Luxembourg Employment Contracts

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Luxembourg Contracts

A successful business largely depends on its employees. By creating working contracts that include the right terms and benefits there will be no misconception and the perfect work-life balance can be created. At Bradford Jacobs, this is our aim, and we support companies in over a hundred countries with creating compliant and balanced labor contracts.

Our team keeps track of Luxembourger laws and regulations daily to be duly aware of updates that can be implemented in working contracts. By using our PEO and EOR service we can provide compliant labor contracts for employees in Luxembourg, including local benefits.

Apart from the specific terms, employees must be given their formal written contract no later than the first day of employment. Although there are no legal requirements for the language used in a contract, the terms must be fully understood by all the parties, whatever their nationality or native tongue. Mandatory information required for all contracts includes identities and addresses of all parties, employment start date, place, and type of work, working hours, annual leave, notice periods, any trial period.

Generally, the standard contract is open-ended and indefinite. The Labor Code allows fixed-term contracts only in certain cases and they cannot exceed a total of 24 months, including a maximum two renewals. A trial period can be written into a contract before employment starts.

Open-ended, Permanent, Indefinite Employment Contracts (CDIs):  The typical and preferred contract type in Luxembourg. Regulations for terminating a permanent contract are laid down by the Labor Code.

Fixed-term Employment Contracts (CDDs):  These are permitted only for specific tasks or timescale, as strictly defined by the Labor Code, such as seasonal work or temporary replacement of staff. They cannot exceed 24 months, including the possibility of two renewals. If employers enter into a fixed-term contract outside the regulations, the agreement automatically becomes open-ended and permanent.

Part-time Employment Contracts:  Can be either permanent or fixed term, following the required regulations.

Seasonal Employment Contracts:  Permitted where a company’s operations (harvests or tourism for example), require employees on a repeated annual basis. They cannot exceed 10 months within any 12-month period.

Apprenticeship Employment Contracts:  Drawn up between employer and apprentice, or the apprentice’s legal representative if they are a minor, and must be registered with the Ministry of Education, Children and Youth. Can be either an initial apprenticeship contract in the case of a minor, or adult apprenticeship contract.

Probation or Trial Period Employment Contracts:  Trial periods can be written into the employment contract and are generally for between two weeks and six months. The probation period can be up to 12 months if the contract stipulates a monthly salary exceeding €4,474.31 (US$5,280).

Collective Bargaining Agreements (CBAs):  Collective bargaining and trade union agreements cover a significant proportion of workers in Luxembourg, in such areas as wages, working hours, notice periods, overtime, general working conditions and vacations. Such agreements overwrite other statutory minimums where they provide a higher level of benefits. Employers are required to enter negotiations with representative trade unions if requested.

CBAs operate at industry or company level in Luxembourg. Industry-level agreements apply to companies that belong to employers’ associations who have signed CBAs, although the government can expand these agreements for an entire sector. In practice, more agreements are signed at company level, and it is estimated that over 60% of workers are covered by industry or company CBAs.