Luxembourg: Social partners begin renegotiating collective agreement in banking sector

In June 2017, the social partners in Luxembourg’s banking sector agreed on a one-year extension to the 2016–2018 collective agreement. Soon after, discussions started for the 2018–2020 collective agreement, with the sector’s three main trade unions in November putting forward new demands, as did the employers’ organisation, the unions themselves having differing opinions.

Background

The social partners in the banking sector – the Luxembourg Association of Bank and Insurance Employees (ALEBA), the Luxembourg Confederation of Independent Trade Unions/the Union of Banks and Insurance (OGB-L/(SBA) and the Luxembourg Confederation of Christian Trade Unions (LCGB), plus employer organisation the Luxembourg Bankers’ Association (ABBL) – agreed on 22 June 2017 to extend their 2014–2016 collective agreement (PDF) by one year.

The agreement, after six months of negotiations, allowed the provisions of the previous collective agreement to be kept, with the addition of a performance-related bonus and a single premium of €400 for employees. However, in November, with discussions for the next multiyear agreement underway, the three unions partially rejected the proposed collective agreement, putting forward new demands to the ABBL.

Modernising the collective agreement

Since June 2017, the four working groups have been meeting to prepare for the complex negotiations on the next multiyear collective agreement. The ABBL wants to ‘modernise’ the collective agreement by changing some of its fundamental provisions, including reducing the number of job categories from six to four by scrapping or merging the two categories covering low-qualified employees and taking more skills into account.

ABBL would also like:

  • review of starting salaries for each of the proposed four categories;
  • eliminate the automatic promotion mechanisms for seniority, in favour of advancement exclusively related to competence;
  • reorganisation of pay mechanisms, in particular the various bonuses such as performance-related and seniority bonuses with the aim of cutting the wages bill.

The parties have discussed their positions in the working groups, with a key point being the definition of a salary increase. While unions advocate a wage increase of 2% in 2018, then 1.5% in 2019 and 2020, the ABBL is arguing for increases based only on performance and merit.

Working time claim

The LCGB want to introduce a right to ‘switch off from work’, based on the French law which encourages businesses to find ways of avoiding intrusion into employees’ private lives by defining periods when mobile business devices can be switched off and no company emails to be sent. The LCGB raised this demand at a press conference on 17 January, highlighting the sharp rise in the number of employees suffering from burnout. The OGB-L/SBA, which has been fighting for to ensure compliance with working time legislation, believes that the problem of burnout could be reduced if employers respected the new legislation on flexible working time. The OGB-L/SBA quoted the Minister of Labour, Employment and Immigration, Nicolas Schmit, at a meeting on 17 January, as saying that ‘one of the reasons for changing the law on working time was primarily to preserve the health of the employees; work overload being one of the first causes of burnout’.

The unions have also criticised the fact that too many employees are considered to be executives (cadres) by the employers, enabling the banks to keep them out of the scope of the collective agreement and, in particular, its provisions on overtime pay.

Social partner reactions

While the ABBL remains discreet about its position during the preparatory phase of the negotiations, the unions have, until now, formed a common front. Laurent Mertz, Secretary General of ALEBA said it was a straightforward matter (PDF): ‘modernising without selling out’. However, the LCGB disagree with ABBL’s proposals, saying, ‘they are drastically reducing the level of wage guarantees in the current collective agreement.’

Commentary

February’s opening negotiations will be closely watched as the banking sector occupies an important place in the economy of the country, especially as the collective agreement in the insurance sector – a close companion to banking – was also rejected in November 2017 and must too be renegotiated.

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