Luxembourg: latest working life developments Q2 2018

New collective agreements in the public, finance and insurance sectors 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 2018.

New wage agreement in the public sector

On 15 June 2018, the civil servants’ union General Public Sector Confederation (CGFP) and the Minister of the Civil Service approved a new wage agreement in the public sector, avoiding the imminent mediation process and a possible social dispute. After a few inconclusive meetings between both parties at the beginning of the year, the situation was resolved during a series of subsequent meetings with the Prime Minister and the Minister of the Civil Service. ¹

As a result of the negotiations, the 2016–2018 wage agreement was extended for two years and the government agreed to CGFP’s core demands. These included the withdrawal of reduced starting wages for trainees and, for those who have been affected by the wage reduction, a transitional solution to avoid pension disadvantages. Another of the CGFP’s key negotiation points was to clarify the demarcation between the wage agreement and the reform of the public service, as well as to consider more sub-sectoral needs in the public sector, and the agreement takes these requests into account. 

There are general elections in October 2018, so the next government will have to implement the agreement retroactively on 1 January 2019.

Regarding the next legislative election, the Confederation of Independent Trade Unions of Luxembourg (OGB-L) published its proposals for the next government and recommended, among other things, extending wage agreement negotiations to the entire non-commercial public sector. The OGB-L emphasised that public wage earners – in hospitals, the municipalities, social and educational services and the higher education sector – should participate with the OGB-L (the most popular trade union with these workers) in negotiations, and suggested that the government should replace the current negotiation model with a new one covering the whole non-merchant sector.

New collective agreements in finance and insurance sectors

On 11 May, after 18 months of negotiations, social partners ¬¬agreed on the main elements of a new collective agreement in the finance sector, which accounts for 28% of Luxembourg’s national GDP. The agreement – supported by employer organisation the Luxembourg Bankers’ Association (ABBL) and trade unions the Confederation of Christian Unions in Luxembourg Financial Sector Employees' Union (LCGB-SESF) and OGB-L Financial Sector Syndicate, among others – will be put into practice through a series of phases. The only element being implemented in 2018 is a 10% increase in the ‘June bonus’; this bonus will then be replaced in 2018 and 2019 by a loyalty bonus of between 20% and 85%, based on seniority and salary. Furthermore, the training budget will increase from 1% in 2018 to 1.5% in 2019 and 2020. The agreement also stipulates the right to individual training for employees in the sector. 

A new collective labour market agreement in the insurance sector was signed on 28 May 2018 between social partners including the Association of Insurance Companies (ACA) and trade unions the Luxembourg Association of Bank and Insurance Employees (ALEBA), OGB-L and LCGB-SESF. The agreement stipulates a series of important elements: a unique bonus for employees in 2018 and 2020; a conjuncture bonus in 2018, 2019 and 2020; the right to 40 hours’ training; and the right to establish an individual annual training plan. 

Commentary

After a long period of negotiations and a series of setbacks in collective bargaining, social partners have reached agreements in some key sectors. Whether this positive trend will continue in the long term, and to the extent that sectoral collective bargaining regains its full strength, remains unclear. The focus of all sectoral agreements is an increase in training resources, both at company and individual employee level, providing employees with a strong defence against digitalisation. 

¹ Le Quotidien, La CGFP précipite les choses, 26 April 2018.