Living and working in Luxembourg

Actors and institutions

Trade unions, employers’ organisations and public institutions play a key role in the governance of the employment relationship, working conditions and industrial relations structures. They are interlocking parts in a multilevel system of governance that includes the European, national, sectoral, regional (provincial or local) and company levels. This section looks into the main actors and institutions and their role in Luxembourg.

Public authorities involved in regulating working life

The Ministry of Labour, Employment and the Social and Solidarity Economy has two areas of influence: policy covering employment, and labour law and industrial relations. The Ministry designs and directs policy, ensures its overall coordination and prepares legislation.

The Inspectorate of Labour and Mines (ITM) works under the authority of the Minister. Its role is to monitor working conditions and protect employees who have an employment contract, excluding administration officials.

The labour tribunal has a court magistrate who is the president of the court and two assessors where one is chosen from among the employers and the other from among the employees. The labour tribunal is competent in matters of employment contracts; apprenticeship contracts; supplementary pension schemes and insolvency insurance. The courts of appeal, which fall under the Supreme Court of Justice, are competent in matters of appeal against the rulings of the labour tribunal.

Health and Safety issues are mainly deal by the Department of Occupational Health (Division de la Santé au Travail) of the Ministry of Health. This department is responsible by law for the control and coordination of the functioning and organisation of occupational health services; it is also an appeal body for employers and employees in case of disputes about doctors’ opinions. It cooperates with the Inspectorate of Labour and Mines.

The Agency for the development of employment (Adem) is governed by the Minister of Labour (Labour Code, article L.621-1). Its competence extends throughout the territory of the Grand Duchy of Luxembourg. It has seven regional offices. A reform has been introduced in 2011 to help it to meet the challenges of the current economic and social context and be effective in helping jobseekers to find employment.

Representativeness

The Collective Employment Relationships Act of 30 June 2004 (Loi sur les relations collectives de travail) introduced and defined the criteria which determine the representativeness of a trade union (Labour Code L.161-3 and L.161-4). Thus, as soon as a trade union meets the legal criteria of representativeness, whether at national or sectoral level, it is entitled to conclude collective bargaining agreements. There are two ‘kinds’ of representativeness that can be at general national level (Labour Code L. 161-4 and L. 161-5), or at sectoral level in a sector that employs at least 10% of the private employees of the country (Labour Code L. 161-6 and L. 161-7). Unions are representative when they receive a minimum share of the votes within the Chamber of Employees (Chambre des salariés) at the latest social elections; 20% at national level or 50% within the sector. Article L-161-4 defines also the general national representativeness of a union in terms of its capacity to sustain a major labour dispute at national level.

There are no statutory regulations setting the criteria of representativeness for employer organisations. Their representativeness is based on mutual recognition.

More information on representativeness of the main social partner organisations can be found in Eurofound’s sectoral representativeness studies.

• Topic: Representativeness

Trade unions

About trade union representation

Article 11 of the Luxembourg Constitution guarantees the freedom to join a trade union. The current legislation that applies to unions (based on the Law of 30 June 2004 that regulates labour relations) has been included in the Labour Code (article 161-3). Employees are organised on a voluntary basis into a number of trade unions whose principal aim is to negotiate collective bargaining agreements and to defend the interests of trades and professions. It is to be noted that unions are not implemented in companies or establishments, as the only existing employees’ representatives at this level are elected employees, although these representatives may be union members.

Trade union density in Luxembourg decreased from 42, 5% in 2004 to 34,1% in 2014 (OECD) (OECD). This net union density is above the EU average. Data provided by Statec are slightly higher (41% in 2010) as they cover only employees who are resident in Luxembourg, while OECDs data also cover cross-border employees whose union rate density is lower than for residents (Statec, 2011). The large number of services provided by unions can explain the relatively high level of union density, as unions provide help with matters such as legal assistance, coaching, and support for income tax declarations. The density is particularly high (over 60%) in public administration, education and transport sectors, but also in industry. It is quite low in sectors with a high rotation of employees such as the hotel-restaurant sector and in SMEs.

Luxembourg’s trade unions can claim a certain level of success in integrating the immigrant population. With the explosion in cross-border work in the 1980s and 1990s in particular, it was vital for the unions to be established among employees who worked in Luxembourg but lived in neighbouring countries.

Trade union membership and trade union density

Source: OECD/Visser (2014), based on Administrative data on aggregate membership of main confederations organising blue and white-collar employees, and independent unions of financial and managerial staff, clerical workers and white-collar employees, private and public sector from trade union websites, EIRO and the European Trade Union Confederation. Active membership is estimated on the basis of Belgian data on membership among retired workers.

Main trade union confederations and federations

Luxembourg’s trade unionism is marked by structural pluralism. Two peak trade union confederations (LCGB, OGB-L) are recognised as nationally representative unions and are mainly active in the private sector. One other peak confederation is active in the public sector (CGFP). Important unions also exist at the sectoral level, such as Aleba for the bank and insurance sector which is recognised as representative at sectoral level.

Main trade union confederations and federations

On 13 November 2013, 437,000 employees and retired workers were invited to vote to elect representatives at the Chamber of Employees and (active employees only) to elect staff delegations, which are similar to works councils, both held in Luxembourg every five years. Elections for staff delegations are organised in the companies while elections for the Chamber of Employees are organised on a national level on the basis of a vote by correspondence. The turnout was just 36% (approximately 158,000 people) for the Chamber of Employees’ election. For the workplace elections, just over 700 companies were involved. Compared with the previous election in 2008, votes for candidates not affiliated to a trade union increased by 3.37 percentage points and these candidates won 50.71% of the vote. Next was the OGB-L which won a slightly lower proportion of the vote (29.14%) compared to 2008 (30.66%). The LCGB came third with 14.11% of the vote (+1.33 percentage points in comparison to 2008). ALEBA received 4.73% of the vote. The next workplace election will be organised in 2019.

Employers’ organisations

About employers’ representation

Employers are organised on a voluntary basis into a number of professional federations, and in addition, there is a system of guild chambers. Affiliation to the Guild Chamber is mandatory for all private individuals or legal entities established in the Grand Duchy as a craftsperson. This is also the case for the Chamber of Commerce (Chambre de Commerce du Luxembourg, CDC), which is an institution of public law, encompassing all companies, except those in agriculture and the craft industry, which have their own guild chambers. At present, there are three chambers for employers: the Chamber of Commerce; Chamber of Trades (Chambre des Métiers); and the Chamber of Agriculture ( Landwirtschaftskammer Luxemburg). Chambers have the statutory right to be consulted by the public authorities on all social and economic issues affecting their members’ interests. They also have the right to submit proposals for legislation. In certain policy areas, such as statistics and vocational training, they even function as public administrative bodies.

There have been no significant changes within employers' organisations in recent years. However, some important changes at the head of employers’ organisations occurred in 2014 (UEL, ABBL, Chambre de métiers) with a new generation of entrepreneurs. In 2013, about 61% of employees worked in a company in which there was at least one member of a professional organisation. 80% of employees work in company which is affiliated to an employer organisation.

Employers’ organisations - membership and density

* Percentage of employees working in an establishment which is member of any employer organisation that is involved in collective bargaining.

Main employers’ organisations

The peak employer confederation is the Union of Luxembourg Enterprises ( Union des Entreprises Luxembourgeoises, UEL), representing private sector companies. UEL has eight members’ organisations (including the Chamber of Commerce and Chamber of Trades) covering about 35,000 employers and about 80% all employees. UEL was founded in 2000 as a result of formalising an existing liaison committee of sectoral business organisations. UEL signed the rare economy-wide agreements that mainly implement European framework agreements.

Within UEL, the main organisation is the Luxembourg Business Federation ( Fédération des industriels luxembourgeois, FEDIL), which represents companies in construction, manufacturing and business services. FEDIL is affiliated to BusinessEurope and its members cover about 25% of national workforce.

There is no rivalry between the five main employers’ organisations as they operate in different sectors and cooperate closely since they are affiliated to UEL.

Main employers’ organisations and confederations

(1) Only collective bargaining to implement some EU directives.
(2) No, only a few sectoral federations affiliated to the employer’s organisation but not the organisation as a whole.

Tripartite and bipartite bodies and concertation

The ‘Luxembourg social model’ is characterised by tripartite consultation, which brings together the government, representatives of employers and of workers.

It was introduced in the 1970s, at a time when it was necessary to reorganise the iron and steel industry and deal with social problems. This tripartite model kept thousands of steel workers from becoming redundant, made the steel industry fit for the global economy and introduced social policy measures aimed at keeping the unemployment rate very low. Since 1977, the ‘Tripartite Coordination Committee’ ( Comité de coordination tripartite) has been used several times by the government to get consensus on crucial reforms (for example, the first National Action Plan on Employment in the framework of the European Employment Strategy in 1998, and the introduction of the unique working status in 2006).

The economic and financial crisis of 2008 altered the tripartite model fundamentally, because the deterioration of public finances implied that employers and employees had to take more of the burden. Moreover, trade unions and employer organisations disagreed on the causes of the crisis and wanted different solutions. Employers wanted to reinforce competitiveness by reducing costs, whereas trade unions wanted to strengthen economic demand. The economic crisis led to the failure of tripartite dialogue in 2010. In 2015, after signing a bilateral agreement with employer representatives, and another with unions, the Luxembourg government has been encouraging the social partners to return to the country’s former tradition of tripartite consultation.

The Economic and Social Council (Conseil économique et social) plays a role of cooperation and consultation along with the Conjuncture Committee. The government consults the committee on projects aimed at changing legislation or regulations that affect different sectors or the whole national economy. The government may also consult the committee on specific issues to obtain its advice. The committee also coordinates the involvement of social partners within the EU Semester consultation process. Other tripartite bodies are: the Permanent Committee of Labour and Employment ( Comité permanent du travail et de l’emploi), the Women’s Labour Committee (Comité du travail féminin) and the Observatory of Industrial relations and Employment ( Observatoire des relations professionelles et de l’emploi, ORPE) under the umbrella of the Ministry of Labour.

Main tripartite and bipartite bodies

Workplace-level employee representation

The main channel for employee representation at workplace level is the Staff Delegation (délégations du personnel/Personal-ausschuss), which is directly elected by all employees in companies with more than 15 employees (Labour Code, article 414-4). In companies employing more than 150, employees are also represented by joint works councils (JWC – Betriebsrot) or joint committees (‘Comités mixte’). In establishments that are part of the same enterprise, a central delegation is established.

The law of 23 July 2015 to reform social dialogue within companies, which was adopted in July 2015, has changed this regulation. From the next round of workplace election, in 2019, the staff delegation becomes the single body representing the interests of the employees and is granted the powers of the joint committee, particularly with regard to codetermination, once the threshold of 150 employees is exceeded. The employees’ representatives are elected for five years. The number of employees’ representatives depends on the number of employees in the company (Labour Code, article 412-1).

Staff delegation

The staff delegation is there to ‘safeguard and defend the interests’ of employees. It makes every effort to prevent and mitigate any individual and collective conflict(s) that could emerge between the employer and the workforce. The staff delegation can, in the absence of any conflict resolution, refer to the Labour and Mines Inspectorate any complaint or observation relating to the application of the legal, regulatory, administrative or contractual provisions (such as those laid down in a collective agreement) that affect the working conditions and protection of employees at their workplace. Article L. 414-4 (Labour Code) enumerates the mandatory topics which have to be submitted to the Staff delegations for information and/or consultation and provides for some formal requirements.

According to the Labour Code, the management is obliged to inform the staff delegation (and the equality delegate) about the structure and the situation of the undertaking (or establishment) as well as the probable evolution of its activities. This information should be provided during meetings with the management of the establishment (see Labour Code article L. 414-4).

The employees’ representatives are elected every five years (through elections called ‘élections sociales’) by all employees at the workplace. They can be nominated by the unions or by at least 5% of the total number of employees. The last elections were held in November 2013.

The legislation envisages a minimal number of meetings for the staff delegation (three a year).

The new law makes the delegation the only body that will represent employee interests, fulfilling functions such as presenting complaints or suggestions to companies on issues such as working safety, part-time work, harassment and training. The size of the delegation depends on the number of employees at the company, ranging from one member for a company that has 15–25 employees, to 25 members for companies with between 5,101 and 5,500 employees.

Staff delegates will benefit from increased paid leave and more time for training to fulfil their duties. In companies with at least 250 employees, some delegates (délégués libérés) will be exempted entirely from work to fulfil their staff representation duties. The employer will provide the delegation with information about the company, including developments of its activities, its financial outlook, and foreseen changes in its employment situation. In companies with at least 150 employees, this will either happen once a month, or at the request of the delegation; in smaller companies, at least annually. Staff delegations will have co-decision rights of the past joint company committee (see below) and additionally, on vocational training issues (Labour Code, article L. 414-2). The staff delegation in companies with fewer than 150 employees have no co-decision rights on these topics, but they are informed and consulted, and they do not have to agree with the employer.

Furthermore, in companies with at least 51 employees (instead of 150 employees before the reform), staff delegates will have increased opportunities to seek the advice of external counsellors or have experts to assist them on technical matters. The employer will pay the experts’ fees. Another innovation is the right to use mediation in the event of disputes about the application of the Labour Code in relation to staff delegations.

Joint company committee

The joint committee, that will be abolished and replaced progressively by the reform of 2015 (see above), has an equal number of employee representatives (appointed by secret ballot) and employer representatives (appointed by the head of the company), according to the size of the workforce employed. The role of the joint company committee is to provide a forum in which employer and employees can work together to improve industrial relations in the workplace. Among other topics, the joint company committee has to be informed and consulted on changes affecting the workplace (such as construction, extension, new production processes) (Labour Code article L. 423-1). There are some issues on which the joint company committee itself decides. These are:

• the introduction of equipment intended to monitor the behaviour or the performance of employees (such as closed circuit cameras);
• measures linked to workplace health and safety;
• general criteria for recruitment, promotion or redundancy; criteria for employee appraisal;
• workplace regulations;
• pay-outs from workplace suggestion schemes.