Luxembourg: Latest working life developments – Q2 2017
The end of major disputes in the health and social care sectors, a new collective agreement in the finance sector and an awareness campaign about fatal work accidents are the main topics of interest in this article. This country update reports on the latest developments in working life in Luxembourg in the second quarter of 2017.
End of major disputes in social care and health sectors
Agreement in social care
On 16 June 2017, in the social care sector (secteurs d’aide et de soins) a labour agreement was signed by the sector’s social partners. These are: on the trade union side, the Luxembourg Confederation of Christian Trade Unions (LCGB) and the Independent Union of Luxemburg (OGBL); and employers’ organisations COPAS, Entente des Foyers de jours (EFJ), Entente des Gestionnaires des Centres d'Accueil (EGCA), and Entente des gestionnaires des maisons de jeunes (EGMJ). The agreement covers around 12,000 employees.
The employers had refused to increase wages and to adapt wages to employee qualifications, arguing that the resulting higher costs could not be implemented without a transitional period. They also argued that if wage costs increased with the new collective agreement, the quality of services could not be guaranteed because they would have to employ lower-qualified staff to control costs. In April 2017, the Minister of Interior clarified the status of the social care sector, saying that as an adjunct to the public sector, it was therefore obliged to guarantee the quality of its services. It was also obliged, said the minister, to pay employees in accordance with the civil service wage agreement. Following a cancelled mediation effort and the threat of strike action, both parties agreed to implement the public wage agreement as part of the new collective agreement.
Renewal of agreement in hospital sector
The hospital sector, with around 9000 employees, was affected by a similar conflict. Despite the intervention of a mediator, collective agreement negotiations failed in May 2017 when employers changed their minds about provisions that had already been negotiated. The OGBL started to organise a strike ballot for 19 June. However, because of tough negotiations by the OGBL and LCGB unions, the need for employers to avoid a strike in the hospital sector and pressure from the positive outcome of the social care sector negotiations, the employers finally accepted the renewal of the collective labour agreement on 22 June 2017, This included the implementation of the public wage agreement.
New collective agreement in finance sector
The conclusion of a new one-year ‘transition’ collective labour agreement on 22 June – which usually covers Luxembourg’s finance sector (banking, insurance and fund industry) for three years – has been the subject of difficult negotiations since the end of 2016, when negotiations restarted at sectoral level.
Negotiations between social partners sought to address major challenges such as digitalisation, new job requirements and a changing legal framework in the context of the financial crisis. In December 2016, the Luxembourg Bankers' Association (ABBL) and the three representative sectoral trade unions – the Syndicat Banques et Assurances/OGBL (SBA-OGBL), Syndicat des Employés du Secteur Financier (LCGB-SESF) and the Association Luxembourgeoise des Employés de Banque et Assurance (ALEBA) – agreed to proceed with a revision of the 2014–2016 labour agreement. Initially, there was considerable disagreement between the social partners on training budgets, a bonus to be paid in June and an overall wage increase of 1% split into a merit award (45%) and a training allowance (55%). However, these conditions were finally accepted. A new agreement was finalised in June 2017 that also allowed more time to continue negotiations, a June bonus linked to the positive socio-economic environment and a €450 bonus linked to the signature of the agreement.
Awareness campaign about fatal work accidents
During the first six months of 2017 there were five fatal work accidents in Luxembourg (14 in total in 2016). The average rate of incidents in the last 10 years has been increasing, with 33,000 recorded work accidents, mainly in the construction sector. On 16 June, the Ministry for Work launched an awareness campaign, ‘Vision Zero’, in collaboration with the Accident Assurance Association (AAA), the employer umbrella organisation Union des Entreprises Luxembourgeoises (UEL) and the National Institute for sustainable development and corporate social responsibility (INDR). The objective of the campaign is to reduce the number of fatalities and serious work injuries by creating a code of conduct. The code has already been signed by 70 major companies, as well as initiating much needed health and safety training.
In addition, the AAA plans to create a bonus-malus (no-claims bonus) system in 2019. It will penalise companies with the most recorded accidents through an increase of up to 50 % in employer’s contributions and will reward companies where there are fewer accidents through a 10% decrease in contributions. Nevertheless, the AAA is aware that small and new companies are more affected by the problem, as larger companies often have better prevention systems in place. The director of the Inspectorate of Labour and Mines (ITM) emphasised the fact that 19,000 enterprises have no safety officer and therefore have difficulties in following security code of practice. The director also emphasised that the ITM lacks sufficient inspectors and that it would need double its staff to carry out inspections properly. Problems also arise due to the 190,000 or so detached workers who come from Belgium, France, Germany and other countries, where workplace safety culture is different.
The Ministry of Labour has put forward its activation policies to help assist the long-term unemployed and disabled workers who are facing new evaluation and orientation services in the Luxembourg labour market.