Directive (EU) 2019/1152 1 on transparent and predictable working conditions in the European Union (Directive) aims to "improve working conditions by promoting more transparent and predictable employment while ensuring labour market adaptability". After almost two years' delay 2, Luxembourg has finally implemented the Directive. Bill of law 8070 passed the first vote on 26 June 2024 and was exempted from the second constitutional vote on 12 July 2024, so the new law (Law) should be published shortly.
The most significant changes that employers need to address are summarised below.
Additional clauses to be included in employment contracts
The Labour Code already specifies a number of provisions that must be included in an employment contract. The Law adds a number of new ones concerning in particular:
- In the absence of a fixed or main place of work, the principle that the employee is free to determine their place of work.
- Arrangements for overtime and its remuneration.
- The distinction between basic salary and additional financial benefits.Arrangements for termination of the employment contract (procedure, formal requirements and notice periods).Conditions applying to the trial period.
- The training entitlement provided by the employer.
- Identity of the competent social security institution(s).
Strict time limits
If the employee so requests, the employer must provide them with the following essential information about their contract of employment:
The new thresholds are as follows:
| Within seven calendar days | Within one calendar month |
|---|---|
| Identity of the parties to the employment relationship | Length of paid leave (it is sufficient to refer to legislative, regulatory, administrative or organisational provisions or to collective agreements) |
| Commencement date for performance of the employment contract | Procedure to be followed by employer and employee on termination, including the formal requirements and notice provisions that must be complied with (it is sufficient to refer to legislative, regulatory, administrative or organisational provisions or to collective agreements) |
| Place(s) of work or a statement that the employee is free to determine their place of work, together with the employer's registered place of business or domicile | Indication of the existence of a collective bargaining agreement or, in the case of collective bargaining agreements concluded outside the business by special joint bodies or institutions, the name of the bodies or institutions within which they were concluded |
| Nature of the position and, where applicable, a description of the duties or assigned tasks | Identity of the social security institution and of the social security protection regime |
| The length of the standard working day or week, the arrangements relating to overtime and its remuneration and, where applicable, any arrangements for shift changes (it is sufficient to refer to legislative, regulatory, administrative or organisational provisions or to collective agreements) | The training entitlement provided by the employer, if any (it is sufficient to refer to legislative, regulatory, administrative or organisational provisions or to collective agreements) |
| The standard working hours | |
| Remuneration, including basic salary and any additional financial benefits (it is sufficient to refer to legislative, regulatory, administrative or organisational provisions or to collective agreements) | |
| Duration and conditions applying to the trial period (it is sufficient to refer to legislative, regulatory, administrative or organisational provisions or to collective agreements) |
If an employee does not receive the information requested within
these time limits and a formal notice is not effective, the
employee is entitled to expedited redress from the employment
courts.
Temporary relocation
The Law adds a number of provisions that must be set out in a written document when an employee is required to work outside Luxembourg for more than four consecutive weeks. These include the country or countries where they will be working, the remuneration due and the relocation allowances.
Digitalisation of employment contracts
Employment contracts may be digitalised, provided that the electronic version is accessible to employees and can be stored and printed, and that the employer retains proof of transmission or receipt in electronic format.
Responsibility for the employment contract
The Law states that the employer is obliged to draft and deliver to the employee a contract of employment that is compliant with the Labour Code.
Transition to another form of employment
Under the Law, an employee now has the right to make one request per year to move from a fixed-term contract (contrat à durée déterminée or CDD) to a permanent contract (contrat à durée indéterminée or CDI) and from part-time to full-time working (or vice versa), with continuation of all other rights and obligations attached to the contract. The key change is that the Law also introduces a right to receive a reasoned response to the request. An employee must satisfy certain conditions in order to qualify for this right.
Stricter rules for fixed-term contracts (CDD)
The maximum duration of a CDD trial period has been reduced. It may not be less than two weeks and may not exceed a quarter of the fixed duration of the CDD. For example, for a 24-month contract, the trial period must not exceed six months. The Law also states that, if the contract fails to include a written provision setting out a part-time employee's working hours (duration and schedule), the employee is presumed to be hired on a full-time basis.
Restriction of exclusivity clauses
The Law renders null and void any clause prohibiting an employee from having another employment outside their normal working hours. Likewise, any sanction for parallel employment that is imposed by an employer is also null and void.
However, this general prohibition does not apply if the parallel employment is impossible on the basis of objective grounds, such as health and safety at work, the protection of business confidentiality or the prevention of conflicts of interests.
Prohibition on retaliation and adverse treatment
The Law also reiterates the prohibition on all forms of retaliation and adverse treatment directed at an employee because of their objections or in response to a complaint or to bringing an action to enforce their rights. Any dismissal or substantial modification of their employment contract in this context is also prohibited. The employee has the right to bring an action for abusive termination of their contract of employment in this situation.
Sanctions for failure to comply with legislative provisions
One of the key new features of the Law is that employers who do not comply with their new obligations are now at risk of criminal penalties ranging from EUR 251 to EUR 5,000 for individuals and from EUR 500 to EUR 10,000 for legal persons (previously there was no criminal sanction if an employment contract did not include the information set out in the Labour Code). A fine will be incurred for each employee affected by the employer's failings. If there is further non-compliance within two years, the penalties may be up to twice these maximums.
Next steps
The Law comes into force four days after its publication in the Luxembourg Official Journal.
For new hires, employers must update their employment contract templates. Our Employment Law, Pensions & Benefits team is available to assist in adapting your template employment contracts so that they comply with the Law.
It is not mandatory to revise existing contracts and there is no requirement to execute an amendment. However, employees employed under employment contracts dating from before the Law enters into force have the right to request a written document complying with the new legislative provisions. Employers must provide this document within two months.
Footnotes
1. Directive (EU) 2019/1152 of the European Parliament and of the Council of 20 June 2019 on transparent and predictable working conditions in the European Union, Article 1.
2. The Directive should have been implemented by 1 August 2022 at the latest.
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.