Breakdown of conciliation talks on civil service pensions

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A referendum conducted in May 1998 by Luxembourg's civil service trade unions rejected by a three-quarters majority a conciliator's proposals for resolving the long-running civil service pensions dispute. The dispute-resolution procedure now provides for mediation before the President of the Council of State.

Since mid-1997, public sector trade unions and the Government have been at loggerheads over the latter's proposal for reform of the civil service pension scheme (LU9706111F). Negotiations failed in January 1998 (LU9802146N) and the largest public sector union, the General Public Sector Confederation (Confédération Générale de la Fonction Publique, CGFP ) triggered a procedure that might ultimately lead to a strike. However, the parties were obliged to undergo a conciliation procedure before the president of the Tribunal d'Arrondissement (the civil court of first instance).

A series of meetings between the parties in the public sector and the conciliator were held over a four-month period (LU9805159N) and the latter submitted a proposal to the former in May 1998

The conciliator's proposal

Under the conciliator's proposal, civil servants in post when the proposed reform comes into effect would find that the value of their pension, which can now be as high as 83.33% (ie five-sixths) of final salary, would gradually reduce over a transitional period before settling at 72%. Those civil servants who met statutory conditions for entitlement to a pension when the reform came into force would retain their entitlement to a maximum five-sixths pension. The 72% rate would apply to staff who took up employment shortly before the reforms came on stream.

Each civil servant affected by the transitional period would have an individual ceiling on benefits, based on years of service both under the old scheme and after the reform comes into effect. An individually calculated replacement rate would provide for a pension increase of 2.31% of final salary for each additional year of service voluntarily worked after the normal retirement age of 60 (55 in the case of the armed forces).

In most cases, civil servants would thus qualify for a pension based on five-sixths of final salary as long as they worked beyond the age of 60, with the necessary additional months of service varying from zero during the first few years of the transitional period to 60 months at the end of it (ie in 35-40 years' time).

The position of the trade unions

The CGFP conducted a referendum of its members to establish their views about the conciliator's proposal for a settlement. The union argued that the "formula clearly reflects goodwill on the part of the author, but it does not change the basic issue: the retroactive violation of legally enshrined statutory rights and the Government's manifest breach of confidence."

When sending the voting papers out to members, the CGFP made its position crystal clear: it is legitimate to defend acquired social rights - after all, they are no more than a quid pro quo for civil servants' restricted rights and the constraints and specific attributions that are part and parcel of the civil service's statutory regime or flow from it.

The CGFP also stated that, out of its concern to reach an agreement, it would be prepared to be accommodating towards a new scheme, but it was not prepared to give up any rights already acquired or in the process of being built up, particularly as there was no financial emergency justifying such desperate measures. It is not, according to CGFP, a trade union's job to engage in such "treacherous" conduct, particularly when its leadership had no mandate to behave in such a way. In the light of the conciliator's proposal, the union "wanted to give those directly affected a voice by involving them in decisions about to be taken, especially as it is not a matter of weighing up improvements in their situation but, on the contrary - and for the second time in five years - of expressing their views about conditions of employment being unilaterally and arbitrarily dismantled to their disadvantage".

Given these conclusions, the CGFP called on its members to vote against the conciliator's proposals, and at the same time to mandate the union to continue with the procedure and engage if necessary in trade union action that might culminate in a strike.

The members' response

Some 19,000 people were balloted by the CGFP and 74.5% of those replying turned down the conciliator's proposal. The CGFP has not revealed the number of votes cast.

Similar support was reported by: the General Federation of Local Authority Employees (Fédération générale de la fonction communale, FGFC) - 84.11% against; the Christian Transport Workers' Trade Union (Syndicat des travailleurs du transport chrétiens, SYPROLUX) - 72.05% against, on a 68.86% turn-out; and the National Federation of Luxembourg Railway and Transport Workers and Civil Servants (Fédération nationale des cheminots, travailleurs du transport, fonctionnaires et employés du Luxembourg, FNCTTFEL) - 89.88% against, on a 71.21% turn-out.

The result of the referendum was described as "unequivocal".

Procedure continues with mediation

In accordance with the law, the CGFP appealed to the President of the Council of State (Conseil d'Etat), who acts as mediator in such situations, on 29 May 1998.

According to the union: "the mediation procedure will be continued until its final stage, unless the Government and its parliamentary majority have second thoughts and pull back from their disastrous policy, the source of pointless chaos and argument which has earned it the contempt of a civil service irritated beyond words by such obduracy."

For its part, the Government might have gone along with the conciliator's proposal as it took a similar line to itself.

Commentary

Without a solution being laid before the mediator, and the chances of that seem minimal at present, the issue of civil service pensions is likely to remain the top news story for some time to come. The next legislative elections are scheduled for June 1999.

The Government is coming under increasing pressure: should it defy the huge potential voting power of civil servants and assimilated grades, or should it beat a retreat?

Both parties in government - the Christian Social People's Party (Chrëschtlich Sozial Vollekspartei, CSV), and the Luxembourg Socialist Workers' Party (Lëtzebuergesch Sozialistesch Arbechterpartei, LSAP) - have probably reached a point of "no return" as there would be a very real danger of the Chamber of Deputies voting new legislation through, should the mediation procedure be exhausted.

Finally, it should be borne in mind that Luxembourg has had a new Constitutional Court (Cour Constitutionnelle) for less than a year. At some point in the future, the Court may have to deliver a judgment, in a case brought before the administrative tribunals by a civil servant, on the constitutionality of the expected pensions provisions in terms of basic principles such as "natural rights" and "the non-retroactive nature of laws". (Marc Feyereisen, ITM)

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