Important changes in employment contracts and working conditions under Luxembourg law
The Directive (EU) 2019/1152 on transparent and predictable working conditions in the European Union was transposed into Luxembourg employment law by a law of 24 July 2024, which entered into force on 4 August 2024.
The most important changes introduced by the law of 24 July 2024 are the following:
- New mandatory information to be included in employment contracts
Employers are now required to include more detailed information in employment contracts, such as: terms related to overtime work and its compensation, a precise description of all salary supplements and bonuses (if any) and of the modalities of payment, procedures for contract termination (including the formal requirements and the notice periods to be observed), conditions of application of a trial period (if any), the identity of the competent social security institution probation periods. For certain information, a reference to the relevant legal provision is sufficient.
There are also specific information that the employer must provide to part-time employees and to employees working outside Luxembourg for more than four consecutive weeks.
If certain mandatory information are not included in the employment contract, the employer is required to provide them to the employee within certain timeframes (i.e., depending on the considered information: within 7 calendar days or one month) from the first working day.
The obligation to provide these new information applies to contracts established since 4 August 2024. However, existing employees also have a right to request that their employer provide updated documents that comply with the new requirements.
- Prohibition of exclusivity clauses
Any clause that restricts an employee from engaging in another employment relationship with one or more employers outside of the agreed-upon working hours specified in the employment contract will generally be considered invalid.
However, exclusivity clauses remain valid when multiple employments are incompatible with objective reasons as defined by the law, such as: health and safety at work, confidentiality protection, public service integrity, or conflict of interest prevention.
- Limitation of trial periods in fixed-term employment contracts
In fixed-term employment contracts, the trial period (if any) must be at least two weeks long, and cannot exceed one-quarter (1/4) of the length of the fixed-term employment contract (or the minimum duration for which the fixed-term contract is concluded).
- Right for employees to ask for a conversion of fixed-term and part-time or full-time contracts
Once every 12 months, employees that have a length of service of at least 6 months (and are no longer in any trial period) may submit to their employer a request that (i) their fixed-term employment contract be converted into an open-ended employment contract, or that (ii) their part-time employment contract be converted into a full-time employment contract (or that their full-time employment contract be converted into a part-time employment contract).
The employer must either approve or refuse the request within one month of receiving it. If the request is refused, the employer must provide a detailed written explanation for the refusal.
- Free trainings
If an employer is required by law, regulation, administrative or statutory provision, or collective agreement, to provide training to employees for their job duties, this training must be provided free of charge during working hours, and the time spent on this training must be treated as actual working time.
- Specific sanctions
Employers who fail to comply with their obligation to provide mandatory information or with their obligation to consider employees' requests for conversion of fixed-term or part-time / full-time contracts may face fines ranging from EUR 251 to EUR 5,000 (or from EUR 500 to EUR 10,000 if the employer is a legal person) per employee.
Employers should review and update their employment contract templates to ensure compliance with the new legal requirements. They should also be prepared to respond to employee requests for updated contract information or for treating employees' request to convert their employment contracts as permitted by the new law.
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.