Luxembourg: Draft Law Reforming Social Dialogue In Undertakings

A draft law reforming social dialogue was presented to the Luxembourg Parliament on February 25, 2013 aiming at re-evaluating and improving the social dialogue in undertakings (hereinafter "the Draft Law").

The innovations may be summarised as follows:

1. The structure of the bodies representing the employees is simplified

A staff delegation must be set up at different levels:

• At the level of an "undertaking" ("entreprise");
• At the level of an economic and social entity ("entité economique et sociale") if any.

Representatives of establishment may also be elected if the undertaking is composed of several separate establishments. Such representatives of establishment are part of the staff delegation set up at the level of the undertaking. Separate establishments are defined as any production or exploitation unit permanently endowed with material assets and personnel managed by a head supervising the establishment to whom the head of the undertaking has delegated limited powers.

2. The right for the staff delegation to have recourse to external counsels is enhanced

Given the complexity of the issues with which the staff delegation must deal and the extension of the scope of their powers, the Draft Law enhances the right for the staff delegates to have recourse to external counsels.

3. The powers of the delegate responsible for occupational safety have been extended

The powers of the delegate in charge of occupational safety issues include health issues.

4. The functions of the staff delegation have been clarified, grouped and completed

It is worth mentioning the obligation to communicate to the staff delegation and to the delegate in charge of occupational safety and health issues, information on the evolution of the absence rate. Moreover, information and consultation requirements on the running of the undertaking are extended to vocational training, policies on the prevention of harassment and violence at the workplace, working time organisation, continuing professional development plans, the setting up of age management plans, the implementation of internal reinstatements and promotion of work-life balance and recourse to agency workers or to fixed-term employment contracts.

5. The Joint Works Council is removed

One of the major changes proposed by the Draft Law is to remove the Joint Works Council and to transfer the functions currently entrusted the Joint Works Council to the staff delegation. This change aims at enhancing the participation of employees within undertakings. Indeed, it removes the distinction between on the one hand, the staff delegation currently focused on claims and disputes between employees and employers, and on the other hand, the Joint Works Council seen as a participative body with a view to implementing a certain collaboration between employees and employers by means of a reciprocal consultation and information process. As a consequence, the staff delegation shall be the sole body representing the employees' interests. The legal threshold for the staff delegation to be entrusted with a participation role (as currently performed by the Joint Works Council) remains set at 150 employees. The requirements for delegation of young employees and divisional delegation are also removed.

6. The allocation of time to the staff delegation has been adapted for undertakings with more than 150 employees

A staff delegate is released from his duties to work and is fully dedicated to his functions as a staff delegate when the undertaking has more than 250 employees instead of 500 as is currently the case. Moreover, staff delegates in their first mandate are entitled to an additional allocation of 16 credit hours in the course of their first year for special training for their new tasks.

7. The legal protection of the staff delegates against any dismissal has been limited under certain circumstances

Another major innovation is a relaxation of the protection rules applicable to staff delegates against any dismissal. Any staff delegate remains as a principle protected against (1) any substantial change to his/her working conditions if such change is detrimental to him/her and (2) any dismissal with notice. However, a staff delegate may be dismissed, respectively a staff delegate's employment contract may be terminated in the following cases:

• In the event of total closure of the undertaking based on economic or technical grounds as recognised by the ITM.
• In case of closure of an establishment of the undertaking or of a part of the undertaking or establishment, staff delegates employed in such establishment or part of undertaking or establishment for over 24 months may be dismissed with notice if such delegates may not be assigned to another job available within the undertaking or establishment.
• In the event of gross misconduct by a staff delegate, the head of the undertaking may immediatly release the staff delegate from the obligation to carry out his duties. The staff delegate remains entitled to his remuneration for a period of three months. The staff delegate may during this period of time start an action in court to claim the continuance of the payment of the remuneration after the initial period of 3 months. The employer may introduce an action in court to request the resolution of the employment contract within 3 months as of the action introduced by the employee to claim the continuance of remuneration or within a period of time expiring 1 month after the expiry of the period of time

8. A mediation procedure is set up to resolve disputes.

The Draft Law provides for a mediation procedure implemented either in the framework of a Collective Bargaining Agreement (at company or industry level), or of an interprofessional agreement, or by the recourse to an ad hoc mediator appointed by common consent of the parties. A mediation procedure may be commenced in case of dispute on the application of the legal provisions, notably in the event where the parties disagree on a co-decision issue.

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.