Luxembourg: Latest working life developments – Q1 2018

Collective bargaining at national and sectoral levels, civil service traineeships, developments in negotiations in the construction and banking sectors, and measures to support jobseekers with disabilities are the main topics of this article. This country update reports on the latest developments in working life in Luxembourg in the first quarter of 2018.

Tensions rise between government and civil servants

A major conflict between the government and Luxembourg’s largest civil service union, the General Confederation of the Public Sector (CGFP), stayed on the agenda throughout the first quarter. Since autumn 2017, CGFP, which represents 30,000 out of 42,000 civil servants, has been demanding improvements to the 2015 reforms of the public service. Its latest request has focused on reforming entry-level wages, following pay cuts introduced in 2015. Currently trainees receive 80% of the entry-level civil servant wage for the first two years of their traineeship, and 90% in the third year. However, the CGFP argues that the pay difference is unfair, considering that trainees perform similar tasks to civil servants. Moreover, they point to improvements in the national economy to justify pay rises.

When the Government failed to respond to CGFP by the end of 2017, the union issued an ultimatum ending in February 2018, which passed without a response. CGFP then called for an emergency meeting with the Prime Minister at the end of March 2018 and announced it would begin mediation unless both sides reached a consensus. The meeting ended without a result and a meeting was planned for early April with Dan Kersch, Minister for the Civil Service and Administrative Reform. To complicate matters further, CGFP wants its demands addressed as a part of the reform of the public service, while the Government has insisted on addressing the issue as part of the next round of wage agreement negotiations.

Difficult negotiations in the finance and construction sectors

Difficult negotiations are on the agenda in the construction and finance sectors as social partners could not agree on a new collective labour agreement (CLA). In construction, the Confederation of Independent Trade Unions of Luxembourg (OGBL) demanded a 4.5% pay rise, to reflect the sector’s current prosperity, and rejected any increased flexibilisation of working hours. The union has called for workers’ career advancement to be based on their level of training and not on seniority. However, they complained that employers often block employees’ participation in training schemes. Sector employers’ associations (the Fédération des Entreprises de Construction et de Génie Civil and the Groupement des Entrepreneurs du Bâtiment et des Travaux Publics) have offered employees a bonus of €100 (€300 over three years) and a 2.1% pay increase.

In banking, negotiations have continued towards a new collective labour agreement. The deal will replace the interim one-year CLA, signed in 2016. Social partners have used the intervening period to negotiate measures designed to ‘future-proof’ the new agreement against upcoming challenges. 

The private trade union, the Luxembourg Association of Bank and Insurance Employeess (ALEBA), transferred a catalogue of claims to the Luxembourg Bankers' Association (ABBL) including a request for wage increases (1.5% in 2017, 1.5% in 2018 and 1.5% 2019). ABBL responded with a set of proposals and the two sides opened negotiations in March 2018.

New employment assistance tool for unemployed people with disabilities

A new draft bill aims to make the job market more inclusive of people with disabilities. On 23 March 2018, government ministers and the CEO of the Employment Administration (ADEM) jointly presented draft legislation to help alleviate disproportionate levels of unemployment affecting people with disabilities and those facing redundancy (i.e. wage earners participating in a redeployment procedure).

The bill allocates extra resources to COSP-HR, a new government support service for jobseekers with disabilities. If the bill passes, the organisation will assign jobseekers a dedicated assistant to support them to (re)integrate into work. Assistants will be responsible for briefing employers on jobseekers’ disabilities and for answering employers’ questions about individual needs. All assistants will be authorised by the government by the government and will have experience of working with people with relevant disabilities. Jobseekers will be eligible for up to 300 hours of assistance over two years and assistants must produce an annual evaluation report. The draft bill’s €2.3 million budget will support approximately 250 beneficiaries until 2020.

The government has so far struggled to reduce unemployment among people with disabilities, who make up 20% of Luxembourg’s out-of-work population.

Commentary

Collective bargaining has continued at a decentralised level. Several ongoing disputes (in the public, hospital, construction and finance sectors) suggest that consensus remains elusive, despite a favourable socioeconomic environment. It will be interesting to observe the extent to which social partners influence the agenda as the October 2018 general elections approach.

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