1. Labour and Employment Law Requirements

A. EMPLOYER POLICY REQUIREMENTS

In Luxembourg, employers are in principle not required by legislation to create and implement employment policies. However, there are a number of policies that employers should create. These policies will help an organization manage employee relations and mitigate the risk of legal liability in the future. The following are thus recommended but not mandatory policies and may be included in a sole policy through an internal regulation or as an attachment to the employee’s employment contract:

• A health and safety policy;
• A flexible working time policy, describing the general rules regarding working time;
• An overtime policy;
• A remuneration policy;
• A whistle-blowing policy;
• A company car policy;
• An equality and diversity policy;
• An IT and communications systems policy;
• A policy regarding sick leave;
• An on-call policy;
• An anti-bribery/corruption policy;
• Policies surrounding the use of employer tools (computer and mobile phone use, internet use, social media, physical tools, etc.) to ensure employees are aware of the expectations surrounding employment;
• A maternity and parental leave policy;
• A harassment policy;
• A disciplinary policy concerning the employees’ performances;
• A travel and business expense reimbursement policy;
• A confidentiality and data protection policy.

For the financial sector, the following policies might also be useful:

• Written Investment Guidelines and a written occupation Investment Risk Management Policy;
• An execution and due diligence policy, for example with regards to broker services and investment funds;
• A conflict of interest policy;
• A remuneration policy.

Exception: The Banking and Insurance Sector:

• Due to the obligations put down in the respective collective bargaining agreements regarding banks and insurance companies, if applicable, banks are obligated to put down a policy of prevention and protection against harassment at the workplace (Annex IV Sectoral Agreement on Moral Harassment of 9 July 2013). Equally, insurance companies must foresee a policy of prevention and protection against harassment and violence at the workplace (Annex V Sectoral Agreement on harassment and violence at work of 25 June 2009).

B. EMPLOYEE TRAINING REQUIREMENTS

Employers are required to complete certain training activities.

Concerning all companies:

• They must ensure that a sufficient number of employees are trained regarding fire safety and security rules and the subsequent evacuation of employees;
• They must ensure that all employees are appropriately informed and trained so that work can be carried out efficiently and safely. For example, for employees who use a computer on a daily basis for continuous or near continuous spells of time of an hour or more, the employer must provide them with information on working at computer workstations and train them appropriately;
• In addition, the employer has the possibility to grant further training measures, but they are not obligated to.

Concerning banks:

• The collective bargaining agreement prescribes that banks shall, where appropriate, give access to further training measures for employees who have been absent because of an interruption of their career; the purpose of this training is to equip them to perform their tasks. The relevant procedures shall be determined by the banks in consultation with the Works Committees or in their absence the staff delegations. Banks shall respect this due to the adhered principle of equal opportunities for men and women in respect to access to occupational training and promotion and of working conditions and salary. (Article 26 Collective Employment Agreement for Bank Employees)
• Banks are also obligated to provide training to employees, both workers and managers on the policy of prevention and protection against harassment at the workplace. (Annex IV Sectoral Agreement on Moral Harassment of 9 July 2013)
• Furthermore, in this specific sector, induction training is often provided and is intended to impart a basic familiarity with the specific features of the Luxembourg financial centre, the banking techniques and general professional knowledge required by the position; if necessary, this programme will be supplemented by further training to provide the requisite knowledge of languages, information technology and economics, etc. However, depending on the degree of compatibility of the individual profile with the position concerned, the induction period may be omitted. (Annex 1 Training Agreement)

Concerning insurance companies:

• Insurance companies must inform and train their employees, both workers and managers, on the policy on prevention and protection against harassment and violence at work. (Annex Sectoral Agreement on harassment and violence at work of 25 June 2009)
• Equally in this sector, induction training is often provided and is intended for learning insurance techniques and general professional knowledge required by the job function; this program is supplemented, if necessary, by upgrades in languages, office automation and economics etc. However, depending on the degree of compatibility of the individual profile with the position concerned, the induction period may be omitted. (Article 12 collective bargaining agreement for Insurance Companies Employees)
• The collective bargaining agreement prescribes that insurance companies shall, where appropriate, give access to further training measures to employees who have been absent because of an interruption of their career; the purpose of this training is to equip them to perform their tasks. The relevant procedures shall be determined at the level of the insurance companies in consultation with the Works Committees or, in their absence, the staff delegations. Insurance companies shall respect this due to the adhered principle of equal opportunities for men and women in respect of access to occupational training and promotion and of working conditions and salary. (Article 18 collective bargaining agreement for Insurance Companies Employees)

C. EMPLOYMENT AGREEMENTS

• In Luxembourg, a permanent contract is the rule and the fixed-term contract is the exception.
• Fixed-term employment contracts may not be used to fill a post resulting from the normal and permanent activity of the company. Therefore, the fixed-term employment contract must indicate the temporary and exceptional nature of the tasks that the employee will have to carry out under this specific form of employment. It may only be concluded under the following conditions listed in the Luxembourg Labour Code:
  • the temporary replacement of employees due to their absence or suspension of their employment contract;
  • the performance of seasonal work;
  • the performance of work in sectors of activity in which it is common not to conclude permanent employment contracts;
  • the performance of work resulting from an extraordinary and temporary workload or from the starting up of a company (in practice, this is one of the most used ground to enter into a fixed-term employment contract);
  • the performance of urgent work in order to avoid accidents and to repair weaknesses in materials, to organise safety measures for the company’s properties so that the company may not be held liable in case of damages suffered by employees or company’s properties;
  • under specific conditions, the hiring of an unemployed registered with the Employment Labor Administration (ADEM) or the hiring of students.

Fixed-term employment contracts must not exceed 24 months, possible renewals included.

If a fixed-term employment contract does not fulfil the above conditions, it will be considered as a permanent employment contract.

• The employment contract, whether for an indefinite period or for a fixed period, must be concluded at the latest at the time of entry into service of the employee and put down in writing for each employee individually. (Article 121-4 of the Luxembourg Labour Code)
• The contract must be passed in duplicate, the first being given to the employer, the second being given to the employee. (Article 121-4 of the Luxembourg Labour Code).
• Finally, the employment contract must include a number of indications, such as for example the identity of the parties, the starting date of the employment agreement, the place of work, the nature of the employment held and the normal work schedule. Further details and all the required indications are listed in Article 121-4 of the Luxembourg Labour Code. As mentioned above, the applicable policies of the company may be attached to the employment contract.
• Current practice in Luxembourg is still the conclusion of global employment contracts, i.e. contracts between 1 employee and more than 1 employer, to render the withholding and payroll obligation much easier.