Government, Civil Service Trade Union Sign Salary Increase Agreement

Luxembourg's Ministry of the Civil Service and the General Confederation of Civil Servants (Confédération Générale de la Fonction Publique - CGFP) have signed a new salary agreement.

On Friday 9 December 2022, Luxembourg's Minister for the Civil Service, Marc Hansen, and the CGFP, represented by Secretary-General Steve Heiliger, presented a new salary agreement, which is valid for the next two years.

Due to the unpredictable economic context, the negotiations took place, according to the ministry, in a spirit of caution with regard to the expenditure of the State which, also at the budgetary level, will have to face various challenges in the coming months and years.

The concluded wage agreement includes a model of temporary increase of the index point, particularly benefitting the lowest state salaries. Instead of applying exclusively linear increases in the index point which benefit civil servants with the highest salaries, Minister Hansen proposed to increase by a substantial percentage the lower part of civil servants' salaries, i.e. a 5% increase on the first 100 index points.

This new approach will be applied during the first year of the agreement, namely from 1 January 2023 for a twelve-month period. In concrete terms, the 5% increase over the first 100 index points corresponds, for the amount of €2,120, to an additional gross remuneration of €106, which constitutes for example an increase of 1.67% for a civil servant earning 300 index points (€6,360), but only a 1% increase for an civil servant with a salary of 500 points (€10,600).

When presenting the agreement, Minister Hansen was particularly pleased with the introduction of this selective and temporary measure: "Lower-income staff, hit hardest by inflation, are compensated primarily by this wage agreement. Through this new model of adjustment of salaries in times of crisis, the State as an employer demonstrates that it is playing its pioneering role in supporting moderate incomes in this difficult period".

For the second year, the parties have agreed on a linear increase of 1.95% in the value of the index point.

The new agreement also provides that the appraisal system will be abolished with effect from 1 January 2023, with the exception of trainee civil servants and state employees during their initiation period. Regarding the management of objectives, individual interviews between staff and their line manager will be organised each year.

In addition, in the B1 salary and allowance groups, a master's degree patent bonus and a superior technician patent bonus (BTS) will be introduced with effect from 1 July 2023.

The parties also agreed that from 1 July 2023, the salary increments for positions with special responsibilities will be increased, as will the percentage limit of these increments, the duration of the temporary mechanism for changing the salary or allowance group will be extended and the protection of civil servants and state employees in the event of long-term illness will be analysed within the framework of a working group. Finally, the parties agreed to discuss the subject of freedom of association.