European Trade Union Institute, ETUI.

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Industrial relations in Luxembourg: background summary

National context

  • According to the most recent estimates, 41 % of employees residing in Luxembourg are a member of a trade union.The percentage is a little lower if we include the numerous cross-border workers. However, the OECD data point to a decrease in this figure (taking into account cross-border workers), which fell from 42 % in 2002 to 33 % in 2012.
  • This relatively high rate can be explained, in particular, by the extensive services provided by the trade unions (legal assistance, assistance with tax returns, etc.) and their capacity to incorporate migrant workers.
  • There are two large trade union confederations, the OGBL and the LCGB, which have members from most sectors of the economy. In spite of their ideological differences, they work quite closely together at both national and European level.
  • Industries and companies are the principal negotiating levels in Luxembourg. It is rare for agreements to be concluded at national level and those that are relate mainly to the transpositions of European collective agreements such as those on telework or protection against harassment.
  • Sectoral agreements initially only apply to companies that belong to the signatory employers’ organisations, but they are often extended by the government to the entire sector. Around 28 existing agreements have been extended in this way.
  • According to the most recent data, 57 % of employees were covered by collective agreements in 2014. They come from a wide variety of sectors, some with high coverage (health, social welfare, public sector, education) and some with very low coverage, such as the hotel and catering industry (7 %). Some important sectors, such as business, have no collective agreements. Only the largest distribution networks have company agreements.
  • Company agreements are much more common than sectoral agreements: in 2014, 79 company agreements were registered with the Labour Inspectorate, compared to just 11 sectoral agreements.
  • Since 2004, the law has decreed that it is primarily representative trade unions that are authorised to negotiate and sign collective agreements. It requires the unions to set up negotiating committees composed of the representative trade unions at national level and in the sector concerned.
  • The scope of wage bargaining is framed by the application of a price indexation mechanism. Wages (as well as pensions and other benefits) are in fact automatically increased the month after a 2.5 % rise in the consumer price index. However, this mechanism was adjusted during the economic crisis.
  • There is also a legal minimum wage at national level. It is increased by 20 % for skilled workers and reduced for young workers. The minimum wage is also price-indexed and based on the actual change in salaries.        

Reform of social dialogue within companies

  • Worker representation within companies underwent a significant reform in 2015. It will be implemented gradually up to the next social elections due to be held in 2018. The Law on the reform of social dialogue within companies aims to ‘improve the quality of that dialogue, which must be a fundamental concern of a modern economy that is facing numerous far-reaching changes that are transforming the work of employees and the organisation of companies’.
  • One of the main objectives of the Law is to merge the two bodies that represent employees. The current tasks of the ‘joint committee’, the body that represents staff in companies with 150 or more employees, are transferred to the ‘employee delegation’, which is to be established in companies with 15 or more employees. The abolition of joint committees means that the delegations are the only bodies to represent the interests of employees.
  • The composition of delegations varies depending on the number of staff, from 1 member where the company has between 15 and 25 employees to 25 members where there are between 5 101 and 5 500 employees, as well as a supplementary member for every additional 500 employees above this threshold. As the joint committees are being abolished, their tasks are transferred, subject to a number of conditions, to the employee delegations.
  • The aim of the employee delegation is to ‘safeguard and defend the interests of a company’s employees as regards working conditions, job security and social status’. It also works to resolve disputes and presents to the employer ‘any individual or collective grievances’. The employer provides it with the information it needs to implement its tasks successfully, and keeps it up to date with details of the progress and life of the company, including recent and probable developments in its activities, and its financial situation.
  • The employee delegation has an informative and consultative role but no negotiating powers. Some topics, such as health and safety or the introduction of staff monitoring tools, are subject to codecision in the employee delegations of companies with at least 150 employees.
  • The employee delegation can make use of ‘internal and external advisers’ in companies with at least 51 employees and ‘experts’ in all companies.
  • The Law also provides for mediation in the case of disputes on the application of, or the effects of the application of, certain articles of the Labour Code as regards the employee delegation.
  • This reform has accentuated the trade union rivalry between the LCGB, which fears that it puts ‘all power in the hands of the largest trade union’, while the OGBL believes that it strengthens the majorities voted for by all of a company’s employees.
  • Workers are represented on the management boards or supervisory boards of companies with at least 1 000 employees, companies in which the State holds more than 25 % of the capital or companies that operate as a State concession (in 2002 there were employee representatives on the boards of 15 Luxembourg companies). In companies with at least 1 000 employees, one third of the members of the management or supervisory boards must represent the staff.