New measures aim for better anticipation and management of restructuring

In the context of measures introduced to promote employment retention, a system for the anticipatory management of restructuring has recently been put in place in accordance with the law of 22 December 2006. The objective of this system is to centralise information on redundancies and to introduce a new phase prior to the collective redundancy phase, involving the establishment of a job retention plan by the social partners encompassing alternative solutions to redundancies.

In accordance with the decisions taken by the tripartite coordination committee on 28 April 2006 (LU0606019I), the regulations relating to the introduction of an anticipatory management system for restructuring have recently come into force. The procedure provides for the centralisation of information on redundancies for economic reasons, the triggering of negotiations between the social partners in certain circumstances, the establishment of a plan involving company measures aimed at avoiding redundancies and the monitoring of such a plan’s implementation.

Centralisation of information

The new regulations introduce the requirement that employers who regularly employ at least 15 workers should issue notification of any redundancies made for reasons other than those relating to an individual employee.

The centralisation of information is operated by the secretary of the Committee for the Economy (Comité de conjoncture). This committee is a tripartite structure set up under the Ministry of the Economy and Foreign Trade (Ministère de l’Économie et du Commerce extérieur). The main role of the committee, which is chaired by either the Minister of the Economy and Foreign Trade or the Minister of Labour and Employment, has until now been to inform the government council of changes in the Grand Duchy of Luxembourg’s economic situation. The bodies represented in the committee are as follows: the National Statistical Institute (Service central de la statistique et des études économiques, Statec), the Ministry of Labour and Employment (Ministère du travail et de l’emploi), the Labour Inspectorate (Inspection du Travail et des Mines, ITM), the Federation of Luxembourg Industrialists (Fédération des industriels luxembourgeois, FEDIL), the two main trade union confederations – 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 Federation of Small and Medium-sized Enterprises (Fédération des Artisans), the Employment Administration (Administration de l’emploi, ADEM), the Luxembourg Trade Confederation (Confédération luxembourgeoise du commerce, CLC), the General Finance Inspectorate (Inspection Générale des Finances) and the Central Bank of Luxembourg (Banque Centrale du Luxembourg, BCL). The committee meets once a month.

Triggering of negotiation procedures

The administration office is in charge of drawing up a monthly statement of notifications received, and of submitting it to the members of the Comité de conjoncture for information and discussion purposes. On the basis of that statement, the committee can, at the initiative of one of its members, invite the social partners at the appropriate levels to begin discussions with a view to establishing a job retention plan within the company concerned. In general, it may do this at any point; however, it is required to do so as soon as there has been notification of five redundancies in a company within a reference period of three months, or of eight redundancies within a reference period of six months in the same company.

If the committee deems it necessary – and to enable it to make a well-informed decision on the appropriateness of drawing up a job retention plan – the office or an expert appointed by the office has the option of carrying out an in-depth examination of the company’s economic situation. However, the scope of this examination still needs to be defined by means of a Grand-Ducal regulation.

Establishment of job retention plan

The primary objective of the job retention plan is to outline the solutions envisaged by the company aimed at avoiding redundancies. Such solutions could include the following measures:

• reorganisation of working hours;

• voluntary part-time work;

• use of time savings account system;

• part-time unemployment;

• outplacement;

• temporary loaning of manpower;

• early retirement;

• reduction of working hours with the possibility of participating in continuing training or retraining during the time which has been liberated.

The Comité de conjoncture has also been entrusted with the task of providing support during the implementation and monitoring of job retention plans.

Outstanding issues

The law which introduces these new procedures has just come into existence. Therefore, it is still too early to assess the effects of its provisions, especially given that many of the points made during the debates on the bill were not reflected in the final text of the legislation. Among these points is the fact that without any inspection procedure or system for penalising non-adherence by employers, the success of the scheme will largely depend on the goodwill of employers. In addition, there is a question mark over the extent to which, in practice, the office of the Comité de conjoncture, or its appointed expert, will have access to the economic and financial information enabling them to evaluate a company’s situation. There is also some unease associated with the fact that in light of the new roles which the law has assigned to the committee, it will from now on have to make controversial decisions; this is in contrast to its present role, which is limited to making suggestions to the government.

Odette Wlodarski, Prevent