Collective agreements: an essential lever for fair social justice and stable employment in Luxembourg

The Labour and Mines Inspectorate currently lists 31 Collective Labour Agreements (CLAs) in force in Luxembourg. Although these agreements are fundamental, they only cover a proportion of workers, particularly in key sectors such as finance. This limited coverage is a major gap in employee protection and raises questions of social equity.

While the Labour Code establishes the basis for relations between employers and employees, CLAs offer a complementary framework specific to the sectors or companies concerned, making it possible to introduce social benefits, pension schemes and additional guarantees often absent from general laws. However, ALEBA is concerned to note that thousands of employees, particularly in sectors such as PFS and fund management companies, benefit only from the minimum legal provisions.

Social injustice linked to the absence of generalised cover

According to Luxembourg for Finance, the Luxembourg financial sector employed around 64,000 people at the end of 2021, representing around 14% of the country's total workforce. Add to this figure the indirect jobs generated by the financial sector and you have around 135,000 jobs. It is therefore very worrying to note that only around 26,500 bank employees and 3,900 insurance company employees are covered by a collective agreement. What's more, some employers take employees out of collective bargaining agreements in exchange for titles or financial compensation that is often inadequate.

This fragmented cover reveals glaring inequalities. Imagine a bank employee, a temporary worker and a service provider working together in the same team. While the first is entitled to 34.5 days holiday and overtime pay, the other two have to make do with 26 days holiday, and their overtime is rarely properly compensated... even though they are often doing the same work.  It will also be much more difficult, if not impossible, for the last two to take out a mortgage.

For ALEBA, it is imperative to remedy this injustice by extending CLA coverage to all workers, regardless of the type of employer or legal structure.

A reform for general and compulsory collective cover

Faced with this inequality, ALEBA is committed to supporting and working with the government and social partners on an ambitious bill aimed at making collective agreements compulsory in all of the country's economic sectors, or in specific companies at the request of the delegations. This bill should include an obligation of results to ensure that each negotiation leads to sound and fair agreements. Discussions without commitment, as currently provided for by law, only serve to reinforce stagnation.

To achieve the 80% collective coverage recommended by the European Union, ALEBA is campaigning for a legislative overhaul that strengthens the role of trade unions in negotiations, while guaranteeing greater inclusiveness. All trade unions, whether national or not, with elected representatives within the scope of a CLA must be able to play an active part in negotiations.

A call for trade union unity for social progress

ALEBA remains determined to work with its trade union partners to defend and improve the Luxembourg social model. If legislative reform is needed to achieve this, we will put forward proposals and mobilise our members to guarantee stable employment based on social justice.

ALEBA - Your partner for fair prosperity and strengthened social dialogue

This article was written by Thierry Roland, member of the ALEBA Executive Committee.