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Luxembourg – Debate on labour reform

10 February 2012

An interesting article by journalist, Camille Leroux-Frati, writing in Le Quotidien outlines her belief that the compromise agreed in 1999 at the European level between management, public enterprises and trade unions over ‘permanent’ contracts seems to be cracking.

The framework agreement on fixed-term employment of 18 March 1999, included in the Council Directive of 28 June1999, stated that "indefinite contracts are and will remain the general form of employment relationship between employers and workers." However, thirteen years later, the number of people employed on permanent contracts seems to have decreased while fixed-term contracts have grown. Nearly 14% of employees in the European Union are now employed on fixed term contacts, between 14.5% and 15% of Belgian and French workers, over 15% of German employees, and up to 25% in Spain. And the trend has accelerated with the onset of the financial and economic crisis in 2008:

Last week, the Court of Justice of the European Union dismissed the appeal of an employee who worked eleven years in the same enterprise on the basis of a total of 13 fixed-term employment contracts. For the ECJ, " The mere fact that an employer may have to employ temporary replacements on a recurring, or even permanent, basis and that those replacements may also be covered  by the hiring of  employees  under employment contracts of indefinite duration does not mean that there is no objective reason or that there is abuse." Although this case started in Germany, it has ramifications for Luxembourg as their legal approach is very similar. The Luxembourg law of 24 May 1989 on the employment contract and its regulations define exhaustively the sectors and contexts that may lead to the conclusion of a fixed term contract.  According to Minister of Labour, temporary work accounts for only 6.1% of employees in Q3 2011. But as Leroux-Frati established, there has been a 173% increased between 1996 and 2010, indicating a lasting presence in the contracting landscape in Luxembourg.

The Union of Luxembourg Enterprises (UEL) would also like to see a change in the legislation on fixed term contracts to allow more flexibility.  "Some rotation is beneficial, employees can find a worthwhile position and the economy needs the right people in the right jobs," argued Peter Bley, director of the UEL.  However, for unions, the law of 12 February 1999 on work organisation already provides the tools needed.

To read the full article in French, click here.



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