Employment 2021 – Employment and Human Resources

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1.1 Most important changes in the last year


Given the widespread use of telework due to the spread of COVID-19, the various social partners in Luxembourg agreed to modernize the existing legal system for telework and signed a new inter-professional convention on the legal system for telework on October 20, 2020.The new agreement was through a grand-ducal ordinance of January 22, 2021 was declared generally binding with effect from February 2, 2021, so that the agreement is binding for all employers in Luxembourg.

The new convention now applies to both occasional and regular telework and introduces a definition of occasional telework for the first time. It also simplifies the conditions for carrying out regular teleworking by reducing the mandatory mentions in the agreement between employer and employee and providing that the agreement can result not only from an individual agreement, but also from a collective agreement or a company-level agreement . The convention also defines the employer’s obligations with regard to equal treatment, work equipment, training, work organization, etc.

In addition to this legal framework, the Luxembourg Financial Supervisory Authority (Commission de Surveillance du Secteur Financier, CSSF) has issued circular 21/769 on teleworking, which will apply to all supervised companies in the financial sector. The circular will generally come into force on September 30, 2021, but may be delayed depending on the development of the COVID-19 pandemic.

This circular defines the governance and security requirements that the supervised companies must comply with when implementing and using teleworking solutions under normal general working conditions (ie not in pandemic situations).

Professional reclassification

On November 1, 2020, the law of July 24, 2020 on the internal and external reclassification system came into force. This law aims in particular to optimize the existing procedures for professional reorganization and to improve the financial situation of people who are in the process of professional reorganization.

Posted workers

The law of December 15, 2020 amending the Labor Code to implement the European Union Directive on posted workers came into force on December 22, 2020. This law extends the main Luxembourg employment rules on mobility, which now also apply to workers posted to Luxembourg – for example: employer-provided accommodation for workers who are far from their usual place of work; Allowances or reimbursements for travel, room and board; and equal treatment in pay.

In addition, if workers are posted to Luxembourg for more than 12 months, or 18 months in the event of an extension, all Luxembourg employment regulations must apply.

1.2 COVID-19 crisis

Numerous derogatory measures have been taken to address the unprecedented COVID-19 crisis, many of which have impacted the employment landscape.

Family leave in the context of the pandemic

The leave of absence for family reasons in the context of the pandemic enables parents in special cases to take an extended leave of absence to care for their children.

This leave applies to all employees, self-employed persons and / or apprentices who are registered with the Luxembourg Social Security, regardless of whether they have the opportunity to work from home and who have a child who:

  • under 13 years of age and under a quarantine or isolation measure imposed by the Directorate of Health;
  • between 13 and 18 years old and admitted to hospital as part of a quarantine or isolation measure imposed by the Directorate of Health;
  • susceptible to COVID-19, provided a medical certificate is presented confirming this susceptibility and the contraindication for attending school or a childcare facility;
  • were born before September 1, 2017 and are younger than 13 years of age or have not left primary school and are unable to attend school due to a formal decision to partially or completely close the school;
  • born after September 1, 2016 and cannot attend daycare after a formal closure.

The age limit of 13 years does not apply if the child receives a special allowance for disabled children from the CAE (Caisse pour l’avenir des enfants).

Family leave can only be taken by one parent at a time. An employee who is put on short-time work or whose partner or spouse is partially unemployed is also not entitled to leave for family reasons.

The leave for family reasons has been extended up to and including September 14, 2021.

This special leave is equivalent to sick leave, ie employees can only be dismissed with immediate effect during their leave for family reasons in the event of serious misconduct.

Family support vacation in the context of the pandemic

The time off for family support in the context of the pandemic enables employees (both from the private and the public sector) and self-employed persons to look after an elderly person or a disabled adult after a daycare center or training or employment facility has been closed.

The following conditions must be met:

  • the approved facility that normally cares for the disabled adult or elderly person must have ceased its activities in connection with the COVID-19 crisis in whole or in part;
  • the private sector worker, the public service worker or the self-employed person must take care of the disabled adult or elderly person at home where both live.

Vacation can be shared among household members, but they are not allowed to take vacation at the same time.

The leave of absence for family support can be up to and including 25 approved services for the person concerned.

This special leave is equivalent to sick leave, ie employees can only be dismissed with immediate effect during their leave in the event of serious misconduct.

Probationary period

For the companies that were obliged to close during the state of emergency and for those entitled to and those who are taking advantage of the partial unemployment system, the trial period in the contracts with their employees was suspended from the day of the official decision to close the company and its activities or from the day on Day on which the employee concerned was admitted to the partial unemployment measure. The suspension lasted until the end of the state of emergency (i.e. June 24, 2020).

Employment contracts covered by this measure were fixed-term contracts, apprenticeship contracts, fixed-term contracts and open-ended contracts.

Teleworking and cross-border commuters

Temporary exemptions from taxation and social security registration of cross-border workers in their country of residence have been agreed with the neighboring countries (Germany, France and Belgium).

It was agreed that, since March 2020, the days that are spent in the country of residence instead of Luxembourg are not counted towards the maximum number of days that employees may previously work in their home country (i ) become liable for income tax in that country; and (ii) must be registered with that country’s social security system.

These temporary exemptions are still in force.

Short-time work

Special and transitional regulations for short-time work (chômage partiel) Temporary measures have been taken since the beginning of the pandemic.

The short-time working regulation in the event of force majeure in connection with the pandemic was valid until the end of the state of emergency, June 24, 2020. Companies that had to close during this period were directly and unconditionally entitled to benefit from this regulation. Other companies had to justify negative effects of the pandemic.

After the state of emergency ended, with a view to gradual normalization, the conditions for compensation continued to evolve. This phase was considered an economic recovery phase and lasted until June 30, 2021.

During the economic recovery, companies that applied for short-time work had to meet various conditions, such as dismissal restrictions (z). During this phase, the number of working hours eligible for compensation due to partial unemployment was capped.

Eligible companies have been compensated by the Employment Fund for their employees’ inactive hours. Reimbursement was limited to 80% of the worker’s normal wage and did not exceed 250% of the social minimum wage for an unskilled worker.

From July 1, 2021, the general regulations on partial unemployment will apply again.

Health and safety measures

The grand-ducal ordinance of April 17, 2020 created a general framework for health and safety measures related to the pandemic.

This regulation introduced measures such as the obligation for companies to take appropriate measures to protect the health and safety of their employees or to avoid and reduce risks. In addition, an obligation has been introduced to assess all unavoidable risks related to the health and safety of workers and to limit as much as possible the number of workers who are or are likely to be exposed to the risks and to inform them of these risks , and how to temper them.

In order to comply with these measures, employers must provide workplaces and workplaces with specific health and safety measures such as information boards and disinfectants. Employers must also ensure that workers maintain a reasonable physical distance or wear face masks.

Salary of employees during sick leave

From April to June 2020 the CNS (Caisse nationale de Santé) took over the payment of the sick employee’s salary from the first day of illness.

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Originally published by Chambers Global Practice Guides – Employment 2021.

The content of this article is intended to provide general guidance on the subject. Expert advice should be sought regarding your specific circumstances.

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