1.1 Main Changes in the Past Year
With the extensive use of teleworking due to the spread of COVID-19, the various social partners in Luxembourg agreed to modernise the existing legal regime for teleworking and signed a new inter-professional convention on the legal regime for teleworking on 20 October 2020. This new convention has been declared of general obligation by a Grand-Ducal Regulation of 22 January 2021, with effect as of 2 February 2021, meaning that the convention is binding on all employers in Luxembourg.
The new convention now applies to both occasional and regular telework, and introduces for the first time a definition of occasional telework. It also simplifies the conditions for the implementation of regular telework, by reducing the mandatory mentions to be included in the agreement between the employer and the employee, and by providing that the agreement may result not only from an individual agreement, but also from a collective bargaining agreement or an agreement at company level. The convention also defines the employer's obligations with respect to equal treatment, work equipment, trainings, work organisation, etc.
In addition to this legal framework, the Luxembourg Financial Supervisory Authority (Commission de Surveillance du Secteur Financier, CSSF) has issued circular No 21/769 on teleworking, which will apply to all supervised entities of the financial sector. The circular will in principle come into force on 30 September 2021, but this may be delayed depending on the evolution of the COVID-19 pandemic.
This circular defines the governance and security requirements the supervised entities must comply with when implementing and using telework solutions under normal general working conditions (ie, not under pandemic-related situations).
On 1 November 2020, the Law of 24 July 2020 on the internal and external reclassification system came into force. This law aims in particular at optimising the procedures in place for professional reclassification and at improving the financial situation of people undergoing professional reclassification.
The Law of 15 December 2020 amending the Labour Code in order to transpose the European Union directive for posted workers entered into force on 22 December 2020. This law extends the core Luxembourg employment rules concerning mobility that now apply also to employees posted to Luxembourg – for example: accommodation provided by the employers to workers who are far from their usual place of work; allowances or reimbursements of travel, accommodation and food; and equal treatment in terms of remuneration.
Furthermore, when employees are posted to Luxembourg for more than 12 months, or 18 months if extended, all Luxembourg employment rules must apply.
1.2 COVID-19 Crisis
Numerous derogatory measures have been implemented to cope with the unprecedented COVID-19 crisis – many of which have impacted the employment landscape.
Leave for Family Reasons in the Context of the Pandemic
The leave for family reasons in the context of the pandemic enables parents to benefit from an extended leave to look after their child(ren) in certain special circumstances.
This leave applies to all employees, self-employed professionals and or apprentices, who are registered with the Luxembourg social security scheme, regardless of whether they have the possibility to work from home or not, and who have a child who is:
- under 13 years old and under a quarantine or isolation measure imposed by the Health Directorate;
- between 13 and 18 years old and hospitalised under a quarantine or isolation measure imposed by the Health Directorate;
- vulnerable to COVID-19, provided that a medical certificate is produced attesting this vulnerability and the contraindication to attend school or a childcare facility;
- born before 1 September 2017 and under 13 years old or who has not left the basic education system and cannot attend the school following a formal decision to close the school, whether partially or completely;
- born after 1 September 2016 and cannot attend a childcare facility following a formal decision to close it.
The age limit of 13 years is not applicable when the child receives special additional allowance for disabled children from the CAE (Caisse pour l'avenir des enfants).
Leave for family reasons can only be taken by one parent at the same time. Additionally, an employee who is placed on short-time work, or whose partner or spouse is partially unemployed, is not entitled to leave for family reasons.
The leave for family reasons has been extended up to (and including) 14 September 2021.
This special leave is assimilated to a sick leave period, meaning that employees cannot be dismissed during their leave for family reasons except for serious misconduct with immediate effect.
Leave for Family Support in the Context of the Pandemic
The leave for family support in the context of the pandemic enables employees (from both private and public sector) and self-employed professionals to look after an elderly person or a disabled adult following the closure of a daycare structure or a training or employment structure.
The following conditions must be met:
- the approved structure that would normally take care of the disabled adult or elderly person must have ceased all or part of its activities in the context of the COVID-19 crisis;
- the private-sector employee, the public-sector employee of self-employed professional must care for the disabled adult or elderly person at home where they both live.
The leave may be divided among members of a household, but they may not take the leave at the same time.
The leave for family support can be requested up to and including 25 November 2021 and shall end if the daycare structure or the training or employment structure notifies the Minister that it has resumed all or part of its activities and that there is a place available in the approved service for the person concerned.
This special leave is assimilated to a sick leave period, meaning that employees cannot be dismissed during their leave except for serious misconduct with immediate effect.
For the companies obliged to close during the state of emergency and for the ones entitled to and using partial unemployment scheme, the trial period in the contracts with their employees were suspended from the day of the governmental decision to close the company and its activities or from the day the concerned employee was admitted to partial unemployment measure. The suspension lasted until the end of the state of emergency (ie, 24 June 2020).
Working contracts covered by this measure were fixed-term contract, apprenticeship, interim contracts, and open-ended contracts.
Teleworking and Cross-border Employees
Temporary derogations from taxation and social security registration rules of cross-border employees teleworking in their country of residence have been agreed with the neighbouring countries (Germany, France and Belgium).
It has been agreed that the days spent in the country of residence instead of Luxembourg, since March 2020 due to the COVID-19 restrictions and recommendations, would not count in the maximum number of days employees are allowed to work in their home country before (i) becoming liable to personal income tax in that country and (ii) having to be registered with the social security system of that country.
These temporary derogations are still in force.
Special and temporary arrangements for short-time working (chômage partiel) temporary measures have been put in place since the beginning of the pandemic.
The short-time working scheme in the event of force majeure related to the pandemic was in place until the end of the state of emergency, 24 June 2020. Companies forced to close during this period were directly entitled to benefit from this scheme without any condition. Other companies had to justify a negative impact of the pandemic.
After the end of the state of emergency, in view of a gradual return to normal, the conditions to obtain compensation were continuously evolving. This phase was considered to be an economic recovery period and lasted until 30 June 2021.
During the economic recovery phase, companies which applied to benefit from the short-time working scheme had to fulfil different conditions, such as limitation of dismissals (eg, prohibition of dismissal for economic reasons, or limits on dismissals calculated as a percentage of active workforce). During this phase the number of working hours eligible for compensation due to partial unemployment were also subject to a cap.
Eligible companies were reimbursed by the Employment Fund for inactive hours of their employees. Reimbursement was limited to 80% of the normal salary of the employee and did not exceed 250% of the minimum social wage for an unqualified employee.
As of 1 July 2021, the general rules regarding partial unemployment are back in force.
Health and Safety Measures
The Grand-Ducal Regulation of 17 April 2020 introduced a general framework for health and safety measures related to the pandemic.
This Regulation introduced measures such as the obligation for the companies to take appropriate measures to protect the health and safety of their employees, or to avoid and mitigate risks. It also introduced an obligation to assess any unavoidable risk related to the health and safety of employees and to limit, to the extent possible, the number of employees exposed, or likely to be exposed, to the risks and to inform them of such risks and how to mitigate them.
In order to comply with these measures, employers have to fit out workstations and workplaces with specific health and security measures, such as information panels and disinfectants. The employers shall also ensure that employees maintain appropriate physical distance or wear face masks.
Employees' Salary during Sick Leave
From April to June 2020, the CNS (Caisse nationale de Santé) assumed the payment of the salary of the employees on sick leave as of the first day of sickness.
Originally published by Chambers Global Practice Guides - Employment 2021.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.