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Luxembourg

22 February 2017

Luxembourg: New legislation to make working time more flexible

The Law of 23 December 2016 on the organisation of working time entered into force on 1 January 2017. Its key measure enables employers to extend the reference period used to calculate the duration of work from one to four months, in exchange for supplementary leave for employees.

In 2016, after the negotiations between the social partners failed to reach an agreement on the organisation of working time, the government was forced to present a draft law that was eventually adopted by the parliament in December. This compromise text, criticised by employers and equally maligned by the trade unions, entered into force on 1 January 2017. One of the key measures of the Law of 23 December 2016 on the organisation of working time is to enable employers to increase the legal reference period from one month to four months. According to the Labour Code, the maximum hours that can be worked per day and per hour are 8 hours and 40 hours, respectively. Therefore, any hours worked over and above these thresholds are counted as overtime, which means that they must be compensated for in the form of leave or additional pay. However, there is a reference period of one month during which employees may be asked to work beyond these limits. In this case, no compensation is received as long as the hours worked do not exceed 40 hours per week (or the duration laid down in the applicable collective agreement).

The Law has extended this period to four months in order to promote flexibility within businesses. From now on, an employer can thus decide to extend the reference period without having to negotiate an agreement with the trade unions. In order to satisfy the unions, and OGBL in particular, which called for a reduction in working time in exchange for this provision (see position), the Law provides some compensation: employers must allocate additional leave days to employees based on the duration of the reference period: from 1.5 days for a reference period of between one and two months, up to 3.5 days for a reference period of between three and four months. However, as before, the social partners may negotiate a collective labour agreement to extend the reference period to 12 months, and negotiate compensation that is appropriate to the needs of the business and the employees.

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