Luxembourg legislation provides for two main categories of employment status: 

• Employees
• Self-employed persons

The Luxembourg Labour Code provides for two types of employment contracts:

• Indefinite term contract (Articles L. 121-2 and ff.)
• Fixed-term contract (Articles L. 122-1 and ff.)

Article L. 121-4 of the Luxembourg Labour Code outlines the requirements with which the employment contract must comply in order for it to be considered valid.

With regard to form, the employment contract must be concluded in two originals, in writing, and be signed and dated by both parties.

With regard to content, Article L. 121-4 (2) outlines the minimum elements that the contract must contain to be valid. This includes, for example:

• the identity of the parties,
• the start date,
• the place of work,
• the nature of the work,
• the normal working hours,
• the remuneration,
• the holiday entitlement,
• the notice period in the event of dismissal,
• the trial period, if applicable,
• reference to the applicable collective bargaining agreement, and
• the existence of a complementary pension scheme, if applicable.

Yes. Article L. 123-6 Luxembourg Labour Code provides that part-time employees must have the same rights as full-time employees.

In parallel, Article L. 122-10 provides that fixed-term employees must also have the same rights as permanent employees.

No. Under Luxembourg law, employment contracts are concluded intuitu personae and therefore cannot be assigned to another person.

Articles L. 127-1 ff. of the Luxembourg Labour Code outline the conditions for a transfer of undertakings to occur.

The employment contracts of transferring employees are immediately and automatically transferred as of the effective date of the transfer of activity. Furthermore, the terms and conditions of employment (including seniority, salary and any benefits) have to be maintained by the receiving entity.

The transfer of undertaking is in itself not a valid reason for dismissal.

In the case of a transfer of undertaking, either the employees’ representatives or the employees themselves must be informed and notified thereof.

Employees do not have a right to object unless the objection concerns changes to essential terms of the contract. Objection to the transfer is not recognized as a legal ground. As such, if an employee refuses to transfer and/or disagrees with a unilateral amendment to their contract, they do not have legal grounds to object and must either accept the change or resign.

No. A change of control does not provide for any particular statutory employee rights under the Luxembourg Labour Code (except for substantial changes to terms and conditions of employment).

Employers can make unilateral changes to the terms of employment that are either neutral or favourable to the employee. 

Article L. 121-7 of the Luxembourg Labour Code sets out a comprehensive procedure to be followed if an employer wants to amend a substantial term of employment in a way that is unfavourable to the employee. If the proposed amendment is not mutually accepted in writing by the employee, the employer has to follow the procedure set out by Article L. 121-7, which requires the same formalities as cases of termination of the employment contract with notice period.

The employee must be notified of the amendment to the essential term(s) of employment in writing, providing in particular an indication of the notice period (generally 2, 4 or 6 months, depending on seniority) and the effective date of the amendment. The employee may request the grounds for such a change, which must be real and serious (réel et sérieux) and provided by the employer in detail and in writing. If the employee refuses to accept the amendment to their employment contract, they must resign. This resignation may be considered a constructive dismissal and gives the employee cause to bring legal action for unfair dismissal.

No. The employment contract can be terminated by the employer either:

• with notice (generally 2, 4 or 6 months depending on the seniority of the employee) (Articles L. 124-3 and ff. of the Luxembourg Labour Code); or
• with immediate effect for gross misconduct (Articles L. 124-10 and ff. of the Luxembourg Labour Code). In this case, the letter of dismissal must give precise details of the reasons for dismissal.

Yes. The case can be brought before the courts by the employee in order to obtain financial compensation.

The protection of whistleblowers is a matter of public policy and is thus mandatory. It applies provided that the whistleblower has made a report within the meaning of the law of 16 May 2023, acted in good faith, and had reasonable grounds for believing that the information reported was true and that its disclosure was necessary. A whistleblower’s identity must remain confidential. They are also protected against any form of threatened, attempted, or actual retaliation (such as unfavorable modification of the employment contract, withholding of promotion, or dismissal), which will be null and void by operation of law.

There are various measures in place to ensure effective protection for whistleblowers. These include reversing the burden of proof in their favor, an expedited procedure before the competent courts, various types of legal remedies with different outcomes, and partial immunity from liability.

Yes, employees have a right to privacy. A breach of privacy could trigger the employee’s right to claim damages in court.
 
In the event of GDPR infringements, administrative fines of up to EUR 20 million or 4% of total worldwide annual turnover may apply. 

Furthermore, Article L. 261-1 of the Luxembourg Labour Code provides for the protection of personal data of the employees. In the case of a breach of Article L. 261-1, Article L. 261-2 provides for a prison sentence ranging from 8 days to 1 year and/or a fine from EUR 251 to EUR 125,000.

Article L. 251-1 of the Luxembourg Labour Code prohibits any direct or indirect discrimination on the basis of religion or beliefs, disability, age, sexual orientation and whether or not one belongs, or is presumed to belong, to a nationality, race or ethnic group.

Article 454 of the Luxembourg Criminal Code also prohibits discrimination and provides for a prison sentence ranging from 8 days to 2 years and/or a fine ranging from EUR 251 to EUR 50,000. The fines and prison sentences can be doubled for all offenses committed “because of” (en raison de) a discriminatory factor.

The Luxembourg Labour Code provides the main rights to statutory leave as follows:

• Paid leave:
• at least 26 days per year (Article L. 233-4 of the Luxembourg Labour Code),
• 11 annual public holidays (Article L. 232-2 of the Luxembourg Labour Code)
• Medical leave: employees on medical leave are protected from dismissal, provided that they informed their employer of this on the first day of absence and have documented their illness by providing a medical certificate to their employer within 3 days of their first day of illness (Article L. 121-6 of the Luxembourg Labour Code).
• Family leave:
• maternity leave is granted 8 weeks before the expected date of birth and 12 weeks after the date of birth (Articles L. 332-1 and ff.)
• leave for the birth of a child is granted for 10 days (divisible into 80 units of one hour) to the second parent provided that they informed their employer of this in writing and at least two months before the date of the leave. If the second parent has not done so, this leave may only be taken once and immediately after the birth of the child, unless the employer and the employee have agreed on a flexible solution allowing the employee to take leave either in full or in part at a later date (Article L. 233-16 of the Luxembourg Labour Code).
• parental leave is up to 6 months of full-time leave for each parent (non-transferable) but it can be taken according to several different options: full-time (4 or 6 months); part-time (8 or 12 months); split leave (4 one-month periods within a period of no more than 20 months, subject to the employer's approval; or 1 or 2 half days per week within a period of no more than 20 months, subject to the employer's approval)

Over the last 12 months, existing types of leave, such as leave for the birth of a child, have been amended and new types of leave have been introduced in the Luxembourg Labour Code:

• leave on grounds of force majeure for urgent family reasons in the case of an illness or accident that requires the immediate attendance of the employee (1 day – divisible into 1-hour units – over a period of 12 months of full-time employment)
• carers' leave to provide personal care or support to a relative or to a person who lives in the same household, and who is in need of significant care or support for a serious medical reason, as confirmed by a doctor (5 days – divisible into 1-hour units – over a period of 12 months of full-time employment)
• cultural leave to participate in high-level professional events (from 2 days up to 50 days) 
• sporting leave to promote a better work-life balance (from 2 days to 90 days)

Article L. 125-8 of the Luxembourg Labour Code recognizes non-competition clauses, provided that they are established in writing, and that the employee's salary exceeds a certain threshold (i.e. EUR 64,382.45 gross per year at the current index of 944.43 for a full-time employee), that the restriction relates to a specific professional sector, that the restriction period does not exceed 12 months and that the restriction does not extend beyond the national territory.

No, an employee cannot be terminated for refusing to sign a restrictive covenant. In practice, restrictive covenants have to be negotiated before entering into contractual relationships. Therefore, an employee may accept a restrictive covenant in the employment contract, but cannot be obliged to agree to a restrictive covenant that is introduced after the conclusion of the employment contract.

The most common restrictive covenant is the non-competition clause. However, there are other types, such as confidentiality, non-poaching, non-solicitation and absence of commercial relations clauses.

Under Luxembourg law, there is no specific requirement of consideration for a restrictive covenant to be valid. However, in practice, remunerated non-competition clauses have become more common.

Articles 239 and 240 of the Luxembourg Social Security Code impose mandatory contributions to the national pension scheme, which consist of social security contributions directly deducted from monthly wages by the employer.

In Luxembourg, there are specific statutory benefits mandated for employees, of which employers should be aware. These mandated benefits include a comprehensive range of leave entitlements, maximum working hours, rest periods, overtime compensation, retirement benefits, sickness benefits, severance payments, etc. 

Luxembourg law also mandates a minimum wage, which is adjusted regularly to reflect the cost of living and economic conditions. The current minimum wage varies depending on the employee's qualifications.

In accordance with Article L. 010-1 of the Luxembourg Labour Code, a certain number of provisions are matters of public order and are therefore applicable to all persons working in Luxembourg, even if their employment contracts are governed by foreign law. It is not possible to derogate from these provisions in a way that is less favorable to employees, for example with regard to public holidays, paid holidays, collective bargaining agreements, provisions on part-time work, health and safety requirements, working conditions of pregnant employees and employees who have given birth, as well as minors, etc.

Article L. 125-3 of the Luxembourg Labour Code provides that the employment contract is automatically terminated on the granting of an old age pension (State pension) and, at the latest, on the employee’s 65th birthday, provided that the employee is entitled to an old age pension.

Articles 226 and ff. of the Luxembourg Social Security Code provide that it is possible to reduce or stop old-age pensions (State pensions) in situations where the beneficiary continues working beyond retirement age and when their remuneration exceeds a certain threshold.

No, an employer is not permitted to impose a mandatory vaccination on its employees. The decision to get vaccinated falls within the scope of the employee’s physical integrity and the employee retains total discretionary decision-making power in this respect. Sanctions imposed on employees based on their refusal to get vaccinated would, in our opinion, be considered discriminatory treatment (i.e. based on their health status) and would therefore likely be considered abusive. Discrimination based on health status is also punishable by criminal sanctions under Luxembourg law. Under the current provisions of Luxembourg law, an employee cannot be dismissed based on their refusal to get vaccinated (even in the unlikely case where a mandatory vaccination is provided for by the employer’s policy).

Current Luxembourg government guidelines state that employees should continue to work from home if they are in a position to do so. However, this is now simply guidance, and employers may request their employees to return to the office, provided that measures to protect employee health are taken.

The Luxembourg Labour Code holds employers responsible for ensuring the health and safety of their employees and their workplace. The employer must avoid risks and take preventive measures and, in situations where it is impossible to eliminate the danger entirely, take steps to mitigate it. These obligations include the current risks faced due to COVID-19.

In order to ensure prevention, the employer must take the following measures:

• keep up to date with official sources (e.g. websites of the Ministry of Health, World Health Organization) to ensure compliance with the latest official recommendations.
• inform all employees of the current situation, indicate guidelines and announce any steps taken (e.g. handwashing facilities, information procedures in the event of travel or risk of contamination, a list of official informative internet resources, remote working options, etc.).
• (increased) provision of specific workplace equipment, such as hand sanitizer, in line with the level of risk.
• frequently disinfect public surfaces (such as door handles, elevator buttons and light switches, etc.).
• ensure that appropriate social distancing measures are in place for all employees.

If the employer has implemented all these preventive measures to protect the health and safety of employees, in principle, employees may no longer refuse to be physically present in the workplace by exercising their right of withdrawal. Any employee who nevertheless refuses would be subject to the risk of disciplinary sanctions by their employer, including dismissal for an unjustified absence.