Economic and Social Council gives opinion on reform of collective agreements legislation

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Luxembourg's Economic and Social Council has recently responded to a government request for its opinion, with a view to reforming the Law of 12 June 1965 relating to collective agreements and of the Grand-Ducal Order of 6 October 1945 dealing with the National Conciliation Office (Office National de Conciliation).

The Government's request to the Economic and Social Council (Conseil économique et social, or CES) was made in the form of a three-chapter questionnaire dealing with: the representativeness of trade unions; the period of validity of collective agreements; and the conciliation procedure. Although representatives sitting on the CES found consensual answers to questions relating to the period of validity and the conciliation procedure, the criteria of representativeness and associated competences led to lengthy debate which, for all its intensity, failed to bring the divergent positions together. This feature is confined to analysing the question of national representativeness.

The law relating to collective agreements

The CES is a government consultative body charged with examining economic, financial and social problems, made up of 14 employer representatives, 14 employee representatives and seven independent representatives. The CES believes that the Law on Collective Agreements has conclusively established collective contractual policy as a pillar of social relations, on the grounds that it is a key instrument in the development of social relations in enterprises, in various sectors and in professional branches of the economy.

As a result, according to the CES, social progress and the distribution of wealth have evolved in an atmosphere marked by social peace, and by respecting the overall national framework within which the contractual policy pursued in enterprises and economic sectors is conducted. Without these relations between social partners at the level of collective agreements, the national-level consultation that produced the "Luxembourg model" would have been virtually impossible.

National representativeness of trade unions

For an agreement to be valid, the 1965 Law on Collective Agreements requires it to have the support of one or more of "the most representative trade union organisations" nationally; it excludes sectoral unions, company unions and enterprise and site-based employee representatives. Trade unions identify themselves as the most representative nationally through the size of their membership, their activities and their independence. Periodic tests of representativeness provided by social elections (eg for occupationally based chambers, sickness insurance funds and workforce delegates' committees) are an opportunity for measuring a union's influence, authority and impact beyond the confines of the membership. An arbitration award handed down on 10 November 1979 created a precedent in respect of trade union representativeness. Now, trade unions must first and foremost defend professional interests and represent workers who are their members; the size of the membership (penetration of 20% is required) is one factor likely to enable occupationally-based organisations to be party to a collective agreement as representative trade unions. Trade union organisations must also engage in the defence of the professional interests of, and provide representation for, members covered by the agreement (the sectoral criterion).

According to two Council of State judgments dated 18 June 1980 and 6 July 1988, a trade union's national representativeness does notipso facto flow from the simple fact that it has membership in a given sector; a trade union must justify its position by having a substantial number of members and, what is more, enjoy a degree of influence in various sectors of the economy. It is also necessary to investigate whether the contracting parties, and employees' representatives in particular, are empowered to sign agreements in such a way that they bind, or are likely to bind, a sufficiently large number of employees, and establish that the agreements can therefore be described as collective.

Suggestions made by CES members

CES members failed to come up with an agreed opinion - quite a rare occurrence. The employees' side spoke against reforming the law, as that would involve fundamentally changing the rules governing collective agreements and the philosophy underpinning contractual relations. The employees' side stresses that, although the criteria defining national representativeness need to be clarified, a new definition should not be used as a pretext for weakening national representative trade unions by introducing into legislation the notion of sectoral representativeness. By contrast, the employers argued in favour of a more fundamental redefinition of what representativeness basically means; they argued for recognition either at national level, or else limited to a sector or to a single enterprise, with any form of representativeness granting entitlement to join a pay negotiating committee.


After giving rise to numerous disputes, the fragile 1965 legislation was shattered recently when a collective agreement was signed in the banking sector with a trade union, the Luxembourg Confederation of Christian Trade Unions (Lëtzebuerger Chrëschtleche Gewerkschafts-Bond, LCGB), which enjoyed national representative status but was considered to be a minority union in this sector. By contrast, the most representative union in the banking sector, the Luxembourg Association of Bank Employees (Association luxembourgeoise des employés de banque, ALEBA), had never submitted a claim for representative status at national level.

This event triggered much unrest in a sector vital to the national economy, and was probably what led the Government to refer the matter to the CES in the hope of finding a solution acceptable to all social partners. Significantly, this particular event is no longer of any relevance as the three nationally representative unions and the sectoral union have just signed a collective agreement for the banking sector covering the period 1996-8. It is also noteworthy that certain sectors with historic traditions, such as printing and transport, boast tacit agreements between nationally representative unions and sectoral unions; these provide for a collective agreement largely negotiated by these sectoral unions to be countersigned at the appropriate moment. Lastly, and without wishing to go into the procedure in any detail, it should be borne in mind that it is not possible to start a legal strike in Luxembourg without the backing of a nationally representative trade union. Given the effectiveness of the "Luxembourg model", and the important role that representative trade unions play therein, it is difficult to imagine how, faced with a joint opinion from the CES, the Government would be tempted to make any decisive alteration to the notion of trade union representativeness at national level. (Marc Feyereisen, ITM)

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