New initiative aims to integrate young people into employment

The creation of the employment initiation contract is among the measures introduced by the law of 22 December 2006 promoting job retention. The initiative aims to replace the employment integration internship from 1 July 2007, and represents part of the implementation of the conclusions of the Tripartite Coordination Committee, signed by the social partners in 2006. The purpose of the proposed modifications is to lessen the insecurity currently facing young jobseekers.

Initiatives targeting young people

The measures introduced by ‘Law 5611’ of 22 December 2006 (LU0610019I) promoting job retention, and especially those relating to young people, reflect what the government describes as the paradox of the Luxembourg job market: numerous jobs are created, but some people are excluded from them – mainly young people, and in particular unqualified young people. Meanwhile, more than 75% of registered jobseekers under 26 years of age have no qualifications. Accordingly, under the new employment initiation contract (Contrat d’initiation à l’emploi, CIE), which replaces the employment integration internship (Stage d’intertion en emploi, SIE) from 1 July 2007, the government plans to offer young people genuine long-term employment prospects in a more concerted fashion. The new CIE represents part of the implementation of the conclusions of the Tripartite Coordination Committee (Comité de coordination tripartite), signed by the social partners in 2006 (LU0606019I).

A recent study conducted by the Centre for Population, Poverty and Socioeconomic Policy Studies (Centre d’Études de Populations, de Pauvreté et de Politiques Socio-Economiques/International Networks for Studies in Technology, Environment, Alternatives, Development, CEPS/INSTEAD) has demonstrated that, of all the job market integration measures, the integration internship has the highest success rate. The objective behind this initiative is to provide practical training for young people during working hours to help facilitate their integration into the labour market. The ultimate aim is that the trainee will be employed by the so-called ‘promoter company’ at the end of the scheme.

Signing of contract

The CIE takes over from the previous SIE, but emphasises aspects of training and employment prospects. Unlike the SIE, which was an agreement entered into between the young person and the company, the CIE will be concluded between the company, the Employment Administration (Administration de l’Emploi, ADEM) and the young person. The government believes that this should prevent any possible abuse of the system. The CIE can be offered by ADEM to jobseekers under the age of 30 years. Such contracts – to which the legal provisions governing employment contracts do not apply – are reserved for companies that are able to offer the trainee a genuine prospect of employment at the end of the contract period. Moreover, ADEM must also offer an individualised activation agreement to every jobseeker who registers at a job centre (LU0707049I).

Training plan

In practice, the company will appoint a supervisor from among its personnel to assist and oversee the work of the trainee. The company and the trainee must draw up a training plan and send a copy of that plan to the youth employment officer at ADEM. A draft Grand-Ducal regulation sets out the contents of this plan, which includes the following:

  • a list of the knowledge/skills that the trainee is supposed to acquire;
  • tasks of particular training value entrusted to the trainee;
  • the supervisor’s roles and duties.

The Luxembourg Chamber of Private Sector Employees (Chambre des Employés Privés-Luxembourg, CEP-L) has been asked by the Minister of Labour and Employment, François Biltgen, to present its opinion on the training plan. CEP-L points out that the draft regulation does not mention any penalties with respect to the promoter company in the event of non-compliance. Moreover, the trade union stresses that the legal text does not stipulate what resources need to be used to involve the young person sufficiently in the drafting of a personal training plan. CEP-L also regrets that the staff representatives are not involved in this procedure, and believes that the supervisor appointed by the company should undergo training to ensure that the required tasks are performed properly.

Trainee’s remuneration

Instead of receiving unemployment benefit, a trainee on a CIE will receive a basic monthly payment at a rate of 80% of the minimum wage for unskilled workers. Despite the trade unions’ opposition to this measure when Law 5611 was at bill stage, it has been retained in the final version of the law. The government has stuck to its position on the grounds that companies have the option of granting a merit bonus to the young workers to cover the remaining 20% of the wage, which – the government notes – is an option that employers tend to take up,.

The CIE is entered into for a period of 12 months and may be renewed once in the case of training that successfully leads to qualifications and training stipulated in collective agreements that are declared to be generally obligatory, subject to authorisation from the Minister of Labour and Employment. If the contract is renewed, the company is obliged to hire the trainee at the end of the initiation contract, or else face a penalty. Moreover, financial aid in the form of a reimbursement of social security contributions for 18 months is granted to the company if it employs the trainee at the end of the initiation contract period.

Odette Wlodarski, Prevent

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