2003 Annual Review for Luxembourg

This record reviews 2003's main developments in industrial relations in Luxembourg.

Political data

Luxembourg has been governed since August 1999 by a coalition of the Social Christian Party (Chrëschtlech Sozial Vollekspartei, CSV) and the Democratic Party (Demokratesch Partei, DP). This coalition continued in power throughout 2003. The next general elections are scheduled for June 2004.

Collective bargaining

Collective bargaining in Luxembourg is conducted mainly at company level, with a few sectoral agreements, and there was no change in this area in 2003. A total of approximately 250-300 collective agreements, mainly at company level, are currently in force in Luxembourg, with some 100 agreements renewed each year. Collective bargaining mainly addressed traditional issues such as pay during 2003.

Pay

Most pay settlements have provided for increases of around 1.5% since 2001, and this continued in 2003. Furthermore, Luxembourg has an automatic indexation system whereby all wages, pensions and benefits are automatically adjusted one month after the average of the cost-of-living index over the previous six months has gone up by 2.5%. The six-monthly average of consumer prices exceeded the 2.5% figure on 1 July 2003, and all wages, pensions and benefits therefore rose by 2.5% from 1 August (LU0309101N).

Legislation increased the statutory minimum wage by 3.5% at the beginning of 2003 (LU0301105N). The rise reflected increases in average real pay in the economy over 2000 and 2001. The new rate stood at EUR 1,368.74 per month for employees aged 18. Employees aged between 17 and 18 receive 90% of the full rate, and those aged between 15 and 17 receive 75%

Working time

There were no notable bargaining developments in terms of working time during 2003, and the average collectively agreed normal weekly working time remained at around 39 hours

Job security

The year saw an agreement on job security-related matters that was notable in the Luxembourg context. In January, SES Astra, the Luxembourg-based satellite operator, announced plans for 32 job losses. However, a redundancy programme negotiated with the Luxembourg Confederation of Christian Trade Unions (Lëtzebuerger Chrëschtleche Gewerkschafts-Bond, LCGB) subsequently succeeded in avoiding any compulsory redundancies, through the use of internal and external transfers and early retirement (LU0302105F).

Equal opportunities and diversity issues

There is currently very little in the way of collective bargaining on equality issues in Luxembourg.

In March, the national Tripartite Coordination Committee (Comité de coordination tripartite), on which the social partners are represented, decided that a parental leave scheme introduced on a time-limited basis in 1999 will be continued for the time being (LU0304101N). The government is to draft new legislation on the issue and, while there will be amendments, the duration of parental leave will remain fixed at six months.

On the basis of the law of 26 May 2000 relating to sexual harassment (LU0005137F), in May 2003 the Personnel Officers' Group (Groupement des chefs du personnel, POG) - a network of finance sector human resources managers - the Luxembourg Association of Banks and Bankers (Association des Banques et Banquiers du Luxembourg, ABBL) and the Finance Sector Occupational Health Association (Association pour la santé au travail du secteur financier, ASTF) drew up a set of guidelines for conduct relating to sexual harassment, aimed at ensuring that the law is implemented in the finance sector in a practical and concrete manner. The guidelines were sent to all 450 enterprises in the Luxembourg finance sector, with the organisations which drew them up proposing that the companies adopt the guidelines and distribute them to their entire workforces (LU0307101N).

In early 2003, the government issued its fourth report (LU0302104F) on implementing the United Nations Convention on the Elimination of all Forms of Discrimination against Women (CEDAW). It sets out a wide range of measures taken since 1999 with a view to eliminating discrimination between women and men in relation to employment, though noting that inequalities persist in areas such as labour market segregation. The report also contains the findings of a recent study on women's participation in economic decision-taking.

Training and skills development

On 2 May, the Union of Luxembourg Enterprises (Union des Entreprises Luxembourgeoises, UEL) signed an agreement on continuing vocational training with the two main trade union confederations - the Luxembourg Confederation of Independent Trade Unions (Onofhängege Gewerkschafts-Bond Lëtzebuerg, OGB-L) and LCGB (LU0305101F). The agreement is aimed at facilitating access to continuing vocational training and thus better meeting the demands of the Luxembourg labour market. It also includes new schemes for unpaid and individual training leave. Some of its provisions require implementation via legislation.

Legislative developments

A new law which came into force on 1 January 2003, regulates working time in the hotels and catering sector (involving 2500 enterprises employing 10,000 staff), after a 30- year legal vacuum, during which the industry's social partners failed to regulate the matter themselves (LU0301107F). The new legislation introduces a statutory 40-hour week in three stages, starting in January 2003 .

The law essentially applies to the hotels and catering sector the general terms of Luxembourg's 1970 and 1971 legislation on working time, that is to say an eight-hour day and a 40-hour week, with the possibility to vary these hours limits, while respecting them on average, over reference periods that differ according to the size and nature of the enterprise. The reference period is: four weeks or one month for enterprises that regularly employ at least 50 people; eight weeks or two months for enterprises employing between 15 and 49 staff; and six months for seasonal enterprises and establishments employing fewer than 15 staff. During this reference period, it is possible to exceed the limits of eight working hours a day and 40 hours a week, normally to a maximum of 10 and 48 hours respectively. During exceptional periods (specifically restricted to Christmas, Easter and the summer), it is possible for weekly hours to be as high as 51-60 hours, depending on the size of the enterprise, but with a daily limit of 12 hours. In all cases, average weekly working hours must be lower than, or equal to, 40 hours over the reference period. Daily working hours may only be interrupted by a single unpaid break lasting a maximum of three hours. Remuneration for all work performed between 01.00 and 06.00 is subject to a premium of 25%, which may be taken as time off or paid in cash.

A law adopted in May introduced a reform of civil servants’ employment conditions and status, which will affect around 21,000 employees (LU0306102F). Civil servants will now find it easier to work part time and will have a more transparent disciplinary procedure. The age limit for starting work in the civil service has been raised from 40 to 45 years of age, teleworking is now possible, and 'equality delegates' are to be appointed in all administrative units, with responsibility for ensuring equal treatment between female and male employees.

A law adopted in September on the income of people with disabilities guarantees, among other provisions, that all disabled people employed in the private, local authority or state sector, or in a sheltered workshop, will receive pay equivalent to the national minimum wage (LU0310103F). The new law also confers legal status on the Higher Council for People with Disabilities (Conseil supérieur des Personnes Handicapées), which will defend the rights of disabled people at the political and social levels.

The organisation and role of the social partners

In February 2003, four white-collar trade unions organising in the private sector - the Luxembourg Association of Banking and Insurance Staff (Associations luxembourgeoise des employés de banque et d’assurances, ALEBA), the Union of Private Sector White-Collar Employees (Union des employés privés, UEP), the Neutral Union of Luxembourg Workers (Neutral Gewerkschaft Luxembourg, NGL) and the National Union of Private Sector White-Collar Employees (Syndicat national des employés privés-Rénovateurs, SNEP) - signed common statutes and joined forces in a single trade union federation with a membership of 20,000, known as ALEBA/UEP-NGL-SNEP (LU0303102F). The immediate objective of the new federation was to present a single slate of candidates at the forthcoming 'social elections' (see below) and the ultimate aim is to form a single trade union body with nationally representative status (LU0211102F).

The five-yearly 'social elections' of employee representatives were held in November. In this poll, employees elect representatives on: employee committee s (délégations du personnels) in enterprises with more than 15 employees (LU0309102T); two consultative 'professional chambers' (LU9810172F) - the Chamber of Private Sector White-Collar Staff (Chambre des Employés Privés, CEP) and the blue-collar Chamber of Labour (Chambre de Travail); and the administrative bodies of the Sickness and Maternity Insurance Funds (Caisses de Maladie). These elections are based largely on lists of candidates presented by trade unions and thus provide an opportunity for measuring the relative strength of unions and give a fairly accurate idea of their national representativeness.

The November 2003 social elections were awaited with much anticipation (LU0311103N), not least with regard to the results achieved by the new ALEBA/UEP-NGL-SNEP federation. However, the outcome of the elections was that two main trade union confederations, OGB-L and LCGB, gained support (LU0312102F). Those who were expecting ALEBA/UEP-NGL-SNEP to make gains were disappointed. Although ALEBA was able to hang on to its dominant position in the banking sector, at the same time it lost some employee committee members (particularly in the larger banking establishments), while the other unions in the federation did not perform well. The federation’s aim of nationally representative status seemed further off than it was before the social elections were held.

In January 2003, the Luxembourg Union of Non-Dispensing Pharmacists (Syndicat des Pharmaciens Luxembourgeois sans Officine), representing pharmacy employees, concluded a five-year collaboration agreement with OGB-L (LU0302102N). Under the terms of the agreement, the two organisations will pursue a joint pay policy with a view to conducting a general revaluation of the profession of pharmacist, and a reform of the way their working time and duty rosters are organised. OGB-L, as the majority trade union representing employees in the health sector, and the Luxembourg Union of Non-Dispensing Pharmacists, which currently claims 260 salaried pharmacists in membership, ultimately intend to ask the relevant employers’ association to commence negotiations with a view to establishing a new collective agreement for the 700 or so employees in the sector. The last agreement dates from 1991.

In January, OGB-L trade union confederation opened a new disabled workers’ department (LU0302101N). It will promote equal opportunities for people with disabilities, not only in employment and training, but also in other areas.

On the employers' organisation side, the main development of the year was the launch of the Luxembourg Automobile Parts Industry (Industrie luxembourgeoise des équipementiers de l'automobile, ILEA), a new industry and employers' federation for the country's automotive parts industry (LU0308102N). The new body brings together 15 enterprises in this growing sector, together employing over 8,000 workers.

Industrial action

On 9 May, around 87% of the workforce of the Luxembourg National Railway Company (Société Nationale des chemins de fer Luxembourgeois, CFL) took part in a 24-hour strike in protest against alleged management non-compliance with agreements on improvements to working conditions and staff recruitment. Apart from this action, which paralysed the entire railway network, there were no major work stoppages in 2003.

Employee participation

The Minister of Labour and Employment presented a bill dealing with collective labour relations, the regulation of collective labour disputes and the National Conciliation Office (Office National de Conciliation) in October 2002 (LU0211102F). The bill redefines the controversial concept of the national representativeness of trade unions, while at the same time professionalising the work of the National Conciliation Office and setting up a national industrial relations observatory. It appears that these proposals have been widely disputed behind the scenes, by both the trade unions and the employers, and that the planned legislation will probably not be implemented before the general elections scheduled for June 2004.

There were no other legislative or other significant developments in the area of employee information and consultation in 2003. Nor were there any moves to implement the EU information and consultation Directive (2002/14/EC) (EU0204207F) or the employee involvement Directive (2001/86/EC) linked to the European Company Statute (EU0206202F) .

Stress at work

The OGB-L trade union confederation and the Luxembourg Mental Health League (Ligue luxembourgeoise d’hygiène mentale) started discussions on stress at work in 2001, and in September 2002 they concluded a partnership agreement aimed at setting up a national scheme with the task of assisting workers who suffer from stress-related illnesses and want help (LU0210101N). This 'work-related stress information unit' operates a telephone helpline, provides individualised counselling, and organises relaxation activities. This move received a positive response from the government and there were indications that employers might also look favourably on the initiative.

Undeclared work

It is reported that the overwhelming majority of companies based in Luxembourg, unlike their counterparts in some other EU Member States, do not employ undeclared staff. However, the Customs Administration (Administration des Douanes) and the Labour Inspectorate (Inspection du Travail) periodically track down workers employed illegally in companies, most of which are foreign enterprises operating in the building sector. There is also a considerable amount of undeclared employment in the construction of private housing, which is organised either by the future owners or by 'specialist' teams - it is suggested unofficially that undeclared work might represent 40% of work in this area. There is a relatively high rate of undeclared work in domestic occupations.

Efforts to ban undeclared work are based on a law dating from 3 August 1977. In practice, the government’s 'policy' appears to be to combat so-called 'organised' undeclared employment, while not particularly targeting undeclared work carried out in domestic occupations. A government campaign aimed at regularising the position of some illegal immigrants during 2003 (LU0112140F) had the effect of eliminating a proportion of undeclared employment.

Apart from declarations of principle, the social partners have not been active in combating undeclared employment.

New forms of work

A Grand-Ducal Regulation of 11 August 2001 granted sector-wide force of law to a collective agreement applying to temporary employment agency workers, concluded between the OGB-L and LCGB trade unions and the the Luxembourg Union of Temporary Employment Agencies (Union Luxembourgeoise des Entreprises de Travail Intérimaire, ULEDI), for the period from 1 January 2001 to 31 December 2003. Apart from this, there have not been any significant recent developments in the regulation of atypical work in Luxembourg.

Other relevant developments

In November, the government and social partners agreed on five structural measures aimed at tackling deficits in the budget of the country's sickness funds, which are expected from 2005 onwards. Most of the measures agreed are designed to stop employees taking sick leave without justification (LU0312101N).

In October, trade unions in the iron and steel industry organised a petition and demonstration in favour of the continuation of a special early retirement scheme, which is due to expire at the end of 2004 (LU0311102N).

Outlook

A general election and European Parliament elections are set for June 2004. During the second half of 2003, the unemployment rate rose slowly to above 4%, and is likely to be a major issue in the general election campaign. A unification of the various pension schemes and an increase in private sector pensions are issues likely to be on the political and industrial relations agenda in 2004, but the extent to which they will be debated in public is not yet clear. Overall, given that the economy appears to have revived, 2004 is expected to be fairly calm as far as industrial relations are concerned. (Marc Feyereisen)