In brief

On 26 June 2024, the Luxembourg parliament adopted draft bill No. 8070 (“Law“). The Law aims to implement into Luxembourg law Directive (EU) 2019/1152 of the European Parliament and of the Council of 20 June 2019 on transparent and predictable working conditions in the EU (“Directive“).

The Directive aims to enhance transparent and predictable working conditions across the EU by mandating comprehensive employment contract information and ensuring timely communication of essential job details to employees. It seeks to improve job security and provide a clear legal framework for employment relationships.

As the state council waived its constitutional vote on 12 July 2024, the Law should enter into force soon.

The purpose of this alert is to provide an overview of the new or enhanced obligations resulting from the Law for employers and to highlight updates that need to be made to employment contract templates and internal procedures.

For further information on what these developments mean for you or your organization, please get in touch with your usual Baker McKenzie contact.

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What you need to know

Enhanced mandatory information to be communicated to employees

The mandatory information to be communicated to employees, apprentices, and posted and temporary employees in relation to their working conditions has been expanded.

Additional details need to be mentioned in existing and future employment contracts/communicated to employees, such as the following:

• With respect to the workplace, whether the parties agree that the employee will be free to determine their place of work.
• The terms and conditions relating to the provision of overtime and their remuneration, and, where applicable, all formalities relating to team changes. 
• The remuneration, including not only the basic salary but also, where applicable, all salary supplements, including the potentially agreed contributions (these must be indicated separately) and the frequency and terms of payment of the salary to which the employee is entitled.
• The procedure that the employer and the employee must follow if the employment contract is terminated, including formal conditions and notice periods to respect or, if these cannot be indicated when concluding the contract, the methods for determining these notice periods.
• The conditions of application of the trial period possibly planned.
• The social security organization(s) collecting social contributions and the related social protection regime.
• The right to training granted by the employer.

Contracts may already provide this information, although not necessarily to the extent required by the new legal provisions. Hence, it is recommended that employers conduct due diligence to assess whether the current employment contracts comply with the enhanced mandatory information or whether they should be completed. Feel free to reach out to our designated contacts should you need assistance with this.  

Enhanced mandatory information to be communicated to posted employees

Should the employee be required to carry out their work for more than four consecutive weeks outside the territory of the Grand Duchy of Luxembourg, the employer is required to deliver a written document that includes at least the following information to the employee before their departure:

1. The country(ies) in which the work must be carried out and the duration of the work carried out abroad.
2. The currency used for paying the salary, and the remuneration to which they are entitled under the provisions of the host member state.
3. Where applicable, benefits in cash and in kind linked to expatriation, as well as allowances specific to the secondment and the terms of reimbursement of travel, accommodation and food expenses.
4. Where applicable, the conditions of the employee’s repatriation.
5. The link to the official national website on posting set up by the host member state (in compliance with EU regulations).

Communicating this information to the (posted) employee upon their request will be subject to a certain form and time frame determined by the Law. This is an expansion of the legal provisions already set out in the Labor Code, which must be taken into account as regards existing and new employment/secondment contracts. Do not hesitate to reach out to our designated contacts should you need assistance in reviewing these agreements to ensure alignment with the enhanced legal provisions.

Free training sessions

As per the Law, a new provision has been added to the Labor Code regarding the training sessions that employers provide to their employees. Specifically, where the employer is mandated — by legal, regulatory, administrative or statutory provisions; collective agreements; provisions arising from collective bargaining agreements; or cross-industry social dialogue agreements of general obligation — to provide training for the employees to carry out the work for which they are hired, this training must be provided free of charge to the employee during working hours. The hours devoted to this training must be considered actual working time. 

Prohibition of exclusivity clauses

The Law includes a significant change as regards exclusivity clauses and their enforceability. As such, a clause prohibiting an employee from exercising, outside the normal working hours agreed in the employment contract, another employment relationship with one or more employers is, in principle, null and void. The same applies to any clause that subjects the employee to unfavorable treatment for this reason.

However, the prohibition does not apply where having multiple employments is incompatible for objective reasons, such as health and safety in the workplace, the protection of business confidentiality, or the prevention of conflicts of interest.

Trial period for fixed-term contracts

Another significant change brought by the Law is the introduction of specific provisions for the duration of the trial period agreed on in a fixed-term contract. Where the duration of the trial period in fixed-term contracts was not specifically regulated, the new provisions impose a limitation on this duration.

The trial period possibly agreed between the parties can be neither less than two weeks nor more than one quarter of the duration set out in the fixed-term employment contract. Therefore, the trial period is set at three months maximum for a 12-month contract.

Change in types of employment contracts

The Law further introduces a new procedure for transitioning from one form of contract to another.

Once a year, the employee can request in writing that the employer convert a fixed-term employment contract into an indefinite-term employment contract, maintaining all other rights and obligations attached to it, or to change from part-time to full-time work or vice versa. However, this is subject to certain conditions that the employee must meet at the time of their request.

Within one month from receiving the employee’s request, the employer is required to either modify the contract following the parties’ mutual agreement or state precisely and in writing the reasons for its refusal to grant the employee’s request.

Part-time contracts

In the absence of a written document mentioning the part-time employee’s working hours and their distribution, the employee is presumed to be employed full-time.

Drafting and digitalization of the employment contract

The Law specifies that it is the employer’s responsibility to draft the employment contract and provide it to the employee in compliance with the Labor Code.

Employment contracts can now be in digital form, provided they are accessible to employees to be saved and printed.

Sanctions in the case of noncompliance

Employers that fail to comply with the new Law may face fines ranging from EUR 251 to EUR 5,000 per infraction. Employees who are denied mandatory information within the legal time frame can pursue emergency legal action post-formal notice. The Law upholds protection against unfavorable treatment or retaliation for employees enforcing their rights under the Labor Code.