equal treatment is deemed to be null and void. All employers must ensure equal remuneration for men and women who do similar work or work of equal value.

The unadjusted pay gap between men and women has narrowed: it was 10.7% in 2006, 8.6% in 2012 and 1.4% in 2018. According to the results of the Structure of Earnings Survey 2022, in contrast to all other EU countries, the pay gap between all men and women workers was -0.7% in favour of women (Statec, 2013b). However, an analysis of the pay gap between men and women should not conceal the fact that there is a very large gap between people of the same gender. The proportion of people with low gross hourly wages (less than €25.00) is greater among men (55.4%) than among women (48.7%), while the proportion of people with medium (€25.00 to €50.00) and high (€50.00 to €75.00) wages is greater among women. The situation reverses again for very high salaries (€75 or more), which concern 3.3% of men and 1.9% of women. On the other hand, if we take the average annual salary of a full-time equivalent (FTE), including end-of-year bonuses, rather than the hourly wage, as the basis for calculation, the gap remains in men's favour (+4.5%), given that a small percentage of men benefit from higher bonuses than women. Finally, hourly and annual FTE wages do not take into account the fact that women work fewer hours on average than men (Statec, 2023b).

This trend is due in particular to a policy of reducing gender inequality. In March 2016, the government launched a plan for equality between women and men for 2015–2018. As part of this plan, the Government Council passed amendments to the Labour Code on 23 September 2016. The main change was the introduction of the men–women equal pay principle within the Labour Code, which beforehand was only mentioned in a grand-ducal regulation. The bill also amended the Labour Code in two ways: it simplified the procedure for receiving financial help to hire a worker of the underrepresented gender; and it specified the conditions for receiving financial assistance through the ‘positive actions’ programme.

Quota regulations

There are currently no specific quotas to promote the membership of women on supervisory boards. However, to reach the goal of having 40% of economic decision-making posts occupied by women by 2019, the Ministry of Gender Equality and Diversity (Ministère de l’ Égalité des genres et de la Diversité), in partnership with the Ministry of the Economy (Ministère de l’Économie), launched a related scheme in 2009 and appealed to the private sector to do more to improve gender equality.

The graph below shows the change in the situation in Luxembourg between 2011 and 2021.

Percentage of women members of boards of directors in non-executive positions, 2011–2021

Note: UE, European Union.

Source: Paperjam, 2022

Employers

• Union of Luxembourg Enterprises (UEL)
• Luxembourg Business Federation (FEDIL)
• Luxembourg Bankers’ Association (ABBL)
• Luxembourg Confederation
• Federation of Artisans
• Horesca
• Chamber of Commerce
• Chamber of Skilled Trades and Crafts

Trade unions

OGB-L and its affiliates

• Luxembourg Confederation of Independent Trade Unions (OGB-L)
• Education and Science Syndicate (SEW)

Other unions

• Luxembourg Confederation of Christian Trade Unions (LCGB)
• General Confederation of Civil Servants (CGFP)
• Fédération des Universitaires au Service de l’État Enseignement (Féduse)
• National Trade Union of Teachers (SNE)
• National Federation of Railway Workers, Transport Workers, Civil Servants and Employees of Luxembourg (FNCTTFEL-Landesverband)
• Secondary and Higher Education Teachers’ Union (APESS)
• General Federation of the Municipal Administration (FGFC)
• Luxembourg Association of Banking and Insurance Employees (ALEBA)
• Neutral Union of Luxembourg Workers/Union of Private Sector White-Collar Workers (NGL-SNEP)
• Joint European Secretariat of the OGB-L and the LCGB (SECEC)

Government

• Ministry of Labour
• Ministry of Social Security

Other links

• Inspectorate of Labour and Mines (ITM)
• National Employment Agency (ADEM)
• Economic and Social Council (CES)
• National Institute for Statistics and Economic Studies (Statec)
• Luxembourg Institute of Socio-Economic Research (LISER), formerly Centre for Population, Poverty and Public Policy Studies (CEPS)/Instead

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