Luxembourg: Latest working life developments – Q4 2016

New collective agreements in three key sectors, discussions about workplace surveillance, plans to improve the education system and an increase in the minimum wage 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 2016.

Renewal of major collective agreements

A new collective agreement in the financial sector covers around 60% of the estimated 45,000 employees in the sector. At the beginning of December 2016, the agreement was signed by the sector’s main social partners: the Financial Sector Trade Union of Luxembourg (ALEBA) and the Luxembourg Bankers Association (ABBL). Both actors agreed that the old 2014 agreement did not fit the new economic context and that more flexibility was needed. However, after a wage freeze in 2016, ALEBA was not willing to accept further wage stagnation. Unions have complained about the ‘false self-employed’ who make up a third of the sector’s employees. Employers sought to increase flexibility and adapt the collective agreement to the profile of Generation Y professionals who do not want to spend their whole professional life in one department.

Around 70% of around 42,000 workers in the construction sector are covered by a collective agreement which expired in September 2016. The main trade union in the sector, the Luxembourg Confederation of Independent Trade Unions (OGB-L), reported that the employers had refused to start negotiations on a new agreement and it planned to organise protest demonstrations. OGB-L wants to include administrative employees in the collective agreement for craftsmen, whose wages are higher. It also accused the employers of blocking training to stop workers qualifying for higher wages. The employers’ response to OGB-L refuted these criticisms, saying that they needed more time to prepare their own proposals and that they would be ready to begin talks at the beginning of 2017.

The new wage agreement in the public sector affects approximately 28,500 public servants and follows the signing of the collective agreement for State employees in summer 2016. Its provisions were initially not included in the government programme and the final agreement is the result of hard negotiations and, ultimately, of favourable economic circumstances. The new agreement sets wage increases of 1.5% and offers workers more flexible part-time work arrangements. Civil servants can reduce their working time by increments of 10% to between 90% and 40% of full working time. The agreement is valid for three years.

Concerns about worker surveillance

There has been serious criticism of Bill No. 7049 amending the law of 2 August 2002 on the protection of individuals with regard to the processing of personal data, said to be needed to simplify administration requirements. The amendment was filed on 31 August 2016 and makes it possible for employers to simply notify the authorities that they plan to conduct surveillance of employees and their data use in the workplace, rather than the current requirement that they must ask for authorisation from the National Commission for Data Protection (CNPD).

In a press release dated 24 November 2016, OGB-L called on the government to reject the bill because it affects the fundamental rights and freedoms of workers. While the Chamber of Civil Servants and Public Employees has not raised any objections to the bill, the Chamber of Employees has denounced the abolition of the principle of prior authorisation from the National Commission for Data Protection (CNPD).

Towards a better quality education system

In October 2016, the government introduced a new draft bill to set up a national observatory of experts on the quality of education. This is part of a plan to modernise Luxembourg’s education system based on a social partners’ agreement reached in February 2016 between the Ministry of Education, Childhood and Youth and the National Union of Teachers (SNE-CGFP).

The observatory will be made up of eight experts from the field of education with the mission of analysing the organisation of the current education system, the overall functioning of primary and secondary schools, and the implementation of education policies. It will also monitor the ministerial departments in charge of the school system and assess education-related research. Its outputs include an annual report and a thematic report.

Increase in minimum wage

On 1 January 2017, the minimum wage increased by about 3.9%. An increase of 1.4% was agreed by the government in October 2016 and this has been boosted by the indexation mechanism that automatically raised wages and pensions by 2.5% on 1 January 2017. These increases bring the new monthly minimum wage to €1,998.59.

Discussions on a bill to increase working time flexibility, mentioned in the previous working life developments quarterly report, continue. 

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