Luxembourg: Latest working life developments – Q4 2017

A law amending provisions for special leave, possible increase of the minimum wage in 2019, and disagreement on elements of the collective agreement in the banking 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 fourth quarter of 2017.

New law on special leave

In December 2017, the parliament passed a law increasing special leave for parents and carers in the private sector. It is part of a European proposal for a Directive of the European Parliament and of the Council on work–life balance for parents and carers and repealing Council Directive 2010/18/EU.

Law A1082 of the Labour Code, which took effect on 1 January 2018, increases paternity leave from 2 days to 10. This amendment concerns only the private sector and the costs are covered by the state. In the public sector, Daniel Kersch, the Minister of the Civil Service and State Reform, said the introduction of time saving accounts would allow civil servants to use banked time for their needs. The General Confederation of the Civil Service (CGFP) said it would wait until the implementation of the time accounts before commenting on a possible increase in paternity leave in the public sector.

The Law changes several other types of special leave.

  • Maternity leave increases from 8 to 12 weeks for all women (the limit of 8 weeks was for non-nursing mothers).
  • In the case of a sick child, the previous law had allowed for 2 days per year until the child reached the age of 15. The new law gives more flexibility in the use of this leave by allowing 12 days in the case of child aged up to 4 years, 18 days for children aged 4 to 12, and 5 days for children aged between 13 and 18, but only in the case of hospitalisation.
  • Special leave for a wedding has been reduced from five to three days (one if it is a civil partnership).
  • Wage earner entitlement is reduced to two days off every three years for moving home (the previous law allowed two days every year).
  • Special leave in the case of the death of a child has been extended from three to five days.

Debate on increase in minimum wage

The Minister for Labour, Employment, Social Economy and Economic Solidarity, Nicolas Schmit, has proposed an increase in the minimum wage by €100 in 2019. Mr Schmit argues that, although the country’s economy is good, the net minimum wage lies below the poverty risk rate – which is unacceptable for one of the richest countries in the world. The Confederation of Independent Trade Unions of Luxembourg (OGBL) has welcomed the Minister’s initiative, stressing that it has been pushing for a structural increase in the minimum wage since 2015. OGBL also pointed out that this would reflect a better distribution of the created wealth in Luxembourg society.

However, the employer’s umbrella organisation, the Union of Luxembourg Enterprises (UEL), has stated that there are some risks with this proposition, pointing out that the minimum wage is strongly linked to housing costs in Luxembourg. It suggests the government should solve this problem first, as well as making its social policies more selective. In addition, a higher minimum wage would increase production costs in Luxembourg and reduce the employability of unqualified Luxembourg workers.

One of the major projects that the government will implement before the elections in October 2018 is the reform of the Guaranteed Minimum Wage (Revenu d’Inclusion Sociale, REVIS), increasing the role of the National Employment Agency (ADEM) in the labour market activation of guaranteed minimum wage beneficiaries.

Collective agreement in the banking sector

On 24 November 2017, the Luxembourg Association of Bank and Insurance Employees (ALEBA), the banking and insurance affiliate of OGBL (OGBL-SBA), and the Luxembourg Confederation of Christian Trade Unions – Financial Sector Employees (LCGB-SESF) informed the Luxembourg Bankers’ Association that they intend to reject some elements of their collective agreement. The trade unions have sent their joint demands to the employers, asking for an initial meeting in January 2018.

Comment

Mr Schmit’s proposal to increase the minimum wage in 2019 will be a major element in the public debates leading up to the legislative elections in October 2018.

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