Transparency and predictability: Anticipating changes from Bill 8070 on working conditions in Luxembourg

Bill 8070 (the Bill) seeks to transpose the European Directive 2019/1152 dated 20 June 2019, into Luxemburg law. This directive focuses on creating transparent and predictable working conditions across the European Union. Its primary goal is to improve the work environment by:

• ensuring workers can access essential information about their employment terms; and
• providing them with guaranteed minimum working conditions.

Although the legislative process is not yet fully completed, a critical final step was taken on 22 April 2024, paving the way for the adoption of the Bill in the coming weeks. Therefore, we do not anticipate any significant modifications to the current Bill anymore. This alert aims to inform and prepare you for the upcoming changes.

Main changes introduced in relation to working conditions

1. Review of the employment contract content

Expansion of mandatory information in employment contracts

The Bill expands the information related to working conditions that must be communicated to employees, seconded and temporary workers, apprentices, pupils, and students.

Employment contracts must include additional details about the workplace, the terms of compensation and the probation period. They should also clearly state the social security authority with which the employee is affiliated. Information regarding overtime work and the procedures for terminating the employment contract must also be included.

Part-time workers' contracts must clearly state their work hours and the days they work each week. If this information isn't included, it will be assumed that the employee works full time.

The Bill also introduces a guaranteed principle of free and accessible training. Employment contracts hence have to include detailed information on training programs made available to the employees.

At a glance

The expansion of the mandatory information to be added in employment contracts, gives rise to different deadlines an employer should be aware of. 

Essential information to communicate to the employee upon their request within seven days

• Identity of the parties to the employment relationship
• Start date of the employment contract
• Workplace
• Nature of the job
• Working hours and conditions for overtime work and its compensation (*)
• Normal schedule
• Remuneration: including the base salary and all salary supplements (*)
• Duration and conditions of the probation period (*) 

Essential information to communicate to the employee upon their request within one month

• Duration of leave (*)
• Procedure in case of termination, including the conditions of form and notice periods to be respected (*)
• Indication of the existence of a collective agreement, if applicable
• Identity of the social security authority and social protection scheme
• Right to training provided by the employer, if applicable (*)

For the information marked with an asterisk, a simple reference to the applicable legal provisions will suffice.

For existing contracts, the employees have the opportunity to request a compliant written document, which must be provided within a period of two months.

Digitalization of employment contracts.

Employment contracts may be concluded in digital form if the digitized version is accessible to employees.

Prohibition of exclusivity clauses.

A notable change is the prohibition of exclusivity clauses in employment contracts. There is, however, one exception to this new general principle of prohibition. If the prohibition of holding multiple jobs is justified by legitimate interests that are objectively verifiable, the exclusivity clause may be included in the employment contract. This will have to be evaluated on a case-by-case basis.

2. Reduction of the maximum duration of the probation period for fixed-term contracts

The maximum duration of the probation period for fixed-term contracts is reduced. It cannot be less than two weeks nor exceed one quarter of the total duration of the contract. For example, for a 12-month contract, the probation period should not exceed three months.

3. Establishment of a transition procedure to another form of employment

A major innovation of the Bill is the establishment of a transition procedure, allowing an employee to switch from one type of contract to another.

Once every 12 months, an employee may ask their employer to either convert their fixed-term contract into an indefinite contract or to change their working time from full-time to part-time (or vice versa).

This request can only be done by employees with at least six months of length of service once their probation period is completed.

The employer must respond within one month. If granted, the transition to a new form of a contract must be formalized in writing. If refused, the employer must provide a written justification. If the employer does not respect this procedure, the employee may take the matter to court to compel the employer to respond to their request.

Financial penalties and procedures in case of employer's non-compliance.

Employers who fail to adhere to the new legislation may incur fines between 251 and 5,000 euros. The fine is imposed on a per-employee basis, where each breach of the law leads to a fine.

If an employee does not receive the mandatory information they requested (outlined in Section I) within the legal timeframe, they can pursue an emergency legal process. This action can only be taken after a formal notice has failed to produce the desired outcome.

The Bill reaffirms the principle of prohibiting any unfavorable treatment or retaliation against employees who have taken legal actions to enforce their rights under the Labour Code.

How to prepare

The content of the Bill will probably come into force by the third quarter of 2024. It is therefore important for employers to start preparing for it.

New information will need to be mentioned in all future employment contracts, and current employees will be able to ask their employer to receive the missing information in writing.

We advise you to review your existing employment contracts to ensure they meet the new requirements.

In your toolbox to prepare for these changes, the Labour Inspectorate (Inspection du Travail et des Mines, ITM) will publish on its website (www.itm.lu) information relating to the obligations of information on transparent and predictable working conditions.

Please feel confident that our team remains at your entire disposal to assist you in the update of your template employment contracts.

For more information, please contact:

Luxembourg

5 Avenue John F. Kennedy, L-1855 Luxembourg, Luxembourg

Tel +352 44 44 55 1

Fax +352 44 44 55 222