New legislation on staff representation

On 23 July 2015, a new law concerning the reform of social dialogue (hereafter the “Law”) was enacted which profoundly changes the situation of staff representation within companies and starts to come into force on 1 January 2016.

For the time being, Luxembourg law provides for a three-tier staff representation system depending on the size of the workforce employed.

Establishments with a workforce exceeding 15 employees must put in place a staff delegation (‘délégation du personnel’) which represents the personnel in relation to the working conditions and has a limited right to receive information. When the workforce exceeds 150 employees, undertakings must set up a works council (‘comité mixte’). The works council is composed of an equal number of employer and employee representatives. Finally, in undertakings operating in the form of a public limited company (‘société anonyme’) and employing at least 1,000 employees, one third of the board members must be staff representatives.

The Law does not make any amendments to the latter form of staff representation.

The Law is aimed at abolishing the works council and transferring the works council’s competencies to the staff delegation in undertakings employing at least 150 employees.

The Law also provides for various important changes to the rules governing the staff delegation.

  •  Appointment of the staff delegation

First of all, the Law makes changes with respect to the appointment of the staff delegation. Currently a staff delegation must be elected in every establishment. If an undertaking comprises various establishments, a central staff delegation must be put in place at the level of the undertaking.

The Law completely changes such perspective in that it establishes a staff delegation in every undertaking and no longer in every establishment. While this will not have any impact for undertakings which are composed of one single establishment, it will however make a significant difference for undertakings which have various establishments spread across the Luxembourg territory.

On the other hand, pursuant to the Law, if various undertakings together constitute a single economic and social entity (ESE), a delegation for the ESE will have to be established if the different staff delegations of the ESE request this set-up. The sole purpose of the ESE staff delegation is to allow the various staff delegations of the undertakings of the ESE to exchange information.

It is important to underline that the threshold for the election of a staff delegation will not change, i.e. the undertaking (instead of the establishment) will be required to put in place a staff delegation if it employs at least 15 employees.

The staff delegations for young employees are abolished by the Law.

  • Competencies of the staff delegation

No substantial changes as regards the competencies of the staff delegation have been introduced by the Law. They will basically remain the same and a certain number of additional competencies will be given to the staff delegation, for instance on such topics as reconciling professional and personal life, preventing harassment and violence, information on the development of the absenteeism rate, vocational training and questions relating to working time.

All the current competencies of the works council will be transferred to the staff delegation in undertakings employing at least 150 employees. For the employer the same matters currently discussed with the works council will continue to be discussed, except that the discussion partner will become the staff delegation. Both information competencies and co-decision competencies will be transferred from the works council to the staff delegation.

The topics which are subject to co-decision remain identical, and a new co-decision competency has been created by the Law with respect to the setting-up and implementation of a program of continuing vocational training. An entirely new procedure for formalising the discussion of matters subject to co-decision is foreseen in the Law.

  • Exemption from work to fulfil the staff delegation’s duties

The staff delegates will benefit, pursuant to the Law, from increased paid leave to fulfil their duties as staff delegates. In addition, some staff delegates benefit from a total exemption from work in order to fulfil their duties; they are called ‘délégués libérés’. Pursuant to the Law, the threshold above which an undertaking is obliged to have a ‘délégué libéré’ will be lowered from 500 employees to 250 employees. This means that smaller undertakings (as from 250 employees, compared to the current threshold of 500 employees) will be obliged to free one or several staff delegates from work.

In addition, the Law introduces the obligation for the employer to enter into an agreement with the staff delegation to inform on the theoretical career development of the staff delegates who benefit from a partial (at least 50% of their working time) or total exemption from work to fulfil their duties, compared to a group of employees used as a reference. This agreement must in particular establish how the staff delegates should participate in vocational training offered by the employer in relation with the staff delegates’ position before they acted as staff delegates.

  • Assistance of the staff delegation

According to the Law, staff delegates will have increased opportunities to seek the assistance of external counsellors. The Law also changes the rules for the assistance of the staff delegation by experts to assist them on technical matters (the costs having to be borne by the employer, subject to some limits).

  • Means of action to fulfil the staff delegation’s duties

Pursuant to the Law, staff delegates are free to leave their workstations to perform their missions of staff delegates provided they have duly informed the employer and their absence does not cause disruptions to the proper operation of the service, whereas the current legal provisions mention that the possibility for staff delegates to leave their workstation is subject to the prior agreement of the employer.

The Law modernises the provisions relating to communications by the staff delegation, by specifying that the staff delegation may use any medium to communicate with the staff, including electronic means.

  • Delegates’ training

The Law provides for an increased number of hours granted to staff delegates for their training. In particular, the Law aims to provide training hours to deputy staff delegates and to grant additional training hours to newly elected staff delegates during the first year of their mandate.

  • Protection against dismissal

The protection regime of staff delegates will also be changed by the Law.

One of the main innovations of the Law is that a staff delegate who is dismissed despite the protection he/she benefits from will be granted an option: he/she can either request the cancellation of the dismissal and his/her reinstatement (as already provided by the current legislation) or the allocation of damages for unfair dismissal. This option did not exist under the former statutory provisions.

The Law also introduces an exception to the protection of staff delegates against dismissal in the case of the closing-down of the entire undertaking. It thus ratifies a solution created by case-law.

The current legislation provides a specific procedure to suspend a staff delegate from work and to request the Labour Court to terminate the employment contract in case the staff delegate has committed a serious fault. The Law aims to adapt this procedure. Pursuant to the Law, the staff delegate, even though suspended, will continue to be paid during the first 3 months of the suspension, after which period he or she will have to request the continued payment of his or her remuneration from the President of the Labour Court until the final decision regarding the termination of the employment contract. The procedure to be followed by the employer for requesting the judiciary termination of the employment contract does not change drastically.

In that case as well, the Law introduces an option for staff delegates who may request the Labour Court to declare the employment contract terminated and to allocate him or her damages for this termination.

An innovation is that a new deadline is provided in the event that the employer fails to submit a request for the termination of the employment contract after the suspension, in which case the staff delegate may request the continuation of the employment contract and the cancellation of the suspension.

Another interesting innovation of the Law is the fact that the existing protection of staff delegates against the unilateral amendment of a substantial element of their employment contract recognised by case-law is acknowledged by the Law.

  • New mediation system

The Law introduces a new mediation system. In case of conflicts between the employer and the staff delegation on various subjects, notably the impossibility of finding an agreement on co-decision matters or discussions on the existence of an ESE, the parties may resort to a mediator who will endeavour to help the parties to find a common agreement.

This is a major reform of staff representation in Luxembourg, which will enter into force partly on 1 January 2016 and partly in 2018, for the next general elections.